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

timmyntc

Housing is property and property is an asset. Morally wrong but that's the reality of it.

So long as houses are going up in value by more than any other investment with similar risk profile, expect more vacants not less.

RichardAnd

https://www.boards.ie/discussion/comment/122728727#Comment_122728727

I'm not aware that they do. This is from their website:

https://vote.sinnfein.ie/house-prices-continue-to-spiral-out-of-control-it-is-time-for-a-new-approach-eoin-o-broin-td/

"In government, we would deliver tens of thousands of genuinely affordable homes at prices from €250,000 through Local Authorities and Approved Housing Bodies, while also activating the private residential development sector to deliver more private homes to purchase at more moderated prices."

Their aim, whether they can do it or not, is to subsidise building to deliver "affordable" houses to people. This is not the same as wanting to lower house prices overall. There state is merely picking up the tab, which is more or less what any such scheme will do.

There is one way to lower house prices and one way only; the increase the supply whilst reducing the demand. No policy that I am aware of will do this.

Rooks

https://www.boards.ie/discussion/comment/122728770#Comment_122728770

"I suspect the remit of the CBI is not to give people what they want"

Yes, you are correct but Gabriel Makhlouf was appointed by the government and one of his earliest and biggest contributions to the policy rules of the Irish financial system was the relaxation of the LTI rules set in place by Patrick Honohan.

If you followed these events closely you could have seen this happening before he took this role. The government wanted this change and appointed the right man to make it happen. It was the most clearly telegraphed move to those who could be bothered to look.

And, like I said, the public reaction to this rule change was overwhelmingly positive. So the government appointed the appropriate governor it seems. And the public got what they wanted.

RichardAnd

https://www.boards.ie/discussion/comment/122728811#Comment_122728811

"Regardless of whether it is his fault or not anyway, we live in a society and we have a duty to contribute positively to that society instead of just our own bottom line."

This. The philosophy of the hyper individual is bringing the West to ruin. Like it or not, no man is an island, and eventually the socially deleterious policies of pursuing growth and personal wealth will eventually come calling. I'll be forgiven for a bit of dramatic language, but men died for Ireland to be its own country and a home to the Irish people. They didn't risk everything so it could become just one more economic zone to generate growth.

It's time we started thinking about the future generations who will have to live with our decisions.

Sierra Oscar

ECB has cut interest rates by a further 0.25%, further cuts signalled as inflation has fallen below target. That's three consecutive cuts now and will fuel further property price increases.

Live updates: European Central Bank lowers key rate (cnbc.com)

Hontou

https://www.boards.ie/discussion/comment/122728670#Comment_122728670

One is for sale. The other can't be sold for personal reasons.

tigger123

I dont think it's as simple as all of those with homes being happy with the current scenario.

For every adult child stuck in a boxroom, there's parents in the house who would love to see them leave and set up their own life. Parents are also stretching themselves to provide contributions to deposits.

There's also people who have family members emigrating because of housing, and are watching their siblings struggle.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122728811#Comment_122728811

That all sounds great in the story books, but in the real world, its an asset for the poster and their family. It belongs to them and they have the right to retain it as they see fit.

Now if its empty, it should be taxed into oblivion via vacancy property tax. If the owner is happy to pay the vacant tax on it then use that money to construct govt homes.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122728941#Comment_122728941

Selling homes in Dublin for 250k would reduce the average price of a home, because you cant buy a home for 250k today.

Increasing supply in a functioning market is the way to go, I agree.

And the govt are doing just that.

Highest new home commencements in the last 12 months for almost 20 years.

RichardAnd

https://www.boards.ie/discussion/comment/122729458#Comment_122729458

It won't reduce the average price. The house may be "sold" for 250k, but the state will be picking up the tab the subsidy.

As for the supply side, this is only increasing at a slow pace. Perhaps it can be increased more; I don't know. What is not increasing as a slow pace is the rate of inwards migration into the country. Increased supply is of no good if the demand continues to outstrip it.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122729502#Comment_122729502

If it's sold for 250k, it reduces the average price of all homes in Dublin.

