Dublin - Significant reduction in rents coming?

brisan

Ozark707 wrote: »

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/

Is that the same Ronan Lyons who works for DAFT and produces their reports
The DAFT that is the leading website for rental properties in the country
That Ronan Lyons ???

Graham

NuMarvel wrote: »

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.

The effect of rental caps at the moment IMO;

• Those with significantly below market rents will likely see maximum rent increases.
  
• Those with market rents from last year will move if the landlord tries to increase rents by 4% as permitted by the RPZ rules
  
• Landlords are reluctant to drop rents for fear they will then be permanently stuck at below market rents. The rent-floor effect.

If rent caps were removed tomorrow, I'd expect rents to drop noticeably.

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?

Low relative to demand
The amount of properties on Daft for over a month would tend to disagree

Claw Hammer

brisan wrote: »

Supply in Dublin is at record highs

It would be even higher if it wasn't for the rent cap.

brisan

Claw Hammer wrote: »

It would be even higher if it wasn't for the rent cap.

It might even be lower if rents were realistic ,nobody forces a landlord to maintain high rents when the market does not warrant them

Claw Hammer

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.

Look back on the posts on this forum 10 years ago. Tenants were boasting of the reductions in rent they squeezed from their landlords. Rents fall in reaction to market conditions as well as rise. Distorting the market artificially usually backfires eventually. Over 20 years ago the Bacon proposals caused rents to double in 3 years.

Melanchthon

beauf wrote: »

People wanted the one property LL out of the market, and the REITs in.

Which people wanted that? People wanted a level of professionalism from landlords that is all.
Before the comeback of that, is landlords aren't a professional unless their only activity is being a landlord - plenty of people do secondary self employed activities where they are expected to maintain the professional standards of primary activity.

beauf

brisan wrote: »

Low relative to demand
The amount of properties on Daft for over a month would tend to disagree

So you have abundant places to rent at low rental prices.

brisan

beauf wrote: »

So you have abundant places to rent at low rental prices.

Abundant places to rent at above market rate
Demand has dropped significantly

Smouse156

Melanchthon wrote: »

Which people wanted that? People wanted a level of professionalism from landlords that is all.
Before the comeback of that, is landlords aren't a professional unless their only activity is being a landlord - plenty of people do secondary self employed activities where they are expected to maintain the professional standards of primary activity.

People that wanted non-substandard accommodation. Considering around 90% were substandard from part time John & Mary’s before REITs;

https://www.irishexaminer.com/opinion/columnists/arid-20345263.html

the REITs were encouraged to bring a higher standard to the game.

The downside is they pay no tax, have high rents and can wait it out in market falls with high vacancy rates.

John & Mary didn’t put a red cent into the property with the 1980s bullet proof furniture but at least most of them paid tax and spent their rental wealth in Ireland.

That’s our system

brisan

Smouse156 wrote: »

People that wanted non-substandard accommodation. Considering around 90% were substandard from part time John & Mary’s before REITs;

https://www.irishexaminer.com/opinion/columnists/arid-20345263.html

the REITs were encouraged to bring a higher standard to the game.

The downside is they pay no tax, have high rents and can wait it out in market falls with high vacancy rates.

John & Mary didn’t put a red cent into the property with the 1980s bullet proof furniture but at least most of them paid tax and spent their rental wealth in Ireland.

That’s our system

John and Mary did not believe tenants had any right either

beauf

Smouse156 wrote: »

...
the REITs were encouraged to bring a higher standard to the game....

How were they encouraged?

REITs go for the max profit. Which is the higher end of the market in general.
Higher standards and regulation increase costs.

beauf

Smouse156 wrote: »

People that wanted non-substandard accommodation. Considering around 90% were substandard from part time John & Mary’s before REITs;

https://www.irishexaminer.com/opinion/columnists/arid-20345263.html...

After REITs..

https://www.thejournal.ie/hap-scheme-rental-standards-3765929-Dec2017/
https://www.irishtimes.com/news/environment/wide-disparity-in-inspections-of-private-rented-housing-1.4131072

beauf

Smouse156 wrote: »

....
John & Mary didn’t put a red cent into the property with the 1980s bullet proof furniture but at least most of them paid tax and spent their rental wealth in Ireland.

That’s our system

How can you recover the cost of damage of furniture and to a property in general from a tenant?

That's our system.

Graham

Smouse156 wrote: »

the REITs were encouraged to bring a higher standard to the game

I think that's only a small part of it.

introduce a new source of capital to the property market
reduce dependence on banks
encourage a longer term view
stability of tenure for tenants
better quality buildings
reduce dependency on private landlords

beauf

Most people here won't remember when rents were cheap, and there was lots of supply. Landlords offered free heating, electricity etc to get places rented.
You really did see a jump in quality then. In came all the faux leather couches and wood (Laminates) floors.

