Dublin - Significant reduction in rents coming?

steddyeddy

In regards to cost of renting in Dublin our German website had a link about cost of living to people thinking of moving here. I currently live in Germany. I'm in a decent three room apartment and paying 433 Euro a month, bills included (Warm rent as it's called here). Dublin rents have to come down or investment will suffer.

Cost of living in Ireland is 17.77% higher than in Germany (aggregate data for all cities, rent is not taken into account).

Rent in Ireland is, on average, 52.77% higher than in Germany.

Timing belt

steddyeddy wrote: »

In regards to cost of renting in Dublin our German website had a link about cost of living to people thinking of moving here. I currently live in Germany. I'm in a decent three room apartment and paying 433 Euro a month, bills included (Warm rent as it's called here). Dublin rents have to come down or investment will suffer.

Germany would have more rental properties per 100k Population than Ireland so you would expect if there was more supply that prices would be lower.

steddyeddy

Timing belt wrote: »

Germany would have more rental properties per 100k Population than Ireland so you would expect if there was more supply that prices would be lower.

Not Berlin but you're right. Why aren't they building more high rise in Dublin?

Timing belt

steddyeddy wrote: »

Not Berlin but you're right. Why aren't they building more high rise in Dublin?

The question is why are they not providing more supply and simple answer is that they spent to long discussing what type of supply and where instead of building anything... low rise or high rise. It takes time for supply to come online but we should see more properties over the coming years.

The big question is immigration.... If immigration is low then they probably have sufficient supply in the pipeline....if immigration goes back to pre covid levels then there will still be a shortage.

Rent will only come down once there is sufficient supply whether that is brought about by building social housing and freeing up rental properties or whether it is private housing makes no real difference on Rent as it is the lack of supply that is keeping rent prices high and not the government paying the market rate for hap properties.

rightmove

steddyeddy wrote: »

I am fairly certain investment makes a huge difference in profitability.

hah?

steddyeddy

rightmove wrote: »

hah?

Exactly. Tell that to some of the landlords here though.

steddyeddy

Timing belt wrote: »

The question is why are they not providing more supply and simple answer is that they spent to long discussing what type of supply and where instead of building anything... low rise or high rise. It takes time for supply to come online but we should see more properties over the coming years.

The big question is immigration.... If immigration is low then they probably have sufficient supply in the pipeline....if immigration goes back to pre covid levels then there will still be a shortage.

Rent will only come down once there is sufficient supply whether that is brought about by building social housing and freeing up rental properties or whether it is private housing makes no real difference on Rent as it is the lack of supply that is keeping rent prices high and not the government paying the market rate for hap properties.

I also think improving transport to and from Dublin would be a step in the right direction.

Dav010

steddyeddy wrote: »

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.

You are missing the point. At a time when rental income on either financed or outright owned properties is at its highest, LLs are leaving the market. Whether they are keeping some or all of that after tax income, whether it is being used to pay off a mortgage or being spent on craft beer, LLs should be entering the market, not leaving it.

JimmyVik

Dav010 wrote: »

You are missing the point. At a time when rental income on either financed or outright owned properties is at its highest, LLs are leaving the market. Whether they are keeping some or all of that after tax income, whether it is being used to pay off a mortgage or being spent on craft beer, LLs should be entering the market, not leaving it.

Talking to one guy getting out the other day about it.
He hasnt got any rent since last March.
He anticipates it will be 2022 before he is able to sell. And he doesnt anticipate getting any rent at all before that.

The_Conductor

steddyeddy wrote: »

Not Berlin but you're right. Why aren't they building more high rise in Dublin?

More high rise? They're not building high rise in Dublin- period. There seems to be some weird Irish hatred to delivering volume housing units in urban centres- in favour of the worst possible types of sprawl you can imagine.

