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

Hubertj

schmittel wrote: »

The problem the councils have is they are committed to paying open market rent, or a % of market rent. As long as RPZ rules are in place, and landlords are preferring to keep units vacant or come up with three months rent free wheezes, rather than reduce the rent, market rents will remain as they are.

Councils may wish to trim the rental budget but the leases say otherwise!

Throw in councillors politicising everything and your NIMBYs. Superb mix

PropQueries

schmittel wrote: »

The problem the councils have is they are committed to paying open market rent, or a % of market rent. As long as RPZ rules are in place, and landlords are preferring to keep units vacant or come up with three months rent free wheezes, rather than reduce the rent, market rents will remain as they are.

Councils may wish to trim the rental budget but the leases say otherwise!

Possible. But I've been through enough downturns in this country to see how quickly the state pulls in the purse strings and investors change tack. It nearly always happens in what seems like overnight

Once the landlords believe it's not going back to normal, they will either sell or rent their properties out at any price (RPZ or no RPZ) IMO

Landlords (despite what they say in public) have being noticing less demand over the past 3 years. The only thing that kept it going was HAP and the councils buying/leasing properties. Once the councils are told to pull back, the landlords will act very quickly IMO. And, no, they won't be selling as there will be nobody to sell to IMO

And remember, once this covid thing is paid for, the pension problem, public sector salaries etc. etc. will raise it's ugly head again.

Wanderer78

Villa05 wrote: »

Watched a program on amazon prime last night that claimed
Bush junior borrowed more than all the previous presidents combined
As did Obama I'm sure that trump and now Biden will carry on that trend. The thesis of the program was that this borrowing was blowing asset price bubbles globally

Hard to argue with it

the majority of the money supply comes from the private sector in the form of credit, credit bubbles create asset bubbles such as housing bubbles!

Danzy

Wanderer78 wrote: »

the majority of the money supply comes from the private sector in the form of credit, credit bubbles create asset bubbles such as housing bubbles!

Private sector, public spending, Central Banks.

Everyone is gushing money out.

It's more than a concern.

Wanderer78

Danzy wrote: »

Private sector, public spending, Central Banks.

Everyone is gushing money out.

It's more than a concern.

true, we have deregulated critical markets such as the fire sectors(finance, insurance and real estate) so much, that as soon as money is created, it floods into asset markets, creating asset bubbles, we need to urgently change this, to more democratic and redistribution methods, as its currently having catastrophic effects for all, including the wealthy

Villa05

fliball123 wrote: »

no in my example they have 72k combined salary or just below the median wage in the country. The median salary in Ireland in 2018 was just over 36k. I am not doing the sums again. Look up the median wage if you dont believe me.

There is a severe supply problem there is no doubt about that but what I could show was that currently on myhome even with a severe supply problem there was over half the available properties for sale at under the 275k mark which is a price point that those on and above the median salary could afford.

Im not disputing the median salary, and credit to you for doing the calculations, My issue is the proportion of family household units that actually earn that income and of the data from my home, if you have it, can you share with us the proportion of properties for sale that have 3 bedrooms or higher.

Im going with 3 beds because the avg FTB is now mid 30's


an interesting account from a 2 teacher couple from Dublin who would be well above the median income



We are in trouble if this combination of income earners are finding it very difficult to find a place to live close to their place of work

Wanderer78

Villa05 wrote: »

Im not disputing the median salary, and credit to you for doing the calculations, My issue is the proportion of family household units that actually earn that income and of the data from my home, if you have it, can you share with us the proportion of properties for sale that have 3 bedrooms or higher.

Im going with 3 beds because the avg FTB is now mid 30's


an interesting account from a 2 teacher couple from Dublin who would be well above the median income



We are in trouble if this combination of income earners are finding it very difficult to find a place to live close to their place of work

the average family home in the dublin region is now 10 times the average industrial wage, and growing, we re already in serious trouble!

