Irish Property Market 2020 Part 2

Hubertj

HotDudeLife wrote: »

Do people foresee a crash in the rental market and it perhaps cascading onto house prices?

I know a handful of people who have managed to negotiate 10-20% reductions off their rent when it came to renewing the lease, all reductions were none covid related (couples still working, not impacted).

Personally most younger workers in my org from down the country have all stopped renting in Dublin or left their house share and returned home, that and the lack of students/tourists will surely drive rents down a lot? Maybe i am wrong but if i was a landlord i would sell now and if i was an investor a buy to let would be one of the last items on my list to invest in.

I thought a daft.ie report already showed prices for some types had already dropped about 20%.

Hubertj

PropQueries wrote: »

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

Average age of a house buyer in Ireland?

PropQueries

Hubertj wrote: »

Average age of a house buyer in Ireland?

But we also built c. 70,000 residential units over the past 4 years or enough new units to accommodate c. 200,000 persons (based on an average of one couple plus one child per unit).

Add in probate sales and refurbished units over the past 4 years and...

Marius34

PropQueries wrote: »

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

You know what to factor and what not, but obsolescence is as well a factor, and many other things that you don't like to factor. A year will pass and you won't see those supplies flooding the market.

I'm not sure why would you exclude people over 35 year. It's quite common to buy property over 35, and even 45 wouldn't be unusual.
Apart from this older house owner are saving more money during Covid as well, which may help their kids financially to find their new homes.

Ireland has unusual demographic with high number of population in the age of 35-45. They was 25-34 some years ago, but it doesn't mean that they fall-out of the property market.

fliball123

PropQueries wrote: »

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

Here you go a little update for you so you can stop copying and pasting as its out of date

so in 2019 the population can be broken down roughly as follows below have a look at the stats yourself

about 1 million 0-14
About 600k 15-24
about 1.4 Million 25-44 (quite possibly the demographic most like to buy)
about 1.2 Million 45 to 64 (quite possibly the 2nd most likely to buy)
about 700K over 65

Please dont copy and paste this again

https://www.statista.com/statistics/710767/irish-population-by-age/

and before you go saying but yours in from the CSO this was also got from data from the CSO

https://statbank.cso.ie/multiquicktables/quickTables.aspx?id=pea01

Idbatterim

PropQueries wrote: »

But by September 2021 we will also have an additional c. 20,000 new build homes, thousands of additional probate sales and probably a very small increase in (if any) net inward migration.

Thousands of extra probate sales? From what? If you think its covid, its a drop in the ocean compared to all other daily deaths ...

PropQueries

Idbatterim wrote: »

Thousands of extra probate sales? From what? If you think its covid, its a drop in the ocean compared to all other daily deaths ...

Not relating the increase to Covid. There have been delays with probate sales over the past several years and this backlog should start entering supply over the next twelve months:

“Some 30,000 people pass away every year in Ireland with up to 86% of them owning a home. This potentially leaves some 26,000 homes affected by these delays in probate.”

Link here from 2018: https://www.thejournal.ie/probate-2-3870061-Feb2018/?amp=1

Timing belt

PropQueries wrote: »

Not relating the increase to Covid. There have been delays with probate sales over the past several years and this backlog should start entering supply over the next twelve months:

“Some 30,000 people pass away every year in Ireland with up to 86% of them owning a home. This potentially leaves some 26,000 homes affected by these delays in probate.”

Link here from 2018: https://www.thejournal.ie/probate-2-3870061-Feb2018/?amp=1

Or Less than 15k if we apply your rule of a couple & child per housing unit.

PropQueries

Timing belt wrote: »

Or Less than 15k if we apply your rule of a couple & child per housing unit.

I actually knocked the figure back by two thirds to c. 10,000 potential probate sales or enough homes to accommodate c. 30,000 persons at an average of one couple and one child. Basically enough new supply (before any new builds are built) to house the total population of an additional new large town in Ireland each year.

And most of these properties would be located in what many would consider prime locations.

Timing belt

PropQueries wrote: »

I actually knocked the figure back by two thirds to c. 10,000 potential probate sales or enough homes to accommodate c. 30,000 persons at an average of one couple and one child. Basically enough new supply (before any new builds are built) to house the total population of an additional new large town in Ireland each year.

And most of these properties would be located in what many would consider prime locations.