We need high rise- we don't have any, and we need to get the hell over our hangup about high-rise.

steddyeddy

Dav010 wrote: »

You are missing the point. At a time when rental income on either financed or outright owned properties is at its highest, LLs are leaving the market. Whether they are keeping some or all of that after tax income, whether it is being used to pay off a mortgage or being spent on craft beer, LLs should be entering the market, not leaving it.

I'm not missing a point. First of all I asked you the reasons why. I'm open to hearing them.

One issue I encountered from a personal perspective is that some landlords enter the market with a house purchased on buy to let and complain it's not as profitable as someone renting without a mortgage.

LLs should be entering the market. We agree there but I think the right sort of landlords should be entering the market. Buy to let schemes are ludicrous.

steddyeddy

The_Conductor wrote: »

More high rise? They're not building high rise in Dublin- period. There seems to be some weird Irish hatred to delivering volume housing units in urban centres- in favour of the worst possible types of sprawl you can imagine.

We need high rise- we don't have any, and we need to get the hell over our hangup about high-rise.

I agree completely. Plenty of high rise in Germany, even in rural parts. It doesn't detract from the area at all.

JimmyVik

steddyeddy wrote: »

I'm not missing a point. First of all I asked you the reasons why. I'm open to hearing them.

One issue I encountered from a personal perspective is that some landlords enter the market with a house purchased on buy to let and complain it's not as profitable as someone renting without a mortgage.

LLs should be entering the market. We agree there but I think the right sort of landlords should be entering the market. Buy to let schemes are ludicrous.

I know a good few of them and I havent heard that one.

In fact I hear very little complaints, bar the following


1- The severely weighted towards the tenant regulations, mostly unwillingness of the regulators to realize the free reign they give to delinquent tenants.

2- moving of the goal posts all the time.

3- high taxes - but sure dont we all complain about high taxes.



Which are all legitimate complaints if you ask me.

Dav010

steddyeddy wrote: »

I'm not missing a point. First of all I asked you the reasons why. I'm open to hearing them.

One issue I encountered from a personal perspective is that some landlords enter the market with a house purchased on buy to let and complain it's not as profitable as someone renting without a mortgage.

LLs should be entering the market. We agree there but I think the right sort of landlords should be entering the market. Buy to let schemes are ludicrous.

Why? Who knows, what we do know is that it goes against market principles. We can only assume that legislation and caps on income are affecting people’s decision given that rents have never been higher and interest rates lower.

I’m really not sure how your paragraph relation to finance/outright ownership is relevant. Obviously someone who has to give a substantial percentage of their rental income to a bank is going to have less to spend on craft beer than someone who has no mortgage.

steddyeddy

JimmyVik wrote: »

I know a good few of them and I havent heard that one.

In fact I hear very little complaints, bar the following


1- The severely weighted towards the tenant regulations, mostly unwillingness of the regulators to realize the free reign they give to delinquent tenants.

2- moving of the goal posts all the time.

3- high taxes - but sure dont we all complain about high taxes.

Which are all legitimate complaints if you ask me.

I don't know what you mean by goal posts but on tax and removing bad tenants I agree with you completely. 100%. Obviously there should be taxes on rent, however, they shouldn't be prohibitively high.

I would add another reason for landlords leaving the business and it happens to every business. There's a certain amount of landlords who enter the business with no idea of costs, profitability and a reasonable return on their investment. A substantial amount of businesses fail every year.

Rent to buy mortgage is a perfect example of this. Plenty I knew got this thinking renting would be easy.

Timing belt

Dav010 wrote: »

Why? Who knows, what we do know is that it goes against market principles. We can only assume that legislation and caps on income are affecting people’s decision given that rents have never been higher and interest rates lower.

I’m really not sure how your paragraph relation to finance/outright ownership is relevant. Obviously someone who has to give a substantial percentage of their rental income to a bank is going to have less to spend on craft beer than someone who has no mortgage.

They are both getting the same rental income it is just that the Buy to let investor is re-investing part of his rental income back into the property so obviously will have less for craft beer as he is investing more that the investor who bought the property with cash.

Dav010

Timing belt wrote: »

They are both getting the same rental income it is just that the Buy to let investor is re-investing part of his rental income back into the property so obviously will have less for craft beer as he is investing more that the investor who bought the property with cash.

Golly. You would think steddyeddy’s friend would have known that.

Timing belt

Timing belt wrote: »

They are both getting the same rental income it is just that the Buy to let investor is re-investing part of his rental income back into the property so obviously will have less for craft beer as he is investing more that the investor who bought the property with cash.

Ones investing borrowed money..... It's a relatively expensive way to invest and as property is illiquid and it's value fluctuates many regret borrowing to invest in it.

Timing belt

Augeo wrote: »

Ones investing borrowed money..... It's a relatively expensive way to invest and as property is illiquid and it's value fluctuates many regret borrowing to invest in it.

Well then the landlord should invest in something else instead of expecting a unrealistic yield...

Does the stock market pay extra for someone that borrows money from a bank and invests in stock and shares?

There is no shortage of money waiting to get into property at the moment and with all the QE reducing yields of all asset classes you can bet that yields on investment property will drop in the next few years.

steddyeddy

Well fair enough if a landlord can pay off a property using rent, however, in this type of (buy to let scenario) you'll hear landlords describe the mortgage as a business expense. Then complain they don't make much profit. That could be true if the property dips in value they'll lose profit but it isn't because not enough rent is being paid.

Timing belt

steddyeddy wrote: »

Well fair enough if a landlord can pay off a property using rent, however, in this type of (buy to let scenario) you'll hear landlords describe the mortgage as a business expense. Then complain they don't make much profit. That could be true if the property dips in value they'll lose profit but it isn't because not enough rent is being paid.

Its not a business expense it is an additional speculative bet that they are willing to take on. If the bet does not pay out then they have no-one to blame but themselves.

Complaining that there is no incentive for a rent-to-let investor entering the market is a joke as well. If I started complaining that that there was no incentive to borrow from a bank and invest in Bonds or shares what do you think people would say to me.

Yes the increased regulation is problematic to an investor and encourages them to hold out for a higher rent rather than let market forces dictate the rent. But that this is the cost of restricting rent increases...

PommieBast

steddyeddy wrote: »

There's a certain amount of landlords who enter the business with no idea of costs, profitability and a reasonable return on their investment. A substantial amount of businesses fail every year.

Many of them would also have accidental landlords who got trapped by negative equity. Over the last few years many of them seemed to have got back to evens and just wanted out.

polaco

Dav010 wrote: »

Third level students are likely to resume classes in September, and not all offices will remain wfh once it is safe to reopen, people will continue to move to Dublin for employment.

According to WHO mass vaccinations would not bring about herd immunity to the coronavirus this year which means we need to maintain physical distancing, hand-washing and mask-wearing etc...
So I would not expect big number of people return to offices not sure about students but there is plenty student accomodation places empty.

polaco

JimmyVik wrote: »

Tiny numbers in the grand scheme of things.

http://www.pleanala.ie/casenum/303435.htm
http://www.pleanala.ie/casenum/304686.htm
http://www.pleanala.ie/casenum/303296.htm
http://www.pleanala.ie/casenum/303296.htm
http://www.pleanala.ie/casenum/305979.htm
http://pleanala.ie/casenum/305728.htm
http://www.pleanala.ie/casenum/304710.htm
http://www.pleanala.ie/casenum/303506.htm

There more examples of current developments in Dublin. I don't think numbers are tiny. My mate works for Kilsaran he says last time there busy like that is 2005.

JimmyVik

steddyeddy wrote: »

I don't know what you mean by goal posts but on tax and removing bad tenants I agree with you completely. 100%. Obviously there should be taxes on rent, however, they shouldn't be prohibitively high.

I would add another reason for landlords leaving the business and it happens to every business. There's a certain amount of landlords who enter the business with no idea of costs, profitability and a reasonable return on their investment. A substantial amount of businesses fail every year.

Rent to buy mortgage is a perfect example of this. Plenty I knew got this thinking renting would be easy.

Imagine if you do all your research and calculations for any chosen investment. You have put a lot of work into it and have come to a reasonably accurate risk/reward profile for it. You know to a good extent where you will end up arter say 10 or 20 years.

You sink your money in and are happy with the profile.
And then within a someone comes along with a pen and introduces some legislation that might upend your whole plan.

You might say there is always a small chance of that happening over a 20 year period and would factor that in.

In the case of residential property investment the chance of that happening is about 100%. And quite probably every year toio. Not just once over your entire investment lifetime.

So in that case you dont get into the investment.
If you did get in and that happened you'd want out fast.
But wait, it gets worse, you cant get out fast, because that same legislatioon has fcuked you over double in that they have locked you in, and locked you in at very high risk of losses to your investment. It could take you 2 years or more to get out now.

Residential property investment is a fools game.

JimmyVik

polaco wrote: »

http://www.pleanala.ie/casenum/303435.htm
http://www.pleanala.ie/casenum/304686.htm
http://www.pleanala.ie/casenum/303296.htm
http://www.pleanala.ie/casenum/303296.htm
http://www.pleanala.ie/casenum/305979.htm
http://pleanala.ie/casenum/305728.htm
http://www.pleanala.ie/casenum/304710.htm
http://www.pleanala.ie/casenum/303506.htm

There more examples of current developments in Dublin. I don't think numbers are tiny. My mate works for Kilsaran he says last time there busy like that is 2005.

If you look at any site in the last year it has come to a crawl.
This will continue. They were already well behind in the number of completions needed before Covid. They are even further behind now.
They will still be behind for a good few years yet.
Then when they are producing a surplus there will be another crash.

polaco

polaco wrote: »

According to WHO mass vaccinations would not bring about herd immunity to the coronavirus this year which means we need to maintain physical distancing, hand-washing and mask-wearing etc...
So I would not expect big number of people return to offices not sure about students but there is plenty student accomodation places empty.

They were speaking in a global sense "We know we need to get to herd immunity and we need that in a majority of countries, so we are not going to see that in 2021," Fisher said."

If by Autumn 2021 most Irish folk are vaccinated then ...

Dav010 wrote: »

Third level students are likely to resume classes in September, and not all offices will remain wfh once it is safe to reopen, people will continue to move to Dublin for employment.....

.......... will most likely be the case regardless what is going on in the US or Bangledesh or anywhere else, IMO.

rightmove

steddyeddy wrote: »

I don't know what you mean by goal posts .

ah now come on

mrslancaster

JimmyVik wrote: »

Imagine if you do all your research and calculations for any chosen investment. You have put a lot of work into it and have come to a reasonably accurate risk/reward profile for it. You know to a good extent where you will end up arter say 10 or 20 years.

You sink your money in and are happy with the profile.
And then within a someone comes along with a pen and introduces some legislation that might upend your whole plan.

You might say there is always a small chance of that happening over a 20 year period and would factor that in.

In the case of residential property investment the chance of that happening is about 100%. And quite probably every year toio. Not just once over your entire investment lifetime.

So in that case you dont get into the investment.
If you did get in and that happened you'd want out fast.
But wait, it gets worse, you cant get out fast, because that same legislatioon has fcuked you over double in that they have locked you in, and locked you in at very high risk of losses to your investment. It could take you 2 years or more to get out now.

Residential property investment is a fools game.

But why do so many posters think investment in property is somehow different to say investing in a small business?

Dav010

mrslancaster wrote: »

But why do so many posters think investment in property is somehow different to say investing in a small business?

I might be taking a flier on this, but few businesses are curtailed on what they charge by legislation in the same way investors in rental properties are. Few businesses are legally required to continue to provide a service long after the customer has stopped paying and few owners lose control of their business in the same way LLs do when a customer avails of the service offered by the business. I hope this relieves at least some of the confusion.