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

I know four apartment blocks currently being built which were bought by Irish life to be rented out, bought before the building even started

mcsean2163

cnocbui wrote: »

You really do like to ignore home truths. It's been pointed out by me and others months ago, that REITS are buying finished developments, not commissioning their construction, thereby reducing retail supply. They bought most of the apartments constructed in Dublin in 2019. They provide demand, not impetus, and you know what, so does a rich individual who buys an investment property to rent out.

One good, the other bad? Socialism.

The rich individual pays tax.

cnocbui

mcsean2163 wrote: »

The rich individual pays tax.

Not quite: The rich individual pays tax and underwrites the US based shareholders of Irish based US multinationals and helps them transition from being 0.01 percenters to being 0.001 percenters, via the taxes Ireland aids and abets those multinationals in avoiding.

Tim Cook under oath, before the US Senate, in reply to being asked how much tax Apple paid in Ireland on billions in earnings: '2.5%'

During its investigations, the subcommittee found that Apple considers three key subsidiaries, all based in Ireland, to have no tax jurisdiction at all. One of those Irish affiliates, Apple Sales International (ASI), reported sales income of $74bn over four years but paid hardly any tax. In 2011 ASI had pre-tax earnings of $22bn but paid just $10m in tax, a rate of 0.05%

The Irish government's response to the EU finding illegal state tax subsidisation and that Apple must pay it to the Irish government: 'no, no, we don't want that €13 Billion - we don't need it, we have a few million tax payers we fleece and if we let up now, the little feckers might get used to it!'

PropQueries

cnocbui wrote: »

Not quite: The rich individual pays tax and underwrites the US based shareholders of Irish based US multinationals and helps them transition from being 0.01 percenters to being 0.001 percenters, via the taxes Ireland aids and abets those multinationals in avoiding.

Tim Cook under oath, before the US Senate, in reply to being asked how much tax Apple paid in Ireland on billions in earnings: '2.5%'



The Irish government's response to the EU finding illegal state tax subsidisation and that Apple must pay it to the Irish government: 'no, no, we don't want that €13 Billion - we don't need it, we have a few million tax payers we fleece and if we let up now, the little feckers might get used to it!'

I think the difference is that Apple had a choice to set up here or not. Without our low taxes, they would have been better off setting up in the UK or other EU country i.e. nearer their market, much bigger concentration of potential workers nearby etc. The low taxes created jobs etc. which otherwise wouldn't be here. Local landlords also benefit from renting their properties to Apple employees etc.

But, if a farmer in Wicklow sells a site for c. €5m, then the only beneficiaries are the farmer, Germany and Switzerland i.e. He will possibly buy a BMW from the German car manufacturer and a chalet in Switzerland.

So, in my view, I have no problem with Apple paying zero tax, but I think that Wicklow farmer should definitely pay 90% tax on any value in excess of the agricultural value of that land. The excess value over the agricultural value was created by the local council when they signed off on the planning permission so the farmer contributed nothing to his new found wealth IMO

Cyrus

PropQueries wrote: »

I think the difference is that Apple had a choice to set up here or not. Without our low taxes, they would have been better off setting up in the UK or other EU country i.e. nearer their market, much bigger concentration of potential workers nearby etc. The low taxes created jobs etc. which otherwise wouldn't be here. Local landlords also benefit from renting their properties to Apple employees etc.

But, if a farmer in Wicklow sells a site for c. €5m, then the only beneficiaries are the farmer, Germany and Switzerland i.e. He will possibly buy a BMW from the German car manufacturer and a chalet in Switzerland.

So, in my view, I have no problem with Apple paying zero tax, but I think that Wicklow farmer should definitely pay 90% tax on any value in excess of the agricultural value of that land. The excess value over the agricultural value was created by the local council when they signed off on the planning permission so the farmer contributed nothing to his new found wealth IMO

You have removed the incentive for the farmer to sell the land now, making land more scarce pushing house prices up .

Timing belt

Hubertj wrote: »

I think risk is definitely a big factor. Links to a point I made this morning about RTB and enforcement of regulations. If landlord and tenant had more faith in system it would help overall.
If someone does sell their investment property where do they put their money though? In bank at 0 or negative? Sell and Sit on cash for 12-18 month then buy again?
Or invest elsewhere?

At the moment property provides the best risk/reward for an investor the other main options are the stock market and get a 2% dividend, Invest in gov bonds and get 2% on a 30year note. With both of these you have serious risks of loosing capital unless you are looking at holding a position till maturity or for a long period to enable the stock market to recover from any crash.