Here is a breakdown of the funds in Ireland I was correct when I said mainly Debt and Equity

https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/other-financial-sector-statistics/investment-funds/information-release-investment-fund-statistics---2020q2.pdf?sfvrsn=6

PropQueries

Timing belt wrote: »

Here is a breakdown of the funds in Ireland I was correct when I said mainly Debt and Equity

https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/other-financial-sector-statistics/investment-funds/information-release-investment-fund-statistics---2020q2.pdf?sfvrsn=6

That’s not related the so-called vulture funds. The line “The Net Asset Value (NAV) of Irish-resident investment funds (IFs) increased by €266 billion, or 12 per cent, to €2,423 billion in Q2 2020” is the giveaway.

Timing belt

PropQueries wrote: »

That’s not related the so-called vulture funds. The line “The Net Asset Value (NAV) of Irish-resident investment funds (IFs) increased by €266 billion, or 12 per cent, to €2,423 billion in Q2 2020” is the giveaway.

Yes some of these funds business model is to buy debt at a discount and max the return. The NAV is the net asset values of what the funds own Globally and they are only described as Irish resident because the legal entity is registered here.

PropQueries

Some possible good news if you’re against co-living with “Taoiseach Micheál Martin has acknowledged that co-living accommodation has the potential to become glorified tenement living”.

Link to article here: https://www.irishtimes.com/news/politics/co-living-apartments-could-become-glorified-tenement-living-says-taoiseach-1.4386528

Idbatterim

Laughable. Co living is a rip off, but whats his plan? 50 square meter apartments affordable on an average wage? Good one...

KennisWhale

https://www.irishtimes.com/business/commercial-property/oaktree-joins-forces-with-johnny-ronan-on-irish-glass-bottle-site-1.4386155

Ronan uber alles.

Johnny Ronan’s Ronan Group Real Estate (RGRE) has secured US private equity group Oaktree as a joint venture partner for the development of the former Irish Glass Bottle (IGB) site in Dublin.

News of RGRE’s addition of the Los Angeles-headquartered investment giant as a partner on the scheme comes just weeks after The Irish Times reported how underbidders for the project had contacted Nama to express their continued interest in the site following the expiration of the 30-day time period the agency had set for the deal’s completion.

The bid was well in excess of the €125 million guide price Nama had been guiding when it began marketing the opportunity in July 2019. It is also understood to have outstripped the offers made by the other shortlisted parties by a significant margin.

The other shortlisted bidders were: Sean Mulryan’s Ballymore Group; Dallas-based private equity giant Lone Star’s Quintain Ireland housebuilding unit; and US real estate investment firm Hines.

The former IGB site lands are held through a company called Pembroke Ventures. Some 10 per cent or 350 of the 3,500 homes planned for the site are to be set aside for social housing, while at least 15 per cent (525) are expected to be affordable housing. The site also has scope for up to one million sq ft of office and retail accommodation, along with a school and public space.

This will be a fantastic development once they start turning the sod. It's very promising to see such interest from big name investors in the housing market. It will give us lots of new developments so buyers won't have to take the probate places which need the old lady smell fumigated just because there is so little supply.

KennisWhale

HotDudeLife wrote: »

Do people foresee a crash in the rental market and it perhaps cascading onto house prices?

I know a handful of people who have managed to negotiate 10-20% reductions off their rent when it came to renewing the lease, all reductions were none covid related (couples still working, not impacted).

Personally most younger workers in my org from down the country have all stopped renting in Dublin or left their house share and returned home, that and the lack of students/tourists will surely drive rents down a lot? Maybe i am wrong but if i was a landlord i would sell now and if i was an investor a buy to let would be one of the last items on my list to invest in.

In Dublin, the rental market has plummeted in the 7 months since just before lockdown for the 1 and 2 bed apartments, with no sign of a floor as of yet considering the 6 week lockdown at least we now have and the eviction ban until the New Year. Supply up hugely as well.

https://www.boards.ie/vbulletin/showpost.php?p=115002444&postcount=1929

thefridge2006

Covid-19 public spending unsustainable without vaccine – Donohoe

https://www.irishtimes.com/news/ireland/irish-news/covid-19-public-spending-unsustainable-without-vaccine-donohoe-1.4386188

Making excuses already for the fairy-tale budget that was never going to work

fliball123

thefridge2006 wrote: »

Covid-19 public spending unsustainable without vaccine – Donohoe

https://www.irishtimes.com/news/ireland/irish-news/covid-19-public-spending-unsustainable-without-vaccine-donohoe-1.4386188

Making excuses already for the fairy-tale budget that was never going to work

Is he not just stating the obvious I reckon they will be able to keep this up for a good 2 or 3 years and hopefully a vaccine will be in play by then. Already Pfizer are on the last stage of trials with their vaccine

PropQueries

Institutional investors bought over 1,000 homes in Dublin in Q3 2020.

