Dublin - Significant reduction in rents coming?

Graham

NuMarvel wrote: »

Not at a time of record homelessness it shouldn't. There's little point espousing purely economic arguments, if you're not going to recognise the human costs of this approach.

On the other hand, if you ignore the economics supply just stops.

You have to remember that rents aren't just a result of supply/demand. The underlying value of the asset also has an effect, particularly on the introduction of new properties to the market (or not) and properties being removed from the market.

NuMarvel

Graham wrote: »

On the other hand, if you ignore the economics supply just stops.

You have to remember that rents aren't just a result of supply/demand. The underlying value of the asset also has an effect.

In fairness, I didn't advocate ignoring the economics, did I? I know LLs are in the market to make a profit. It has to be an attractive prospect in order keep them there and I'm fine with leveraging market forces to achieve a public policy aim.

But removing the caps without also addressing the issues that lead to the caps in the first place isn't going to solve anything.

JimmyVik

NuMarvel wrote: »

In fairness, I didn't advocate ignoring the economics, did I? I know LLs are in the market to make a profit. It has to be an attractive prospect in order keep them there and I'm fine with leveraging market forces to achieve a public policy aim.

But removing the caps without also addressing the issues that lead to the caps in the first place isn't going to solve anything.

Whats you solution?
Force new investors to enter the market?
Force current investors leaving to stay in the market?
Let me guess. Tax everyone for everything.

rightmove

NuMarvel wrote: »

, I'm all ears.

your not though. The free market would have done better then really bad interference. You just will not recognize that fact so until then you are not all ears.

As a LL I was a victim of these regulations and as a tenant properties like mine we off the market exactly when I as a tenant would need them most.....work that one out

Graham

NuMarvel wrote: »

removing the caps without also addressing the issues that lead to the caps in the first place isn't going to solve anything.

I'd argue the opposite.

Leaving the caps in place now is preventing rents from falling naturally now that supply has increased.

Rent caps are now working against tenants, not for them.

beauf

NuMarvel wrote: »

The issue wasn't just market rent though, but also the rate of rent increases. But yes, ultimately this is down to greedy landlords. And the caps were introduced because a lot of landlords were being a little greedy, or a few landlords were being VERY greedy (or a mixture of both). And there's no way, that I know of anyway, where you can target just those landlords. At least not without creating a further inflationary effect amongst the rest of the market.

I'm curious what defines "greedy" in a private market, where you might be renting a million euro apartment.

brisan

beaufoy wrote: »

only just seen this thread and i might be repeating someone else, but it is my own thoughts.
The student rentals will bounce back the badly educated are badly paid, and there are no jobs...so students will return next year...maybe 20% or more will commut from mummy's house so the new expensive student villages will have a bad time
Offices and shops will close and be converted to apts so city centre accommodation will become more easy to find and so will decrease a little in price
However the main stumbling block is that Ireland copied the most stupid british policy of selling off council houses and not replacing them...this policy has to be corrected before prices drop significantly

In an alternative reality perhaps but not in this one
Nigh on impossible to convert offices and shops to habitable accommodation so I have no idea where thats coming from

beauf

NuMarvel wrote: »

In fairness, I didn't advocate ignoring the economics, did I? I know LLs are in the market to make a profit. It has to be an attractive prospect in order keep them there and I'm fine with leveraging market forces to achieve a public policy aim.

But removing the caps without also addressing the issues that lead to the caps in the first place isn't going to solve anything.

If the issue was "greed" and the rent cap fixed it. Then why is this thread still complaining about rents and empty property.

brisan

Cantstandsya wrote: »

Fauci in the US is hopeful a vaccine will be discovered by December. That's best case scenario. If one were discovered in December it would be April before anyone in Ireland received it... so, if a vaccine were announced in the morning it would probably be January before the first person in Ireland received it.

This won't be gone tomorrow and it won't be gone in a few months either. The absolute best case scenario is vaccine by December and rollout begins in Ireland in April, how long after that before things get back to normal? My opinion is things won't ever go back to how they were.

Saying all of that doesn't make someone a doom monger, it's what the experts are telling us.

https://www.irishtimes.com/life-and-style/health-family/when-will-the-first-covid-19-vaccine-be-used-in-ireland-1.4324737

WFH is her to stay

brisan

Dav010 wrote: »

On the other hand, there is no mass emigration as there has been previously in recessions, bank deposits are healthy, lenders have not and will not supply easy credit. School students are back and most people are back to work.

Are third level students in full time education eligible for PUP when term commences? If not, there will be a significant drop in PUP numbers in 3 weeks.

I agree this is a very difficult time for LLs, obviously supply has increased, how could it not when you take hundreds of thousands of students and wfh’s out of the equation. But there is certainty that classes will return to normal, though when that will be is currently unknown, and many office workers will return to their offices. It doesn’t take a brilliant economic mind to recognise the problems which currently exist in the sector, but the reality is that normal service will resume when students go back because there has been negligible increase in property unit completions and LLs will continue to leave the market.

