Dublin - Significant reduction in rents coming?

JimmyVik

kian163 wrote: »

"Rent pressure zones could be replaced with broader protections for the whole market under new plans being considered by the Minister for Housing Darragh O’Brien"

https://www.irishtimes.com/news/ireland/irish-news/minister-may-replace-rent-pressure-zones-with-new-protections-1.4451571

"In an interview with The Irish Times, Mr O’Brien said he and a team of officials have begun work on a possible system to replace the pressure zones"

“One of the things with the rent pressure zones is that, while they work to a degree, in setting the 4 per cent increase rate, 4 per cent nearly became a target for landlords. Most people haven’t got 4 per cent increases in salary. So rents are still too expensive in most parts of the country now"

“We’re actually looking now at what potentially would replace them"

More moving of goal posts, which hasd NEVER worked.
It will just scare off more and more investors.
You would be nuts investing when you dont know what kick in the hole you are going to get from the next hair brained idea from a housing minister.

steddyeddy

Blut2 wrote: »

One thing thats also not mentioned by the "scare off investors" crowd is the high rents in the Dublin market currently scare of investors as it is - and not property investment ones, but financial or tech companies. ie ones that provide far more jobs, and far more tax revenue to the state.

The high cost of renting for the young staff in these sectors is a huge issue with attracting talent to Dublin these days. And has required salaries to increase to account for it. This is regularly mentioned as the main reason companies thinking of opening offices in Dublin choose not to.

Exactly this. I work for the biotech industry. The global industry in my field is worth 180 billion. I remember an old boss of mine had a meeting with the heads of IDA Ireland. They told them that their employees don't like the idea of paying the majority of their wages on rent, particularly in a renting sector that's not properly regulated.

Everyone apparently agreed with my boss except one guy who later turned out to be a landlord with properties in the Docklands. He argued that you can't expect cheap rents ect and he didn't believe in socialism ect. My boss argued that even if you're a heartless b%stard who doesn't care about increasing homeless surely you can see that from a purely capitalistic point of view that high rents = less foreign investment. He got nowhere and later told several politicians that the personal greed of some landlords was going to lose the country a lot of money, including his investment which would have opened hundreds of high skill positions to the country.

steddyeddy

JimmyVik wrote: »

More moving of goal posts, which hasd NEVER worked.
It will just scare off more and more investors.
You would be nuts investing when you dont know what kick in the hole you are going to get from the next hair brained idea from a housing minister.

Jimmy it will scare of property investors maybe but it will increase the amount of foreign business investment. We want an economy based on industry, tech and other useful things. Look what happened last time an economy was built around property. Also property investment is about more than renting.

JimmyVik

steddyeddy wrote: »

Jimmy it will scare of property investors maybe but it will increase the amount of foreign business investment. We want an economy based on industry, tech and other useful things. Look what happened last time an economy was built around property. Also property investment is about more than renting.

How can you say that when you dont even know what he is planning to do?


But for sure, changing the rules on an investment every time there is a whim, is going to scare investors off.
If they did the same to companies you wouldnt be long seeing them locate in a more stable economy.

Dav010

steddyeddy wrote: »

Exactly this. I work for the biotech industry. The global industry in my field is worth 180 billion. I remember an old boss of mine had a meeting with the heads of IDA Ireland. They told them that their employees don't like the idea of paying the majority of their wages on rent, particularly in a renting sector that's not properly regulated.

Everyone apparently agreed with my boss except one guy who later turned out to be a landlord with properties in the Docklands. He argued that you can't expect cheap rents ect and he didn't believe in socialism ect. My boss argued that even if you're a heartless b%stard who doesn't care about increasing homeless surely you can see that from a purely capitalistic point of view that high rents = less foreign investment. He got nowhere and later told several politicians that the personal greed of some landlords was going to lose the country a lot of money, including his investment which would have opened hundreds of high skill positions to the country.

