Irish Property Market chat II - *read mod note post #1 before posting*

SwimClub

And we are actively shaking small landlords out of the market to be replaced by this monopoly.

Small landlord in RPZ forced out by current shambles, tenants have to move out and get to line up for one of the institutional landlord places available and pay nose bleed inducing rent.

Market rents going up 14% year on year due to this effect, despite an RPZ cap of 2%.

You'd have to question the ulterior motives of people insisting on this system.

Donald Trump

https://www.boards.ie/discussion/comment/120207080#Comment_120207080

Vendor finance can be provided by means of a delayed payment. There is nothing in that article to say how it is being provided, only that up to 55% is available.

o1s1n

https://www.boards.ie/discussion/comment/120199005#Comment_120199005

Could he not have just broken his fixed rate term and paid the penalty fee?

Donald Trump

https://www.boards.ie/discussion/comment/120207081#Comment_120207081

Do you know once again you are spouting about something you have not got a clue about

Is there an award for the most ironic post of the year/decade?

Bass Reeves

https://www.boards.ie/discussion/comment/120207424#Comment_120207424

This was mid '90's toid 00's. Rules were different back a ten year fixed was a ten year fixed. Costs were often calculated off the difference between the rates. While I would have known him well in the early/mid 90' would have sort of lost contact by the late 90's and would only have met him in passing so never found out hoit ended but I do know he was paying it 2-3 years after the rates dropped

combat14

https://www.boards.ie/discussion/comment/120207241#Comment_120207241

if the regulator comes to the conclusion that funds are "setting" prices or abusing dominant market position some sort of action could be taken down the line whether that takes the form of fines, reduced rents, forced sale of fund properties will remain to be seen we are realistically some distance away from that but the fact that the ECB report is picking up on funds "setting rents" in 9 post codes in dubkin is very interesting

Timing belt

https://www.boards.ie/discussion/comment/120207555#Comment_120207555

That is interesting especially when you consider how strong EU antitrust law was prior to Covid. If it was applied to the rental market a decision on setting rents, fines or forced sale would be taken out of the hands of the government and applied from EU level. Will it happen I doubt it because EU are only concerned about one EU country having an unfair competitive advantage against another EU country. But still very interesting

spudrick

The report says up to 40% in certain postcodes are owned by investment funds (plural not singular). It goes on to say that the top 20 most dominant investment funds account for 75% of that. If you do some simple maths, any given investment fund in the top 20 will have about (40%*75%*1/20th) = 1.5% of the market in the most saturated postcode areas.

It's worth looking at for sure, but 1-2% in the most impacted areas is far from a monopoly.

Also it's not a report from the ECB, it's university research from someone who happens to work at the ECB in his day job. Doesn't make it less true but it is a distinction - this isn't something on the ECBs radar that they're concerned about.

combat14

https://www.boards.ie/discussion/comment/120207773#Comment_120207773

at the same time if funds are found in any way to be colluding to set rental prices that could open a while other can of worms but realistically a discussion for another day

coolshannagh28

https://www.boards.ie/discussion/comment/120207555#Comment_120207555

Penny is dropping , the funds are controlling the market by ownership of the properties in play ie buying a high % of what comes on the market and setting rent thereafter . The govt has backed the funds via tax incentives after initially being coerced into this by the troika who wished to see a more European rental model for Ireland , we have taken a uniquely Irish approach to this by adopting a US freemarket capital model . We have benefited from this by a huge influx of capital and the quid pro quo of MNC tech investment and also by outsourcing the risk inherent in our deeply cyclical property market. Our high level of immigration feeds the demand for property driving up prices and rents which pleases the investors and the govt and gives mom and pop landlords the chance to exit and wash their faces. Interestingly left wing groups are also happy that we are offering succour to refugees and migrants so everyone benefits ....but the natives are starting to growl setting up a quandry for both govt and opposition .

Villa05

https://www.boards.ie/discussion/comment/120207817#Comment_120207817

Have heard that these investment funds use software to maximise rental income, would imagine that the funds are using similar/same software so in effect its collusion

Was on a podcast will dig it out if anyine is intrested

Timing belt

https://www.boards.ie/discussion/comment/120207884#Comment_120207884

Software is only as good as assumptions and inputs. Unless all funds are using the same assumptions and inputs only then would it be collusion.

its not that complicated that it even needs software. A simple model that captures demand, supply and disposable income is all that is required. A simple spreadsheet would work it out but saying that I suspect most wouldn’t even bother with this and will just use a simple calc of we need a yield of x so we need to set rent at anything above y

J_1980

https://www.boards.ie/discussion/comment/120207129#Comment_120207129

Wonder if the AHB are also part of these “property investors”.

to my knowledge funds aren’t buying 2nd hand properties.

Villa05

https://www.boards.ie/discussion/comment/120208166#Comment_120208166

With regard to funds: They are, far more than they are building

Since 2012, investors have leaned towards acquiring existing property as opposed to delivering new homes, despite government incentives for investors aimed at generating new supply. Daly said investors acquired around 13,500 homes and delivered 12,500 units.

Daly, who presented his findings to the SSISI in January, said investment in residential property as a portion of overall property investment had increased “dramatically”, with a “significant shift towards residential housing” since 2018

He showed that Ires Reit, the largest landlord in the state with 4,201 units, had bought 3,461 of these units second-hand and built 740 units. Kennedy Wilson, the US landlord, has a portfolio of 2,323 units, of which it acquired 1,735 second hand

lordleitrim

3 properties in my area of Dublin 15 that have been stuck on Daft for months have been updated on Daft with new asking prices 15k and 20k below what they were as they were not attracting interest. This time last year similar properties in the same neighbourhood were on and off Daft in less than a month with PPR showing closing sale prices up to 40K more than the asking price.

Definitely a market shift going on....the real estate agents just don't want to publicise it....

Donald Trump

https://www.boards.ie/discussion/comment/120207068#Comment_120207068

I missed this earlier. You clearly don't understand the basics Bass.

In this case the owner is selling a property. The buyer is handing over money in return. (The analogy I gave to make it easier is you going to a shop to buy something.). Here the vendor is offering some sort of finance. (Again, the analogy is the shop owner offering in-store credit). Regardless of that, the point I tried to make, as basically as possible, is that you buying something in the shop is not the same as you buying a share in the shop. Timing belt said (incorrectly) that the analogy is between you buying a share in the shop business versus you giving the shop a loan. That is not the correct analogy. At no stage here is the potential buyer of that property giving the seller a loan. The buyer is not acquiring a share in the seller. The seller is also not trying to acquire a share in the buyer. How do we know the latter? Well because the buyer has not been identified and there is nothing in the advertisement to say that that is what they want.

In case you are still confused, let me explain it in a different way. Basswaffle Ltd wants to buy a property. A different party says they will give Basswaffle Ltd a loan of 10m to buy the property, or else buy a 10m share of Basswaffle Ltd. which Basswaffle can use to buy the property. That is the analogy that Timing Belt is talking about. The latter would be a PE transaction. (In this example, the different party happens to be the vendor, but don't get hung up on that).

It is fairly ironic to be calling other's stupid when you don't appear to know what is being talked about. Feel free to go off on some irrelevant tangent rant. Tell us another anecdote about Eddie Hobbs again while you are at it.

herbalplants

Dell to cut 5% of workforce worldwide as PC demand falls.

Timing belt

https://www.boards.ie/discussion/comment/120208500#Comment_120208500

your talking crap the PE funds don’t just buy an equity share….the also buy properties and issue debt. The way that they would provide finance is by issuing a loan note. For someone who claims to have 10 years experience you show the same level of knowledge as a intern.

J_1980

https://www.boards.ie/discussion/comment/120208266#Comment_120208266

Yes but does buying a full block off a developer count as “second hand” or self building (ie ordering someone to build something).

“2nd hand” to me is buying something off another landlord or owner, not a completed development off builder.

Timing belt

https://www.boards.ie/discussion/comment/120208266#Comment_120208266

Of course they are just look at the cso data on non household transactions which will include housing bodies and institutional investors. If you then look at the split on residency and NACE code you can see a clear correlation with an increase in house prices. One thing I would point out is that the funds activity in the Irish property market is a wide umbrella which include:

a fund providing finance to developers (much needed as banks wouldn’t lend directly)

funds that trade debt that is secured on property (needed so that banks didn’t need more capital injections from the government)

funds that BTR

funds that purchase property

Donald Trump

https://www.boards.ie/discussion/comment/120208652#Comment_120208652

The clue is in the name. Private. Equity. Transaction.

If you don't understand that, then you are better off leaving be rather than ranting.

Timing belt

yet again you show you know F all…maybe try taking to someone that works in the funds industry. PE funds cover a lot more than equity…. you’re actually clueless

newmember2

https://www.boards.ie/discussion/comment/120208802#Comment_120208802

You're worse, arguing with him.

https://www.boards.ie/discussion/comment/120208802#Comment_120208802

Don’t follow the rabbit down the hole.

Donald Trump

https://www.boards.ie/discussion/comment/120208802#Comment_120208802

I don't care any more. I'm not wasting time explaining basics to you. Go and ask your own little back-office buddies if you want.

Zenify

Anybody else noticing properties requiring work staying on the market longer compared to last year? A few I've been watching haven't budged. Would like to know what others have experienced and what area?

J_1980

https://www.boards.ie/discussion/comment/120209545#Comment_120209545

Yes seeing the same. Things like this:

https://offr.io/property/81-trimleston-gardens-booterstown-co-dublin-a94-hd45-ie/5253

Though newbuilds with really small gardens are also sticky.

oddly people are still picking up nice looking E rated houses though.

Zenify

I can't believe there are still green bathrooms hanging around... initially I was going to say that doesn't need that much work but then I realised its just the photography.

Bass Reeves

https://www.boards.ie/discussion/comment/120210499#Comment_120210499

Older people are often reluctant to spend money on replacing something that while dated in colour or design may be still functional.

You can still wash, go to the toilet and have a bath there.

realitykeeper

I think it is fair to say the government does not want property prices to fall. So is the sale of Irish passports to wealthy foreign nationals one of their strategies to keep house prices high?

If a lot of young Irish professionals choose to emigrate rather than pay high rent (or take on an inflated mortgage) will the government try to bridge the gap by selling 100,000 Irish passports to wealthy Chinese who are willing to buy houses here?