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

Villa05

https://www.boards.ie/discussion/comment/121208862#Comment_121208862

I deliberatey chose 1 paragraph as it emphasised that retail performed better than office space despite being down 30% in the 3 years after the peak being called in Irish commercial property, that's 2 of the 4 main commercial real estate segments

With regard to hotels, they were always going to get a bounce coming out of covid. As a person that has almost always holidayed in irl, since covid we have gone abroad. We have been priced out and we are not alone. The medium/long term effects of this have yet to be felt. The wheel always turns!

Ukraine aside, We also have over 14000 in emergency accomodation, usually hotels at huge cost to the taxpayer. At the same time we have a boom in residential properties acting as airbnb's. You cannot legislate for the depths of stupidity where homes are for the odd tourist and hotels are used as housing for families

What proportion of CRE is warehousing?

We were continuously told here from 2016 to 2020 that we could not build more residential property because Labour was busy building offices, hotels etc. Had we a plan we could have a more balanced approach with less commercial and more residential and then we might have some hotel beds for tourists and homes for families

I do recall David calling for a buyers strike, but here is his opinion piece on the market January 2020

https://twitter.com/IrishTimes/status/1217559737157541888

Timing belt

https://www.boards.ie/discussion/comment/121209314#Comment_121209314

100% correct and government would love to move into housing to save money and this not taken into account in the assessments of no of houses needed. Which tells you that AHB will step in and drive demand and prices even if the CRE residential sector started to slow.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121209314#Comment_121209314

Do we have any recent figures on govt take up in hotels?

Especially the split between international protection & people on housing waiting lists.

Villa05

https://www.boards.ie/discussion/comment/121211237#Comment_121211237

The state started this cycle up to there eyeballs in property and land and will end it being the last fool in the market

Great deal for the taxpayer yet again, odd that it's dressed up as a money saving exercise

We are where we are, I suppose

Timing belt

https://www.boards.ie/discussion/comment/121211642#Comment_121211642

AHB = social and affordable housing and is what what we are hearing day in day out is required by all parties. This is what traditionally was called council housing….Only difference is that by doing via a AHB any debt doesn’t get consolidated into the national debt….regardless of what political party is in power they will all use these vehicles for any social housing. Correct me if I’m wrong but this is what you have repeatedly said what is needed (I.e. social and affordable housing)

The only difference between SF and current government Policy is that SF want to use public land so that there budget figures look better in a short media clip. But Once you take into account the land value at market prices you end up in same financial cost to tax payer. Neither SF or current government can change the cost of building social housing directly to the same standard.

Just to be clear I’m not talking about a policy of renting or leasing instead of building because were specifically talking about CRE getting into difficulty and not building BTR. We have seen signs of something similar over the past year or two and the example I gave was the apartments being built in cork at present where the majority are AHB and very little private BTR because yields are to low despite eye watering rents to break ground on projects with planning approved.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121211982#Comment_121211982

We dont need just social housing though.

People on average salaries need somewhere to live also.

The govt buying up new homes on estates and developments, on top of the Part 5 allocation, is soul destroying for those above the social welfare threshold.

Timing belt

https://www.boards.ie/discussion/comment/121211469#Comment_121211469

It’s irrelevant as to the split because there is a legal requirement to house international protection.

what we do know is that in homeless numbers they are not included despite the need to house.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121212009#Comment_121212009

But that still doesnt help supply for the average worker that doesnt qualify for AHB.

The split matters to them.

If a developer builds 100 apartments and 20 go via part 5 to the social, thats grand and instructs a mixed development.

If the council then buy the other 80 to house IP or reduce their social housing list, thats **** for the average worker who doesnt get a look in because they earn too much and from their perpsective, housing supply has increased by zero - pushing prices of available stock (available to them) even higher.

Great work govt. Not.

Timing belt

https://www.boards.ie/discussion/comment/121212035#Comment_121212035

the average worker gets a look in today with the Help to Buy…. that’s the only help they get…does it push up prices of course it does when the supply isn’t adequately addressed. it’s SF policy to remove this but yet again it doesn’t address supply issue.

When it comes to supply they are of the belief that building more social housing will fix the problem and the private market will continue to deliver the same level of housing at present despite workers being redirected to build social housing and the loss of the HTB subsidy.

It’s not like as a country we don’t know what happens to house building when costs are more expensive than the sales price. Are peoples memories really that short?

So the way I see it is unless SF can explain the following then anyone that is working and paying tax beyond the min rate is going to be substantially worse off if they are looking to buy a house.

• - how they are going to control building cost to ensure that private housing doesn’t cost more than it would sell for so housing
• 
  
• - how they will find extra workers to build their social housing without impacting the private housing market.
• 
  
• - how they will cut the cost of building to offset getting rid of HTB
• 
  
• - how they are able to build housing so much cheaper to the same standard in their alternative budget besides fudging figures to exclude or not take into account all the relevant costs such as the public land they are building on.