Villa05

intresting to step back and see how things worked out in the past



October 2003



Primetime Housing Debate Part 1


Primetime Housing Debate Part 2




Imagine the pain that could have been spared if appropiate action was taken back then rather than pouring more fuel on the demand side as what happened back then.


Can you spot the similarities of the arguments between late 2003 and now

Cyrus

Villa05 wrote: »

Im not disputing the median salary, and credit to you for doing the calculations, My issue is the proportion of family household units that actually earn that income and of the data from my home, if you have it, can you share with us the proportion of properties for sale that have 3 bedrooms or higher.

Im going with 3 beds because the avg FTB is now mid 30's


an interesting account from a 2 teacher couple from Dublin who would be well above the median income



We are in trouble if this combination of income earners are finding it very difficult to find a place to live close to their place of work

This is a lad who is promoting his Instagram page who wants to buy in d6 or d8

He can afford in Dublin alright just not exactly where he wants.

hometruths

Wanderer78 wrote: »

the average family home in the dublin region is now 10 times the average industrial wage, and growing, we re already in serious trouble!

15 years ago we thought 10 times average wage was the sign of a boom, now we seem have normalised it!

Hubertj

Villa05 wrote: »

intresting to step back and see how things worked out in the past



October 2003



Primetime Housing Debate Part 1


Primetime Housing Debate Part 2




Imagine the pain that could have been spared if appropiate action was taken back then rather than pouring more fuel on the demand side as what happened back then.


Can you spot the similarities of the arguments between late 2003 and now

I can’t get over how people wore such badly fitting suits back then.

Villa05

combat14 wrote:

more concerned by all the PUP and HAP payments at the moment, HAP in particular is only keeping rents extortionately high

combat14 wrote:

423 million spent on HAP alone in 2019

271 million on emergency homeless services last year a jump from 131million in 2018.
Direct provision providers now moving into the sector as costs soar
Proving highly profitable for the private sector
220 million budgeted for this year

drogon.

Villa05 wrote: »

Watched a program on amazon prime last night that claimed
Bush junior borrowed more than all the previous presidents combined
As did Obama I'm sure that trump and now Biden will carry on that trend. The thesis of the program was that this borrowing was blowing asset price bubbles globally

Hard to argue with it

Curious what is the program called ? Would be interested to watch it

Wanderer78

drogon. wrote: »

Curious what is the program called ? Would be interested to watch it

it does indeed sound interesting, but i suspect conservatively biased

Villa05

drogon. wrote:

Curious what is the program called ? Would be interested to watch it

Overdose: The next financial crisis
On amazon prime

theballz

Property market is nuts these days. I was bidding on an apartment, that has gone for 50k over asking price.

It’s definitely not worth it. People sitting on cash now and it’s driving prices back up. It’ll end in tears I feel

Marius34

schmittel wrote: »

15 years ago we thought 10 times average wage was the sign of a boom, now we seem have normalised it!

Looking at this thread it seems it happened the opposite.

15 years ago, average price were around or over 10 times the wage, nationally, and appears it was normal, people didn't see it as a boom.
Today nationally it's less than 10 times the wage, and so many here see it as a boom.

PropQueries

theballz wrote: »

Property market is nuts these days. I was bidding on an apartment, that has gone for 50k over asking price.

It’s definitely not worth it. People sitting on cash now and it’s driving prices back up. It’ll end in tears I feel

It’s not cash rich investors or other buyers. It’s the state. Back in July 2020, the housing minister said:

“The Airbnb properties that are now not being used – is there an opportunity for the state to buy more of them? It’s something that I’m looking at, absolutely. It is something that I want to do frankly,” said O’Brien.”

Dublin City Council also said recently they’re in negotiations to buy or rent c. 4,000 properties in the city.

Basically, if you’re one of the few people actually bidding for properties these days, your counter bidder is more than likely the state.