For those currently in rental accommodation, there has never been a better time to upgrade or find a lower cost rental. Given the need to provide notice, that window of opportunity may only be open until the beginning of the third semester when hopefully vaccine roll out will have begun.

Considering property sales have remained relatively strong, Im surprised more LLs are not selling.

Not what I am reading
A hybrid learning model will be the way forward
Covid 19 has changed forever many aspects of our lives and will continue to do

brisan

Mr Hindley wrote: »

Something that has me confused (and worried) - having decided to hold off on buying for another six months to a year, and focusing on the rental market, the rental prices, or asking prices at least, still seem to be sky high. What's more, it can't be a case that deluded landlords are sitting there demanding an unrealistic rent while their property lies empty, as most places that catch my attention seem to go back off the market in a week or two, implying there's still plenty of demand.

Now, I'm constrained for family reasons to the south Dublin / north Wicklow area, and that might be a very different market to central Dublin if that's where the posters talking of lots of empty flats in their buildings are from. Where I'm looking is maybe exactly the kind of place that people are trying to leave central Dublin to move to.

Is anyone else still seeing this i.e. rental properties flying off the shelves?

Nope
I know one landlord charging old rents with 2 properties on the market for 3 months
10 mins from O Connell street

brisan

Claw Hammer wrote: »

The rent cap is now operating to keep property off the market, thus reducing supply. It is doing the opposite of what was intended initially. It demonstrates the other stupidity of introducing the rent cap in the first place. If it wasn't for the rent cap rents would be falling naturally, fewer landlords would have sold out and rents overall would be lower for tenants. There would be fewer homeless with consequent savings for the local authorities.

Supply in Dublin is at record highs

brisan

Claw Hammer wrote: »

The rent cap is now operating to keep property off the market, thus reducing supply. It is doing the opposite of what was intended initially. It demonstrates the other stupidity of introducing the rent cap in the first place. If it wasn't for the rent cap rents would be falling naturally, fewer landlords would have sold out and rents overall would be lower for tenants. There would be fewer homeless with consequent savings for the local authorities.

If the pandemic had not happened rents would have gone sky high without rent caps

Graham

brisan wrote: »

If the pandemic had not happened rents would have gone sky high without rent caps

But the pandemic did happen.

The rent caps have become a rent-floor rather than a rent-ceiling.

brisan

Graham wrote: »

But the pandemic did happen.

The rent caps have become a rent-floor rather than a rent-ceiling.

Nothing stopping a landlord dropping his rent ,nothing at all
Granted he wont be able to put it back to its previous high level IF demand returns but the choice is his
No tenant at 1800 a month for a year or 1500 a month for that year with 4% increases after that

The value of you investment may fall as well as rise
Returns on your investment are not guaranteed
A lot of financial investment ads state this

beauf

brisan wrote: »

Supply in Dublin is at record highs

Its low relatively to demand.

brisan wrote: »

If the pandemic had not happened rents would have gone sky high without rent caps

Rents still increased with the rent cap. Because it was structured in a way that encouraged places stuck on low rent to leave, and new places with high rent to enter the market.

brisan wrote: »

Nothing stopping a landlord dropping his rent ,nothing at all
Granted he wont be able to put it back to its previous high level IF demand returns but the choice is his
No tenant at 1800 a month for a year or 1500 a month for that year with 4% increases after that

The value of you investment may fall as well as rise
Returns on your investment are not guaranteed
A lot of financial investment ads state this

Then they choose not to. Everyone's happy?

eleventh

The legislation should be changed so that LLs in RPZs could decrease rent without being subject to 4% cap on increase in a few years if market changes (but 4% cap continues where there's no decrease).

Graham

brisan wrote: »

Nothing stopping a landlord dropping his rent ,nothing at all
Granted he wont be able to put it back to its previous high level IF demand returns but the choice is his
No tenant at 1800 a month for a year or 1500 a month for that year with 4% increases after that

The value of you investment may fall as well as rise
Returns on your investment are not guaranteed
A lot of financial investment ads state this

and you can't understand why that might (will) act as a disincentive?

I can't think of many investments where an investor is only permitted to avail of the downsides.

beauf

eleventh wrote: »

The legislation should be changed so that LLs in RPZs could decrease rent without being subject to 4% cap on increase in a few years if market changes (but 4% cap continues where there's no decrease).

Yeah no one would touch that political hot potato with barge pole.

People wanted the one property LL out of the market, and the REITs in.
They wanted RPZ and increased protection for tenants and none for LLs.
This is the rental market that resulted from all that.
Everyone should be happy now.

Ozark707

Students rents have not dropped according to Ronan Lyons. Didn't expect that.

https://www.thejournal.ie/student-rents-largely-stay-the-same-2020-5203614-Sep2020/

NuMarvel

Graham wrote: »

I'd argue the opposite.

Leaving the caps in place now is preventing rents from falling naturally now that supply has increased.