Of course the could get rid off Vat on residential property (if legally allowed by EU) but then how will they balance the books for this loss of gov income. Will they increase tax elsewhere or make cut to government spending or will the savings in HAP or Hotels cover it. Basically share how the figures genuinely stack up without the smoke and mirrors.

Timing belt

https://www.boards.ie/discussion/comment/121212035#Comment_121212035

So if government buy for homeless or IP it is irrelevant as to split either way house is not available to buy on private market.

MacronvFrugals

Further offsetting the ECBs inflation fight:

Homeowners will also be able to claim 20pc tax relief on mortgage increases between this year and last year capped at around €1,250 under a new scheme to be announced by Finance Minister Michael McGrath.

https://www.independent.ie/irish-news/budgets-cost-of-living-package-worth-23bn-with-1250-tax-break-for-homeowners-and-welfare-rate-to-rise-to-15/a267323800.html

Zenify

https://www.boards.ie/discussion/comment/121213168#Comment_121213168

Everything we've learned from economics over the last few centuries is that increasing borrowing costs during inflation is the lesser of 2 evils.

Irish government currently offsetting the ECB increases as much as possible. Bonkers

BlueSkyDreams

https://www.boards.ie/discussion/comment/121212383#Comment_121212383

Yes I agree and have asked the question myself of potential SF voters. Not had a reply yet.

Essentially, I dont see how SF will benefit the average worker in terms of housing access.

Their policies are aimed at those that qualify for social welfare only and there will be a negative impact on everyone else as a result.

Its amazing that people arent seeing that, especially the younger folks who have a career ahead of them.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121212297#Comment_121212297

Yes. But same also if they buy for social housing to reduce their social housing waiting lists.

The homes are still not availble to the private market in that case either.

The irony is that private developers are building private schemes, which the council then buy (or even worse, rent) and return to everyone EXCEPT the private buyer.

Same also if the council purchase for rentals.

The Herbert Hill dev in Dundrum or the Butteryard in Blackrock were built for the private market, but DLR rent them entirely for social.

Not a single unit amongst them returned to the private market, pushing private rental prices higher, as there is no stock.

And the govt say they want mixed developments? hmmm...

Seems to me the priority for the council is to reduce the social housing waiting list at all costs and to hell with the average salaried or above worker.

danfrancisco83

How do you get a "lifetime tenancy"?

Does this mean that this is a council owned house and they are selling? Or is there a literal lifetime tenancy contract that is legally binding? It's a nice looking house (from the outside anyway).

https://www.daft.ie/for-sale/semi-detached-house-23-orchard-lawns-ballyfermot-dublin-10/5440068

Timing belt

https://www.boards.ie/discussion/comment/121213331#Comment_121213331

That is the priority and has been since the massive outcry about homeless figures.

It’s no different to everyone calling for SF to come in and start building social housing because they are disgusted at the HAP payments and believing that it will result in lower rents and more house for sale.

If there was no-one in emergency accommodation and no increase the overall total new homes built then this would result in the following;

-negative impact on FTB as less new private properties built

-positive impact on renters as rental properties are freed up

-negative impact on renters assuming that the reduction of private builds results in less new rental properties coming to the market

-positive impact on social housing beneficiaries.

-positive impact on tourism as hotel rooms get freed up

-positive impact on people in emergency accommodation

The only fly in the ointment is that because of the numbers in emergency accommodation any property freed up gets filled by people in emergency accommodation.

so in reality we end up with:

-negative impact on FTB as less new private properties built

-negative impact on renters assuming that the reduction of private builds results in less new rental properties coming to the market

-positive impact on social housing beneficiaries.

-positive impact on people in emergency accommodation (Assuming that there isn’t an increase in number of refugees or people becoming homeless as landlords sell up)

End result any private buyer or renter looking for an increase in social housing ends up in a worse position as they are in today unless the overall number of new houses increases.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121213935#Comment_121213935

I see what you are saying and emergency accom is of course playing a large part in taking up any new stream rental accomodation and diverting that stock away from the private market.

But people on the social housing waiting lists are also being accommodated in govt purchased homes. (new homes, purchased from private developments)

So even if there was nobody in emergency accom, there are still 10s of thousands on the social wait list.

Dublin City has 13k on the wait list alone. Thats about the same as the total emergency accom count for the whole country.

Emergency accom and social wait list combined are certainly hoovering up available rentals new to market and of course, many hotels are taken up with the same cohorts.

What does need to happen is that the local councils start building their own council homes again, rather than pilfering private stock.

DLR built 2 social housing units in the whole of 2022....thats a disgrace by anyones standards.

But I do agree with you and have said it myself that although SF may want to embark on this massive social home building venture, where are they going to get the funds and the labour from, without negativley impacting the 25k-30k private homes that are built each year and are needed.

I dont think SF have an actual costed plan, nor the answer to that question.

