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

Padre_Pio

https://www.boards.ie/discussion/comment/121373586#Comment_121373586

Ireland's inflation rate doesn't include the purchase cost of housing.

Inflation is calculcated on the CPI (consumer price index) which is a measure of the changing cost of an imaginary "basket of goods and services" that a typical household may buy.

What's included in this imaginary basket is based on the household budget survey held every 5 years

Mortgages are included, so increasing mortgage rates will cause inflation to increase.

Zenify

https://www.boards.ie/discussion/comment/121374935#Comment_121374935

And this "imaginary basket" is used by central banks all over the world as the best means to calculate inflation/value of money.

Therefore a 5.5% increase whilst property staying the same price would reduce the value of the housing by same percent...? Again that's not including the decline that's actually happening to the price which is resulting in over 7% decline.

L1011

CPI also includes rent as well as mortgage interest. It would be quite hard to pick a baseline to add in housing costs considering the variability across the country is higher than for rent these days

DataDude

https://www.boards.ie/discussion/comment/121374996#Comment_121374996

Probably best to compare to wage inflation rather than CPI to assess change in ‘real’ affordability.

Wages are running at somewhere between 4%-5% over the last year. So your conclusion is correct, overall house prices have fallen quite significantly in ‘real’ terms in the last 12 months.

Makes them more attainable for those stuck with the 4x LTI constraint. However the reduction in real prices is probably more than eaten up by increase cost of Finance for those with a mortgage.

Blut2

https://www.boards.ie/discussion/comment/121371233#Comment_121371233

You stated AirBNB charges 3% fees of hosts as fact, a quick Google says from multiple sources its actually up to 14.2%, as I posted one link to show. This is not country dependent, its dependent on the policies the hosts implements for their property. As any research would have told you.

I'm not sure why you seem angry enough about this to post multi-paragraph rants of questionable veracity. Just take the 'L' and admit fault and move on - you're clearly just a little ignorant of the specifics of how AirBNB operates.

Padre_Pio

https://www.boards.ie/discussion/comment/121374996#Comment_121374996

What you're really saying is the expected rise in house prices didn't happen, and therefore you're counting it as a saving.

Since inflation includes mortgage payments, the actual amount that mortgage holders will pay becomes more detached from the purchase price as inflation increases. So in real terms you're getting even less for your money.

If you're looking at house prices over 48 months, then house prices inflated by an average of 5% annually, while inflation was 3.8% annually.

So yes, perhaps you could argue that house prices are 7% cheaper this year compared to last, but you'd have to disregard that house prices have climbed dramatically over the past 5 years and that the average mortgage holder is paying more this year than they were last year.

I'm open to being corrected on any of this.

Blut2

https://www.boards.ie/discussion/comment/121374329#Comment_121374329

+1

I'm all for a massive expansion of social housing in general (the Viennese model) but this is an incredible policy that just reeks of desperation. If there are underutilized social housing units (ie a single person in a 3bed house/apartment) surely the logical thing to do would be to offer that tenant two options - either they move to a smaller unit, or else two other single people will be moved into their larger unit to share with them.

People across the country are paying large amounts of moeny to live in houseshares until their 40s now out of economic necessity, its not too much to expect it of social housing tenants getting massively subsidised housing.

Zenify

https://www.boards.ie/discussion/comment/121375117#Comment_121375117

Yeah, probably the fact that I am a cash buyer means I view it differently to most.

I haven't done the math but people trading up with a good bit of equity probably benefit too. Especially as people here have mentioned it's the upper end reducing the most.

People downsizing are probably worst off...? Anyone doing so want to share their experience?

BlueSkyDreams

https://www.boards.ie/discussion/comment/121374329#Comment_121374329

Never mind willing social tenants, it should be mandated that they house share, for people without children at least.

And some people still think we have a centre right govt...unemployed folks profiteering on the back of private housing, rented by the council, the tenant doesnt pay their nominal contribution (even though its given to them by the council inthe first place) and they still get to keep the rent a room money!

I'd love to see Suella Braverman's reaction if that policy was proposed by a Tory.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121374935#Comment_121374935

Does anyone know what percentage of the population own their own home outright?

Mortgage paid off.

Surely those folks experience a different CPI, with no mortage or rent to pay.

Padre_Pio

https://www.boards.ie/discussion/comment/121375171#Comment_121375171

I wouldn't see it as a saving at all.

As I mentioned previously, there's no explanation why Dublin prices dropped while the rest of the country continues to increase. Since there were less sales overall, it's easier to skew the results. I would imagine there are a few big falls in the €1million+ price range in Dublin, which have masked the many minor increases in the sub €1million range.

