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

In a way we should appreciate the foreign investment in our rental sector, they are the only ones willing to invest/take a chance on rentals. Without them, the rental sector would be much worse as not all renters can afford to buy, particularly with rates rising.

Zenify

https://www.boards.ie/discussion/comment/120602395#Comment_120602395

Would you prefer to be shot in the head or the foot?

An affordable and functioning property market is what the hard working young people of this country deserve.

Being thankful of the big foreign investment which has enabled people in their 30s to house share at nearly 50% of their income is a slap in the face IMO.

Thankful for foreign investment is like the soup during the famine. Thanking the British for giving you soup after they orcastrated a famine.

https://www.boards.ie/discussion/comment/120602550#Comment_120602550

Finished?

Im not saying it is ideal, or even preferable, but you have to be a bit of a clutz not to realise that with Irish landlords leaving the market, people who cannot, or do not wish to buy, need some place to rent. If they were not in our market, there would be even less rental properties, and even higher rents.

Zenify

https://www.boards.ie/discussion/comment/120602636#Comment_120602636

Would you thank OPEC for creating a lovely cartel that provides the world with the oil it needs?

I'm sorry, I'm clearly not finished.

Please don't take these comments as an attack against you. It isn't.

I'm a fan of the free market. But the property market in this country looks very fishy. You would have to be a bit of a "clutz" to not realise the corruption going on.

https://www.boards.ie/discussion/comment/120602731#Comment_120602731

There is a conspiracy theories forum.

You can blab on about the way it could be, should be, will be or won’t be, but there is now the way it is. And without the rental properties provided by foreign investment, then the rental sector would be even worse as domestic owners exit the market.

You might say that without all these investors, more people would be able to buy, but it is unlikely that many units would not have been built without forward financing and you have to accept, not everyone wants/can buy, so we need rentals.

Blut2

Its too legally/logistically difficult to make buying property here for citizens only. A decently high property tax is the best way to prevent or at least significantly reduce foreign buyers though.

Tax property at 1-3% of value per year, with a rebate/exemption for low and middle income households that are tax resident, and you'll make Irish property far less attractive to foreign owners buying it just to park cash. And raise lots of revenue for the state as a bonus on top.

Something like a system that worked out to 0% property tax on households with income of up to 100k per year, 1% property tax per year on households with income up to 200k, 2% property tax per year on households with income up to 300k, and 3% property tax per year on all others (including non tax-residents) would be fairly hard to argue with on a moral level and would do wonders.

You could even have an additional failsafe if required that if households are asset rich/cash poor and unable to pay the tax on a yearly basis thats fine, the tax bill will just be retained as a lien over the property that will be charged at sale or transfer of the property. Again minimizing the impact to actual Irish residents, nobody ever loses their house or faces poverty, but it reduces the attractiveness of a house as an investment asset hugely.

ionapaul

On the greenway side of the Clay Farm development in D18 (I walk it very often as live nearby), I believe there are three Indian families in a row moved into the new houses recently occupied - I'm guessing the area is extremely attractive to people working in Microsoft, etc... in Sandyford, being a 10 minute drive away and a few stops on the Luas, so always think 'software engineers' when I seem them! Probably an offensive generalisation!

wassie

https://www.boards.ie/discussion/comment/120601592#Comment_120601592

China has very strict capital controls on the outflow of money from the country. For local Chinese people, there is a USD $50,000 annual limit on money transferred outside of mainland China. There are of course ways around this, however it is very complicated and comes with risk (not only to loss of capital but loss of freedom!).

Also AFAIK, Chinese residents are also restricted from buying houses overseas. Immigration is the only legal way if they want to buy property abroad.

Bargain_Hound

Our neighbours house initially went sale agreed 50k above asking to a cash Chinese buyer last year. Sale eventually fell through. But, I Thought it was a little odd at the time, but seems from reading here it’s common place for what ever reason.

grumpyperson

https://www.boards.ie/discussion/comment/120602297#Comment_120602297

Loophole closed last February.

https://www.ft.com/content/00c75b49-4390-4c08-a4d0-529b6d7d2942

Doesn't seem to have made much difference in the housing crisis.

DownByTheGarden

https://www.boards.ie/discussion/comment/120603061#Comment_120603061

Ive a friend from China and he has bought a house here. He also scouts out houses for other Chinese people to buy here and they buy them. Last year he even organized for another Chinese person to buy a shop in Artane.

Last time I was talking to him about 2 weeks ago he had another one he was bidding on for someone in China. He shows them around on facetime and deals with the EA here. Doesnt seem short of clients. And thats not even his day job. Its just a side job for him.

RichardAnd

https://www.boards.ie/discussion/comment/120603103#Comment_120603103

It's not whether it's contributing to the housing crisis or nay. Citizenship is not something to be sold....

However, it's good that this particular avenue has been terminated.

Villa05

https://www.boards.ie/discussion/comment/120602808#Comment_120602808

Have you figures on how many developments were directly funded by funds. Maybe its just the media but it would appear most of their property was either built or in development when purchased by funds, even moreso with social housing.

With regard to conspiracy theroies, I'm sure it's pure accident that FG is worried about the td's they are loosing to the lobbying industry and how the result of that lobbying has stacked the property market in favour of funds to the detriment of traditional LL's and tennants.

We can rule out that they have found a more efficient way to bleed the taxpayer, they're just trying to help create more supply

It just unfortunate that there no longer td's as my opportunity to show my gratitude at the ballot box has been taken away from me. Such a shame

RichardAnd

https://www.boards.ie/discussion/comment/120603342#Comment_120603342

I think that we need to stop throwing about the label "conspiracy theory" to dismiss an argument. It's akin to calling someone "far-right" if they raise genuine concerns regarding immigration.

monkeybutter

https://www.boards.ie/discussion/comment/120603061#Comment_120603061

thats per person, per year, you can see how it can easily be bypassed

i dont think there's any other rules in place as pretty impossible to regulate, all they can really do is regulate exchanges of currency

https://www.boards.ie/discussion/comment/120603342#Comment_120603342

Property is the most valuable asset the vast majority of people will ever own, it therefore stands to reason that the vast majority, especially recent buyers, want their home’s value to remain high. I don’t know about you, but I don’t want the value of my house to drop significantly. So please, don’t be a hypocrite and tell us that it is only in FG’s best interest to keep property values high, we are all part of the same self interested pretence of saying, property should be cheaper, except mine of course.

This is an article from a couple of months ago about the enormous volume being spent on forward financed projects.

https://archive.ph/hOyIO

Villa05

https://www.boards.ie/discussion/comment/120603457#Comment_120603457

From the article

In 2021, large property funds invested more than €1.7 billion in Ireland’s residential sector, according to Sherry FitzGerald. Some €1.3 billion was invested through forward funding agreements to pay for the development of residential schemes

By my maths (suspect), that's less than 2500 units less than 10% of the output. Expect that to drop significantly with much higher rates. High cost to the state for very low output.

Makes no difference to me if my house is at 2018 or 2023 price.

The 2023 price actually drives up my costs in terms of tax, insurance, general inflation as with oil the higher the price the higher the price of everything else

Fortunately housing and inflation are our governments number 1 priority :-)

awec

https://www.boards.ie/discussion/comment/120603691#Comment_120603691

Makes no difference to me if my house is at 2018 or 2023 price.

Unless you're mortgage free it will definitely make a difference. More inflated value = better LTV = better mortgage rates.

https://www.boards.ie/discussion/comment/120603691#Comment_120603691

Whats the correlation between maintenance costs on the same house when its market value changes?

Insurance is rebuild cost, not market value.

JohnnyChimpo

https://www.boards.ie/discussion/comment/120603457#Comment_120603457

For many, yes this is the case. For me, my LTV would be fine even if my property dropped by 15%, and I'm fixed for a number of years either way. That kind of correction in the market would allow me to trade up to a more expensive property more cheaply, would decrease inflationary pressure on the economy as a whole, and make it easier for others of my generational cohort to acquire a home. So that would be just fine by me.

I'm not doubting that "number goes up" is deeply rooted in the Irish psyche, but it's not a monolithic opinion.

AlanG

https://www.boards.ie/discussion/comment/120195717#Comment_120195717

If you are saving for a house then only house price inflation is really important. That is far lower than general inflation. Also with wage increases now above house price inflation the average house price is now a lower multiple of the average wage so should be more affordable. Of course if you are paying rent while saving then that can make it more complex.

Frank Bullitt

https://www.boards.ie/discussion/comment/120600352#Comment_120600352

Just replace London with Vancouver for me. They own an incredible amount of property here in Point Grey, which is the richest postal code in Canada.

https://www.boards.ie/discussion/comment/120604582#Comment_120604582

It’ll be easier for you to trade up if values drop?

So you think the value of the more expensive will drop, but your existing house will not? And if values decrease, there is likely to be more competition for the better houses.

You are kinda making my point, you want other houses to fall so that you can buy a better house, and also that your generation can buy a house, but you don’t seem to factor in that the price of your house may fall more, and more people, particularly cash buyers will take advantage of lower prices.

Timing belt

https://www.boards.ie/discussion/comment/120603061#Comment_120603061

Casinos are an easy way around this

Timing belt

https://www.boards.ie/discussion/comment/120603342#Comment_120603342

99% of all developments are financed by funds because banks stopped lending directly to developers and instead lend to a fund who along with investors in the fund finance the development.

Bass Reeves

https://www.boards.ie/discussion/comment/120604582#Comment_120604582

A drop in value would stop many from trading up. When you sell you need to have not enough left ( along with savings) to make up a 20% deposit. This is where a serious drop in price would catch many. It might mean they have no equity in the house they are selling remember auctioneer and solicitors fees for two purchases along with stamp duty ( most trading up will be buying older bigger houses) will eat up about 5-6% of any sale price

J_1980

https://www.boards.ie/discussion/comment/120602880#Comment_120602880

Levy even more taxes on the small amount of resident net tax payers….

EU citizen will always be treated like irish citizens, so any taxes would have to be residency based. There aren’t many foreign based BTL buyers in ireland anyway. Most landlords are residents.

DataDude

https://www.boards.ie/discussion/comment/120602880#Comment_120602880

Someone earning €300k already pays €142k in income taxes.

You might reasonably expect them to have a house worth €1.5m after a 4x mortgage and deposit. That would bring a further property tax of €45k per year.

So €300k gross would become €110k net. A 64% effective rate of tax. Yikes.

DownByTheGarden

https://www.boards.ie/discussion/comment/120606094#Comment_120606094

Not to mention that any event big enough to make property prices collapse would need to wipe out half the jobs in the country and nobody will be trading up without a job.

I honestly dont think all of the people praying for a crash understand what else will be happening besides house prices falling if there is a crash big enough to collapse property prices in any significant way.

PokeHerKing

https://www.boards.ie/discussion/comment/120606094#Comment_120606094

The logic is that the higher priced property falls further. Its a big generalisation but broadly speaking if you're looking to trade up, price dips/crash are better for you than rising prices.