Dublin - Significant reduction in rents coming?

beauf

Assetbacked wrote: »

If rents became significantly cheaper, in fact cheaper than paying a mortgage on average, would it be likely that people wouldn't bother buying houses or what impact on demand for housing would it have? Has there been a time before where rents were lower than mortgages?

Yes. I think it was early 90s maybe earlier. I remember it. Just not exactly when.

It's wasn't the hot potato it had been for the last few decades.

brisan

Assetbacked wrote: »

If rents became significantly cheaper, in fact cheaper than paying a mortgage on average, would it be likely that people wouldn't bother buying houses or what impact on demand for housing would it have? Has there been a time before where rents were lower than mortgages?

Back when mortgage rates were 16% in the 80s I would guess rents were cheaper than mortgages

Assetbacked

I think I may have found some data showing in Q3 2006 rents were around 20% lower than the cost of mortgages. From the attached extract from a paper by the National Competitiveness Council.

https://en.m.wikipedia.org/wiki/Irish_property_bubble

As part of this research, I noticed something in the Wikipedia page on the Irish property bubble;
"By March 2006 most economists thought that property prices were unsustainable because rental yields had fallen below the risk free rate of over 3.5% offered by Government bonds".

Currently Irish gov bonds are being offered at around 0.1% but with so many new builds/newly renovated institutional investor properties on the market sitting vacant, many for a couple years, arguably they are yielding below government bonds. Is this data pointing to the roller-coaster being at the very top of the climb and trickling towards the drop, on the basis that demand is more than likely going to be muted for at least another 6 months?

brisan

Assetbacked wrote: »

I think I may have found some data showing in Q3 2006 rents were around 20% lower than the cost of mortgages. From the attached extract from a paper by the National Competitiveness Council.

https://en.m.wikipedia.org/wiki/Irish_property_bubble

As part of this research, I noticed something in the Wikipedia page on the Irish property bubble;
"By March 2006 most economists thought that property prices were unsustainable because rental yields had fallen below the risk free rate of over 3.5% offered by Government bonds".

Currently Irish gov bonds are being offered at around 0.1% but with so many new builds/newly renovated institutional investor properties on the market sitting vacant, many for a couple years, arguably they are yielding below government bonds. Is this data pointing to the roller-coaster being at the very top of the climb and trickling towards the drop, on the basis that demand is more than likely going to be muted for at least another 6 months?

Properties lying empty return a negative yield due to property tax and insurance and maintenance costs
Apartments even more so with management fees

Assetbacked

https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/commercial-property/state-bodies-playing-role-in-squeezing-dublin-housing-market-1.4356642?mode=amp

"State bodies playing role in squeezing Dublin housing market
Groups other than households bought almost half new homes in capital in last year"

This is crazy and is exactly the type of action that adds fuel to the fire and lends credence to the belief that the market is being artificially propped up.

beauf

Assetbacked wrote: »

https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/commercial-property/state-bodies-playing-role-in-squeezing-dublin-housing-market-1.4356642?mode=amp

"State bodies playing role in squeezing Dublin housing market
Groups other than households bought almost half new homes in capital in last year"

This is crazy and is exactly the type of action that adds fuel to the fire and lends credence to the belief that the market is being artificially propped up.

I thought they were buying up housing for social housing, because no one was building any. The govt failed dysmally to improve the supply. As a result they are having to buy expensive housing to use as social housing often in prime, premium even, locations.

The real damage was done prioritizing investment and recapitalisation over basic housing.

The local authorities buying property is a side show in comparison.

beauf

brisan wrote: »

Properties lying empty return a negative yield due to property tax and insurance and maintenance costs
Apartments even more so with management fees

Any stats about vacant properties over the last twenty years. Be interesting to see that, and the breakdown of where and of what type.

beauf

beauf wrote: »

I ...

The local authorities buying property is a side show in comparison.

Unless you're bidding against them obviously.

I thought recent stats show the majority of recent buyers are owner occupiers and the majority are first time buyers. I could be wrong, my memory is a little fuzzy on it.

Hubertj

Assetbacked wrote: »

https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/commercial-property/state-bodies-playing-role-in-squeezing-dublin-housing-market-1.4356642?mode=amp

"State bodies playing role in squeezing Dublin housing market
Groups other than households bought almost half new homes in capital in last year"

This is crazy and is exactly the type of action that adds fuel to the fire and lends credence to the belief that the market is being artificially propped up.

Terrible first time buyers were prevented from buying, provided they could afford at the prices offered.

brisan

beauf wrote: »

Any stats about vacant properties over the last twenty years. Be interesting to see that, and the breakdown of where and of what type.