You are saying one employee who happened to be a LL was able to dictate to a biotech company where they locate their business? I’m going to have to call BS on that one.

steddyeddy

Dav010 wrote: »

You are saying one employee who happened to be a LL was able to dictate to a biotech company where they locate their business? I’m going to have to call BS on that one.

No. I'm saying that a manager in the IDA exemplified the attitude that my boss routinely encountered. I'm saying it's this prevalent attitude that renting income is the most important investment in the country is making the place uninvestable for other type of industries.

You're saying that high rents isn't a factor in where people want to work?

steddyeddy

JimmyVik wrote: »

How can you say that when you dont even know what he is planning to do?


But for sure, changing the rules on an investment every time there is a whim, is going to scare investors off.
If they did the same to companies you wouldnt be long seeing them locate in a more stable economy.

Am I right in thinking that when you say investors you're exclusively talking about property investors looking to invest for the purposes of rental income?

JimmyVik

steddyeddy wrote: »

Am I right in thinking that when you say investors you're exclusively talking about property investors looking to invest for the purposes of rental income?

Keep moving the goal posts on residential property investors and anyone invests in property for financial return will be. Looking to clear out. You certainly wont be encouraging new entrants.
How many years now have the government been shifting the goalposts?
Has any of it ever done anything except increase rents. And then to mend the damage they do, they go and do it again, making it even worse. And around we go.

steddyeddy

JimmyVik wrote: »

Keep moving the goal posts on residential property investors and anyone invests in property for financial return will be. Looking to clear out. You certainly wont be encouraging new entrants.
How many years now have the government been shifting the goalposts?
Has any of it ever done anything except increase rents. And then to mend the damage they do, they go and do it again, making it even worse. And around we go.

Investment in Dublin property is at an all time high. What's the benefit of attracting new entrants to the property market if it results in increasing rents and decreasing foreign investment in tech ect?

steddyeddy

Blut2 wrote: »

One thing thats also not mentioned by the "scare off investors" crowd is the high rents in the Dublin market currently scare of investors as it is - and not property investment ones, but financial or tech companies. ie ones that provide far more jobs, and far more tax revenue to the state.

The high cost of renting for the young staff in these sectors is a huge issue with attracting talent to Dublin these days. And has required salaries to increase to account for it. This is regularly mentioned as the main reason companies thinking of opening offices in Dublin choose not to.

Here's an article from the BBC that highlights your excellent point further.

Dublin rents are a turn off for professionals. Why in the name of sweet Jesus should we care if there's less property investment, lower rents and increased foreign tech investment?

cgcsb

steddyeddy wrote: »

Here's an article from the BBC that highlights your excellent point further.

Dublin rents are a turn off for professionals. Why in the name of sweet Jesus should we care if there's less property investment, lower rents and increased foreign tech investment?

Some people (ironically people who themselves are part of the squeezed middle class) have been brainwashed into a FG/Thatcherite mantra of property speculators being benevolent gods requiring periodic sacrifices (usually in the form of wads of cash in ever growing rents and purchase prices and of course taxation funded schemes aimed at price inflation). But don't dare question this new religion, you'll be labelled a socialist or an economically illiterate shinner who wants to 'scare investors'.

Phat Cat

steddyeddy wrote: »

Here's an article from the BBC that highlights your excellent point further.

Dublin rents are a turn off for professionals. Why in the name of sweet Jesus should we care if there's less property investment, lower rents and increased foreign tech investment?

This was highlighted a few years ago, yet nothing has been done since then, in fact rents have increased, so things have actually gotten worse.

Dav010

steddyeddy wrote: »

You're saying that high rents isn't a factor in where people want to work?

I’m saying if a company wants to locate its offices in any city with low housing supply and high rents, they are going to have to accept that employees will have to pay those prices. The IDA cannot influence rental prices, perhaps your boss should have considered locating outside Dublin.

steddyeddy

Phat Cat wrote: »

This was highlighted a few years ago, yet nothing has been done since then, in fact rents have increased, so things have actually gotten worse.

Indeed they have. There's a reason why biotech companies are primarily in Cork and Galway. Dublin renting is set up for maximum profit for landlords coupled with an unsustainable rent to wage ratio for workers.