"The continued strength of Dublin’s private rented sector (PRS) market was evidenced once again in the three-month period to the end of September with 1,016 homes sold for a total of €470 million to institutional investors.

The largest transaction in the first nine months of this year across all categories of investment saw the Cosgrave Property Group secure about €200 million from the sale of 368 apartments at Cualanor in Dún Laoghaire to Deutsche Bank subsidiary, DWS. Contracts were also signed on the € 145 million off-market sale to DWS of 317 residential units spread over four developments in north Dublin."

Link to Irish Times article here: https://www.irishtimes.com/business/commercial-property/institutional-investors-spend-470m-on-residential-properties-in-latest-quarter-1.4381696

PropQueries

Looks like the Government has come up with a new way to keep rents high for young workers in Ireland. They plan to replace 'reception centres' for up to 3,500 asylum seekers a year with a scheme similar to HAP where they will rent homes from private landlords. For 'private landlords', just change to 'their investor property owning mates'

To the younger workers. I genuinely feel sorry for you. You can't/won't win.

"Local councils would use private rental accommodation to house asylum seekers, in a similar way to how homeless people are housed in private rental tenancies through HAP."

Link to Irish Independent here: https://www.independent.ie/irish-news/asylum-seekers-would-be-given-own-door-accommodation-after-three-months-under-ambitious-direct-provision-proposal-39651296.html

Graham

PropQueries wrote: »

Looks like the Government has come up with a new way.....

Minister for Justice Helen McEntee said the government would look at the recommendation but “at this moment in time it’s not something that I can give a commitment to.”

PropQueries

Graham wrote: »

Minister for Justice Helen McEntee said the government would look at the recommendation but “at this moment in time it’s not something that I can give a commitment to.”

Aw come on You know the purpose behind this 'recommendation'. I'm actually quite impressed. They have the younger workers by the proverbial this time. They have come up with a scheme to keep rents high indefinitely and where they can't complain or they will be labeled you know what.

Graham

If you're going to throw in hysterical posts about proposals and present them as policy, expect to get called on it.

PropQueries

Graham wrote: »

If you're going to throw in hysterical posts about proposals and present them as policy, expect to get called on it.

Ok. I'll take your point. I guess we'll have to wait and see where this proposal goes.

Springy Turf

PropQueries wrote: »

Ok. I'll take your point. I guess we'll have to wait and see where this proposal goes.

Your assertion that the people behind proposals to improve things for asylum seekers are somehow motivated by screwing over young workers is far-fetched, and pretty nasty.

PropQueries

Springy Turf wrote: »

Your assertion that the people behind proposals to improve things for asylum seekers are somehow motivated by screwing over young workers is far-fetched, and pretty nasty.

I'll take the flac. I'll 100% admit it was worded wrongly. I'm just extremely suspect of any Government proposal that may add demand to a market that apparently has supply issues. Especially when there are many other possible solutions that wouldn't impact as much on the supply/demand dynamics of the market.

This proposal has the potential to significantly impact the demand side of the equation with no obvious benefits to either the state, the asylum seeker or the younger worker seeking rental accommodation in our cities.

If a younger worker is thinking of buying, they must compete with both the state and the investment/pension funds for housing. If they're renting they must compete with the state under the long-term lease initiative, HAP etc. and now another version of HAP may be thrown into the mix. Many workers must accept HAP not because they don't work hard but simply because they have no choice because of the government's policy (and it does now appear to be policy) of driving rents ever higher through these schemes.

In fact, I truly believe that this proposal has the very real potential to invite resentment towards this group (not justified on any level) as has already been seen in many villages up and down the country. But, time will tell as they say.

But I'll fully admit I could have worded it differently. So apologies and no offence meant.

Hubertj

PropQueries wrote: »

Aw come on You know the purpose behind this 'recommendation'. I'm actually quite impressed. They have the younger workers by the proverbial this time. They have come up with a scheme to keep rents high indefinitely and where they can't complain or they will be labeled you know what.

i think this comment is extremely offensive.

PropQueries

Hubertj wrote: »

i think this comment is extremely offensive.

See my mea culpa above.

salamiii

unemployment will keep rising.more houses will come on market.more rentals will come out as people move out due to high rents

you looking at the next six months for this to happen


you need to save up cash as the rainy day is coming

stefanovich

salamiii wrote: »

unemployment will keep rising.more houses will come on market.more rentals will come out as people move out due to high rents

you looking at the next six months for this to happen


you need to save up cash as the rainy day is coming

Yes, liquidate all your assets into cash. Stick it in a 0% interest rate deposit account while they devalue the currency.