All you are seeing now is system that encourages new properties, new rentals over old. By default they will be nicer because they are newer.

beauf

Graham wrote: »

I think that's only a small part of it.

introduce a new source of capital to the property market
reduce dependence on banks
encourage a longer term view
stability of tenure for tenants
better quality buildings
reduce dependency on private landlords

I think it was more to inject investment into Ireland, via the property market to re-capitalist the banks,
and kick start the economy especially the construction industry.
In general it worked. But it was unbalanced and was at the expense of the housing crisis.

eleventh

beauf wrote: »

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.

Removing the disincentive to drop rents would benefit both landlord and tenant. Not doing that or doing nothing will harm both.

Smouse156

beauf wrote: »

After REITs..

https://www.thejournal.ie/hap-scheme-rental-standards-3765929-Dec2017/
https://www.irishtimes.com/news/environment/wide-disparity-in-inspections-of-private-rented-housing-1.4131072

HAP properties are clearly the pits! The ones that can’t get regular tenants. Paul Howard properties

Smouse156

beauf wrote: »

How were they encouraged?

REITs go for the max profit. Which is the higher end of the market in general.
Higher standards and regulation increase costs.

Tax breaks, fire sale prices from NAMA, etc

Max profits come from chopping up old houses into studios or cramming as many people as possible into houses, Slumlord style.

My point is only that their apartments aren’t substandard

Smouse156

beauf wrote: »

How can you recover the cost of damage of furniture and to a property in general from a tenant?

That's our system.

This comment is hilarious, considering most of the “furniture” in rental properties is completely worthless and decades old. It actually has a negative value as you have to pay to dump it!

Now some landlords put nice furniture into their properties but not many. I lived in 5 different rentals in Dublin and bar the REIT, not one had any furniture that was worth a cent. Even the fridges/cookers etc would fetch sweet **** all.

NuMarvel

Claw Hammer wrote: »

Look back on the posts on this forum 10 years ago. Tenants were boasting of the reductions in rent they squeezed from their landlords. Rents fall in reaction to market conditions as well as rise. Distorting the market artificially usually backfires eventually. Over 20 years ago the Bacon proposals caused rents to double in 3 years.

We don't base public policy on anecdotal evidence provided on boards.ie during a recession. In the 6 years between this time 10 years ago, and the introduction of rent caps at the end of 2016, rents had risen by 30% percent.

Leaving this in the hands of the market is clearly not a runner.

beauf

Smouse156 wrote: »

This comment is hilarious, considering most of the “furniture” in rental properties is completely worthless and decades old. It actually has a negative value as you have to pay to dump it!

Now some landlords put nice furniture into their properties but not many. I lived in 5 different rentals in Dublin and bar the REIT, not one had any furniture that was worth a cent. Even the fridges/cookers etc would fetch sweet **** all.

That maybe be. But I asked a straight question, and you have no answer for it.

beauf

NuMarvel wrote: »

We don't base public policy on anecdotal evidence provided on boards.ie during a recession. In the 6 years between this time 10 years ago, and the introduction of rent caps at the end of 2016, rents had risen by 30% percent.

Leaving this in the hands of the market is clearly not a runner.

Leaving what in the hands of the market.

Who should set the appropriate rent of a million euro apartment.

Smouse156

beauf wrote: »

That maybe be. But I asked a straight question, and you have no answer for it.

To answer: deposit to cover the negative value of the worthless furniture.

NuMarvel

beauf wrote: »

Leaving what in the hands of the market.

People being able to have an affordable place to live, of course. That is what public policy is about, remember.

beauf

Smouse156 wrote: »

HAP properties are clearly the pits! The ones that can’t get regular tenants. Paul Howard properties

I've no idea what or who Paul Howard is.

HAPs get more inspections and have standards.

https://www.citizensinformation.ie/en/housing/renting_a_home/repairs_maintenance_and_minimum_physical_standards.html

Smouse156 wrote: »

Tax breaks, fire sale prices from NAMA, etc

Max profits come from chopping up old houses into studios or cramming as many people as possible into houses, Slumlord style.

My point is only that their apartments aren’t substandard

That just how they were encourage to invest. Nothing about standards.

What % of REITs are at the cheaper end of the market or HAP.

https://www.rte.ie/news/2018/0809/983942-housing-social-tenancies/

beauf

Smouse156 wrote: »

To answer: deposit to cover the negative value of the worthless furniture.

I see so you reckon can fit out a house to pass the HAP inspection for free, including labour to move it.

In that case you should start a business to provide such a service for a small fee, it should be very profitable for you. Why not rent out furniture and fittings, for rentals, and HAPs. You be doing tenants a favour. For what a small % of the deposit. Since the deposit covers damage to the house also. Furniture and fittings being worthless only needs a tiny deposit.


I bet you won't though...

beauf

NuMarvel wrote: »

People being able to have an affordable place to live, of course. That is what public policy is about, remember.

Its not the private markets remit to create policy or provide social, or even affordable housing.

It is the Govts Job. But they decided not to basically ignore it for the past 20~30 yrs.

beauf

So in conclusion, there is supply and a reduction in rents. REITs are providing the professionalism and standards people want. Lots of regulations, standards.

Should be no problems then...