No idea where one would find that data
I do know from posters on here that quite a high percentage of the higher end apt’s owned by REITS are empty and landlords on here are saying it’s better to leave an apartment empty rather than reduce rent due to RPZ regulations

The_Conductor

brisan wrote: »

No idea where one would find that data
I do know from posters on here that quite a high percentage of the higher end apt’s owned by REITS are empty and landlords on here are saying it’s better to leave an apartment empty rather than reduce rent due to RPZ regulations

Its a combination of RPZ regulations- and the manner in which many of the high end units are owned by pension funds and REITs. If one of these types of landlords reduces the rent- they have to discount the forward revenue stream from the unit- and book a 'loss' (a capital depreciation) that they may have to make good- whereas if they leave it vacant- they can simply book a lower cash-flow, without having to tinker with book valuations and forward income projections etc.

Its particularly bad for pension funds who are legally obliged to make a periodic FRS17 declaration enumerating their assets and future liabilities and their income streams.

If RPZ was not there- it would make sense to let the units for whatever they could get- as there would be no need to discount future revenue projections.

Damned if you do, damned if you don't.

JimmyVik

The_Conductor wrote: »

Its a combination of RPZ regulations- and the manner in which many of the high end units are owned by pension funds and REITs. If one of these types of landlords reduces the rent- they have to discount the forward revenue stream from the unit- and book a 'loss' (a capital depreciation) that they may have to make good- whereas if they leave it vacant- they can simply book a lower cash-flow, without having to tinker with book valuations and forward income projections etc.

Its particularly bad for pension funds who are legally obliged to make a periodic FRS17 declaration enumerating their assets and future liabilities and their income streams.

If RPZ was not there- it would make to let the units for whatever they could get- as there would be no need to discount future revenue projections.

Damned if you do, damned if you don't.

At this stage if they got rid of the RPZ I would be thinkiing thats only temporary and underneath there is a plan to bring them back as soon as possible. Wouldnt trust anything the govt do for investors im afraid.

Assetbacked

Not a reduction in rent post, but a nifty streetview type tour of the Quayside Quarter gym and residents lounge; https://my.matterport.com/show/?m=N7jWy9UWMRW

Very slick looking, unfortunately 1 beds start from 2430 and what remains of the 2 beds starts from 2900!

https://www.daft.ie/dublin/multi-units-for-rent/north-wall-quay-dublin-1-dublin-162471/

Smouse156

Assetbacked wrote: »

Not a reduction in rent post, but a nifty streetview type tour of the Quayside Quarter communal areas; https://my.matterport.com/show/?m=N7jWy9UWMRW

Very slick looking, unfortunately 1 beds start from 2430 and what remains of the 2 beds starts from 2900!

https://www.daft.ie/dublin/multi-units-for-rent/north-wall-quay-dublin-1-dublin-162471/

These must be nearly empty at this stage but the accounting trick means they can “pretend” there is no write down in book value as long as one or two pay the rents.

The RPZ’s really effecting rents. Best to let landlord drop rents and increase them in future up to the last long term rental price: if apartment was renting for 2k a month (for at least 9 months) and landlord reduced it to 1600 to get a tenant then he should be allowed to increase it back to the 2k rather than 4% annually.

Once back at 2k then it goes to 4% increases.

This would put further pressure on the REITS as most of their apartments in the expensive developments (Capital Dock, Quayside Quarter etc) have never rented and couldn’t not be brought back up to a fantasy asking price. However, their competition (John & Mary) would benefit from the increased flexibility and take the remaining few tenants they have.

rightmove

Smouse156 wrote: »

These must be nearly empty at this stage but the accounting trick means they can “pretend” there is no write down in book value as long as one or two pay the rents.

The RPZ’s really effecting rents. Best to let landlord drop rents and increase them in future up to the last long term rental price: if apartment was renting for 2k a month (for at least 9 months) and landlord reduced it to 1600 to get a tenant then he should be allowed to increase it back to the 2k rather than 4% annually.

Once back at 2k then it goes to 4% increases.

This would put further pressure on the REITS as most of their apartments in the expensive developments (Capital Dock, Quayside Quarter etc) have never rented and couldn’t not be brought back up to a fantasy asking price. However, their competition (John & Mary) would benefit from the increased flexibility and take the remaining few tenants they have.

really interesting. Kinda like buying something at argos where they tell you what it was previously on sale for or what the lowest price was on the item?

So in your suggestion would go something like
apt1 - previous max rent jan 2020 2k per month
apt1 - current rent 1k per month (decrease allowed)
the inference being that if it hits 2k ever again it can only increase by 4%?

its a good idea but i think if we looked at it we should use the chance to remove the rpz's but your suggestion might work with a bias and ignorant media

cgcsb

Assetbacked wrote: »

Not a reduction in rent post, but a nifty streetview type tour of the Quayside Quarter gym and residents lounge; https://my.matterport.com/show/?m=N7jWy9UWMRW

Very slick looking, unfortunately 1 beds start from 2430 and what remains of the 2 beds starts from 2900!

https://www.daft.ie/dublin/multi-units-for-rent/north-wall-quay-dublin-1-dublin-162471/

I'm curious how long the institutional investors will hold out. Surely they need to come up with some actual money eventually, accounting tricks only go so far.