Maybe they could take copy Elon musk and invest in Bitcoin

Rent would need to drop up to 40% before the other investments were on a equal footing from a reward perspective IMO

Timing belt

Hubertj wrote: »

Would falling prices not be positive? I would also like to see a survey of people who bought outside Dublin due to affordability. If prices decrease would they take opportunity to move back to Dublin to be closer to family, friends and Starbucks?

I think the majority of purchases would see a fall in prices as a positive. If it is a case that people WFH outside Dublin the first impact will probably be felt in the rental market.

You would need to see a drop in rents of about 30% for rent to be on par with a mortgage repayment (assuming 30 yrs @ 3%) so there should still be demand to buy for people wanting to live in Dublin and they may have more choices as supply comes online and return it to a more normally functioning housing market with the exception of DLR/Wicklow that will find it more difficult to sell at current prices as these areas have already maxed out on property prices.

Elsewhere in the country you will probably see a shortage of houses and strong increases in price as someone on a Dublin wage will be able to outbid someone on a local wage.

decreds

schmittel wrote: »

Who'd have thought it. Remote working more appealing to certain age groups, study finds

Two in every five - 40% - workers are happy to stay working from home post-Covid, according to a new study



I think we can assume that this almost 50% of would be WFHers are in the same age range as the bulk of would be FTBers.



If almost 50% of late 20s/30s workers want to WFH and 1 in 10 of all workers would like to leave larger urban centres, it would suggest that more than 1 in 10 of FTBers would like to leave larger urban centres.

If this survey is even close to representative that is a serious headwind for Dublin prices.

Fwiw, my company has offices in Belfast, Dublin and London.


I have been with the company years and know most of the people in the Dub office. There is roughly 90-100 in the Dub office with around 30 of them from the countryside (all under 35), around 25 of them have all moved back home and now that we have been given the green light with full time WFH the majority of them will now be purchasing outside of Dublin.


Colleagues in Belfast and London have reported similar patterns. It's a drop in the ocean but people in MNC have been WFH for years on a semi-regular basis, now that most of them are offering full time WFH we could see a huge amount of FTB opt out of Dublin.

hometruths

decreds wrote: »

Fwiw, my company has offices in Belfast, Dublin and London.


I have been with the company years and know most of the people in the Dub office. There is roughly 90-100 in the Dub office with around 30 of them from the countryside (all under 35), around 25 of them have all moved back home and now that we have been given the green light with full time WFH the majority of them will now be purchasing outside of Dublin.


Colleagues in Belfast and London have reported similar patterns. It's a drop in the ocean but people in MNC have been WFH for years on a semi-regular basis, now that most of them are offering full time WFH we could see a huge amount of FTB opt out of Dublin.

Makes sense. Given that FTBers for years have been opting out of Dublin in favour of affordability in Wicklow/Kildare/Meath without wide scale WFH, a larger number will clearly do so and look further afield still if they have the option to WFH.

PropQueries

This is a completely new initiative from DCC and I don't believe anyone could have foreseen this.

According to the Irish Times: "Dublin City Council to consider using public parks for Traveller housing schemes"

DCC also said "We will face opposition to proposals and we would welcome strong political leadership to support new development proposals brought before Councillors for approval."

I don't think anyone can now now seriously disagree with building social homes on Phoenix Park if this latest proposal goes through IMO. And, I'm not saying that in jest.

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/dublin-city-council-to-consider-using-public-parks-for-traveller-housing-schemes-1.4479511

hometruths

PropQueries wrote: »

This is a completely new initiative from DCC and I don't believe anyone could have foreseen this.

According to the Irish Times: "Dublin City Council to consider using public parks for Traveller housing schemes"

DCC also said "We will face opposition to proposals and we would welcome strong political leadership to support new development proposals brought before Councillors for approval."

I don't think anyone can now now seriously disagree with building social homes on Phoenix Park if this latest proposal goes through IMO. And, I'm not saying that in jest.

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/dublin-city-council-to-consider-using-public-parks-for-traveller-housing-schemes-1.4479511

Bit speechless reading that. Hubert's assessment of councillors IQ seems to be spot on.

Timing belt

PropQueries wrote: »

This is a completely new initiative from DCC and I don't believe anyone could have foreseen this.

According to the Irish Times: "Dublin City Council to consider using public parks for Traveller housing schemes"

DCC also said "We will face opposition to proposals and we would welcome strong political leadership to support new development proposals brought before Councillors for approval."

I don't think anyone can now now seriously disagree with building social homes on Phoenix Park if this latest proposal goes through IMO. And, I'm not saying that in jest.