Most baffling of all is that there are landlords who are telling us that measures to make renting easier will somehow be bad for us.

steddyeddy

Dav010 wrote: »

I’m saying if a company wants to locate its offices in any city with low housing supply and high rents, they are going to have to accept that employees will have to pay those prices. The IDA cannot influence rental prices, perhaps your boss should have considered locating outside Dublin.

The IDA have a direct line to government as their primary role is to secure foreign investment. They can't reduce rents directly of course but they can state the reason that they will not invest in Ireland. No one who is a skilled worker has to accept paying Dublin prices. I wouldn't in a thousand years. Why should the country suffer due to one sector (rental) charge too much?

As stated previously biotech firms are primarily in Cork or Galway but these too are becoming unrealistic.

Dav010

steddyeddy wrote: »

The IDA have a direct line to government as their primary role is to secure foreign investment. They can't reduce rents directly of course but they can state the reason that they will not invest in Ireland. No one who is a skilled worker has to accept paying Dublin prices. I wouldn't in a thousand years. Why should the country suffer due to one sector (rental) charge too much?

As stated previously biotech firms are primarily in Cork or Galway but these too are becoming unrealistic.

Do you honestly think the Government doesn’t know that availability/cost of rentals impacts investments from abroad?

That does not however mean that the same Government can build 100k properties and become the States biggest private LL. Property building requires private investment, but you have to ask yourself, why when rents were so high were LLs leaving the sector?.

It seems that people want increased property numbers, increased competition which leads to lower rents, but want policies put in place which limit the investors profit, why would LLs invest in these circumstances?

steddyeddy

Dav010 wrote: »

That does not however mean that the same Government can build 100k properties and become the States biggest private LL. Property building requires private investment, but you have to ask yourself, why when rents were so high were LLs leaving the sector?.

You tell me Dav? There's always something that's left out in these type of discussions is the type of investment landlord's make in renting. That plays a huge part in potential profit. Buy to let, a landlord renting a room in their house and/or a landlord renting an owned property out are completely different in terms of profitability and/or expense.

Which types of landlords are leaving the market and why?

steddyeddy

steddyeddy wrote: »

..........There's a reason why biotech companies are primarily in Cork and Galway.................

MSD Swords, Pfizer, Takeda, Grifols Grange Castle, Alexion, West Pharma & BMS D15, Amgen Dun Laoghaire, Leo Pharma Kimmage etc etc etc all say hello

steddyeddy

Augeo wrote: »

MSD Swords, Pfizer, Takeda, Grifols Grange Castle, Alexion, West Pharma & BMS D15, Amgen Dun Laoghaire, Leo Pharma Kimmage etc etc etc all say hello

The difference between biotech and manufacturing plants says hello!

Timing belt

steddyeddy wrote: »

Investment in Dublin property is at an all time high. What's the benefit of attracting new entrants to the property market if it results in increasing rents and decreasing foreign investment in tech ect?

As long as there is a shortage in supply of residential property rents are going to be high. It takes time for properties to come on stream and in the mean time the government need to house people that require help and this makes the rental shortage worse and help to push up prices.

The Government can buy houses on the open market (Which they are doing) but this then shrinks the pool of housing and pushes the price of houses higher which in turn pushes rents up.

Until a time that there is sufficient or oversupply rents won't drop. Everyone gives out about the institutional investors in the market but they are providing supply. In the short term they will push up rents to max profits but in the long term they lead to lower rents as long as they continue to add supply and are not restricted from building or regulation. This is not a unique situation that Dublin finds its self in. Most big cities are experiencing similar since 2008.

The following link is a research paper on the topic
https://research.stlouisfed.org/wp/more/2020-047

Dav010

steddyeddy wrote: »

You tell me Dav? There's always something that's left out in these type of discussions is the type of investment landlord's make in renting. That plays a huge part in potential profit. Buy to let, a landlord renting a room in their house and/or a landlord renting an owned property out are completely different in terms of profitability and/or expense.