SharkMX

https://www.boards.ie/discussion/comment/121213347#Comment_121213347

Everything about that house screams dont even take it for free.

danfrancisco83

https://www.boards.ie/discussion/comment/121214678#Comment_121214678

I think it looks well kept, so not likely a non-paying tenant or troublesome tenant or anything like that. I think there may be some kind weird tenancy clause thing going on here that I've never heard of.

Geuze

https://www.boards.ie/discussion/comment/121214280#Comment_121214280

SF have stated that they intend to increase stamp duty to 12.5% on commerical property, to divert labour and capital to residential construction.

Pearse Doherty has also mentioned "emergency powers".

That may refer to vacant houses.

MacronvFrugals

€1250 for mortgage interest relief and €800 for the rental credit, that'll probably go down like a lead balloon!

Also, it appears the vacant home tax is being raised from 3x LPT to 5x

https://www.independent.ie/irish-news/politics/budget-2024-childcare-fees-to-be-cut-by-25pc-mortgage-relief-for-160000-and-renters-credit-to-increase/a267323800.html

BlueSkyDreams

https://www.boards.ie/discussion/comment/121215003#Comment_121215003

Thanks.

Would a 5% increase on Commercial SD make much difference? The Commercial market will fade out after this year anyway due to the over supply of offices.

I'd be wary of SFs 17% surcharge on resi developments bought by funds.

If we deter them too much, the building of larger developments becomes less viable for developers and this strategy could easily lead to a slow down in resi developments - especially when you consider the other headwinds of resi development at the moment.

Not least the cost of building & labour.

Villa05

https://www.boards.ie/discussion/comment/121211982#Comment_121211982

We've moved beyond social housing being a priority, Ffg have made such a mess of this, what should be the priority is build to rent for teachers, SNA's, nurses, guards and all the other professions (public & private) that are required for the smooth running of our country. We are currently loosing these to countries that value them more after spending loads to educate them to that level.

Call this a thank you scheme for the front line workers we were lauding during Covid but kicking since covid is no longer an issue

Doing this would add supply in a cash neutral or revenue positive manner for the state, availing of this Lower cost accomodation allows

Housing security for the beneficiaries

Allows them to save a deposit for there own property allowing them to move on and make the house available for the next participant

Participation disqualifies from ftb grant as your getting protected from the private rental sector, saving the state a significant amount plus cooling new house price inflation.

The state providing btr would flush out the land hoarders, knowing that a competitor adding supply would devalue there land if they continued to sit on it.

Supplying build to rent only would prevent the state from gifting state assets to private individuals which is of little no value to the taxpayer. I saw a former council house on the examiner newspaper in Kinsale expected to make 1,000,000 at auction.

Villa05

https://www.boards.ie/discussion/comment/121211982#Comment_121211982

The only difference between SF and current government Policy is that SF want to use public land so that there budget figures look better in a short media clip. But Once you take into account the land value at market prices you end up in same financial cost to tax payer.

Are you including the cost of the state having idle or under utilised land and property. There are multiple examples

Having a significant revenue generating asset on this land would be better than having to pay to secure and maintain land and property that is doing nothing

Villa05

https://www.boards.ie/discussion/comment/121211982#Comment_121211982

Just to be clear I’m not talking about a policy of renting or leasing instead of building because were specifically talking about CRE getting into difficulty and not building BTR

What the government have been hinting at is providing the funding for apartment complexes that have planning permission but have not yet started.

If they have not started in a period of 0 interest rates,

0 tax on investment funds,

a planning system that is used to increase the value of land rather than get anything built

Stable prices on materials and labour

One would have to assume that these projects are severely unviable in current conditions and land prices therefore exposing the taxpayer to potentially enormous losses. This is what I meant by the state being potentially the last fool in the market

Much better to develop property on the states own land

CorkRed93

https://twitter.com/barratree/status/1711476240144605660

you have to laugh

Timing belt

https://www.boards.ie/discussion/comment/121217664#Comment_121217664

You should look at SF alternative budget because the extra 7100 units are not all being built on state land. The majority are purchased from existing supply.

I state units above because 700 the average cost they expect to pay per unit is 165k which would indicate these are 1 bedroom apartments and if they did purchase from the market for social (as stated in their alternative budget) then this 700 equates to 10% of properties advertised in this price bracket no longer being available to private buyers.

Donald Trump

https://www.boards.ie/discussion/comment/121217781#Comment_121217781

Many TDs have rental properties. There probably aren't too many of them trying to buy their first house..............

SharkMX

https://www.boards.ie/discussion/comment/121217781#Comment_121217781

I think they are trying to make it attractive to new landlords to come into the market as well as for existing ones to stay.

Its not enough to make either happen though. So maybe that was the plan. Make it look like they are doing something, but make it so useless and hard to get that noone will claim it.

Villa05

https://www.boards.ie/discussion/comment/121217793#Comment_121217793

I'm just proposing solutions, not a spokesperson for SF. Being honest there call last week for mortgage interest relief was the final straw.