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

Timing belt

PropQueries wrote: »

But I’d also add in the c. 5,000 (or whatever the figure is, maybe half that?) additional dwellings that are reconnected to the ESB each year (reconnections are only counted if they haven’t been connected in the past 2 years) so are very real additional supply into the market annually.

You are correct that reconnections are only counted if they haven't been connected in the past 2 years.

Yes this is adding additional supply to the market but not to the overall housing stock.

If you are to include this in your figures then you need to look at the full picture and not just the additional supply.

The majority of these reconnections are due to bank repossessions being sold as mentioned in the 2018 CSO report on ESB Connections

"The number of reconnections has increased as the ecconomy has improved and one of the reasons for properties becoming vacant (and potentially thereafter requiring reconnection) relates to the issue of mortgage distress and repossessions which may arise as a result. There have been 8,500 repossessions of residential dwellings and 4,900 repossesions of buy-to-let (BTL) dwellings in Ireland since 2009. Data from the Central Bank4 as shown in Figure 3.5 suggests that there can be a time lag between the repossession and disposal of dwellings with over 3,000 dwellings in the lenders' repossession as of end 2017. In the majority of cases, this time lag would be sufficient to lead to a disconnection from the ESB network.
The increase in reconnections in recent years however indicates that a number of vacant properties of this kind are being brought back into use."

The total reconnections from 2011 to Q3 2020 was 13,501
Source: cso

The total repossessed properties sold from 2011 to Q3 2020 was 14,061
Source: cbi

The total propertes repossessed from 2011 to Q3 2020 was 15,020
Source: cbi

There will be Additional Supply but as you can see from the figures above supply will also be reduced by the number of repossessed properties.

The net effect on the overall supply is negligible

Reins

https://www.ft.com/content/71990315-d346-40bb-81db-52b7f6e58517

Eurozone banks scale back lending as bad debt fears grow

random_banter

Moving! wrote: »

Was the one you viewed in Dundrum on Barton Rd East? We were looking at that - had gone sale agreed at €584k late last summer and then sale fell through recently. Last I heard, it was at €610k on Friday...
That's symptomatic of everything I have seen over the last few months.

No, Laurel Drive, just off the above road. Went through the PPR and it’s definitely inflated bids due to terrible supply.

We were thinking of viewing the above house you mentioned but it’s a little too far from the Luas for us. As you’ve pointed out, there seems to be a premium of almost 30k on that one too vs last summer. It does seem to have lots of potential though! This pandemic has created an interesting set of circumstances for the property market. Best of luck with your search.

Praying for this situation to settle with the vaccine rollout and for more people to decide theyre ready to put homes on the market.

MacronvFrugals

Landlord Hammerson collects 31% of its Irish rents in current quarter

Hammerson, Ireland's largest retail landlord, said its Irish properties had a busy Christmas but has so far collected just over 30% of the rents due in this first quarter, lower than its performance in France and in Britain

https://www.irishexaminer.com/business/economy/arid-40210271.html

mcsean2163

PropQueries wrote: »

A cash buyer buys a €400k investment property at e.g. 5% rental yield = €20,000 per annum.


Over 10 years, that's gross income of €200,000


If that person decides to leave that €400k sitting in the bank = 0% maximum = €0 per annum


Over 10 years, that's income of €0


If the landlord is incredibly unlucky and his tenants don't pay any rent for 5 years, after 10 years, he's still €100,000 better off (gross) than leaving it sitting on deposit. More than compensates for the "hassle" of renting a property IMO



Even if he spends €50k over that 10 years on "improvements", "fixing things", replacing a €250 cooker etc. he would still be better of by the 10's of thousands after 10 years.



Taxation doesn't come into it because he still wouldn't be paying any tax on the €0 he would achieve by leaving it in the bank.


The "hard work" entailed in managing a property shouldn't come into play either as if he's a decent landlord, the property should be in good condition to begin with before he's letting it out.

