2021 Irish Property Market chat - *mod warnings post 1*

PropQueries

Geuze wrote: »

Give me a few mins.

According to the Irish Times back in December 2020:

"An analysis undertaken for the Government said the annual gross cost of public sector pensions would rise from €3.4 billion in 2017 to €5.3 billion in 2025. The rise reflects the ageing of the public service – in line with the general population – the fact people are living longer and the pension rules which apply to those taken on before 2013."

So, by 2025, if the state and public sector pensions are added together, we're probably talking about an annual spend of c. €13 - €15 billion per year by 2025.

I still think the current c.€8 billion includes the public sector pensions as otherwise it's more unsustainable than it is already.

Link to Irish Times article here: https://www.irishtimes.com/news/politics/q-a-what-is-the-story-with-the-cost-of-public-sector-pensions-1.4438799

Geuze

I can 100% tell you that DSP exp on State pensions is 8bn, and that does not include PS pensions.

The DSP 8bn is all explained in the DSP Annual Stats.

(NB: it is part of my job to read these things)



So total public exp is = DSP exp on State Pensions PLUS each department exp on retired PS from that dept.

So total public exp on pensions = DSP 8.1bn + exp on PS pensions








A current working or retired PS, hired before April 1995, did not pay full-rate PRSI, and so do not receive State pensions.

Geuze

PropQueries wrote: »

So, by 2025, if the state and public sector pensions are added together, we're probably talking about an annual spend of c. €13 - €15 billion per year by 2025.

Yes, correct.

To give you an idea of the scale we are talking about, with no annual increase in the SP contributory, expenditure rises by 200m anyways, due to numbers and ageing.

Bear in mind that FF and SF want to add 5 per week / 260 pa, on top of that, every year.

(550,000)(260pa) = 143m for the rate increase

PropQueries

Geuze wrote: »

Yes, correct.

To give you an idea of the scale we are talking about, with no annual increase in the SP contributory, expenditure rises by 200m anyways, due to numbers and ageing.

Bear in mind that FF and SF want to add 5 per week / 260 pa, on top of that, every year.

(550,000)(260pa) = 143m for the rate increase

At least we now know where all that additional revenue from the carbon taxes is going to go. Looks like we also now know the true reason why FF/FG brought the Greens into the coalition. Nice smokescreen IMO

L1011

Topic. Can everyone remember that concept please.

Timing belt

<MOD SNIP>

DataDude

<MOD SNIP>

cnocbui

PropQueries wrote: »

If the land is truly needed, compulsory purchase it at agri/amenity prices and rezone it to housing after purchase.

No, you are definitely not a capitalist, let alone more then me, as you claimed. I'd say you are a deep red socialist.

Have you thought of organising a search party for that moral compass you seem to be missing?

Villa05

MacronvFrugals wrote:

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

No one has an issue with inviting them in. The issue is imbalance in how they are treated v local investors

The problem is Govt policy, taxation policy,

CorkRed93 wrote:

Not really on subject but wanting to ask. Do you/anyone see over short-med term that interest rates rise again?

Timing belt wrote:

635k x 248 x52 = 8.2bn

Xmass bonus
53

Hubertj

MacronvFrugals wrote: »

I'm sorry but BAM should be restricted from future state projects, this is becoming a farce

Children's Hospital won't be ready until May 2024

I would also question how the project is being managed the public servants. At the start didn’t they get the contractor to begin work while plans were still being finalised? This resulted in change requests etc?

Villa05

The state is propping up prices/rents and the state is in debt up to its eyeballs and continuing to drive unsustainable spending

I don't think anyone disputes these facts

Then state spending is not only fair game but the only game in town for discussion on this thread

DataDude

Cyrus wrote: »

that would be a turn up for the books, could potentially work for tax staff but a lot of the rest spend more time at client premises than their own office, id expect that to persist.

also a few friends are partners and they have been in more than out, they want their people back in, but who knows.

The below is from Mark Kennedy in Mazars - not quite the big 4, but close enough. Along with PWC today announcing WFH persisting fulltime until September, it certainly doesn't seem like the Audit firms are resisting the "new normal" as much as many people thought.

“I suspect we will not return to full in the office working in the way we were before,” he said. “That said, we do need offices. What you can’t do remotely is get the kind of collaborations that you need with teams. It’s harder to train people etc.

“I think what we’ll probably do is convert our space and use it in a different way going forward. We have offices in Limerick, Galway and Dublin, and we are reflecting at the moment on how much space we need in each, because we have seen our workforce spread around the country.

“I don’t think we’ll see everyone return on masse. I suspect a rhythm will form where people are in the office sometimes and we use the office space in a slightly different way going forward.”

Link - https://www.irishtimes.com/business/financial-services/state-must-not-withdraw-business-supports-abruptly-1.4480354

PropQueries

One of the states first affordable housing schemes are to be built in Lusk, Co. Dublin.

According to the Irish Times:

“Prices will start from €166,000 for two-bedroom apartments; from €206,000 for three-bedroom duplexes; from €250,000 for three-bedroom terraced houses; and from €258,000 for three-bedroom semi-detached houses.”

You must be a FTB and resident in Finglas for at least 12 months.

To put the above prices in perspective and compare to DCC’s idea of affordable housing at O’Devaney Gardens:

“The council report said that the “affordable” homes would be sold with a 30-40% discount.

The council also laid out the cost for the affordable units; €240,000 to €250,000 for a one-bedroom apartment and from €300,000 to €320,000 for a two-bedroom apartment.

And for housing at O’Devaney- €260,000 to €300,000 for a two-bedroom house and €300,000 to €320,000 for a three-bedroom house.“

Link to article on Lusk in Irish Times here: https://www.irishtimes.com/news/social-affairs/affordable-housing-one-of-state-s-first-schemes-to-be-built-in-lusk-1.4480279

Big difference in Lusk and O'Devanney gardens.

O'D is good value at those prices.
The prices in Lusk sound about the same as prices are out there anyway.

Cyrus

DataDude wrote: »

The below is from Mark Kennedy in Mazars - not quite the big 4, but close enough. Along with PWC today announcing WFH persisting fulltime until September, it certainly doesn't seem like the Audit firms are resisting the "new normal" as much as many people thought.

Not quite the big 4 is an understatement:D

But let’s see

hometruths

DataDude wrote: »

The below is from Mark Kennedy in Mazars - not quite the big 4, but close enough. Along with PWC today announcing WFH persisting fulltime until September, it certainly doesn't seem like the Audit firms are resisting the "new normal" as much as many people thought.

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

cnocbui

bubblypop wrote: »

Big difference in Lusk and O'Devanney gardens.

O'D is good value at those prices.
The prices in Lusk sound about the same as prices are out there anyway.

Do they come with a 20 year ban on on-selling?

jill_valentine

schmittel wrote: »

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

I've posted before here about my involvement in the quite-big-old-company-I-work-for's rollout into WFH - today we were officially told not to expect our current in-office staffing levels to change until March next year (ie a rotating skeleton crew for stuff involving physical documents, equipment etc).

In reality though, we've already physically changed the office and hardware models we have, and the company clearly expects this to be how it is for good. Staff are starting to make decisions about where they live from now on around it.

Not an immediate sea change or anything, and of no benefit to me personally, but from my company's POV the commuter belt has expanded by at least a county or so on all sides.

Edit - was talking to a chap last week who now lives in Belfast, for a job in Dublin, which was new to me.

decreds

Timing belt wrote: »

I agree but they can't change it without crashing everything.

Agreed, but one has to wonder how long they can kick the can down the road? It's all well and good for property owners to smugly feel hubris due to the rise in house prices but these same people need to think long term, if they want to upgrade that new property is going to cost them more and how will their children fair when they try leave the nest?


I have a feeling we may see adults staying at home until at least 30 become the norm in future generations by the way things are going, only a massive correction can stop this.

decreds

schmittel wrote: »

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

Hundred percent agree. I assume the people that disagree don't work in tech. The cat is out of the bag that permanent WFH will be on the table once all this ends. My company who don't have a huge presence this side of the water have hired roughly 80 people in Europe within the past year (WFH is all in their contracts).



The vast majority of jobs that can be done remotely will continue to be WFH when the virus subsides. This will likely have an impact on the Dublin housing market and many capital cities/tech hubs around the world.

cnocbui

cnocbui wrote: »

Do they come with a 20 year ban on on-selling?

Don't know! Presume there is some restrictions on selling on.

Timing belt

decreds wrote: »

Agreed, but one has to wonder how long they can kick the can down the road? It's all well and good for property owners to smugly feel hubris due to the rise in house prices but these same people need to think long term, if they want to upgrade that new property is going to cost them more and how will their children fair when they try leave the nest?


I have a feeling we may see adults staying at home until at least 30 become the norm in future generations by the way things are going, only a massive correction can stop this.

It's all relative as even if they stopped kicking the can down the road and housing, stock market and all other asset classes re-priced so would salary and wages as you would have mass unemployment and as people went go to back to work it would be for lower salaries IMO

It is like looking at a cheap house in another country.... it is only cheap if you have foreign purchasing power but if you are a local in that country it would not be cheap... As I say it's all relative.

And believe it or not there are less young adults living at home compared to 15 years ago. It's hard to believe with media reports but it is true.

Mic 1972

decreds wrote: »

Hundred percent agree. I assume the people that disagree don't work in tech. The cat is out of the bag that permanent WFH will be on the table once all this ends. My company who don't have a huge presence this side of the water have hired roughly 80 people in Europe within the past year (WFH is all in their contracts).



The vast majority of jobs that can be done remotely will continue to be WFH when the virus subsides. This will likely have an impact on the Dublin housing market and many capital cities/tech hubs around the world.

i'm working for a major big tech company, we all work from home now.
However they are still advertising internal roles that are office based and that will require giving up WFH. All these roles are currently done from home, so there is no apparent reason why they sholdnt be done from home in the fututre

HansKroenke

decreds wrote: »

Hundred percent agree. I assume the people that disagree don't work in tech. The cat is out of the bag that permanent WFH will be on the table once all this ends. My company who don't have a huge presence this side of the water have hired roughly 80 people in Europe within the past year (WFH is all in their contracts).



The vast majority of jobs that can be done remotely will continue to be WFH when the virus subsides. This will likely have an impact on the Dublin housing market and many capital cities/tech hubs around the world.

https://www.irishtimes.com/business/economy/leo-varadkar-i-want-to-make-sure-this-pandemic-is-a-lost-year-or-so-not-a-lost-decade-1.4480399?mode=amp

Varadker's interview in the IT today regarding the likelihood of restrictions into next year should also throw cold water on any claims that returning to offices in meaningful numbers will be part of the return to life after covid, particularly as he references the winter surge and seasonality of covid. To me that indicates no chances will be taken next winter and people will be told to stay off public transport and out of offices during the winter period.

It will take nearly two years in total to get fully back to normal (ie no more restrictions), it looks like. While it has been a year WFH, I don't think this experience is an indicator of what it will be like after covid. For example, people weren't ready to WFH, needed to get screens, chairs, desks etc. Also, there is little to no recreation outside of the home so people can feel that all they do is work. That is not a normal WFH experience. Finally, people may have paid more for their home in buying or renting to be close to the office but of course, given the option, they will look to move somewhere they would prefer to live as proximity to the office won't be anywhere near as big a factor.

In short, with 2 years pandemic-induced WFH, the very most of a change we will see post-covid will be a hybrid model of WFH/part time in the office. There are huge ramifications for this in property, particularly Dublin City office rentals and the €2k per month one bedroom rentals. Somehow I think that Dublin City centre will be reborn in terms of retail, cafes and pubs, as public transport and cycling/scooter infrastructure is enhanced making it easier and more pleasant to get in and out.

cnocbui

Timing belt wrote: »

It's all relative as even if they stopped kicking the can down the road and housing, stock market and all other asset classes re-priced so would salary and wages as you would have mass unemployment and as people went go to back to work it would be for lower salaries IMO

It is like looking at a cheap house in another country.... it is only cheap if you have foreign purchasing power but if you are a local in that country it would not be cheap... As I say it's all relative.

And believe it or not there are less young adults living at home compared to 15 years ago. It's hard to believe with media reports but it is true.

The figure was higher than 70% 15 years ago?

https://extra.ie/2020/02/07/news/irish-news/i-wouldnt-be-able-to-afford-any-kind-of-rent-over-70-of-irish-young-adults-living-with-their-parents

Timing belt

cnocbui wrote: »

The figure was higher than 70% 15 years ago?

https://extra.ie/2020/02/07/news/irish-news/i-wouldnt-be-able-to-afford-any-kind-of-rent-over-70-of-irish-young-adults-living-with-their-parents

Cyrus

schmittel wrote: »

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

I don’t think anyone is saying it’ll go back to the way it was but to think there will be wholesale wfh 5 days a week is incredibly naive aswell, there will have to be some sort of blend and the blend will be more weighted towards the office.

I’m sure there are certain interact with no one jobs that can be done entirely remotely but thankfully we don’t all work like that .

hometruths

Cyrus wrote: »

I don’t think anyone is saying it’ll go back to the way it was but to think there will be wholesale wfh 5 days a week is incredibly naive aswell, there will have to be some sort of blend and the blend will be more weighted towards the office.

I’m sure there are certain interact with no one jobs that can be done entirely remotely but thankfully we don’t all work like that .

Nobody is saying there will be wholesale WFH 5 days a week.

Cyrus

schmittel wrote: »

Nobody is saying there will be wholesale WFH 5 days a week.

Well what are you saying ?

What does embrace wfh mean ?

TheSheriff

The WFH effect and its impact on property has come up again - we are none the wiser since it did a few weeks back.

To assess the impact of WFH we should look at industries which have this already; I have mentioned Pharma before, we had 2+ days WFH per week pre-Covid in my particular company. This gives people more scope in the area they can live yes, but geographically, they will still be tied to a region. I suspect if Tech embrace's this model (which is all but certain), you will see an exodus from the city centre and a movement outwards. I would expect previously desirable areas (thinking areas like malahide, wicklow etc.) to become more popular as the work-home balance will be more important.

If I had a house in a desirable south Dublin location I wouldn't be too worried.

If I had a high end apartment in the city centre which was previously bringing in 2k+ per month I would be very worried.