Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on [email protected] for help. Thanks :)
Hello All, This is just a friendly reminder to read the Forum Charter where you wish to post before posting in it. :)

Dublin - Significant reduction in rents coming?

24567113

Comments

  • Registered Users Posts: 174 ✭✭ headtheball14


    Edgware wrote: »
    If you are letting a property e.g. a one bed and pulling in 15000/16000 a year you would need a high occupancy level with an Airbnb to match that. With letting of a properly organised property you could go 12 months without having any contact with tenants. In an Airbnb you have cleaning, laundry, taking bookings etc all the time. Hard to see that this is worth whatever extra income you might get
    If you have an agency running it then you can have very limited involvement in an Airbnb. You have the potential of a let that causes one or two nights damage, along with some level of coverage of damages in an Airbnb. This is compared to the potential of a year or two of not receiving rent along with legal action to remove a tenant, the tax treatment is the same more or less currently .
    I think what’s interesting is the complete lack of enforcement or ability to enforce the Airbnb regulations that were brought in but the effect actually limiting the income that could be made from Airbnb has made.
    At the moment in general, current taxation doesn’t encourage activity, this may change if there is increases in property tax for example.


  • Registered Users Posts: 3,102 ✭✭✭ Mic 1972


    .


  • Posts: 0 [Deleted User]


    Some of them are being offered as 12 month rentals already. So they won't be returning to Airbnb. Most I see are being offered as 2-3 month rentals. I think they will soon start to realise that the demand for the properties on Airbnb will be low for much longer than when we see most of the restrictions lifted and will will join others in putting them into the long term rental pool. In many cases they won't have a choice as they will get into massive financial difficulty if these properties aren't generating any revenue.

    Looking around south Dublin and you have to laugh at the ex AirBnb rentals for close to 2k but with **** 3 months lease only**** in the description. As if there is much demand for €2k/pm 3 months rentals in the regular rental market so the property owner can get back to Airbnb-ing it when it suits them leaving you barely settled before you’re back to square one.

    https://www.daft.ie/22018726


  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    I suspect those landlords are in for a short, sharp re-education cisk.


  • Registered Users Posts: 1,493 ✭✭✭ HerrKuehn


    cisk wrote: »
    Looking around south Dublin and you have to laugh at the ex AirBnb rentals for close to 2k but with **** 3 months lease only**** in the description. As if there is much demand for €2k/pm 3 months rentals in the regular rental market so the property owner can get back to Airbnb-ing it when it suits them leaving you barely settled before you’re back to square one.

    https://www.daft.ie/22018726

    That is delusional. I wouldn't imagine there is any market at all for short term leases like that at the moment.
    I remember in 2008 I rented an apartment. When the year was up, in 2009, I was able to negotiate a 25% reduction. Other apartments in the same building were advertised at that price. I am not sure if it will be the same thing this time.
    Will landlords be unwilling to reduce the rent given that they will be then only allowed to increase by 4% a year? It would take several years to get back to previous level.


  • Advertisement
  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Graham wrote: »
    Talk of AirBnB is all a bit academic in the current environment.

    I suspect that will remain the case for at least the remainder of 2020.

    My guess; AirBnB hosts are about to see several years of healthy profits completely wiped out. Hundreds of ex-STLs will be returned to residential use.

    While I agree with your first two points, the third is rubbish.

    When you say “wiped out”, the income made for STLs were multiples of rental income, in my case X3, I’m sure in more popular tourist areas, it was even more. 6 months of this, compared to renting, will not wipe out profits made over the last couple of years. Your post is more wishful thinking than reality.

    Profits were certainly an important consideration for many owners when deciding to enter STL market, problems with the residential tenancy are equally if not more important. That has not changed, a few properties going back will not make any difference. What would be more interesting is whether 2-3 months after flights/tourism has resumed, Airbnb listings have fallen. It is possible that some properties where tenants leave will decide to take the opportunity to enter the STL market.

    I read in a recent newspaper article that Airbnb’s account for about 3% of rental properties, Graham a few hundred going back to rental sector isn’t going to make a lot of difference, in fact, if every Airbnb changed to rentals, it still wouldn’t make a significant difference.