In our case, both sets of tenants were nuisance tenants. We lost money by selling but were glad to do it just to avoid the dramas,. At the time we both had full time jobs and some guy deciding not to pay was maddening for me. Different for huge landlords but subsiding someone elses rent while paying our own had an emotional toll. I couldn't understand how the guy could essentially steal from us and the police would do nothing. Sounds fine as outlined by you but for me was a nightmare.

Marius34

Timing belt wrote: »

The issue is not about a bubble in Tech shares... The issue is if we see to much inflation it will raise yields on Government debt. The central banks will not be in a position to undertake QE to push yields lower as this will generate more inflation. In this situation we have:

• Government debt servicing costs increase
• The increase in yield will also push up the cost of servicing all Corporate and personal Debt
• The logic that has pushed the share prices (and other assets classes) higher is that market has repriced to the low interest rare environment. All of a sudden there is a big hole in this logic which results in a repricing down of Shares and other assets. (Tech stocks are more sensitive to interest rate so will see larger falls)

Hopefully at this stage the economy will be growing sufficiently to be able to deal with the increase in debt servicing costs. (e.g. tax take is up because the economy has grown)

If the inflation is significant enough the central banks may need to start tapering QE or raise rates even if the economy is not growing. This will result in the same conditions as listed above but will result in growth being cut back at the same time as the Brakes have to be applied to the economy.

If this happens then we have very serious issues as the increase in debt servicing costs need to be found somewhere by the Government, Companies and individuals.

• The Governments will need to cut expenditure or increase their tax take.
• Companies will cut costs which means unemployment which means lower taxes.
• Individuals will have higher mortgage repayments (unless they are fixed) and are likely to be paying more tax (assuming they have not lost their job)

Although I agree with you that there is no Bubble in Irish house prices. I can not see how they would not be impacted in such a situation.

You all may be right, not sure, I'm just looking to the stock market from the different angle. It seems to me it reached Bubble territory simply based on Historical prices, and based on the current&expected revenues/profits(&dividend) to stock value. although I have no idea if there will any major crash.

Regarding stock market impact on Property Price, I'm not saying that it doesn't have impact on Property Market, it definitely has, but not a massive in current situation. If stock crash by 30-50% it may reduce property price by some extend, but I would not expect this to cause a crash on the Residential Property price.

MacronvFrugals

'About 30%' of construction sites remaining open despite Level 5 shutdown

Non-essential construction sites have been closed since Friday 8 January but the numbers of construction workers on the PUP suggests that many sites remain open.

https://www.thejournal.ie/construction-sector-3-5329355-Jan2021/

combat14

MacronvFrugals wrote: »

Landlord Hammerson collects 31% of its Irish rents in current quarter

https://www.irishexaminer.com/business/economy/arid-40210271.html

wow only 31% payment of commercial rents here a far cry from 90+% earlier last year, and this pandemic still has a long way to go

just shows how many businesses are hurting here...
and leads to natural questions about how many will fully reopen, what kind of future job losses in the economy to expect later in the year if any..

combat14

results from israeli rollout of pfeizer vaccine indicate it may be necessary to give people their 2 jabs closer together raher than give everyone their first jab and wait to rollout second jab - wonder will this slow down economy getting back on its feet

guess we are lucky that there are a few vacinces on the way - and we are not getting the chinese version here as apparently it is only 50.4% effective!!


https://www.google.com/amp/s/news.sky.com/story/amp/covid-19-real-world-analysis-of-vaccine-in-israel-raises-questions-about-uk-strategy-12192751

L1011

combat14 wrote: »

results from israeli rollout of pfeizer vaccine indicate it may be necessary to give people their 2 jabs closer together raher than give everyone their first jab and wait to rollout second jab - wonder will this slow down economy getting back on its feet

guess we are lucky that there are a few vacinces on the way - and we are not getting the chinese version here as apparently it is only 50.4% effective!!


https://www.google.com/amp/s/news.sky.com/story/amp/covid-19-real-world-analysis-of-vaccine-in-israel-raises-questions-about-uk-strategy-12192751

We're working on 4 weeks, not the 8+ the UK is so reverting to 3 would not have that disasterous an impact on rollout.

fliball123

PropQueries wrote: »

Was referring to the average number of potential occupants per new built unit.

But I’d also add in the c. 5,000 (or whatever the figure is, maybe half that?) additional dwellings that are reconnected to the ESB each year (reconnections are only counted if they haven’t been connected in the past 2 years) so are very real additional supply into the market annually. I’d also add in the probate sales at a minimum of c. 5,000 - 10,000 per annum.

Contrary to some people’s opinions here, when old people pass away, we don’t send in the demolition contractors and immediately knock down their home so it’s very real additional supply each year.

So, new supply entering the market each year is definitely exceeding demand IMO.

And I think many people don’t realise that those housing demand projection figures put out by the central bank, ESRI etc. include having to replace c. 5,000 units that they believe become obsolete and vanish into space each and every year in Ireland.

I doubt that level of obsolescence (if true) is happening in Dublin, Galway, limerick and Cork each year (where people actually want to live) so the estimates for future housing demand projections are way off IMO, especially as their projections are also based on net inward migration staying at c. 30,000 per annum out to 2030.

Did you take away the dwellings bulldozed for the new developments?? in 2016 alone a rate of 6394 in obsolescence. Surely they have not pulled this figure from their bumhole. A rate of between 4 to 6% per annum.

https://www.housing.eolasmagazine.ie/the-challenge-of-housing-obsolescence/#:~:text=According%20to%20Sirr's%20figures%2C%20a,19%2C000%20is%20due%20to%20obsolescence.


The above link also explains why your ESB connections use for counting all of these connections as new to the number of houses available is not fit for purpose as detailed in the article.


Also as I have pointed out to over and over that our population is growing year on year for the last one hundred years meaning there are more people every year in the bracket for looking for a house than those dying.

Ursabear

We are also buying and getting some quotes prices for new builds almost 5- 8% higher then the prices for similar houses in the same developments last year. Am terrified it's a bubble and it will burst and we will have bought at the peak. Would happily but 2nd hand but very little on market due to covid.

bilbot79

Ursabear wrote: »

We are also buying and getting some quotes prices for new builds almost 5- 8% higher then the prices for similar houses in the same developments last year. Am terrified it's a bubble and it will burst and we will have bought at the peak. Would happily but 2nd hand but very little on market due to covid.

I wonder does this also have a bit to do with the increase of help for ftbs from 20 to 30k?. I'm trading up but literally won't touch a new build as I don't get that bonus

SmokyMo

fliball123 wrote: »

and others will spend their lives paying rent as they did not buy.

You can buy at any time when you renting.. Dont get your point.

I do get a whiff of fear in this thread from homeowners knowing deep inside they overpaid for their property and afraid of any price fluctuations.

Ursabear

bilbot79 wrote: »

I wonder does this also have a bit to do with the increase of help for ftbs from 20 to 30k?. I'm trading up but literally won't touch a new build as I don't get that bonus

I think it is partially, we don't qualify either as my partner used to own an apt from pre crash with his ex.

I think there is also a policy to pass some of the extra expenses from covid and possibly increases in building material prices on to the buyer also. One development intimated the increase in price was due to Covid.

StevenToast

SOFT LANDING!

bilbot79

StevenToast wrote: »

SOFT LANDING!

Did I just wake up in 2008?

Marius34

SmokyMo wrote: »

You can buy at any time when you renting.. Dont get your point.

I do get a whiff of fear in this thread from homeowners knowing deep inside they overpaid for their property and afraid of any price fluctuations.

What are you talking about?

combat14

interesting read for anyone who thinks the world and irs economy is in for a soft landing any time soon:



“What We’re Dealing with Now Is a New Pandemic”

Can We Stop a Super Coronavirus?

https://www.spiegel.de/international/world/can-germany-stop-the-new-supervirus-a-e9ffc207-0015-4330-8361-b306f6053e15?fbclid=IwAR0TvNGur9FlPjwo2KBIKsPNsNLLX3VA0vMGIK6WGhkWV0oyVlQnPBC0Tjg

PropQueries

According to the Irish Times today:


"Glenveagh Properties is on course to secure over €60 million from the sale of more than 100 apartments at its Marina Village scheme in Greystones, Co Wicklow, to the German investor Realis."


