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CSO rental report & Landlord statistics

  • 22-11-2021 11:36am
    #1
    Registered Users Posts: 2,264 ✭✭✭ sk8board




    good to see some hard data from the CSO a few days ago, from a combination of sources (census, rtb, lpt, ber and Revenue), up to 2020:

    • over half of landlords have net income under €10k
    • 67% of landlords have 1 rental and a further 19% have 2 (i.e. 86% with 2 or under)
    • age profile of Landlords is getting older, as fewer younger people can afford to buy rentals, and existing LLs age
    • 22% of LLs use rent as their primary source of income (presumably that’s a combination of companies and also some elderly folks with a single rental, no mortgage and pension income)
    • total number of landlords has been dropping since 2016, down 4,400 in 2020 to 165k, while the number of rentals owned by companies has increased.
    • of the 165,000 landlords, there can be more than one LL registered to a single rental (husband/wife, sister/brother, etc), so selling a rental can remove multiple LLs from the market


    as an investment market, it’s very clear that most LLs are either not investors (accidental), or are taking on a lot of tenant-side risk to rely presumably on future capital appreciation. with much of that appreciation probably already done, it helps explain the exodus of LLs in recent years.


    the market is clearly broken on both sides, but it’s rare to get detailed data on the LL side.



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Comments

  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    Just 2% of new mortgage approvals are for Buy2Let’s. 2%!

    the market is completely broken, on both sides.

    im sure there are some cash buyers across the market, but it’s unlikely with such low interest rates on offer, and 100% interest deductible.


    Mortgage approvals slow in October - BPFI

    https://www.rte.ie/news/business/2021/1130/1263935-bpfi-mortgage-approvals/

    Post edited by sk8board on


  • Registered Users Posts: 5,368 ✭✭✭ JimmyVik


    I cant help but imagine how financially ignorant that 2% must be :)



  • Moderators, Society & Culture Moderators Posts: 32,260 Mod ✭✭✭✭ The_Conductor


    Its good to see some nice hard data for a change- we all hear anecdotal stories of the exit from the sector etc- but few hard facts such as are outlined here.



  • Registered Users Posts: 12,042 ✭✭✭✭ Varik


    Where are you seeing the 165k total and the drop from, it's not in the article and I can't see it in the actual report.



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  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    RTB annual report - its easy to find on their website and they always include a graph of total LLs since their inception about 15 yrs ago. The numbers are falling since 2016, and the rate of LLs leaving is accelerating each year.

    also, bear in mind that this is the net change in registered LLs - there will be some new LLs joining the market, and also cash LLs who are being found and (rightly) forced to register. It also won’t include LLs who didn’t notify the RTB that they were exiting (I’m not aware that it’s a requirement).

    the number of LLs exiting the market is actually higher.



  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    some up to date data on the continuous increase in the number of LLs leaving the market, 2012 v 2020. Its been accelerating every year since 2016.

    https://m.independent.ie/news/tenants-feel-squeeze-as-46-landlords-a-week-left-market-in-the-autumn-41121495.html



  • Registered Users Posts: 5,368 ✭✭✭ JimmyVik


    <QUOTE>"However, Sinn Féin housing spokesperson Eoin Ó Broin said that it was a “bare-faced lie” to say that the new legislation would put in place tenancies of indefinite duration.“Almost nobody gets evicted on those grounds.

    “Tenants are getting virtually no additional extra protection,” he said.

    “While the technical change [the minister] is making is welcome, what he really needs to be doing is removing those other two grounds for eviction.

    “If the landlord wants to sell, they should sell with the tenant in situ.”

    The data, which has not yet been formally published by the RTB but was released to Mr Ó Broin, shows that the number of landlords selling their properties is now higher than pre-pandemic levels in the past several years."</QUOTE>

    And there go the landords who are left straight out the door :)



  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    Yeh I saw that too - it’s a pretty narrow buyers market if the only person you can sell to also needs to be a landlord :D

    complete and utter unimplementable populism.

    the central bank said a few years ago that for every 5 LLs leaving the market, that 1 new LL was entering - and they weren’t even buyers, it was usually a couple moving in together and keeping both houses they already owned (i.e yet another accidental LL).

    I’d imagine the recent price rises would mean that 1-in-5 figure is far lower now, as it’s a less attractive investment



  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    (Green line) Fascinating drop in rental availability on Daft, from 24,000 in 2011, to just 1,300 today - note in particular the steep fall in the past 18 months, a clear indicator of landlords taking advantage of increased property prices to leave the market.

    it will be interesting to see how how many LLs leave before it bottoms out, it’s down from 220k in 2011 to 164k today.