Good luck with your bidding, but if you do win, you’re also more than likely paying c. 50% more than you would have paid if the state wasn’t also involved in the bidding process and driving up the price IMO

Link to his interview in TheJournal.ie here: https://www.thejournal.ie/darragh-o-brien-housing-minister-5146915-Jul2020/

hometruths

Marius34 wrote: »

Looking at this thread it seems it happened the opposite.

15 years ago, average price were around or over 10 times the wage, nationally, and appears it was normal, people didn't see it as a boom.
Today nationally it's less than 10 times the wage, and so many here see it as a boom.

There are those on here claiming property is currently affordable which is bonkers. That is who I am referring to.

Yes there some 15 years ago saying property at over 10 times the national wage was perfectly normal, and that people should stop cribbing and moaning from the sidelines. Look how well that turned out.

Marius34

PropQueries wrote: »

It’s not “cash rich investors”. It’s the state. Back in July 2020, the housing minister said:

“The Airbnb properties that are now not being used – is there an opportunity for the state to buy more of them? It’s something that I’m looking at, absolutely. It is something that I want to do frankly,” said O’Brien.”

Dublin City Council also said recently they’re in negotiations to buy or rent c. 4,000 properties in the city.

Basically, if you’re one of the few people actually bidding for properties these days, your counter bidder is more than likely the state.

Good luck with your bidding, but if you do win, you’re also more than likely paying c. 50% more than you would have paid if the state wasn’t also involved the bidding process and driving up the price IMO

Link to his interview in TheJournal.ie here: https://www.thejournal.ie/darragh-o-brien-housing-minister-5146915-Jul2020/

To get to this logic you need to have a rough figure how many second hand properties state is buying a year.
I'm not sure you have knowledge on how many second hand properties state has bought?

Timing belt

PropQueries wrote: »

It’s not cash rich investors or other buyers. It’s the state. Back in July 2020, the housing minister said:

“The Airbnb properties that are now not being used – is there an opportunity for the state to buy more of them? It’s something that I’m looking at, absolutely. It is something that I want to do frankly,” said O’Brien.”

Dublin City Council also said recently they’re in negotiations to buy or rent c. 4,000 properties in the city.

Basically, if you’re one of the few people actually bidding for properties these days, your counter bidder is more than likely the state.

Good luck with your bidding, but if you do win, you’re also more than likely paying c. 50% more than you would have paid if the state wasn’t also involved in the bidding process and driving up the price IMO

Link to his interview in TheJournal.ie here: https://www.thejournal.ie/darragh-o-brien-housing-minister-5146915-Jul2020/

No doubt the DCC buying is having an impact but don't think it is to the extent that you are alluding to:

For 2020 their were 15,254 properties sold in Dublin at market value per the CSO
Row Labels Existing New
Volume of Sales
Household Buyer - First-Time Buyer Owner-Occupier 3017 1087
Household Buyer - Former Owner-Occupier 4584 935
Household Buyer - Non-Occupier 817 69
Non-Household Buyer 2633 2112
Grand Total 11051 4203


50% of new builds were bought by the state or institutional investors whilst only 24% of second hand homes were bought by non household buyers

Would the situation have changed that much for the first 2 months of 2021?

PropQueries

Marius34 wrote: »

To get to this logic you need to have a rough figure how many second hand properties state is buying a year.
I'm not sure you have knowledge on how many second hand properties state has bought?

No idea of how many they bought last year but I’m sure someone here can find the figures.

But what I do know is that DCC said explicitly a few weeks ago that they’re currently in active negotiations to rent or buy c. 4,000 properties in the city.

Dublin City is not that big (it’s not London), so 4,000 properties is a very very big proportion of the sales market.

That’s also backed up by the Minister for Housing stating back in July that he’s looking at buying up all those empty AirBnB properties.

Also, given that 4 in 10 new builds are being bought by either the funds or the state and another 3 are one-off builds, that leaves about 3 in 10 new build units available for the private market.

