Vacant Properties in Ireland

Timing belt

PropQueries wrote: »

Our property market is extremely distorted (we had one of if not the biggest property busts in modern world history). It's also most likely there is no other developed country in the world where such few short-term thinking funds probably control such a big share of the property market as they do in Ireland.

Extreme views are probably justified in such a scenario.

The US housing market bust was as big if not bigger that ours and I don't think that hedge funds are sitting on as much property as you think as they bought debt and not property.

PropQueries

Timing belt wrote: »

The US housing market bust was as big if not bigger that ours and I don't think that hedge funds are sitting on as much property as you think as they bought debt and not property.

I don't believe the banks sold much of their performing debt. It's the non-performing property related debt that would have made up a significant percentage of those sales (€200 billion between 2012 and 2016).

The developers in rural Ireland couldn't pay it back so now the funds do control the assets that debt was secured on. They most likely also control many of the trophy homes those same developers built and bought during the celtic tiger years as personal guarantees were used very often.

As many here regularly point out, you can still buy a property in most areas outside the major cities for less than the cost of building it. The banks sold the loans. The investment funds bought those loans. They now own the assets secured on those loans.

Timing belt

PropQueries wrote: »

I don't believe the banks sold much of their performing debt. It's the non-performing property related debt that would have made up a significant percentage of those sales (€200 billion between 2012 and 2016).

The developers in rural Ireland couldn't pay it back so now the funds do control the assets that debt was secured on. They most likely also control many of the trophy homes those same developers built and bought during the celtic tiger years as personal guarantees were used very often.

As many here regularly point out, you can still buy a property in most areas outside the major cities for less than the cost of building it. The banks sold the loans. The investment funds bought those loans. They now own the assets secured on those loans.

The majority of the assets sold were for Commercial Real Estate properties where the fund would restructure the debt agreements and make a killing so they would never own the assets. You are assuming that it is all residential

Timing belt

here is a breakdown of what Nama sold.

47% of the assets securing the debt were not even in Ireland

PropQueries

Timing belt wrote: »

The majority of the assets sold were for Commercial Real Estate properties where the fund would restructure the debt agreements and make a killing so they would never own the assets. You are assuming that it is all residential

Never said all.

But, if only €15 Billion of the €200 Billion in property and business loans were related to rural Ireland residential properties with an average face value of €250,000 each, that would amount to 60,000 properties or only 7.5% of the property and business loans purchased.

From this calculation, I would now believe I'm significantly underestimating the number of properties investment funds own in rural Ireland.

hometruths

PropQueries wrote: »

Never said all.

But, if only €15 Billion of the €200 Billion in property and business loans were related to rural Ireland residential properties with an average face value of €250,000 each, that would amount to 60,000 properties or only 7.5% of the property and business loans purchased.

From this calculation, I would now believe I'm significantly underestimating the number of properties investment funds own in rural Ireland.

I presume the 200 billion was the outstanding value of the total loan books rather than what the funds actually spent?

Timing belt

PropQueries wrote: »

Never said all.

But, if only €15 Billion of the €200 Billion in property and business loans were related to rural Ireland residential properties with an average face value of €250,000 each, that would amount to 60,000 properties or only 7.5% of the property and business loans purchased.

From this calculation, I would now believe I'm significantly underestimating the number of properties investment funds own in rural Ireland.

What is your calculation based on? One hour ago you were saying 200bn and now 15bn. Is that 15bn Debt or property?

PropQueries

Timing belt wrote: »

What is your calculation based on? One hour ago you were saying 200bn and now 15bn. Is that 15bn Debt or property?

You said a significant percentage of the €200 Billion in property and business loans purchased between 2012 and 2016 don't relate to property or mostly relate to commercial property (I think that's doubtful).

But, I took you at your word and removed 92.5% of the property and business loans purchased. Would removing 92.5% of them be significant enough for you? And that leaves a potential 60,000 properties they own in rural Ireland.

Timing belt

PropQueries wrote: »

You said a significant percentage of the €200 Billion in property and investment loans don't relate to property (doubtful).