I assume there's communication (i.e. a cartel) between them to the effect that they'll stick together and keep prices high. It'll only take one of them to blink to cause a cascade though. If those places take a tumble in value then John and Mary may just sell up.

polaco

https://www.daft.ie/dublin/houses-for-rent/rathfarnham/3-bedroom-house-occu-scholarstown-scholarstown-road-rathfarnham-dublin-2044234/

Most of those houses already gone starting price is 2550.


https://www.daft.ie/dublin/houses-for-rent/rathfarnham/type-b-whitepines-south-stocking-avenue-rathfarnham-dublin-2050617/

Those are slowly getting more tenants as well

I was expecting both estates are going to be empty for while but it doesn't look like Covid has change much in demand

cgcsb

polaco wrote: »

https://www.daft.ie/dublin/houses-for-rent/rathfarnham/3-bedroom-house-occu-scholarstown-scholarstown-road-rathfarnham-dublin-2044234/

Most of those houses already gone starting price is 2550.


https://www.daft.ie/dublin/houses-for-rent/rathfarnham/type-b-whitepines-south-stocking-avenue-rathfarnham-dublin-2050617/

Those are slowly getting more tenants as well

I was expecting both estates are going to be empty for while but it doesn't look like Covid has change much in demand

These are large 3 bed 2 bath houses though. The real over inflated prices are the one bed flats for the same price.

brisan

polaco wrote: »

https://www.daft.ie/dublin/houses-for-rent/rathfarnham/3-bedroom-house-occu-scholarstown-scholarstown-road-rathfarnham-dublin-2044234/

Most of those houses already gone starting price is 2550.


https://www.daft.ie/dublin/houses-for-rent/rathfarnham/type-b-whitepines-south-stocking-avenue-rathfarnham-dublin-2050617/

Those are slowly getting more tenants as well

I was expecting both estates are going to be empty for while but it doesn't look like Covid has change much in demand

That’s good value in the current market
There again so is this

Check out this property I found using Daft: https://www.daft.ie/22066307

Smouse156

rightmove wrote: »

really interesting. Kinda like buying something at argos where they tell you what it was previously on sale for or what the lowest price was on the item?

So in your suggestion would go something like
apt1 - previous max rent jan 2020 2k per month
apt1 - current rent 1k per month (decrease allowed)
the inference being that if it hits 2k ever again it can only increase by 4%?

its a good idea but i think if we looked at it we should use the chance to remove the rpz's but your suggestion might work with a bias and ignorant media

It’s a good idea! The Govt/media will not allow a removal of the RPZ so even discussing that is pointless.

Renters benefit from a depressed market even if temporarily.

Landlords currently getting zero for their empty properties and are scared to lower rents as it might effect sales prices could drop large percentages and rise them by large percentages when demand picks up.

It benefits everybody bar the REITs who have never rented their empty properties.

Assetbacked

brisan wrote: »

That’s good value in the current market
There again so is this

Check out this property I found using Daft: https://www.daft.ie/22066307

Then you still have kips like this https://www.daft.ie/dublin/houses-for-rent/dublin-7/valentia-parade-dublin-7-dublin-2059902/

It was first listed on 13 August for 1800, dropped to 1600 on 22 August an is still advertisted. Barely worth 800 going on those photos.


I was half looking today and remember posting this place a while ago to show price drops. It is, from what I can see, a nice house with a good price relative to the area and proximity to the city centre. Price has been dropped by 750 in total from 2500 to 1750 since 25 June.

https://www.daft.ie/dublin/houses-for-rent/clontarf/5-saint-josephs-square-clontarf-dublin-2044077/

brisan

Assetbacked wrote: »

Then you still have kips like this https://www.daft.ie/dublin/houses-for-rent/dublin-7/valentia-parade-dublin-7-dublin-2059902/

It was first listed on 13 August for 1800, dropped to 1600 on 22 August an is still advertisted. Barely worth 800 going on those photos.


I was half looking today and remember posting this place a while ago to show price drops. It is, from what I can see, a nice house with a good price relative to the area and proximity to the city centre. Price has been dropped by 750 in total from 2500 to 1750 since 25 June.

https://www.daft.ie/dublin/houses-for-rent/clontarf/5-saint-josephs-square-clontarf-dublin-2044077/

I know the square well
Right beside the coast and Clontarf village
Transport is a major issue in the area
Coast road constantly busy and it’s a bit of a hike to the dart
Good cycleways though
I’d like to live in the area

brisan

Assetbacked wrote: »

Then you still have kips like this https://www.daft.ie/dublin/houses-for-rent/dublin-7/valentia-parade-dublin-7-dublin-2059902/

It was first listed on 13 August for 1800, dropped to 1600 on 22 August an is still advertisted. Barely worth 800 going on those photos.