    Also, some landlords may also take the opportunity to sell when tenants leave. So while there is a lot of speculation and wishful thinking, a lot of people still need places to rent, all building has stopped, landlords are selling (and more likely to do so if rents fall) and the pariah that is the Airbnb host, may hold, flip flop, or go into rental sector. No one can be sure.

    The fact is, a cumulation of multiple factors will contribute to rents falling, staying the same, rising. And while there are a number of unknown variables, what we know for certain is that new builds are stalled, landlords have been selling off properties and STLs are a tiny portion of properties.


  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    Dav010 wrote: »
    When you say “wiped out”, the income made for STLs were multiples of rental income, in my case X3, I’m sure in more popular tourist areas, it was even more. 6 months of this, compared to renting, will not wipe out profits made over the last couple of years. Your post is more wishful thinking than reality.

    Maybe you're right Dav010.

    Maybe ex-AirBnB properties are somehow insulated from property price turmoil and competition from several hundred ex-STLs all hitting an unsteady market simultaneously.

    Maybe ex-AirBnB properties will sell quickly at pre-pandemic prices.

    Maybe hundreds of ex-AirBnB rentals hitting the market at once aren't going to drive down market rents before locking themselves into those new market rents +4% for years to come.

    Maybe (if/when) the STL market starts to return, local authorities aren't going to find it easier to play whack-a-mole with a handful of new unathorised STLs each month rather than the current cast of thousands.

    Maybe.


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Graham wrote: »
    Maybe you're right Dav010.

    Maybe ex-AirBnB properties are somehow insulated from property price turmoil and competition from several hundred ex-STLs all hitting an unsteady market simultaneously.

    Maybe ex-AirBnB properties will sell quickly at pre-pandemic prices.

    Maybe hundreds of ex-AirBnB rentals hitting the market at once aren't going to drive down market rents before locking themselves into those new market rents +4% for years to come.

    Maybe (if/when) the STL market starts to return, local authorities aren't going to find it easier to play whack-a-mole with a handful of new unathorised STLs each month rather than the current cast of thousands.

    Maybe.

    Yip, that’s pretty much it in a nutshell, you can speculate and/or wish something to happen, but the market is fickle. When rents were at an all time high, LLs were selling, I can’t imagine many will be reversing investment strategy if prices are falling.

    I doubt too many Hosts worry about the LA, I’m not aware of a single prosecution so far, in fact it seems the legislation is largely being ignored. I’m sure LA staff will be thrilled at the prospect ot talking to tourists from other countries, face to face, as is necessary to reach the threshold to prove a STL has occurred.

    Time will tell. But in relation to Airbnb, gauging how it has effected listing should be postponed until the tourism market reopens. Listing numbers may dip now as owners rent for a while, or sell, but may rise again as new properties list and existing ones return. Maybe it will drop, maybe if rents fall, Airbnb numbers will go up.

    Maybe.


  • Registered Users Posts: 1,552 ✭✭✭ WhiteMemento9


    Dav010 wrote: »
    I read in a recent newspaper article that Airbnb’s account for about 3% of rental properties, Graham a few hundred going back to rental sector isn’t going to make a lot of difference, in fact, if every Airbnb changed to rentals, it still wouldn’t make a significant difference.

    Can you provide a link to the article? This thread is specifically about Dublin. 4700 entire apartments or houses plus all the rooms in other rentals. Releasing even half of these back on to the market as long term rentals would clearly have a very significant impact.

    Here is the data in Dublin

    I wonder how many planning permissions Dublin has on its books for Airbnb rentals? I hope they are using the data available during this time to collect information on properties in breach and impose the current fines where appropriate.


  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    Dav010 wrote: »
    But in relation to Airbnb, gauging how it has effected listing should be postponed until the tourism market reopens.

    Absolutely right.

    All we can do for now is speculate how the AirBnB/STL landscape might change.


  • Advertisement
  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    Releasing even half of these back on to the market as long term rentals would clearly have a very significant impact.

    That would be my guess, in the short term at least.