But, I took you at your word and removed 92.5% of the property and business loans purchased. Would removing 92.5% of them be significant enough for you?

Lets walk through the figures.... Nama acquired 74Bn of loans in 2010 and the property that these loans were secured on was worth 32Bn and comprised of only 3.7bn residential properties.
Source: https://www.nama.ie/uploads/documents/AboutNAMABrouchure23May2012.pdf


Where does the remainder of your 200bn come from is this the banks selling off there loan Books?

PropQueries

Timing belt wrote: »

Lets walk through the figures.... Nama acquired 74Bn of loans in 2010 and the property that these loans were secured on was worth 32Bn and comprised of only 3.7bn residential properties.
Source: https://www.nama.ie/uploads/documents/AboutNAMABrouchure23May2012.pdf


Where does the remainder of your 200bn come from is this the banks selling off there loan Books?

Yes and the UK banks that left the market after the crash. It wasn't just the Irish banks and NAMA selling loan portfolios.

Obviously nobody (except a select few) know exactly but it's reasonable to make assumptions based on the figures we do have.

The €200 Billion figure is from the RTE documentary back in 2017. "The Great Irish Sell-Off (Monday, RTÉ One, 9.35pm) comes to putting a face on the otherwise anonymous financial companies that now control 90,000 mortgages and €200 billion in property and business loans in the country."

Irish Times article link here: https://www.irishtimes.com/culture/tv-radio-web/the-great-irish-sell-off-turning-the-spotlight-on-ireland-s-vulture-capitalists-1.2931597

You can watch it on RTE here: https://www.rte.ie/player/movie/the-great-irish-sell-off/76850216156

Timing belt

PropQueries wrote: »

Yes and the UK banks that left the market after the crash. It wasn't just the Irish banks and NAMA selling loan portfolios.

Obviously nobody (except a select few) know exactly but it's reasonable to make assumptions based on the figures we do have.

Ok but anything that was really distressed was bought by Nama when the banks offloaded it and they held onto what they thought that they could make money on.

The reason that banks then sold these loan books was because they would fail their EBA Stress Tests and need an injection of Capital because people were no longer buying bank shares as a lot of people got burned in 2008. (or the bank was exiting the Irish market)

Of these loan books the largest portion will relate to the commercial real estate (CRE) market that will include a very small portion of residential housing stock as an investor with 6 or more residential properties will be classed as CRE.

This then leaves the mortgage books and due to slow nature of repossession in this country will mean that very small amount of property will be owned by the funds.

Hence why I can not see the funds owning the number of properties that you claim.

PropQueries

Timing belt wrote: »

Ok but anything that was really distressed was bought by Nama when the banks offloaded it and they held onto what they thought that they could make money on.

The reason that banks then sold these loan books was because they would fail their EBA Stress Tests and need an injection of Capital because people were no longer buying bank shares as a lot of people got burned in 2008. (or the bank was exiting the Irish market)

Of these loan books the largest portion will relate to the commercial real estate (CRE) market that will include a very small portion of residential housing stock as an investor with 6 or more residential properties will be classed as CRE.

This then leaves the mortgage books and due to slow nature of repossession in this country will mean that very small amount of property will be owned by the funds.

Hence why I can not see the funds owning the number of properties that you claim.

I get where you're coming from. But, without direct knowledge, one has to make assumptions based on the information we have.

So, what information do we have?

In relation the c. 180,000 vacant properties in the last Census, c. 123,000 couldn't be categorised but were also not categorised as either "Boarded up - habitable" or "Abandoned farm house", so it's reasonable to assume that these properties were considered habitable in the judgement of enumerator at that time.

Ireland is a very small country and Irish people like to talk, so if the neighbours or local people didn't know who owned them (the enumerator did ask), it's most likely someone or some organisation that nobody locally knows and most likely from outside the area owns them.

So, we have 123,000 perfectly habitable properties that nobody locally knows who they belong to.

I think (you can disagree) that it would be reasonable to assume that at least 60,000 of the 123,000 properties that couldn't be categorised but were also not categorised as either "Boarded up - habitable" or "Abandoned farm house" could be owned by the investment funds given that we do know they purchased €200 billion in property and business loans between 2012 and 2016. These 60,000 properties would only amount to 7.5% of the €200 billion purchased.

Timing belt

PropQueries wrote: »

I get where you're coming from. But, without direct knowledge, one has to make assumptions based on the information we have.

So, what information do we have?

In relation the c. 180,000 vacant properties in the last Census, c. 123,000 couldn't be categorised but were also not categorised as either "Boarded up - habitable" or "Abandoned farm house", so it's reasonable to assume that these properties were considered habitable in the judgement of enumerator at that time.

Ireland is a very small country and Irish people like to talk, so if the neighbours or local people didn't know who owned them (the enumerator did ask), it's most likely someone or some organisation that nobody locally knows and most likely from outside the area owns them.

So, we have 123,000 perfectly habitable properties that nobody locally knows who they belong to.

I think (you can disagree) that it would be reasonable to assume that at least 60,000 of the 123,000 properties that couldn't be categorised but were also not categorised as either "Boarded up - habitable" or "Abandoned farm house" could be owned by the investment funds given that we do know they purchased €200 billion in property and business loans between 2012 and 2016.

If you look at the accounts of the banks that have left the Irish Market you will get to see the make up of their loan books. If you look at the 4 Irish retail banks accounts you will be able to work out what was sold. The information is all readily available. It won't give a breakdown of properties but will tell you CRE/Mortgage split and also how many of these were in arrears.

At a max there is 4bn of residential properties which based on an average of 250k a house will equate to 16,000 properties that fell into the hedge funds that bought the debt and of these a substantial amount of them will have already be sold so you are probably looking at a holding of 10k max of stock.

hometruths

PropQueries wrote: »

I get where you're coming from. But, without direct knowledge, one has to make assumptions based on the information we have.

So, what information do we have?

In relation the c. 180,000 vacant properties in the last Census, c. 123,000 couldn't be categorised but were also not categorised as either "Boarded up - habitable" or "Abandoned farm house", so it's reasonable to assume that these properties were considered habitable in the judgement of enumerator at that time.

Ireland is a very small country and Irish people like to talk, so if the neighbours or local people didn't know who owned them (the enumerator did ask), it's most likely someone or some organisation that nobody locally knows and most likely from outside the area owns them.

So, we have 123,000 perfectly habitable properties that nobody locally knows who they belong to.

I think (you can disagree) that it would be reasonable to assume that at least 60,000 of the 123,000 properties that couldn't be categorised but were also not categorised as either "Boarded up - habitable" or "Abandoned farm house" could be owned by the investment funds given that we do know they purchased €200 billion in property and business loans between 2012 and 2016. These 60,000 properties would only amount to 7.5% of the €200 billion purchased.

I'm not a PropQueries hater like so many on here. Nor am I a vacancy denier like so many on here.

But I must say even I am struggling with this theory.

And having spent so many posts trying to persuade the deniers that saying we have a vacancy rate issue is not the stuff of propaganda or conspiracy theorists, I think you're not helping my case!!

Timing belt

schmittel wrote: »

I'm not a PropQueries hater like so many on here. Nor am I a vacancy denier like so many on here.

But I must say even I am struggling with this theory.

And having spent so many posts trying to persuade the deniers that saying we have a vacancy rate issue is not the stuff of propaganda or conspiracy theorists, I think you're not helping my case!!

Your point is valid the figures say that we have vacant properties and it is acknowledge by government and lobby groups that there is an issue here.

https://vacanthomes.ie/

https://www.housing.gov.ie/housing/home-ownership/vacant-homes/vacant-homes

If anything you have highlight something that I was not aware of.

EDIT: I'm not a propqueries hatter either I just don't agree with his theory and have tried to articulate why not

hometruths

Timing belt wrote: »

Your point is valid the figures say that we have vacant properties and it is acknowledge by government and lobby groups that there is an issue here.

https://vacanthomes.ie/

https://www.housing.gov.ie/housing/home-ownership/vacant-homes/vacant-homes

If anything you have highlight something that I was not aware of.

EDIT: I'm not a propqueries hatter either I just don't agree with his theory and have tried to articulate why not

I had you pegged as neither a vacancy denier nor a PropQueries hater! Your posts strike me as by someone intelligent enough to apply critical thought both to what you post and what you read.

Sadly cannot say the same for the government. They're paying lip service at best to the issue.

PropQueries

Timing belt wrote: »

If you look at the accounts of the banks that have left the Irish Market you will get to see the make up of their loan books. If you look at the 4 Irish retail banks accounts you will be able to work out what was sold. The information is all readily available. It won't give a breakdown of properties but will tell you CRE/Mortgage split and also how many of these were in arrears.

At a max there is 4bn of residential properties which based on an average of 250k a house will equate to 16,000 properties that fell into the hedge funds that bought the debt and of these a substantial amount of them will have already be sold so you are probably looking at a holding of 10k max of stock.

The €90 billion in distressed mortgages the funds bought between 2012 and 2016 was on top of the €200 billion in property and business loans they bought.

In relation to the loan sales from non-Irish banks, this is just one (link below) "London-listed Lloyds Banking Group, which inherited Bank of Scotland’s €32 billion Irish loan book under its rescue takeover of HBOS a decade ago this month, sold its remaining €5 billion Irish mortgage portfolio to Barclays in May."

You also mentioned earlier that "an investor with 6 or more residential properties will be classed as CRE." That would include many of the so-called ghost estates. Many properties used as security also wouldn't have mortgages.

123,000 vacant properties when nobody knows who owns them or what they're used for, just seems too much of a coincidence (to me) when we do know the funds bought €200 billion of property and business loans between 2012 and 2016.

I agree that my theory must be refined. But I also do believe I may be getting somewhere and your questions and alternative information is helping. I just need to work on backing up my theory as best I can I'll get back on it when I have more...

Link to Bank of Scotland Irish loan book: https://www.irishtimes.com/business/financial-services/former-bank-of-scotland-ireland-loans-set-for-bond-refinancing-deal-1.3625932

Timing belt

schmittel wrote: »

I had you pegged as neither a vacancy denier nor a PropQueries hater! Your posts strike me as by someone intelligent enough to apply critical thought both to what you post and what you read.

Sadly cannot say the same for the government. They're paying lip service at best to the issue.

The one thought that I did have in relation to the vacancy rates in the cities is that property developers may have acquired a large portion of vacant properties and don’t look at them as housing stock but see them the same as land they are sitting on waiting to be developed

hometruths

I definitely suspect financial institutions own the security for a whole heap of these vacant properties, as well as semi derelict ones, I just cannot imagine it being as high as 50%.

I do agree with your theory that the foreign ones will be looking for an exit strategy though. But I think their problem is precisely the opposite that you are suggesting - most of their loans are backed by properties that are occupied!!

On a slightly OT note it frustrates me that the government does not leverage this to their advantage.

If we had a smart finance minister and smart housing minister working together I think they could do a deal with the vulture funds which would have a massive positive impact in short order, both for the housing crisis. Politically they could claim a big win as well.

hometruths

Timing belt wrote: »

The one thought that I did have in relation to the vacancy rates in the cities is that property developers may have acquired a large portion of vacant properties and don’t look at them as housing stock but see them the same as land they are sitting on waiting to be developed

For sure, totally agree. And that's an understandable decision for them. Like Airbnb and other explanations etc we can file it under "Keeping property vacant because it is makes more financial sense to do so"

I think the government should recognise and incentivise/disincentivise where appropriate.

Timing belt

schmittel wrote: »

For sure, totally agree. And that's an understandable decision for them. Like Airbnb and other explanations etc we can file it under "Keeping property vacant because it is makes more financial sense to do so"

I think the government should recognise and incentivise/disincentivise where appropriate.

I also think that a large number of vacancy relating to flats will relate to property over a shop that would have been rented in the past but the shop owner etc no longer wants the hassle etc. the reason for this logic is that of the 43k vacancies circa 18k are in towns across the country.

hometruths

Timing belt wrote: »

I also think that a large number of vacancy relating to flats will relate to property over a shop that would have been rented in the past but the shop owner etc no longer wants the hassle etc. the reason for this logic is that of the 43k vacancies circa 18k are in towns across the country.

Yes, that would make sense, and in fairness to govt there is some scheme to try and bring these back to use. But I think in this case it falls back to your point about the market - they will remain empty unless and until there is genuine demand for them.

Taylor365

cnocbui wrote: »

I have my doubts about this article anyway, I randomly picked one Grand Canal Dock building - Hanover Court:

Prices:

One bed apartments – Sold Out
Two bed apartments from €675,000
Three bed apartments – Sold Out
https://hanovercourt.ie/

So not as empty as made out.

How do you know they're not bought by big tech or a REIT? Sitting empty, appreciating in value?

Marius34

Taylor365 wrote: »

How do you know they're not bought by big tech or a REIT? Sitting empty, appreciating in value?

I guess, there is no clear knowledge on those properties. It just makes no sense to select some luxury new builds, get some unclear numbers, and speak about the huge numbers of vacant properties.
I would understand if there are tens of thousands of vacant turn key properties sitting empty for years in urban arrears, that needs to be done something. But it's not a case, thus not much can be done about it.

PropQueries

Marius34 wrote: »

I guess, there is no clear knowledge on those properties. It just makes no sense to select some luxury new builds, get some unclear numbers, and speak about the huge numbers of vacant properties.
I would understand if there are tens of thousands of vacant turn key properties sitting empty for years in urban arrears, that needs to be done something. But it's not a case, thus not much can be done about it.

Well there are over 1,000 listings on MyHome.ie for properties with an a-rating above A3.

As many are one listing for estates or apartment blocks with multiple units there must be at least well over 10,000 a-rated properties currently on the market looking for buyers.

Link here: https://www.myhome.ie/residential/ireland/house-for-sale?minenergyrating=130

Graham

PropQueries wrote: »

Well there are over 1,000 listings on MyHome.ie for properties with an a-rating above A3.

As many are one listing for estates or apartment blocks with multiple units there must be at least well over 10,000 a-rated properties currently on the market looking for buyers.

My calculations are different.

1000 listing, each one representing a new build estate of 400 properties.

There must be at least 400,000* new builds on the market looking for buyers.


*figures probably not even remotely accurate but at least you can see how I arrived at them.

Hubertj

We need to start knocking houses and apartments. There are too many.

Marius34

PropQueries wrote: »

Well there are over 1,000 listings on MyHome.ie for properties with an a-rating above A3.

As many are one listing for estates or apartment blocks with multiple units there must be at least well over 10,000 a-rated properties currently on the market looking for buyers.

Link here: https://www.myhome.ie/residential/ireland/house-for-sale?minenergyrating=130

I would not count on your numbers, as it's pure speculation. Whatever it is, it used to be higher in the past years, and it didn't end up in ghost estates.
So those new builds gets occupied at some point. Some takes couple of months, some may take couple of years, but vast majority ends to be in use. Thus nothing abnormal here, nor we will see much change here.

PropQueries

Marius34 wrote: »

I would not count on your numbers, as it's pure speculation. Whatever it is, it used to be higher in the past years, and it didn't end up in ghost estates.
So those new builds gets occupied at some point. Some takes couple of months, some may take couple of years, but vast majority ends to be in use. Thus nothing abnormal here, nor we will see much change here.

Well between 2019, 2020 and 2021 we will have built at least 60,000 new a-rated homes. That’s seems like an awful lot of new homes over three years for a country with such a small population as Ireland has.

Graham

PropQueries wrote: »

Well between 2019, 2020 and 2021 we will have built at least 60,000 new a-rated homes. That’s seems like an awful lot of new homes over three years for a country with such a small population as Ireland has.

Unless we'd built almost nothing for a decade beforehand and demand was greater than the numbers being built.