I’ve seen very little media coverage over the past three years of people queuing to buy these new built homes which leads me to believe there’s very little private demand (at the asking prices anyway) and that the only thing holding up the market is the state renting or buying any property that comes on the market.

Given the budget concerns, once the state inevitably pulls back from this current spending spree, it will be shown that there’s little to no private demand.

Not at anywhere near current asking prices anyway IMO

hometruths

Timing belt wrote: »

No doubt the DCC buying is having an impact but don't think it is to the extent that you are alluding to:

For 2020 their were 15,254 properties sold in Dublin at market value per the CSO
Row Labels Existing New
Volume of Sales
Household Buyer - First-Time Buyer Owner-Occupier 3017 1087
Household Buyer - Former Owner-Occupier 4584 935
Household Buyer - Non-Occupier 817 69
Non-Household Buyer 2633 2112
Grand Total 11051 4203


50% of new builds were bought by the state or institutional investors whilst only 24% of second hand homes were bought by non household buyers

Would the situation have changed that much for the first 2 months of 2021?

You need to look beyond the numbers bought. The fact that the state is prepared to enter into long term leases with landlords and developers means is having a significant impact.

This is both keeping rents and purchase prices high by removing supply from both the private sales and rental market. Despite what some on here believe rents and purchase prices are inextricably linked.

The government is essentially underpinning the entire market, either by accident or design.

Marius34

PropQueries wrote: »

No idea of how many they bought last year but I’m sure someone here can find the figures.

But what I do know is that DCC said explicitly a few weeks ago that they’re currently in active negotiations to rent or buy c. 4,000 properties in the city.

Dublin City is not that big (it’s not London), so 4,000 properties is a very very big proportion of the sales market.

That’s also backed up by the Minister for Housing stating back in July that he’s looking at buying up all those empty AirBnB properties.

Also, given that 4 in 10 new builds are being bought by either the funds or the state and another 3 are one-off builds, that leaves about 3 in 10 new build units available for the private market.

I’ve seen very little media coverage over the past three years of people queuing to buy these new built homes which leads me to believe there’s very little private demand (at the asking prices anyway) and that the only thing holding up the market is the state renting or buying any property that comes on the market.

Given the budget concerns, once the state inevitably pulls back from this current spending spree, it will be shown that there’s little to no private demand.

Not at anywhere near current asking prices anyway IMO

It doesn't mean that all 4000 will be on the market for sale, to make it as significant counter-bidder as you think.

Graham

PropQueries wrote: »

Also, given that 4 in 10 new builds are being bought by either the funds or the state and another 3 are one-off builds, that leaves about 3 in 10 new build units available for the private market.

So assuming your figures are accurate.

40% rental
60% private market

Hubertj

schmittel wrote: »

You need to look beyond the numbers bought. The fact that the state is prepared to enter into long term leases with landlords and developers means is having a significant impact.

This is both keeping rents and purchase prices high by removing supply from both the private sales and rental market. Despite what some on here believe rents and purchase prices are inextricably linked.

The government is essentially underpinning the entire market, either by accident or design.

You also need to consider by how much the state outbid random punters by and how many? Are they going in over the top quickly to close a sale? I wouldn’t be surprised as they aren’t particularly competent, are not accountable and it’s not their money. Actually they just got a pay rise so must be doing a great job.

Or is the state outbidding punters by a small margin. I’d be interested to know how many people can afford in the current market but are blocked by the state.

Timing belt

schmittel wrote: »

You need to look beyond the numbers bought. The fact that the state is prepared to enter into long term leases with landlords and developers means is having a significant impact.

This is both keeping rents and purchase prices high by removing supply from both the private sales and rental market. Despite what some on here believe rents and purchase prices are inextricably linked.

The government is essentially underpinning the entire market, either by accident or design.

I am not arguing that government actions are not impacting the housing market that is obvious to every man and their dog.

All I am saying is that it is not to the scale that Props is alluding to whereby every time someone is outbid it is due to the state being on the other end.....Way back last year I said that there would be increases in property prices because institutional investors would pile in and outbid anyone as they will not get a return like that from any other asset class. It is a risk free with a good yield as long as the state keeping the money flowing which they will have to unless they develop there own properties which doesn't look like will happen anytime soon.

Instead we will follow a lot of US cities where similar has happened whereby institutional investors will pile in create demand and build more till there is a surplus of properties and rents start to fall by which time the institutional investors will have tried to flip the properties to another investor or retail buyer. There is even a research paper on the FED website that even talks about this dynamic.

Mic 1972

PropQueries wrote: »

No idea of how many they bought last year but I’m sure someone here can find the figures.

But what I do know is that DCC said explicitly a few weeks ago that they’re currently in active negotiations to rent or buy c. 4,000 properties in the city.

Dublin City is not that big (it’s not London), so 4,000 properties is a very very big proportion of the sales market.

That’s also backed up by the Minister for Housing stating back in July that he’s looking at buying up all those empty AirBnB properties.

Also, given that 4 in 10 new builds are being bought by either the funds or the state and another 3 are one-off builds, that leaves about 3 in 10 new build units available for the private market.

I’ve seen very little media coverage over the past three years of people queuing to buy these new built homes which leads me to believe there’s very little private demand (at the asking prices anyway) and that the only thing holding up the market is the state renting or buying any property that comes on the market.

Given the budget concerns, once the state inevitably pulls back from this current spending spree, it will be shown that there’s little to no private demand.

Not at anywhere near current asking prices anyway IMO

I met only private buyers at the viewings I attended in the last few months. To say that there is little to no private demand sounds like an exaggeration

PropQueries

Timing belt wrote: »

I am not arguing that government actions are not impacting the housing market that is obvious to every man and their dog.

All I am saying is that it is not to the scale that Props is alluding to whereby every time someone is outbid it is due to the state being on the other end.....Way back last year I said that there would be increases in property prices because institutional investors would pile in and outbid anyone as they will not get a return like that from any other asset class. It is a risk free with a good yield as long as the state keeping the money flowing which they will have to unless they develop there own properties which doesn't look like will happen anytime soon.

Instead we will follow a lot of US cities where similar has happened whereby institutional investors will pile in create demand and build more till there is a surplus of properties and rents start to fall by which time the institutional investors will have tried to flip the properties to another investor or retail buyer. There is even a research paper on the FED website that even talks about this dynamic.

But I don’t think the institutional investors are interested in buying that one three bed semi that comes up for sale in the middle of an estate in e.g. Stillorgan.

The problem now is that there’s a good chance the state is now directly competing with that family looking to buy that three bed in Stillorgan IMO

hometruths

Timing belt wrote: »

I am not arguing that government actions are not impacting the housing market that is obvious to every man and their dog.

All I am saying is that it is not to the scale that Props is alluding to whereby every time someone is outbid it is due to the state being on the other end...

I don't think Prop's is saying (I'm sure he'll correct me if I am wrong) is that the state is bidding on every property, outbidding each and every buyer. That's ridiculous.

But in the market as a whole, where prices are set at the margin, the state is the marginal buyer, which you appear to agree with:

Timing belt wrote: »

Way back last year I said that there would be increases in property prices because institutional investors would pile in and outbid anyone as they will not get a return like that from any other asset class. It is a risk free with a good yield as long as the state keeping the money flowing which they will have to unless they develop there own properties which doesn't look like will happen anytime soon.

If investors are piling in for yield because the state is to all intents and purposes setting a floor for rents, then the state is essentially setting the price at the margin. The Redrock deal I posted yesterday is a perfect example.

If the state is driving prices upwards by their activity in the market, then Props is bang on the money. Once again.