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Can you provide a link to the article? This thread is specifically about Dublin. 4700 entire apartments or houses plus all the rooms in other rentals. Releasing even half of these back on to the market as long term rentals would clearly have a very significant impact.

    Here is the data in Dublin

    I wonder how many planning permissions Dublin has on its books for Airbnb rentals? I hope they are using the data available during this time to collect information on properties in breach and impose the current fines where appropriate.

    When you consider that owners, including myself, report that hundreds of people apply for rentals when they are advertised, a few hundred properties does not make a significant difference. All those Airbnb properties will not return to the rental market. From reports about numbers who applied for PP, it would seem Hosts are ignoring the regs. Collecting the info about short lets is easy, just open Airbnb/Booking.com etc, but having the info is not enough to prosecute. The LA have to prove money was paid, catch the guest in the property and confirm they were guests who paid for a short let. A tall order to do in any meaningful number of cases, LA staff literally have to watch the property to catch the guest.

    I’ll look for the article.

    Edit: The most recent CSO figures on rentals was 500k in 2016, Airbnb listings in peak season/summer 2019 was just under 5k.

    https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/tr/


    https://www.google.ie/amp/s/www.thejournal.ie/scraped-data-suggests-that-most-airbnb-revenue-comes-from-renting-full-homes-for-more-than-90-days-4700461-Jun2019/?amp=1


  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    Talk of enforcement is pretty meaningless in the context of zero market.


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Graham wrote: »
    Talk of enforcement is pretty meaningless in the context of zero market.

    And zero staff.


  • Registered Users Posts: 1,552 ✭✭✭ WhiteMemento9


    Dav010 wrote: »
    When you consider that owners, including myself, report that hundreds of people apply for rentals when they are advertised, a few hundred properties does not make a significant difference. All those Airbnb properties will not return to the rental market. From reports about numbers who applied for PP, it would seem Hosts are ignoring the regs. Collecting the info about short lets is easy, just open Airbnb/Booking.com etc, but having the info is not enough to prosecute. The LA have to prove money was paid, catch the guest in the property and confirm they were guests who paid for a short let. A tall order to do in any meaningful number of cases, LA staff literally have to watch the property to catch the guest.

    I’ll look for the article.

    I am not saying they will all return to LT rentals but saying that they don't represent a significant proportion of rentals in Dublin that contribute massively to the current problems in the market is disingenuous. You said in your last post that even if they were all released back to the market it wouldn't make any difference and that is clearly not true. We are not talking a few hundred but almost five thousand properties.

    There is a pretty simple solution to gather actual proof of doing dummy rentals. Considering it is very obvious when places are in breach and success rate would be extremely high to cover costs of having people rent the places undercover. for the purposes of gathering evidence for prosecutions. I am sure a private company would be willing to undertake the task considering it would currently be an extremely lucrative contract. (Edit - Obviously right now, not so much :))


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    I am not saying they will all return to LT rentals but saying that they don't represent a significant proportion of rentals in Dublin that contribute massively to the current problems in the market is disingenuous. You said in your last post that even if they were all released back to the market it wouldn't make any difference and that is clearly not true. We are not talking a few hundred but almost five thousand properties.

    There is a pretty simple solution to gather actual proof of doing dummy rentals. Considering it is very obvious when places are in breach and success rate would be extremely high to cover costs of having people rent the places undercover. for the purposes of gathering evidence for prosecutions. I am sure a private company would be willing to undertake the task considering it would currently be an extremely lucrative contract.

    Do you believe 1% is a significant change? And that would be if all properties returned.

    Getting the evidence is not easy:

    https://www.google.com/amp/s/www.irishtimes.com/news/environment/dublin-city-council-seeks-400-000-to-set-up-taskforce-to-crack-down-on-airbnbs-1.3708469


  • Banned (with Prison Access) Posts: 2,896 ✭✭✭ sabat


    Dav010 wrote: »

    Personally, the reasons for me choosing to leave the rental market as tenants move out hasn’t changed. I have an Airbnb house that I am just going to wait it out with, and put it up on Airbnb again when things open again later in the year. If rents are falling, the benefits of Airbnb will be even more obvious.

