Dublin - Significant reduction in rents coming?

JimmyVik

mrslancaster wrote: »

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

Well because it is different.
Legislation and treatment of it for tax purposes etc makes it different.
You dont see a shop being able to charge €1 for a loaf of Brennans while the shop next door is only allowed to charge 50c max for the same loaf.
You also dont see someone who has that loaf in their hands being allowed to walk out of the shop without paying for it and keep it for a couple of years.

mrslancaster

Dav010 wrote: »

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.

Agree but I was wondering why so many posters think it's such a bad thing for an individual to invest their money in a property? If it's providing somewhere that can be rented by a person who needs a place to live that's a good thing surely?

If they invested in shares for example that only benefits the investor.

Why do so many have such an obvious dislike of those who choose to invest in something that can actually be of some benefit to others?

imo any investment has to have some return or there is no point doing it. It also seems it is just individual property owners that get this dislike yet big build-to-rent developers are ok. I dont understand it.

JimmyVik

mrslancaster wrote: »

Agree but I was wondering why so many posters think it's such a bad thing for an individual to invest their money in a property? If it's providing somewhere that can be rented by a person who needs a place to live that's a good thing surely?

If they invested in shares for example that only benefits the investor.

Why do so many have such an obvious dislike of those who choose to invest in something that can actually help others?

imo any investment has to have some return or there is no point doing it. It also seems it is just individual property owners that get this dislike yet big build-to-rent developers are ok. I dont understand it.

I dont think the haters even understand it themselves.
Its like teacher bashers. They just cant help it.

mrslancaster

Dav010 wrote: »

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.

Thanks dav010 & it does seem a very good reason for less people wanting to become landlords.
so maybe the rental market will go the same way as the corner shop and end up being controlled by a few large corporations. It appears from what I've read on boards that would be welcomed by many renters.

JimmyVik

mrslancaster wrote: »

Thanks dav010 & it does seem a very good reason for less people wanting to become landlords.
so maybe the rental market will go the same way as the corner shop and end up being controlled by a few large corporations. It appears from what I've read on boards that would be welcomed by many renters.

I think that you are right. That is exactly where I see it going.
There will be pain for all on the way though.
I doubt very much that its going to have the effect of easing rents.

Timing belt

mrslancaster wrote: »

Agree but I was wondering why so many posters think it's such a bad thing for an individual to invest their money in a property? If it's providing somewhere that can be rented by a person who needs a place to live that's a good thing surely?

If they invested in shares for example that only benefits the investor.

Why do so many have such an obvious dislike of those who choose to invest in something that can actually be of some benefit to others?

imo any investment has to have some return or there is no point doing it. It also seems it is just individual property owners that get this dislike yet big build-to-rent developers are ok. I dont understand it.

Agreed that an investment needs to have a return and yes it is beneficial (from a renters perspective) to have investors contributing to the housing stock.

The point I was trying to make yesterday was that the when a BTL investor invests in a property. He is taking out two separate investments
1) A speculative investment that the property will be worth more in the future. The risk is that it may not be worth more and the reward is the capital appreciation of the asset.

2) A rental investment where rent will be paid for the occupancy of the property. The risk is that the property may not be occupied and the Reward is the rental income if it is occupied.

This is no different to a stock market investment where I will get the same return regardless of whether I invest with cash savings or got a loan for the investment.

In all likelihood if I did get a loan purely to invest in the stock market the risk of the investment returning a negative yield would be quite high unless I was in a strong Bull Market.

A BTL mortgage is no different and this is why it attracts higher interest rate and a Lower LTI to a normal residential mortgage because if there is not a property Bull market the investment is likely to return a negative yield.

Dav010

mrslancaster wrote: »

Thanks dav010 & it does seem a very good reason for less people wanting to become landlords.
so maybe the rental market will go the same way as the corner shop and end up being controlled by a few large corporations. It appears from what I've read on boards that would be welcomed by many renters.

Yip, people want “professional” landlords.