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/dublin-city-council-to-consider-using-public-parks-for-traveller-housing-schemes-1.4479511

It won't be the first time that they build on public parks. They built 50 odd houses on a public park in Clondalkin 2/3 years ago.

https://consult.sdublincoco.ie/en/consultation/part-8-proposed-new-rapid-build-social-housing-development-st-cuthberts-park-clondalkin

PropQueries

Timing belt wrote: »

It won't be the first time that they build on public parks. They built 50 odd houses on a public park in Clondalkin 2/3 years ago.

https://consult.sdublincoco.ie/en/consultation/part-8-proposed-new-rapid-build-social-housing-development-st-cuthberts-park-clondalkin

So there we go. We have the solution to the supposed lack of land problem for building houses in the city. It's called Phoenix Park

Timing belt

PropQueries wrote: »

So there we go. We have the solution to the supposed lack of land problem for building houses in the city. It's called Phoenix Park

That would be total madness... but where the council are involved you never know.... the only comfort I would get is that it would take 10 years to publish their plan and then another 10 years in court.... Burn through a few million euro in legal fees, consultants etc. and end up with noting and then blame each other for not delivering.

cnocbui

PropQueries wrote: »

This is a completely new initiative from DCC and I don't believe anyone could have foreseen this.

According to the Irish Times: "Dublin City Council to consider using public parks for Traveller housing schemes"

DCC also said "We will face opposition to proposals and we would welcome strong political leadership to support new development proposals brought before Councillors for approval."

I don't think anyone can now now seriously disagree with building social homes on Phoenix Park if this latest proposal goes through IMO. And, I'm not saying that in jest.

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/dublin-city-council-to-consider-using-public-parks-for-traveller-housing-schemes-1.4479511

Buy some old clapped out barges, load the feckless freeloaders on the and tow them 2 km out into the Irish sea and anchor them. Send a supply vessel out once a week. There you go, problem solved the right way.

PropQueries

According to the Irish Times: “ESB plan to convert museum into luxury apartments criticised by city councillors”

Just like when RTÉ sold part of their site at Donnybrook for c. €100m back in 2017, isn’t this just another example of a state body using or selling what is state owned land (owned by me) for the exclusive benefit of relatively few ESB employees?

Shouldn’t the state just take this site for social housing purposes given that the ESB now have no interest in using it? The state will gladly take my front garden (actual real private property paid for by me) to build a bus route etc.

Link to article here: https://www.irishtimes.com/culture/heritage/esb-plan-to-convert-museum-into-luxury-apartments-criticised-by-city-councillors-1.4479543

Villa05

Timing belt wrote:

You would need to see a drop in rents of about 30% for rent to be on par with a mortgage repayment (assuming 30 yrs @ 3%) so there should still be demand to buy for people wanting to live in Dublin and they may have more choices as supply comes online and return it to a more normally functioning housing market with the exception of DLR/Wicklow that will find it more difficult to sell at current prices as these areas have already maxed out on property prices.

Every bubble needs a decent hot air system to blow it up

schmittel wrote:

Bit speechless reading that. Hubert's assessment of councillors IQ seems to be spot on.

In fairness it always seems to be DCC that come out with these hair brained plans while the surrounding councils seem to be far more efficient and deliver affordable housing albeit in low numbers @ value for money for taxpayer

If this thread has proven anything. DCC should not be left to look after your back garden nevermind the centre of our capital city

Hubertj

Villa05 wrote: »

Every bubble needs a decent hot air system to blow it up




In fairness it always seems to be DCC that come out with these hair brained plans while the surrounding councils seem to be far more efficient and deliver affordable housing albeit in low numbers @ value for money for taxpayer

If this thread has proven anything. DCC should not be left to look after your back garden nevermind the centre of our capital city

I wouldn’t ldnt confine acts of stupidity and incompetence to Dublin City council.

PropQueries

Here's an interesting investment property for sale in Ahascragh, Co. Galway.

It was initially looking for €680,000 (price in the original brochure), then it was €490,000. Now it has dropped it's price to €390,000.

I does seem to show that noone knows how to value anything, propertywise, in Ireland anymore IMO

Link to MyHome here: https://www.myhome.ie/residential/brochure/main-street-ahascragh-ballinasloe-galway/4257369

Villa05

Hubertj wrote:

I wouldn’t ldnt confine acts of stupidity and incompetence to Dublin City council.

Neither would I, but they appear to be putting severe pressure on the measuring scale

Cyrus

PropQueries wrote: »

Here's an interesting investment property for sale in Ahascragh, Co. Galway.