According to the article, it's the same fund who purchased Herbert Hill in Dundrum where the council is paying up to €3,000 per month per apartment over a 25 year lease term.



However: "The Irish Times understands there are no plans at this point for it to pursue a deal similar to the one at Herbert Hill with Wicklow County Council.".


But if they do make a deal with Wicklow County Council, it will definitely make it one the best social housing developments in the country, if not the world IMO



Link to Irish Times article today here: https://www.irishtimes.com/business/commercial-property/german-investor-to-acquire-greystones-apartments-for-60m-1.4462425

Here's the link to the Herbert Hill development in Dundrum in the Irish Times from 2019: https://www.irishtimes.com/news/social-affairs/council-chairman-defends-dundrum-lease-deal-with-foreign-cuckoo-fund-1.4108443

"The Herbert Hill apartments are now set to be used as social housing with the council reportedly paying monthly rents of some €2,000 for one-bed apartments, €2,500 for two-bed units and €3,000 for three-bed units. However, protesters argue that rent paid by the council over the next 25 years will end up exceeding what Realis paid for the complex, which stands in a prime location next to Dundrum Town Centre."

CorkRed93

PropQueries wrote: »

According to the Irish Times today:


"Glenveagh Properties is on course to secure over €60 million from the sale of more than 100 apartments at its Marina Village scheme in Greystones, Co Wicklow, to the German investor Realis."


According to the article, it's the same fund who purchased Herbert Hill in Dundrum where the council is paying up to €3,000 per month per apartment over a 25 year lease term.



However: "The Irish Times understands there are no plans at this point for it to pursue a deal similar to the one at Herbert Hill with Wicklow County Council.".


But if they do make a deal with Wicklow County Council, it will definitely make it one the best social housing developments in the country, if not the world IMO



Link to Irish Times article here: https://www.irishtimes.com/business/commercial-property/german-investor-to-acquire-greystones-apartments-for-60m-1.4462425

What a world. Truly insane.

MacronvFrugals

PropQueries wrote: »

According to the Irish Times today:


"Glenveagh Properties is on course to secure over €60 million from the sale of more than 100 apartments at its Marina Village scheme in Greystones, Co Wicklow, to the German investor Realis."


According to the article, it's the same fund who purchased Herbert Hill in Dundrum where the council is paying up to €3,000 per month per apartment over a 25 year lease term.



However: "The Irish Times understands there are no plans at this point for it to pursue a deal similar to the one at Herbert Hill with Wicklow County Council.".


But if they do make a deal with Wicklow County Council, it will definitely make it one the best social housing developments in the country, if not the world IMO



Link to Irish Times article here: https://www.irishtimes.com/business/commercial-property/german-investor-to-acquire-greystones-apartments-for-60m-1.4462425

Scandalous and grotesque are two words that come to mind

Glenveigh homes (owned by a vulture fund) selling properties to a REIT who will likely rent back to the state for 30 years

Idbatterim

Absolutely insane, 1.5 million euro mortgage and interst for you on your say 750k house or apartment ( including furnishing and maintenance) . Oh and your yearly lpt and management fee. Free for your neighbour!

virginmediapls

SmokyMo wrote: »

You can buy at any time when you renting.. Dont get your point.

I do get a whiff of fear in this thread from homeowners knowing deep inside they overpaid for their property and afraid of any price fluctuations.

This is a major thing in this thread.

The counterpoint of this is that there's a rake of ~30 year olds waiitng to get into the market, hoping the inevitable crash is about to come.

SmokyMo

virginmediapls wrote: »

This is a major thing in this thread.

The counterpoint of this is that there's a rake of ~30 year olds waiitng to get into the market, hoping the inevitable crash is about to come.

I do agree. People trying to time market most of the time gonna fail miserably.