Rent caps are now working against tenants, not for them.

I disagree. The rent caps might not favour those who reduce rents, but they don't disadvantage those who keep rents static. Those landlords still have the option to apply the up to 4% per annum increase in the future if they want, and if market rents allow.

Yet, have we really seen that? Has there been instance of low or even NO rent increases? From what I can see the only time rents have stopped rising, or even fallen in Ireland is when there's been a blanket ban on rent increases. LLs seem to view the cap as a target, not a limit, and I don't think they're going to change their behaviour if the cap was removed.

NuMarvel

NuMarvel wrote: »

I disagree. The rent caps might not favour those who reduce rents, but they don't disadvantage those who keep rents static. Those landlords still have the option to apply the up to 4% per annum increase in the future if they want, and if market rents allow.

Yet, have we really seen that? Has there been instance of low or even NO rent increases? From what I can see the only time rents have stopped rising, or even fallen in Ireland is when there's been a blanket ban on rent increases. LLs seem to view the cap as a target, not a limit, and I don't think they're going to change their behaviour if the cap was removed.

My previous rent increase of 4% made my rent E1406.08. I was a little curious about what would happen if I just paid the 1406. Would the landlord come after me for the 8 cent? In the end I decided either way she was pathetic and my time was more valuable than to be wondering such things.

cgcsb

If you search for a place to rent in Dublin on daft the first 4 pages are ads for BTR companies charging more than €1,600-€2,500 for a one bed. It's obvious on the street, e.g. at capital, dock that a lot of these developments have a low occupancy rate. The BTR companies can probably afford to keep them empty for years before they decide to drop the rents. A big disadvantage with big institutional landlords compared to amateur landlords, few of whom could afford an empty investment property for more than 4 or 5 months.

NuMarvel

Deleted User wrote: »

My previous rent increase of 4% made my rent E1406.08. I was a little curious about what would happen if I just paid the 1406. Would the landlord come after me for the 8 cent? In the end I decided either way she was pathetic and my time was more valuable than to be wondering such things.

Even my LL wasn't that petty. Then again, the 4% cap was about the only aspect of the rent increase rules he complied with, so it's probably swings and roundabouts...

beauf

NuMarvel wrote: »

I disagree. The rent caps might not favour those who reduce rents, but they don't disadvantage those who keep rents static. Those landlords still have the option to apply the up to 4% per annum increase in the future if they want, and if market rents allow......

Of course they do.

If the LL wants to sell their property its value to a BTL buyer is reduced.
If the rents increase there is a very long time lag before you can increase them.

Graham

NuMarvel wrote: »

I disagree. The rent caps might not favour those who reduce rents, but they don't disadvantage those who keep rents static. Those landlords still have the option to apply the up to 4% per annum increase in the future if they want, and if market rents allow.

I suspect most landlords trying to raise rents in the current market will quickly discover they'll be re-letting unless they're working from a significantly below market rate.

NuMarvel wrote: »

Yet, have we really seen that? Has there been instance of low or even NO rent increases? From what I can see the only time rents have stopped rising, or even fallen in Ireland is when there's been a blanket ban on rent increases.

Look again.

Between 2008 and 2016 I was paying rents that would have averaged a 1% - 2% yield for the landlords at the time.

NuMarvel

beauf wrote: »

Of course they do.

If the LL wants to sell their property its value to a BTL buyer is reduced.
If the rents increase there is a very long time lag before you can increase them.

The point I was addressing was around rental caps preventing rent reductions and falls in the rate of rental increase.

Your point seems to be that the caps mean LLs can't milk every cent possible out of the property. I haven't given that much thought, but you might be right. You'll understand if I don't shed many tears for LLs in that particular situation.

brisan

beauf wrote: »

Its low relatively to demand.



Rents still increased with the rent cap. Because it was structured in a way that encouraged places stuck on low rent to leave, and new places with high rent to enter the market.



Then they choose not to. Everyone's happy?

Except the bank if there is a mortgage to be serviced

NuMarvel

Graham wrote: »

Look again.

Between 2008 and 2016 I was paying rents that would have averaged a 1% - 2% yield for the landlords at the time.

To be clear, considering we're talking about the effects of the rental caps, I was referring to instances of low or no rent increases since the rent cap came into effect.

But, yes, in the broader sense, there have been instances of rent reductions prior to the rent caps coming into effect. But the RTB figures show the biggest drops happened during the recession, and I'm not sure that's something anyone wants to repeat (though we may not have much of a choice).

brisan

Graham wrote: »

and you can't understand why that might (will) act as a disincentive?

I can't think of many investments where an investor is only permitted to avail of the downsides.

If a landlord is prepared to forfeit 18k gross over a year in the hope that things will go back to normal that's his choice.
I do not see a flood of rental properties hitting the sales market.
Surely now while demand is high and prices rising is the time to sell if they cant turn a profit renting
The upside was a 4% yearly increase in rent with minimal inflation and low interest rates