    Remember, when the hotels reopen they'll be selling 4* rooms in good locations for about €50 or €60 just to keep the lights on and these are the rates you'll be competing against. This will probably be the case until summer 2021, or it could be the new normal for long after that, seeing as there was a glut of new hotels built or being built recently. Unless you have a unique or very well located house it might be more profitable to just get regular tenants, especially when you factor in vacancies, cleaning, maintenance, assorted airbnb hassles etc.


  • Registered Users Posts: 1,552 ✭✭✭ WhiteMemento9


    Dav010 wrote: »
    Do you believe 1% is a significant change? And that would be if all properties returned.

    All dumped on the market tomorrow. Yes it would represent a massive change. There is usually about 1.5k of these type of properties on Daft for rental in Dublin at any one time each day. Are they going to help with the housing crisis in Dublin, NO. Are they going to help with the rent situation in this particular sector of the market, massively.
    Dav010 wrote: »

    I don't see what is so hard judging on that article. It is exactly as I suggested and given the rewards of shooting fish in a barrell for a few months the upside would be massive. As I said let a private company take it on and you have no start up costs.


  • Registered Users Posts: 708 ✭✭✭ Ozark707


    sabat wrote: »
    Remember, when the hotels reopen they'll be selling 4* rooms in good locations for about €50 or €60 just to keep the lights on and these are the rates you'll be competing against. This will probably be the case until summer 2021, or it could be the new normal for long after that, seeing as there was a glut of new hotels built or being built recently.

    This is a very good point, international travel is going to take a long time to recover to previous levels so if STL's are going to sit it out and compete with hotels at lower rates then it is going to be interesting.


  • Registered Users Posts: 17,561 ✭✭✭✭ Idbatterim


    the biggest issue is, tourism has stopped and huge amounts of students etc, have returned to their family homes outside dublin. Supply is now stopped, population is still growing. I mean they would have provided what in dublin this year in terms of new units? ten thousand units + probably and prices were not dropping.

    there will be drops now obviously, but if colleges , english schools ( maybe before) etc are back in september etc, that will come to an end...

    if this turns out to be on the lesser end of the scale of disaster, rents could be cheapest, during early summer, when leases on college places are up and supply normally increases (to be taken up often by more tourists, but this summer or at least early summer , that is highly unlikely)...


  • Advertisement
  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    I'd anticipate there will be almost no tourism for the remainder of the year and what bit we do get is going to be nowhere near enough to sustain most STLs.

    When the tourist market does eventually return, most of the current STLs will be long gone effectively giving local authorities a very manageable clean slate when it comes to controlling new entrants to the STL market.


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    sabat wrote: »
    Remember, when the hotels reopen they'll be selling 4* rooms in good locations for about €50 or €60 just to keep the lights on and these are the rates you'll be competing against. This will probably be the case until summer 2021, or it could be the new normal for long after that, seeing as there was a glut of new hotels built or being built recently. Unless you have a unique or very well located house it might be more profitable to just get regular tenants, especially when you factor in vacancies, cleaning, maintenance, assorted airbnb hassles etc.

    Very true, but STLetting is an emotive subject for a verity of reasons. From my own Airbnb experience, guests tend to be families/friends who want the benefits a whole property provides. I was in New York last year, with teenagers, an apartment was better and more practice than 4 hotel rooms. So when tourism returns, there will be a market for STLs.

    The reality is that new builds have a far greater effect on supply. Many developments currently under construction in Dublin are forward financed, the financing depends on receiving a certain minimum level of rental income. Right now that building has stopped so supply, much needed will be further delayed. During the last recession, people emigrated to get work, with joblessness rising in virtually every country, particularly the traditional markets like the US, UK and Australia, there is no place to go. So, same population, same low supply., and the likelihood of more small LLs selling. Makes STLs pretty insignificant in the greater scheme of things.


  • Registered Users Posts: 708 ✭✭✭ Ozark707


    Will any LL's contact their tenants to try and agree a new (lower) deal before the tenants call them with a potentially bigger reduction?