It was initially looking for €680,000 (price in the original brochure), then it was €490,000. Now it has dropped it's price to €390,000.

I does seem to show that noone knows how to value anything, propertywise, in Ireland anymore IMO

Link to MyHome here: https://www.myhome.ie/residential/brochure/main-street-ahascragh-ballinasloe-galway/4257369

surely an investment property is valued in relation to its yield?

im not sure no one knows how to value anything any more, id argue more expensive stuff outside the more desirable areas is harder.

Villa05

PropQueries wrote:

I does seem to show that noone knows how to value anything, propertywise, in Ireland anymore IMO

It's not that long ago when nearly one side of the main the main street in Charleville, co Cork sold for less than that at an allsop auction

JimmyVik

PropQueries wrote: »

This is a completely new initiative from DCC and I don't believe anyone could have foreseen this.

According to the Irish Times: "Dublin City Council to consider using public parks for Traveller housing schemes"

DCC also said "We will face opposition to proposals and we would welcome strong political leadership to support new development proposals brought before Councillors for approval."

I don't think anyone can now now seriously disagree with building social homes on Phoenix Park if this latest proposal goes through IMO. And, I'm not saying that in jest.

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/dublin-city-council-to-consider-using-public-parks-for-traveller-housing-schemes-1.4479511

I doubt they will be putting halting sites in public parks.



But I have it on good authority from a friend in the know that they are looking to buy a site for sale in North Dublin (well a large house on about an acre of land), to move the halting site from the airport to. Some people who think that the house with a huge garden for sale beside them are going to be getting a lot of new neighbors, instead of one family moving in.

PropQueries

Cyrus wrote: »

surely an investment property is valued in relation to its yield?

im not sure no one knows how to value anything any more, id argue more expensive stuff outside the more desirable areas is harder.

Fully agree with that. And, that's where the state comes in relation to property valuations in Ireland. If the state aren't interested in renting a particular property, even in the cities, what's the potential yield and hence the valuations?

I think this explains all the empty new built apartments and houses in Dublin. If the state won't rent them or subsidise the rent through HAP etc., the demand simply isn't there for the rents they're seeking, so the potential yields and valuations are all out of whack IMO

The state should realise by now that they're the only real customer in town and should act accordingly in their negotiations IMO

Cyrus

PropQueries wrote: »

Fully agree with that. And, that's where the state comes in relation to property valuations in Ireland. If the state aren't interested in renting a particular property, even in the cities, what's the potential yield and hence the valuations?

I think this explains all the empty new built apartments and houses in Dublin. If the state won't rent them or subsidise the rent through HAP etc., the demand simply isn't there for the rents they're seeking, so the potential yields and valuations are all out of whack IMO

The state should realise by now that they're the only real customer in town and should act accordingly in their negotiations IMO

Are there lots of empty new build houses in Dublin ?

Villa05

The senior public servant that repeatedly and strongly advised against the shared ownership scheme appears to be moving to the department of health


Just saying!

PropQueries

Villa05 wrote: »

The senior public servant that repeatedly and strongly advised against the shared ownership scheme appears to be moving to the department of health


Just saying!

Unfortunate as he was one of the few smart ones there IMO

PropQueries

schmittel wrote: »

Not sure about the precise taxation position, but the article I linked yesterday highlights a notable difference.



The difference in government attitude and thus policy is why investors can get twice the yield in Ireland as they do in Germany.

https://www.irishtimes.com/opinion/david-mcwilliams-a-solution-to-irish-house-price-silliness-1.4476967?localLinksEnabled=false

This article is now free to read on David McWillliams's website.

One point he made that I thought was interesting was: "For example, when rents start rising in the German capital, the Berlin authorities impose rent controls. This sends a clear signal to everyone that the State will not tolerate rents that rise far above income – such rents serve only to enrich landowners while penalising everyone else."

Link to David McWilliams's article here: http://www.davidmcwilliams.ie/a-solution-to-irish-house-price-silliness/

Villa05

PropQueries wrote:

One point he made that I thought was interesting was: "For example, when rents start rising in the German capital, the Berlin authorities impose rent controls. This sends a clear signal to everyone that the State will not tolerate rents that rise far above income – such rents serve only to enrich landowners while penalising everyone else."

A simple no cost solution to affordabilty

Sends a signal to land speculators/hoarders as well.
A city's wealth is derived from its people not property. Policy should reflect that.

Taxpayers funds provide much of the infrastructure that allows cities to function, yet private funds can hold the taxpayer to ransom for affordable housing while they are the greatest beneficiary of taxpayer funded infrastructure

Organised theft

Interested Observer

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat