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

Villa05

timmyntc wrote:

If its all student/holiday lets, is it any surprise they target cash buyers/investors rather than mortgage applicants? Would a bank even lend for this type of property?

How did 69 of them end up with 20 year leases attached?

javaboy

fliball123 wrote: »

Why would you sell an asset giving 20 year state guaranteed rental income (with rents at an all time high) with an asset that has to be handed back in the same state as it was given. You still have an asset that could be worth a lot more. if it is worth less you would of at least covered the short fall for this with the rent. Its like a bet in the bookies where the person cannot lose.

Because 20 years is a long time. You might want to realise a large profit now rather than wait 20 years to realise a larger profit.

timmyntc

fliball123 wrote: »

Why would you sell an asset giving 20 year state guaranteed rental income (with rents at an all time high) with an asset that has to be handed back in the same state as it was given. You still have an asset that could be worth a lot more. if it is worth less you would of at least covered the short fall for this with the rent. Its like a bet in the bookies where the person cannot lose.

If it is worth less then the fund loses - they invested with a particular minimum yield in mind. If they fail to get that back, then they lose. Their entire modus operandi is to maximise their profits. If the value of the property drops after 20 years, it eats into their profits.

Villa05

fliball123 wrote:

Why would you sell an asset giving 20 year state guaranteed rental income (with rents at an all time high) with an asset that has to be handed back in the same state as it was given. You still have an asset that could be worth a lot more. if it is worth less you would of at least covered the short fall for this with the rent. Its like a bet in the bookies where the person cannot lose.

In this particular case its the approved housing body selling to the investment fund, maybe they have local knowledge of other properties they could double the value of by utilising the states property pump apparatus and need to free up capital to make another killing.

This is certainly a story that requires further digging

fliball123

javaboy wrote: »

Because 20 years is a long time. You might want to realise a large profit now rather than wait 20 years to realise a larger profit.

Well you wouldnt sell them now as prices are still rising and may well keep rising for the forseeable

Eclectic Econometrics

So this thread becomes a bit conspiratorial "great Reset" etc. but it is still a good read with great links.

https://twitter.com/APhilosophae/status/1402434266970140676

The problem of pension funds etc. chasing yield will come to a head at some point.

Ace2007

Eclectic Econometrics wrote: »

So this thread becomes a bit conspiratorial "great Reset" etc. but it is still a good read with great links.

https://twitter.com/APhilosophae/status/1402434266970140676

The problem of pension funds etc. chasing yield will come to a head at some point.

If you were selling your house and were offered 50% more than the asking price, and you found out it was a pension fund - would you pull out?

yagan

Eclectic Econometrics wrote: »

The problem of pension funds etc. chasing yield will come to a head at some point.

All it takes is one pension fund to go bust with property related losses and then savers in every other fund will stampede out of illiquid assets, further speeding up the bust.

If we thought Trump boomers were angry before then they'll be in full scale armed revolt when their pensions implode.

Ace2007

yagan wrote: »

All it takes is one pension fund to go bust with property related losses and then savers in every other fund will stampede out of illiquid assets, further speeding up the bust.

If we thought Trump boomers were angry before then they'll be in full scale armed revolt when their pensions implode.

They don't really go bust though - these funds don't have all their eggs in one basket, and they invest in a lot more than just residential property as i pointed out not so long ago. They are well diversified in terms of location of property and rental sector.

I think it was yourself who seem to think ILIM would have over 50% of their funds in property - but then i showed you it was like 3% - property makes up a very small allocation of pension funds assets.

yagan

Ace2007 wrote: »

If you were selling your house and were offered 50% more than the asking price, and you found out it was a pension fund - would you pull out?

I'd sell. In the end all that's going to happen is that we'll end up with another NAMA type entity that will rent out those long term lease units the government signed us up to even after yields collapse.

The current housing minister last private sector job was with a pension fund so I've no doubt that insiders already have any rental drops legally covered by government guarantee.

cnocbui

Ace2007 wrote: »

If you were selling your house and were offered 50% more than the asking price, and you found out it was a pension fund - would you pull out?

Would you happen to have contact details for that fund? I'd like to drop them a heads-up when I list mine.

Nice to see two NZ cities in the top 4 of the Economists ranking of world cities on livability. Can't wait.

Eclectic Econometrics

Ace2007 wrote: »

If you were selling your house and were offered 50% more than the asking price, and you found out it was a pension fund - would you pull out?

I watched a programme about Barbados a couple of years ago and this old guy had a shack on the beach he wouldn't sell. The trend, over 80 years, went from property inland that was valuable to beachside, so this coffin dodger is sitting on a corrugated iron roof house which is worth $8,000,000 and he's having none of it. Understandable, when you get old and you are just set in your ways.

As for me, Ace, of course I would take more. It is a bit like everyone's tax situation, you're only going to pay what you have to. You may be happy to pay more if it benefits everyone but you are not going to hand over additional cash to revenue out of the goodness of your heart. I would take the 50% extra but if there was legislation that meant it wasn't forthcoming then I would live with it.

yagan

Ace2007 wrote: »

They don't really go bust though - these funds don't have all their eggs in one basket, and they invest in a lot more than just residential property as i pointed out not so long ago. They are well diversified in terms of location of property and rental sector.

This is the exact thinking that allows fund managers to fill their parachutes before the collapse.

I've posted the Financial Times piece several times on this thread now so I'm not going to post it again, but according to the IMF major international pension funds have seen their share of property assets go from 20% to over half their funds worth since 2008.

The mantra once was house prices only ever go up and many made fortunes in mortgage commissions exploiting that bias.

Same applies now to the blind faith that pension funds can't go bust.

Ace2007

yagan wrote: »

This is the exact thinking that allows fund managers to fill their parachutes before the collapse.

I've posted the Financial Times piece several times on this thread now so I'm not going to post it again, but according to the IMF major international pension funds have seen their share of property assets go from 20% to over half their funds worth since 2008.

The mantra once was house prices only ever go up and many made fortunes in mortgage commissions exploiting that bias.

Same applies now to the blind faith that pension funds can't go bust.

Yet you never post it to say it's about Ireland... when you compare asset investment in property compared with total assets - you'll see it's quite small an allocation in Ireland

propertyseeker

I got serious question
We want to buy ok house for 350,000 but can't find any in area we look
Before covid 2020/2019 we would get ok property for price
Now economy worse
People panic scared and price go up
Economy is most fragile since ww2
why do people think prices are now permanent and only keep going up?
When everything open up and more supply build should prices not go back to 2020/2019?

Marius34

propertyseeker wrote: »

I got serious question
We want to buy ok house for 350,000 but can't find any in area we look
Before covid 2020/2019 we would get ok property for price
Now economy worse
People panic scared and price go up
Economy is most fragile since ww2
why do people think prices are now permanent and only keep going up?
When everything open up and more supply build should prices not go back to 2020/2019?

No it shouldn't, and unlikely to go back. The world is moving.
I don't see from where large supplies to come on market any time soon.
It's not just panic, simply there are high demands, and low supplies. It just a fairly low stocks of residential properties.

cnocbui

propertyseeker wrote: »

I got serious question
We want to buy ok house for 350,000 but can't find any in area we look
Before covid 2020/2019 we would get ok property for price
Now economy worse
People panic scared and price go up
Economy is most fragile since ww2
why do people think prices are now permanent and only keep going up?
When everything open up and more supply build should prices not go back to 2020/2019?

Because there is a lot more demand than supply.

Prices sshould only retreat if the supple vs demand is better and if the construction costs go back down. Good luck waiting for the latter.

enricoh

Big bad landlords getting vilified in the media again, no doubt there'll be a segment next week urging landlords to share their horror stories!

https://www.irishtimes.com/news/social-affairs/tenants-share-your-stories-of-unfair-treatment-by-landlords-1.4588673?mode=amp

zom

MacronvFrugals wrote: »

Dublin down 22 spots to 51st in latest 'Global Liveability Index'

https://www.eiu.com/n/campaigns/global-liveability-index-2021/?utm_source=economist&utm_medium=daily_chart&utm_campaign=liveability21

Not just Dublin but all Europe fall down miserably. EU is not working well anymore...

https://pages.eiu.com/rs/753-RIQ-438/images/global-liveability-index-2021-free-report.pdf

yagan

Ace2007 wrote: »

Yet you never post it to say it's about Ireland... when you compare asset investment in property compared with total assets - you'll see it's quite small an allocation in Ireland

I think it was you that made the same assertion before, but when I asked for you to give links stating the current asset allocation of major Irish pension funds you couldn't do it.