But it will come, people will struggle to maintain their repayments due to job losses, market will be flooded when funds begin to offload properties that they have been buying in bulks.

If you think its going to be rising indefinitely for the duration of your mortgage you live in a fallacy.

I am sympathetic to people who bought recently as everyone situation is different.

Idbatterim

Covid hits and everyone expects a crash to come immediately, economically and also housing prices, it doesnt play out this way. However I now think many think it wont come at all, I reckon more likely than not , it will. The timelines in all of it, are just far longer than we expect...

Its like a volcano, it takes ages to build and then bang!

https://www.irishtimes.com/business/economy/how-ireland-s-housing-crisis-is-part-of-a-global-problem-1.4462602?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fhow-ireland-s-housing-crisis-is-part-of-a-global-problem-1.4462602

Cyrus

SmokyMo wrote: »

You can buy at any time when you renting.. Dont get your point.

I do get a whiff of fear in this thread from homeowners knowing deep inside they overpaid for their property and afraid of any price fluctuations.

im sure you will be adding your nuanced analysis to the thread, i look forward to it.

Villa05

Idbatterim wrote:

Absolutely insane, 1.5 million euro mortgage and interst for you on your say 750k house or apartment ( including furnishing and maintenance) . Oh and your yearly lpt and management fee. Free for your neighbour!

Just for a little bit of balance

I would be classed as a working class person and I can guarantee you no self respecting person would want to live in these places rent free or at all

The magic and bond of working class areas is the people and how they look out for each other.

You put people in these areas and you open them up to resentment from people that have to pay the full cost

For every working class area that main stream media mention as being trouble some one could probably name 10 that are fine

Working class areas that are troublesome is mainly down to drugs which is problem fed by the money of the rather wealthy.

I said it before and I'll say it again. The criminal in the tie will always do more damage to this country than the person in the hoody.
These schemes are a transfer of taxpayers money to the very wealthy dressed up as social housing. a major breach of the covenants of taxation.

This is basically theft from working and middle class for the enrichment of the very wealthy. I can take action and prentative measures to protect myself from the criminal in the hoody, I am pretty powerless to do anything about this theft

HansKroenke

combat14 wrote: »

interesting read for anyone who thinks the world and irs economy is in for a soft landing any time soon:



“What We’re Dealing with Now Is a New Pandemic”

Can We Stop a Super Coronavirus?

https://www.spiegel.de/international/world/can-germany-stop-the-new-supervirus-a-e9ffc207-0015-4330-8361-b306f6053e15?fbclid=IwAR0TvNGur9FlPjwo2KBIKsPNsNLLX3VA0vMGIK6WGhkWV0oyVlQnPBC0Tjg

This is utter nonsense. It is normal for a virus to mutate but there is absolutely no evidence the vaccines developed can't be effective against it as it mutates. Remember, bar some anomalies in the data, covid only kills the vulnerable and elderly (i.e. one needs to be in both categories), so this article is just typical of tabloid nonsense and should be treated as such. My own suspicion is that articles like these are going to be used to try to bulk up vaccine take up among those who are not likely to get a vaccine due to lack of vulnerability to covid, since mandatory vaccines will not be implemented (by all credible reports).

Government support for the economy will not stop anytime soon, which is all that matters in terms of any economic crash concern. Once the vaccine is rolled out as planned (i.e. frontline and elderly vaccinated by end of February and 4m in Ireland by September), the government will introduce more spending and borrowing in the budget to encourage spending by the public and develop infrastructure projects as things return to normal. What happens to this debt and the massive corporate debt in the system is uncertain beyond the post-covid economic recovery.

awec

Idbatterim wrote: »

Absolutely insane, 1.5 million euro mortgage and interst for you on your say 750k house or apartment ( including furnishing and maintenance) . Oh and your yearly lpt and management fee. Free for your neighbour!

It's not that big a deal. We've social houses in our development and it doesn't bother me at all.

I don't think very many people spend too much time thinking about what their neighbours are paying in mortgage or rent. Once you can afford your own, just get on with your life and enjoy it.