Which types of landlords are leaving the market and why?

RTB data shows numbers of tenancies and Landlords fell during a period when rents were at their highest. As licensee agreements are not tenancies, these would not be included in the data, I’m not sure what difference it makes whether a property is financed or not if they are deciding to leave a market when rents are high.

steddyeddy

steddyeddy wrote: »

The difference between biotech and manufacturing plants says hello!

Please elaborate.

what biotech sites in Cork and Galway aren't manufacturing plants? The med device plants in Cork and Galway aren't even biotech.

Pfizer Grange Castle isn't biotech?

AlanG

Phat Cat wrote: »

I realise that the whole of Dublin is pretty much a RPZ at this stage, but where does it stop? Are rents going to raise by 4% per annum until people simply can't afford to live anywhere half decent?

Unfortunately it will only stop when there is long term certainty in the legislation. A huge amount of landlords who didn't put up their rents after the last crash got screwed by the RPZ and are still charging way below market rents. Dropping the rent on a property could have implications for 10 or 15 years to come. If certain political parties have their way you won't be able to up rents, sell at market price or get rid of bad tenants.
its just wiser to sit on the property and keep it empty until Air BnB rentals come back in a few months.

steddyeddy

Augeo wrote: »

Please elaborate.

what biotech sites in Cork and Galway aren't manufacturing plants? The med device plants in Cork and Galway aren't even biotech.

Pfizer Grange Castle isn't biotech?

Grange castle is the exception as they do some R and D, however, the majority of sites in Dublin are manufacturing plants which don't necessarily involve high skilled labour. These places also pay significant cost of living bonuses to high skill workers in Dublin.

I previously stated that the majority of biotech is in Cork and Galway. The jobs there encompass significantly more R and D.

Of course med plants are biotech. A significant amount of med device engineering requires biofilm prevention. Galway is one of the leading places to work on that.

Also you're listing plants that were established in Dublin a long time ago. There is significant job losses in Dublin Pharma. For example Viatris generic medicines will be shutting down their Dublin plant with a loss of 400 jobs.

News that nearly 450 staff at a pharmaceutical company in north Dublin are to lose their jobs has been described as a “devastating blow” by Tánaiste and Minister for Business Leo Varadkar.

Trinity Biotech in Bray are reducing operations resulting in 70 job losses.

Novartis, a company which previously complained about high rents are also laying off 500 workers in Ireland and shrinking their operations.

AlanG

Genuine Question -

How would you decide between two people who want a particular house? How would you remove corruption from that system?

steddyeddy

Dav010 wrote: »

RTB data shows numbers of tenancies and Landlords fell during a period when rents were at their highest. As licensee agreements are not tenancies, these would not be included in the data, I’m not sure what difference it makes whether a property is financed or not if they are deciding to leave a market when rents are high.

And that's the problem. Many landlords don't seem to see their initial investment in the property as playing a part in the profitability of renting. Sometimes it's not always the government's fault if landlords can't make money. A lot of landlords I met seem to have profit expectations far in excess of their business acumen.

steddyeddy

steddyeddy wrote: »

Grange castle is the exception as they do some R and D, however, the majority of sites in Dublin are manufacturing plants which don't necessarily involve high skilled labour. These places also pay significant cost of living bonuses to high skill workers in Dublin.

I previously stated that the majority of biotech is in Cork and Galway. The jobs there encompass significantly more R and D.

Of course med plants are biotech. A significant amount of med device engineering requires biofilm prevention. Galway is one of the leading places to work on that.

Also you're listing plants that were established in Dublin a long time ago. There is significant job losses in Dublin Pharma. For example Viatris generic medicines will be shutting down their Dublin plant with a loss of 400 jobs.



Trinity Biotech in Bray are reducing operations resulting in 70 job losses.

Novartis, a company which previously complained about high rents are also laying off 500 workers in Ireland and shrinking their operations.

Ah now, you cannot claim that BioTech is just R&D. FFS that's ludicrous.

I listed Alexion, BMS and MSD Swords all of which are/were recent huge projects. Alexion was a greenfield site, BMS and MSD Swords brownfield but all are BioTech. The new jobs there are multiples of the losses you detail.

Novartis job losses are Cork. Trinity is in Bray, Bray isn't in Dublin......... you've listed one Dublin site that's closing.

Most of the med device plants in Cork are not biotech........ Medical Biotechnology. Medical biotechnology involves the use of living cells to develop technologies for the improvement of human health. ...,,,,,,, metal hips and kness aren't biotech.......


how many are employed in galway working on "A significant amount of med device engineering requires biofilm prevention. Galway is one of the leading places to work on that" ......... of course in R&D as you reckon that's where the jobs are

the biofilm is indeed biotech........... use that criteria to go through the places in Cork and Galway and come back to me.

steddyeddy

AlanG wrote: »

Genuine Question -

How would you decide between two people who want a particular house? How would you remove corruption from that system?

It's been a long time since I was in the Dublin rental system. Is there obvious corruption going on now? I'm in Germany and it seems much more regulated.

steddyeddy

Augeo wrote: »

Ah now, you cannot claim that BioTech is just R&D. FFS that's ludicrous.

I listed Alexion, BMS and MSD Swords all of which are/were recent huge projects. Alexion was a greenfield site, BMS and MSD Swords brownfield but all are BioTech. The new jobs there are multiples of the losses you detail.

Novartis job losses are Cork.

Most of the med device plants in Cork are not biotech........ Medical Biotechnology. Medical biotechnology involves the use of living cells to develop technologies for the improvement of human health. ...,,,,,,, metal hips and kness aren't biotech.......


how many are employed in galway working on "A significant amount of med device engineering requires biofilm prevention. Galway is one of the leading places to work on that" ......... of course in R&D as you reckon that's where the jobs are

No I'm not claiming biotech= R and D. I should have been clearer but biotech R and D is primarily high skilled. R and D is an extremely stable and indicative of serious investment.

Plant manufacture is extremely motile in biotech. It can and will move if the conditions (low tax) change. Plant manufacture is certainly in Ireland but it's cutting jobs and always cuts jobs in country's that aren't supportive. R and D centres are the equivalent of an industries base of operations. For example Roche are also closing down their plant and winding up operations in Ireland. It's

Medical device companies rely on extensive biotech to produce devices compatible with human health and resistant to pathogenic microbes. Of course there's a significant biotech element.

Well if you can't take job losses seriously then there's no convincing you.

steddyeddy

steddyeddy wrote: »

No I'm not claiming biotech= R and D. I should have been clearer but biotech R and D is primarily high skilled. R and D is an extremely stable and indicative of serious investment.

Plant manufacture is extremely motile in biotech. It can and will move if the conditions (low tax) change. Plant manufacture is certainly in Ireland but it's cutting jobs and always cuts jobs in country's that aren't supportive. R and D centres are the equivalent of an industries base of operations. For example Roche are also closing down their plant and winding up operations in Ireland. It's

Medical device companies rely on extensive biotech to produce devices compatible with human health and resistant to pathogenic microbes. Of course there's a significant biotech element.

Well if you can't take job losses seriously then there's no convincing you.

A biopharma plant that makes a drug that's injected into the bloodstream doesn't also require R&D.

What employers in Cork and Galway are the R&D centres you are claiming them to be?

You listed Bray and Cork as sites after mentioning Dublin "There is significant job losses in Dublin Pharma."

Relocating a med device plant is easy compared to a pharmaceutical plant. Have you ever seen a cleanroom that makes stents for example and have you even been in a pharma plant?

steddyeddy wrote: »

.................

Medical device companies rely on extensive biotech to produce devices compatible with human health and resistant to pathogenic microbes. Of course there's a significant biotech element. ...........

Orthopaedic implants are cobalt chrome or titanium. Large lumps of metal. There's not much of a biotech element going on there. A bit of science in the clean and pack admittedly.