It doesnt reduce the price of non-SF homes, but it does reduce the average selling price of homes in Dublin overall.

I'd say the 62k home starts in the last 12 months is evidence of increased construction at a rapid pace, but it needs to be maintained or ideally increased further, certainly.

hometruths

https://www.boards.ie/discussion/comment/122728212#Comment_122728212

Sorry, should have made the point clearer - I'm certainly not suggesting making rental yields more attractive.

Rent a room relief is currently capped at 14k per annum. You charge a cent over that and you're taxed on the full amount, so obviously nobody does charge more.

Apply the same logic to a tenancy. Cap it at tax free 14k per annum, a cent over and you pay tax on it all. You could have bands of caps for 1,23 bed etc.

Take your example fo a 300k apartment renting for 2200. Gross yield is almost 9%, net yield is closer to 4.5%.

14k per annum would provide a slight improvement in net yield, but only about 0.5%, an extra 800 quid in rent. Enough to make it worthwhile for existing property owners, bur hardly enough to cause a stampede of new BTL landlords.

Obviously you'd need to tweak a few other areas of policy to facilitate, but don't see any reason why it couldn't be done.

In short, I am talking about significantly reducing rents, not doubling rental yields. It would be great for renters and first time buyers.

RichardAnd

https://www.boards.ie/discussion/comment/122730076#Comment_122730076

It won't be a solid 250k. The 250k will be what the person who gets the house will pay, but the actual cost will be more. If they ignore what the state does to subsidise the price, then yes it will lower the average price on paper, but this is just numbers on paper.

This is, of course, assuming that SF get elected and that they can even deliver on this. In my opinion, they will not see power as they have lost their core voters on the matter of immigration along with being historically unpopular among a great many people here.

62k is an increase, that is true. But bear in mind that any affordable housing construction would take away from this number.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122730276#Comment_122730276

I dont see SF getting in either, but nevertheless, a huge reduction in the overall price of some new homes will decrease the average price of all homes.

Why would affordable homes not be included in the 62k? People would still be living in them.

RichardAnd

https://www.boards.ie/discussion/comment/122730296#Comment_122730296

Once again, the price is not being reduced. It's just being subsidised. The demand will persist, so the actual prices of housing will continue to grow. This means that those nominally 250k houses will cost more to the state, and the taxpayer will be paying for that.

On your second point, they affordable houses would be coming from that figure. What I would fear is that if SF were to attempt this scheme, they would just bulk purchase housing to be used as affordable housing in addition to whatever social housing is already coming from the pool of new builds.

herbalplants

There is someone looking to do a nice flip. Sold last June for 1.9 million, a year later without doing a tap looking at 350k profit. Wonder why is he/she selling now if prices keep going up, what not wait till next year maybe get 500k profit.

https://www.myhome.ie/residential/brochure/181-mount-prospect-avenue-clontarf-dublin-3/4838722

RichardAnd

https://www.boards.ie/discussion/comment/122732461#Comment_122732461

No pictures of the inside of the house eh? It must be in s**t :/

Rooks

https://www.boards.ie/discussion/comment/122732461#Comment_122732461

There could be a number of reasons for their decision to sell. It's anyone's guess.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122732070#Comment_122732070

The average sales price is reduced. We would end up with a two tier system where private 3 beds were selling for 600k and SF 3 beds were selling for 250k. Average sales prices for all 3 beds comes down, but the private homes will actually increase in value, due to lack of supply, as the new supply is diverted toward the SF homes.

I know what you mean about the second point, but the current govt already do that. Numerous examples of high end apartment complexes in DLR that have all gone to social housing.

spillit67

Reducing the costs in Dublin to €250k is delusional and unnecessary. It feels like this discussion is five to six years out of date and also influenced by people who bought their homes when they were far cheaper.

spillit67

https://www.boards.ie/discussion/comment/122733094#Comment_122733094

Indeed. The €90k limit puts their “affordable” homes out of reach for a couple in their 30s in Dublin earning the median wage each.

People need to slow down and consider this.

There’s a bit of a game going on at the moment where we still have delusions out there that household incomes of €100k is major money.

spillit67

https://www.boards.ie/discussion/comment/122729111#Comment_122729111

I don’t think this will have as much influence as you think. I think Irish households were already relatively well protected against inflation by government subsidies. Our mortgage rules were already relatively strict as well.

I don’t think you can attribute the same things that we see in other countries to Ireland necessarily.

BlueSkyDreams

https://www.boards.ie/discussion/comment/122733118#Comment_122733118

Yep. The SF housing proposal doesnt benefit the average working couple, because they dont qualify for the housing SF are proposing.

The only people that benefit are those on no or low incomes, everyone else will be paying extra for their private homes and average earners will be locked out altogether.

spillit67

Yeah to me is basically is pulling out the universal subsidy to further subsidise housing for lower incomes.

The issue SF have here is their tax policy for those households on €100k. There is a massive psychological barrier on that income level. That particularly tax policy is ironically borne out of the U.K. (and a Tory policy at that!) from 2010. That became an issue in the U.K. as as it is here, £100k isn’t what it once was. €100k then is €127k now…it’s hard to walk away from such a policy though as people’s heads are so tuned up to think that is major household money. It would be patently ridiculous if SF raised the policy from €90k to €100k when their tax policy says that €100k is mega earnings.

Anyway, if there was a party serious about reducing costs then I’d be interested in voting for them. The SF policy on land to me just comes from years of Twitter warriors talking about it but the outcome (continued hereditary benefits for families) is just another means of lucky dip income redistribution. Nobody really wants to confront the real issues.

spillit67

https://www.boards.ie/discussion/comment/122728568#Comment_122728568

It’s called well meaning but negative unintended consequences. This regularly happens with regulations but when it does, the claim is that it is a conspiratorial often by the same people who demanded it at the time.

Bass Reeves

https://www.boards.ie/discussion/comment/122728392#Comment_122728392

I disagree. I think its been a fairly significant addition to getting older properties back into liveable condition. Yes there will ve abuse ofvthe system but in general its a good system.

It actually has not seen a significant rise in value of this type of property as those in housing need can avail of it or you need to rent the refurbished house for 5 years.

There was a few vacant properties in a village near me at present there is about 8 being refurbished or already refurbished.

Cannot see a significant number leaving a property vacant to access the grant maybe for 4-6 months but not for two years, it doesn't make sense. Rental income lost could be 25-40k or you could ve paying that In rent to achieve the grant.

In Limerick the ĹA is putting CPO's on vacant or derelict houses and forcing owner to refurbish or give up possession. There is a small cottage not far from me gpi g through the process at present

felonious_Gru

I have only one residential property left but before I purchased another commercial property in June 2022 , I went close to buying a four bed semi in castletroy in limerick , I went to €390 k but they went with the lower bid of €385 as I was waiting on the sale of another property

I've relatives in the same estate and a near identical house a number of doors down sold for €510 k lately

Things are parabolic right now

RichardAnd

https://www.boards.ie/discussion/comment/122736502#Comment_122736502

Interesting. Any idea why they took the lower bid?

Parabolic is quite the adjective to use. Think I'll listen to some Tool….

felonious_Gru

https://www.boards.ie/discussion/comment/122736953#Comment_122736953

I was sale agreed on a house in another part of the country but hadn't funds at ready as the sale wasn't fully complete, I was a cash buyer , by the time the sale was completed in August 2022, the castletroy sale was finalized,I then discovered a commercial property in limerick city and bought it but I'm familiar with the estate as one of my brother's in law lives there

Him and his wife paid €260 k in 2017

The Market absolutely is parabolic

KennedyJelly

Hi Looking for some advice: I have a sale agreed on a house, but I’m feeling uncertain and a bit pressured to finalize things. A more suitable property is available with the same realtor. Is it appropriate to discuss the possibility of viewing this new property? Thanks a lot.