I was half looking today and remember posting this place a while ago to show price drops. It is, from what I can see, a nice house with a good price relative to the area and proximity to the city centre. Price has been dropped by 750 in total from 2500 to 1750 since 25 June.

https://www.daft.ie/dublin/houses-for-rent/clontarf/5-saint-josephs-square-clontarf-dublin-2044077/

But lads are saying rents are not dropping

Beigepaint

brisan wrote: »

But lads are saying rents are not dropping

Even if they are, they’re not.

Reminds me of the Narcissist’s Prayer.

Ozark707

polaco wrote: »

https://www.daft.ie/dublin/houses-for-rent/rathfarnham/3-bedroom-house-occu-scholarstown-scholarstown-road-rathfarnham-dublin-2044234/

Most of those houses already gone starting price is 2550.


https://www.daft.ie/dublin/houses-for-rent/rathfarnham/type-b-whitepines-south-stocking-avenue-rathfarnham-dublin-2050617/

Those are slowly getting more tenants as well

I was expecting both estates are going to be empty for while but it doesn't look like Covid has change much in demand

If you were previously paying close on 2.5k for a 2 bed this represents much better value. Good to see more places coming on the market. Wonder were they able to negotiate a reduction in price.

Assetbacked

brisan wrote: »

I know the square well
Right beside the coast and Clontarf village
Transport is a major issue in the area
Coast road constantly busy and it’s a bit of a hike to the dart
Good cycleways though
I’d like to live in the area

To you is there anything you could think of that might work against the property/square other than the road transport issues? E.G. anti-social behaviour in the square.

Assetbacked

Ozark707 wrote: »

If you were previously paying close on 2.5k for a 2 bed this represents much better value. Good to see more places coming on the market. Wonder were they able to negotiate a reduction in price.

Similarly, seeing really nice new builds/newly renovated with the full amenities, high spec fittings etc offering two beds for 2300 starts to put downward preessure on those Celtic Tiger era Sandyford and Grand Canal / Spencer Dock 2 beds for €2k+.

These are two developments which are pretty accessible to the city centre/Docklands, certainly by bike (15/20 mins);

Mount Argus, Harold's Cross 2 beds from 2300 https://www.daft.ie/dublin/multi-units-for-rent/mount-argus-road-harolds-cross-dublin-161860/

Clancy Quay 2300+ for 2 beds https://www.daft.ie/dublin/apartments-for-rent/dublin-8/two-bedroom-apartment-clancy-quay-by-kennedy-wilson-south-circular-road-dublin-8-dublin-2046047/

By comparison, these places look like poor value;

Gallery Quay, GCD 2400 https://www.daft.ie/dublin/apartments-for-rent/grand-canal-dock/gallery-quay-grand-canal-dock-dublin-2017016/

Pembroke Square (beside Google) 2200 https://www.daft.ie/dublin/apartments-for-rent/grand-canal-dock/pembroke-square-grand-canal-dock-dublin-2076113/

brisan

Assetbacked wrote: »

To you is there anything you could think of that might work against the property/square other than the road transport issues? E.G. anti-social behaviour in the square.

No its an exceptionally quiet square
A lot of older couples with a few houses converted into 2 apts (one upstairs one downstairs)
Car parking is on the street and you are not allowed park in the centre area so parking can be a bit scarce
But for a rental its a great area if the transport options work for you
Pub Supermarket (pricey) restaurants post office ,etc on your door
10 min walk to St Annes park and a 2 minute walk to the seafront
You could walk to the IFSC or the eastpoint on a nice day

Hubertj

brisan wrote: »

No its an exceptionally quiet square
A lot of older couples with a few houses converted into 2 apts (one upstairs one downstairs)
Car parking is on the street and you are not allowed park in the centre area so parking can be a bit scarce
But for a rental its a great area if the transport options work for you
Pub Supermarket (pricey) restaurants post office ,etc on your door
10 min walk to St Annes park and a 2 minute walk to the seafront
You could walk to the IFSC or the eastpoint on a nice day

Do they have gardens or terraces put back? I don’t think the ad showed any outdoor spaces?

brisan

Hubertj wrote: »

Do they have gardens or terraces put back? I don’t think the ad showed any outdoor spaces?

I have only been in one and it had a small courtyard
Most have been extended over the years
I seen one on DAFT with a small garden ,most are courtyards though
in the fifth picture in that ad you can see a small courtyard
Down to 1690 as and from today