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Graham wrote: »
    I'd anticipate there will be almost no tourism for the remainder of the year and what bit we do get is going to be nowhere near enough to sustain most STLs.

    When the tourist market does eventually return, most of the current STLs will be long gone effectively giving local authorities a very manageable clean slate when it comes to controlling new entrants to the STL market.

    Graham, lots of hotels won’t open until the numbers of tourists increase. People can go online today and book an Airbnb for later in the year. I have had loads of cancellations, but I’ve still got a few bookings from September onwards.

    Existing entrants can stay on Airbnb. You can block/suspend bookings if you want.


  • Registered Users Posts: 708 ✭✭✭ Ozark707


    Dav010 wrote: »
    Many developments currently under construction in Dublin are forward financed, the financing depends on receiving a certain minimum level of rental income. Right now that building has stopped so supply, much needed will be further delayed.

    There is also a number of developments that are about to hit the market with now no chance of receiving the rents they might have expected to get 6 weeks ago. Are they simply just going to leave them empty with no rent roll from them? That might be fine if it was just going to be a few weeks but now it is generally excepted that this will go on for longer than this.


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Ozark707 wrote: »
    There is also a number of developments that are about to hit the market with now no chance of receiving the rents they might have expected to get 6 weeks ago. Are they simply just going to leave them empty with no rent roll from them? That might be fine if it was just going to be a few weeks but now it is generally excepted that this will go on for longer than this.

    According to the finance expert on the Last Word, there is a development in the IFSC with one third occupancy, the owners preferred to leave units empty than rent at a lower price. Posted about it while it was on, on another thread, it should be up on a podcast. But I’m not going to look back through all my posts to find the date. I suspect most big developers will wait to see how this plays out. But again, time will tell, at the moment a lot of those developments are far from complete.


  • Registered Users Posts: 708 ✭✭✭ Ozark707


    Dav010 wrote: »
    According to the finance expert on the Last Word, there is a development in the IFSC with one third occupancy, the owners preferred to leave units empty than rent at a lower price. Posted about it while it was on, on another thread, it should be up on a podcast. But I’m not going to look back through all my posts to find the date.

    Capital Dock was over 50% empty after a year (unsurprising given the astronomical rents they were looking at). Another development down there listed that all 2 beds could have a month free...well before Covid hit and still the same (obviously). There are other developments further afield which also look like they are not shifting in any meaningful manner....their backers must have deep pockets...


  • Registered Users Posts: 11,668 ✭✭✭✭ Dav010


    Ozark707 wrote: »
    Capital Dock was over 50% empty after a year (unsurprising given the astronomical rents they were looking at). Another development down there listed that all 2 beds could have a month free...well before Covid hit and still the same (obviously). There are other developments further afield which also look like they are not shifting in any meaningful manner....their backers must have deep pockets...

    In a lot of cases they are institutional investment firms, deep pockets 2 months ago, squeaky bum time now. But they are far more likely to wait it out than small time LLs would have been, had so many of them not left the market. A few ads with lower prices today is not a quantitative indicator of market collapse, it will take another couple of months before the true effect can be measured. A general downward push on rents may be counteracted by a further reduction in supply if LLs sell off investment properties.


  • Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭ Graham


    Dav010 wrote: »
    Graham, lots of hotels won’t open until the numbers of tourists increase. People can go online today and book an Airbnb for later in the year. I have had loads of cancellations, but I’ve still got a few bookings from September onwards.

    I suspect many AirBnB hosts are the same.

    I'd guess many of those haven't cancelled yet as the extenuating circumstances cancellation policy only applies to stays up to May 31st (for now).

    I don't envy any hosts dependant on a handful of bookings 6 months from now, most couldn't survive as evidenced by the sudden rush back to long-term rentals.


  • Advertisement
  • Registered Users Posts: 708 ✭✭✭ Ozark707


    Dav010 wrote: »
    A general downward push on rents may be counteracted by a further reduction in supply if LLs sell off investment properties.

    Even if they do it is unlikely to massively change the supply/demand dynamic...if the place for sale ends up being bought as an investment then no net change, if it purchased by someone who was renting then it is one less place to rent but also one less person looking to rent.


Advertisement