If you haven't noticed that foreign funds are outbidding voters for homes in Ireland then there's no helping you.

Timing belt

yagan wrote: »

I think it was you that made the same assertion before, but when I asked for you to give links stating the current asset allocation of major Irish pension funds you couldn't do it.

If you haven't noticed that foreign funds are outbidding voters for homes in Ireland then there's no helping you.

Most of the Irish domiciled funds are foreign capital anyway. Plus it is very difficult to see the real exposure to property as funds will invest in funds that in turn invest in funds that buy property or finance the building of property. Yes funds should be diversified so they don’t have a concentration risk on property in a specific market but a lot of that goes out the window when you can’t find yield elsewhere.

Ace2007

yagan wrote: »

I think it was you that made the same assertion before, but when I asked for you to give links stating the current asset allocation of major Irish pension funds you couldn't do it.

If you haven't noticed that foreign funds are outbidding voters for homes in Ireland then there's no helping you.

I did give it to you

Ace2007 wrote: »

Again no, you think an investment manager like ILIM is solely in property? Just look at their website - They only have approx 3 billion in property.

ILIM is in investment management company, investing in equities/bonds/property/alternatives, etc.

The Germany Property Group - was well property as the name suggests.

Ace2007 wrote: »

There are numerous different funds, but

Property approx 3 billion: https://www.ilim.com/investment-capabilities/property/

Total assets under management - 92 billion: https://www.ilim.com/who-we-are/

So property funds make up approx. 3% of their funds. Which is no where near half that the poster had originally claimed.

MacronvFrugals

Interesting development breaking from Facebook



https://twitter.com/adrianweckler/status/1402735192352112642?s=20

javaboy

fliball123 wrote: »

Well you wouldnt sell them now as prices are still rising and may well keep rising for the forseeable

Same answer. Cash. They might want to realise their gains now not later.

cubatahavana

MacronvFrugals wrote: »

Interesting development breaking from Facebook



https://twitter.com/adrianweckler/status/1402735192352112642?s=20

Yes, wife works in FB. Got notification today. If all goes according to plan, we will be moving to Spain in 5-10 years

thefridge2006

MacronvFrugals wrote: »

Interesting development breaking from Facebook



https://twitter.com/adrianweckler/status/1402735192352112642?s=20

This is huge!!! I would imagine there will be a massive uptake. I know several non Irish people working in FB etc and they will 100% be on the first plane out of here.... they get paid extremely well and their money will go a lot further out of this rip off city

selassie

DCC better take out some more 20+ year leases before all the big tech company employees leave and the cost plummets.

zom

If other big tech firms follow suit at scale, potential effect on Dublin rents etc.

In your dreams. I've seen new top grade office buildings in minutes walk distance from Stephens Green vacant for years - big Irish landlords have a big connections in banks and government - they will get their loans propagated or bailed rather they will go down with prices...

Ozark707

thefridge2006 wrote: »

This is huge!!! I would imagine there will be a massive uptake. I know several non Irish people working in FB etc and they will 100% be on the first plane out of here.... they get paid extremely well and their money will go a lot further out of this rip off city

Think about the less well paid (if their roles are eligible). They will certainly looking to relocate if they can substantially reduce their outgoings.

Ozark707

zom wrote: »

In your dreams. I've seen new top grade office buildings in minutes walk distance from Stephens Green vacant for years - big Irish landlords have a big connections in banks and government - they will get their loans propagated or bailed rather they will go down with prices...

I think the Twitter poster was more referring to residential rents than office rates.