Ozark707

mrslancaster wrote: »

so maybe the rental market will go the same way as the corner shop and end up being controlled by a few large corporations

Well these large corporations seem immune to normal market practices and are happy to leave vast swathes of units empty so that they don't have to drop the headline rates. Can that persist for much longer? If it can and they continue to increase market share then it will be extremely serious, would it be serious enough for the government to do something about it (e.g. vacancy tax)?

We have a new Minister of Housing who seems to want to give the impression that he is doing things. One might think that tackling these corporations might be a quick win....

JimmyVik

Ozark707 wrote: »

Well these large corporations seem immune to normal market practices and are happy to leave vast swathes of units empty so that they don't have to drop the headline rates. Can that persist for much longer? If it can and they continue to increase market share then it will be extremely serious, would it be serious enough for the government to do something about it (e.g. vacancy tax)?

We have a new Minister of Housing who seems to want to give the impression that he is doing things. One might think that tackling these corporations might be a quick win....

What then? Drive the REITS out too because of regulations ever changing and ask for the private landlords to come back?

cgcsb

JimmyVik wrote: »

What then? Drive the REITS out too because of regulations ever changing and ask for the private landlords to come back?

Or just tax them like a regular company. Then separately use abundant state land and cheap/free credit on international markets to borrow enough money to build housing, sell half of it at cost to individuals and use the rest to clear all social housing lists, include small units for temporary housing for people in emergancy situations. Stop paying HAP and hotel fees and stop buying €700k apartments from developers for social housing. Speculators won't like it but the state's remit is to the public, not speculators. Then don't just forget about the housing crisis, proactively build whatever amount of new housing is required every year going forward to meet the population's requirements. The average salary is €49,000 so an average modest home (one or two bed) should cost no more than €200,000.
This can't happen because FFG are too corrupt but they'll be out in 2025 if not beforehand as the housing crisis deteriorates further.

Dav010

Ozark707 wrote: »

Well these large corporations seem immune to normal market practices and are happy to leave vast swathes of units empty so that they don't have to drop the headline rates. Can that persist for much longer? If it can and they continue to increase market share then it will be extremely serious, would it be serious enough for the government to do something about it (e.g. vacancy tax)?

We have a new Minister of Housing who seems to want to give the impression that he is doing things. One might think that tackling these corporations might be a quick win....

Wouldn’t a vacancy tax risk penalising landlords who can’t get tenants as well as those who are happy to leave properties vacant? Seems counterproductive if you are trying to increase supply.


Looks like some people are getting their wish, more professional landlords buying whole developments for rental. New build so owner sets rent, they will all increase at the same rate yearly and no competition. Every ones a winner.

https://m.independent.ie/business/commercial-property/cairn-homes-sells-150-homes-to-cuckoo-fund-as-it-reports-profit-of-24m-39963495.html

JimmyVik

cgcsb wrote: »

Or just tax them like a regular company. Then separately use abundant state land and cheap/free credit on international markets to borrow enough money to build housing, sell half of it at cost to individuals and use the rest to clear all social housing lists, include small units for temporary housing for people in emergancy situations. Stop paying HAP and hotel fees and stop buying €700k apartments from developers for social housing. Speculators won't like it but the state's remit is to the public, not speculators. Then don't just forget about the housing crisis, proactively build whatever amount of new housing is required every year going forward to meet the population's requirements. The average salary is €49,000 so an average modest home (one or two bed) should cost no more than €200,000.
This can't happen because FFG are too corrupt but they'll be out in 2025 if not beforehand as the housing crisis deteriorates further.

Has anyone in the world solved this problem?
Would Ireland be the first?

JimmyVik

Dav010 wrote: »

Wouldn’t a vacancy tax risk penalising landlords who can’t get tenants as well as those who are happy to leave properties vacant? Seems counterproductive if you are trying to increase supply.


Looks like some people are getting their wish, more professional landlords buying whole developments for rental. New build so owner sets rent, they will all increase at the same rate yearly and no competition. Every ones a winner.

https://m.independent.ie/business/commercial-property/cairn-homes-sells-150-homes-to-cuckoo-fund-as-it-reports-profit-of-24m-39963495.html

Plus they are buying everything out from under normal people who just want to buy somewhere to live. The govt are at this too.

Ozark707

Dav010 wrote: »

Wouldn’t a vacancy tax risk penalising landlords who can’t get tenants as well as those who are happy to leave properties vacant? Seems counterproductive if you are trying to increase supply.


Looks like some people are getting their wish, more professional landlords buying whole developments for rental. New build so owner sets rent, they will all increase at the same rate yearly and no competition. Every ones a winner.

https://m.independent.ie/business/commercial-property/cairn-homes-sells-150-homes-to-cuckoo-fund-as-it-reports-profit-of-24m-39963495.html

We are being constantly told that there is not enough stock so an individual LL cannot get a tenant then it probably means that he is looking for REIT like rents or the place is almost unliveable. There seems to be a shortage of stock nationwide so I am at a loss to understand how they cannot fill a place. From what I see most places which are well priced are let very quickly so it shows that even in Covid there is a lot of demand out there. If someone is looking to get rents that they would have got at the start of 2019 they might be waiting quite a while to fill it.

Re the Cairns report. This is what I was more getting at. If they decide to try and let these 150 units at sky high prices and as a consequence they remain mostly vacant then maybe this will be something the gov could look at. I won't be holding my breath though

Ozark707

JimmyVik wrote: »

What then? Drive the REITS out too because of regulations ever changing and ask for the private landlords to come back?

Hmmm....set policy to suit REIT's or what might benefit lots of tenants. I probably would go for the latter.

Dav010

Ozark707 wrote: »

We are being constantly told that there is not enough stock so an individual LL cannot get a tenant then it probably means that he is looking for REIT like rents or the place is almost unliveable. There seems to be a shortage of stock nationwide so I am at a loss to understand how they cannot fill a place. From what I see most places which are well priced are let very quickly so it shows that even in Covid there is a lot of demand out there. If someone is looking to get rents that they would have got at the start of 2019 they might be waiting quite a while to fill it.

Re the Cairns report. This is what I was more getting at. If they decide to try and let these 150 units at sky high prices and as a consequence they remain mostly vacant then maybe this will be something the gov could look at. I won't be holding my breath though

So in rural areas where demand may not be high, punish the LL for not renting to anyone that enquires?

JimmyVik

Ozark707 wrote: »

Hmmm....set policy to suit REIT's or what might benefit lots of tenants. I probably would go for the latter.

Keep on regulating....

cgcsb

JimmyVik wrote: »

Has anyone in the world solved this problem?
Would Ireland be the first?

Of course not and indeed Ireland has resolved previous housing shortages on 2 or 3 occasions through large scale public investment. But that has been forgotten and now 'investors' are going to solve society's housing need somehow.

Ozark707

Dav010 wrote: »

So in rural areas where demand may not be high, punish the LL for not renting to anyone that enquires?

As they have RPZ already set surely they could use these to establish where action could be taken/targeted. As an asideI know of some rural areas where people cannot get housing.

Timing belt

Ozark707 wrote: »

We are being constantly told that there is not enough stock so an individual LL cannot get a tenant then it probably means that he is looking for REIT like rents or the place is almost unliveable. There seems to be a shortage of stock nationwide so I am at a loss to understand how they cannot fill a place. From what I see most places which are well priced are let very quickly so it shows that even in Covid there is a lot of demand out there. If someone is looking to get rents that they would have got at the start of 2019 they might be waiting quite a while to fill it.

Re the Cairns report. This is what I was more getting at. If they decide to try and let these 150 units at sky high prices and as a consequence they remain mostly vacant then maybe this will be something the gov could look at. I won't be holding my breath though

If there is an increase in supply then less regulation is better for renters in the long term because it allows the market to adapt quickly.
e.g.
If we didn't have RPZ then landlords would be quicker to lower rents when supply increases or demand falls.

We know that demand by institutional investors in property has significantly increased with the drop in yields of other assets so we will see a lot more purchases like the Cairns report in the paper. The big question is supply and I think that this will increase in line with the demand from institutional investors but will take a year or two because of the time it takes to build.

If the supply of overall housing does not increase then we need the RPZ to limit price rises and accept that rents will be kept high if if demand falls.

The more regulation means more barriers to entering the market which is exactly not what we need if we are to lower rental costs long-term.

Every time we intervene in the market to fix a problem we generally create another 2 issues.

JimmyVik

Timing belt wrote: »

If there is an increase in supply then less regulation is better for renters in the long term because it allows the market to adapt quickly.
e.g.
If we didn't have RPZ then landlords would be quicker to lower rents when supply increases or demand falls.

We know that demand by institutional investors in property has significantly increased with the drop in yields of other assets so we will see a lot more purchases like the Cairns report in the paper. The big question is supply and I think that this will increase in line with the demand from institutional investors but will take a year or two because of the time it takes to build.

If the supply of overall housing does not increase then we need the RPZ to limit price rises and accept that rents will be kept high if if demand falls.

The more regulation means more barriers to entering the market which is exactly not what we need if we are to lower rental costs long-term.

Every time we intervene in the market to fix a problem we generally create another 2 issues.

I wouldnt be too sure about that.
After so much regulation and moving of goalposts, they would be probably thinking, whats the catch, if regulation was removed.

cubatahavana

https://www.daft.ie/for-rent/apartment-apartment-43-carraig-bu-johnstown-road-cabinteely-dublin-18/2858957

Don't see this as a significant decrease

Fran has a bone

cubatahavana wrote: »

https://www.daft.ie/for-rent/apartment-apartment-43-carraig-bu-johnstown-road-cabinteely-dublin-18/2858957

Don't see this as a significant decrease

Looks great by Irish apartment standards. Obscene rent though

Fran has a bone

My impression from reading online is that Dublin rents have not came down in any significant amount.

And that there is a massive amount of vacancies not even advertised just left idle. It's pretty disappointing for lower paid workers such as myself. It's hard to see any future renting in Dublin for anyone on under 40k salary.

Ozark707

Fran has a bone wrote: »

My impression from reading online is that Dublin rents have not came down in any significant amount.

And that there is a massive amount of vacancies not even advertised just left idle. It's pretty disappointing for lower paid workers such as myself. It's hard to see any future renting in Dublin for anyone on under 40k salary.

Unfortunately that is the case. The only thing I have heard from a few people is that they have secured reductions in asking prices so I would try that where you are looking in case that makes it easier for you.

Smouse156

Fran has a bone wrote: »

My impression from reading online is that Dublin rents have not came down in any significant amount.

And that there is a massive amount of vacancies not even advertised just left idle. It's pretty disappointing for lower paid workers such as myself. It's hard to see any future renting in Dublin for anyone on under 40k salary.

Look for a place offering 1-month free of which there are many! That’s a 7.7% reduction effectively

newmember2

cubatahavana wrote: »

https://www.daft.ie/for-rent/apartment-apartment-43-carraig-bu-johnstown-road-cabinteely-dublin-18/2858957

Don't see this as a significant decrease

At least the balcony is not overlooked :eek:

Clazbeag

I'm looking to move back up to Dublin. Saw a place remotely that I know the old tenants were on 1,450. Rent will now be 1,675. Prices going up up up!!

It's for a one bed in an excellent location. Increase pushed it out of my price range

bucketybuck

Fran has a bone wrote: »

It's hard to see any future renting in Dublin for anyone on under 40k salary.

I'm on a good bit more than 40k, looking for somewhere right now and frankly I can't justify it any more. €1600 for any half decent apartment, and they are being snapped up quick enough so I'm not seeing any last month free deals or anything like that.

I'd hoped the prices would come down but at this stage unless I want to be paying 60% of net salary on rent then my time in Dublin needs to come to an end.

Fran has a bone

bucketybuck wrote: »

I'm on a good bit more than 40k, looking for somewhere right now and frankly I can't justify it any more. €1600 for any half decent apartment, and they are being snapped up quick enough so I'm not seeing any last month free deals or anything like that.

I'd hoped the prices would come down but at this stage unless I want to be paying 60% of net salary on rent then my time in Dublin needs to come to an end.

Yeah true even if I had the money to pay 20k a year rent in Dublin I wouldn't do it, I'd rather save to buy a house