If you're in the former category then you're likely saving more than 1.9% compared to last year

If you're in the latter then you're not seeing savings at all.

Either way, you're still paying 20% more on the purchase price of an "average" house today than you were pre-pandemic.

Villa05

Eoin Mcgee has his own podcast

This one is on housing is worth a listen, plenty of advise

https://open.spotify.com/episode/0VuzqKV5z9pQstgGoOwXoU?si=e241869725914b51&nd=1&utm_medium=organic&product=open&%24full_url=https%3A%2F%2Fopen.spotify.com%2Fepisode%2F0VuzqKV5z9pQstgGoOwXoU%3Fsi%3De241869725914b51&feature=organic&_branch_match_id=1124802866406332680&_branch_referrer=H4sIAAAAAAAAA7WNywrCMBREvyZdtiZ9aIUigtSFC3FhcSdpmrahMbnmgdivNxX8BGEWwwyHMzoHdpskFrQT%2FTumALEUakp2YHTnmas0cBUhkvVeyrs3shoXBKV7ROqQ5Y5%2FNNOPMHEQVnc8tFXj5%2BepyecSLtYNR31%2B3fQVpbUVKD1wkuFNUa5JXuKszfHXQqVsKZv%2Ba0KkUF3YcdRz6rzhlTYDVYJ9AE6C4d4PAQAA

https://www.boards.ie/discussion/comment/121375108#Comment_121375108

Ignorant of airbnb, I am not, as a host I can just go into my airbnb account and see what fees apply in Ireland.

You are wrong about those fees not being country dependent, in fact one of the links you posted specifically mentions how differing fees apply to different countries due to their rules related to short lets:

Quote:

• Italy, South Korea, China and Germany: Different policies apply for all stays in Italy and for South Korean guests staying at places with Strict cancellation policies. The flexible long-term policy is not available for stays in China. Additionally, if you are a Host in Germany, please make sure that your selected cancellation policy complies with the local requirements. Learn more about cancellations in Germany.

In relation to Ireland, here is what airbnb have on the fees section of the host's account:

Host fee

Most Hosts pay a 3% fee but some pay more, including:

• Hosts with listings in Italy
• Hosts with Super Strict cancellation policies

This fee is calculated from the booking subtotal (nightly rate + cleaning fee + additional guest fee, if applicable – excluding Airbnb fees and taxes) and is automatically deducted from the Host payout.

Guests, however do may a higher service fee when booking, so perhaps in your rush to post/judge, you looked at all fees involved.

Guest fee

Most guest service fees are under 14.2% of the booking subtotal (nightly rate + cleaning fee + additional guest fee if applicable – excluding Airbnb fees and taxes). This fee varies based on a variety of factors and is shown during checkout before you book so that you know what to expect. For some stays over three months, the Airbnb guest service fee is reduced after the third month.

Or perhaps you were thinking of host-only fees charged to hospitality specific listings like hotels, serviced apartments etc, or in certain country dependent locations:

2. Host-only fee

With this structure, the entire fee is deducted from the Host payout. It’s typically 14–16% although Hosts with Super Strict cancellation policies may pay more and fees for monthly stays may be less. 

This fee is mandatory for traditional hospitality listings – such as hotels, serviced apartments, etc., as well as software-connected Hosts (unless most of their listings are in the USA, Canada, the Bahamas, Mexico, Argentina, Taiwan or Uruguay). 

So you are absolutely wrong to say it is not country dependent, and few if any listings that I have seen in Ireland have the "super strict cancellation policies" which I'm going to leave you to look up.

So your calculations, and assumptions comparing airbnb income to tenancies as they apply to Irish hosts are flawed, not just in your lack of understanding of how airbnb works in this country, but also in your 30 day term, which currently does not apply here, and which may never apply here. Even at 90 days, which would work out at most weekends of the year, at my average listing price, I would earn only slightly less than a tenancy.

Whether it is 3%, or even 14%, obviously hosts are willing to accept less income in order to not have tenants. Let's just leave it at that.

Blut2

https://www.boards.ie/discussion/comment/121375886#Comment_121375886

"some pay more, including: Hosts with Super Strict cancellation policies"

"With this structure, the entire fee is deducted from the Host payout. It’s typically 14–16%"

You should probably have actually read that before posting it. It just confirms you were completely wrong 😂

No wonder you're afraid to return your property to the private sector rental market if you can't even understand the AirBNB fee structure. You should definitely stick with the less challenging option.

https://www.boards.ie/discussion/comment/121376004#Comment_121376004

You think the reason hosts don’t return properties to the rental sector has anything to do with understanding airbnbs fee structure?

How could anyone with even a modicum of understanding of the well publicised issues with renting possibly think that? Incredible.

lordleitrim

https://www.boards.ie/discussion/comment/121375215#Comment_121375215

You could say that about petrol inflation for those who don't use cars or butter inflation for those that don't use butter. It's probably meaningless to silo various goods in the CPI basket just because you don't use those particular goods. If inflation is generally going upwards, it will hit you some way, be it your bus fare, your Big Mac, your health insurance or your toothpaste.

Suffice it to say, if you own your home outright, your disposable income is obviously far better than someone who doesn't but your euro only goes just as far as the renter next door...except that you may have more euros....

BlueSkyDreams

https://www.boards.ie/discussion/comment/121376240#Comment_121376240

More euros, but less demand to spend them.

People in that position must "feel" a different level of CPI, although I understand it is one rather crude calculation.

I would be interested to know the percentage of outright home owners anyway. I wonder if it is decreasing now, given the cost of housing.

Frank Bullitt

They recently imposed new legislation over here in Vancouver around Air Bnb

https://bc.ctvnews.ca/b-c-is-bringing-in-new-rules-for-short-term-rentals-here-s-what-s-changing-1.6603052

It has only been a few weeks, but there have been plenty of people with various properties playing the victim, that it's their retirement plan etc etc. Not much sympathy for them.

You do see a lot now on Craigslist and Facebook Marketplace, but the prices are clearly to try and not take too much of a hit on them. Time will tell how it plays out over here.

OEP

https://www.boards.ie/discussion/comment/121376004#Comment_121376004

I have no skin in this but it quite clearly says hosts in Italy or hosts with Super Strict Cancellation policies pay that much? And the host only fee applies to hotels or serviced apartments.

L1011

Time to drop this

lordleitrim

What do folks think of this proposed closed bid process that they might introduce in Ireland? At least this would eliminate fears about phantom bids or that you are bidding against yourself...

“They will examine the evidence, they will hear people’s stories. But I know in Scotland they have a different system of bidding, it is a closed bid where a person puts in their bid once and the highest bidder gets the house. I am not saying it is the best thing to do, it might not be, but at least it gets away from that stress a lot of people experience several times. By the time they actually get to buy a house, they were outbid a few times and it drags on for weeks.”

Bidding process for buying homes in Ireland could be overhauled after expert process

https://www.irishtimes.com/politics/2023/11/14/bidding-process-for-buying-homes-in-ireland-could-be-overhauled-after-expert-process/

https://www.boards.ie/discussion/comment/121379354#Comment_121379354

Is the owner allowed to set a price below which the highest bid will not be accepted?

danfrancisco83

Neighbour recently sold up, and chose to sell to a young family instead of a shady character who bid 5k more. What we have at the moment is not perfect, but it's better than the closed bid process IMO.

PS. Also, it's naive to think that any other process is not open to corruption. For example, what's to stop an insider contacting an investor that's giving them backhanders and telling them the current highest bid on property X is €415,000 etc.

amacca

https://www.boards.ie/discussion/comment/121378837#Comment_121378837

one would wonder if the money will just be swallowed up and the apartments priced higher anyway....is there any sort of mechanism to limit the price charged on the private market?

Elessar

https://www.boards.ie/discussion/comment/121378837#Comment_121378837

This is good to see, and we need more of it, especially in Dublin. However the cynic in me thinks that despite the subsidies, the apartments will still retail for ~€4-500k. Most buyers in that range will want a house, and they will struggle to sell these. Ultimately the state and various AHBs will then step in and buy up most of them and the blocks will become defacto social housing ghettos.

I hope I'm wrong.

L1011

https://www.boards.ie/discussion/comment/121379454#Comment_121379454

In Scotland, yes. You are meant to advertise at your base acceptance price with "offers over".

Villa05

https://www.boards.ie/discussion/comment/121379565#Comment_121379565

Disaster waiting to happen

If the project is unviable, let market forces work till it's at a point of viability.

DataDude

https://www.boards.ie/discussion/comment/121380052#Comment_121380052

I agree with your sentiment but

’we missed housing completion targets by a mile because we’re letting market forces work’ is not a vote winning strategy in an election year.

Government focus is very much on delivery as many units as possible and getting people into those houses. Affordability becomes secondary when you have chronic under supply.

Best way to stimulate more supply in the short term is to drive prices higher (see 2004-2007).

SharkMX

https://www.boards.ie/discussion/comment/121376004#Comment_121376004

You should give up. You are just arguing for the sake of pretending to yourself that you didnt lose the argument now. At this point its like you are trying to crawl up your own arse :)

Villa05

Rather intresting stat

https://twitter.com/danobrien20/status/1725470603287601267?t=Yln8ejD7j0BaR5Eu3EApaw&s=19