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  • Posts: 0 ✭✭✭ Joe Full Sulfur


    Wow, only 1,300 properties to rent in the entire country 😲



  • Registered Users Posts: 544 ✭✭✭ agoodpunt


    populist socialist treshold directed policies have the private market striped of supply politics needs to be remove from the property market they are responsible for its destruction starting with the scraping of the rtb



  • Registered Users Posts: 544 ✭✭✭ agoodpunt


    decent older tenants wiill be excluded, youmg families returning to ireland and body starting a new career is the result of socializeing the private market and in part has aided the supply shortage.

    Result is we are seening more and more houses been sold with tenants excluding some buyers from securing a home if they want to buy.

    Corporate landlords playing no tax while small LL been screwed.

    Threats to make tenancies indefefiinte whille tenants can move when ever the want they cannot be held on total one sided contracts.

    Removal of property rights, families moving a member into a property been challenged resulting in many been left vacant.

    And the socialist clowns call rents to be frozen again the market is still fecked from the last one so lets really feck it even more.

    Post edited by agoodpunt on


  • Registered Users Posts: 2,264 ✭✭✭ sk8board



    this mightn’t seem like a lot, but it’s about 4,000 LL’s leaving the market annually, or about 2.5% of all LLs in the country (165,000, which is down from 212,000 a few years ago).

    the rental market is just getting tighter and tighter, from both Supply and Demand.

    on an aside, daft listings are down to just 1,150 across the whole country this morning - a record low.

    for reference that’s down from a high of over 20,000 high in 2012.



  • Registered Users Posts: 949 ✭✭✭ redarmyblues


    The REITS pay tax on their activities in administering the rentals (15% of rental income), as I understand it they do not own the properties, the institutional investors in the REIT own the properties and they pay tax on the rental at the appropriate rates, these rates are generally lower than Mom n Pop rates but not necessarily so, for example a pensioner with rental making 8K a year would probably pay no tax just USC. The institutional investor pays the same CGT rate as the pensioner.



  • Registered Users Posts: 5,619 ✭✭✭ Claw Hammer


    The rental income is reduced in the REITs by borrowing the money from a sister company abroad who has in turn sourced the money at a much lower interest rate. The profit on the Irish rental income is thus converted into an arbitrage profit in another jurisdiction which conveniently has a nil or low tax rate.



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  • Registered Users Posts: 949 ✭✭✭ redarmyblues


    I thought the original seed in most cases are institutional funds seeking a return since the best days of couponed fixed income are long gone.



  • Registered Users Posts: 5,619 ✭✭✭ Claw Hammer


    It is always sourced from abroad. The original seed will be sent abroad and lent back if necessary.



  • Registered Users Posts: 3,505 ✭✭✭ spaceHopper


    I help my mother look after what was my Dad’s rental house in flats. 

    I see renting as something you should do in your 20’s when you are starting out by your 30’s you have either bought on your own or with a partner. 

    Rent Allowance is for short term problems like losing you job, if it becomes long term you move to social housing. 

    I don’t think private rental should be used for social housing for longer than 1 year as a stop gap. 

    I don’t believe in renting for life as when you retire you are f*cked.

    Bad tenants are a nightmare and haven’t used daft for the last two tenants, word of mouth from somebody living in the house works best. If they are disruptive their friend has to live with it so they will filter out the dross. 

    One day I will inherit the house – I’m not in any rush for that to happen. My heart wants to keep it, it used to make sense on paper but not I’m not so sure, the risk are to high.  



  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    Just 75 of the 3,900 mortgage approvals in Feb were for investment purposes, with an avg mortgage value of €160k (!).

    this is approvals, so actual drawdowns will be lower. It’s incredibly small volume for a market with nearly 1.8m dwellings.





  • Registered Users Posts: 6,205 ✭✭✭ Flinty997


    I'd like to know the breakdown of landlords with social housing tenants. Or the average rent breakdown of Landlords.

    I think REITs are mostly at the top end of the market. Small landlords at the bottom. But I have no stats.



  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    There was a big report recently on the average incomes of landlords - it was something like €10k annually, and it split it by region and no. of rentals etc.

    REITs can’t turn away HAP no more than a small accidental LL, so the mix will likely be similar, but where they will differ (and may be what you’re referring to sorry), is that REITs will own more expensive places with rents beyond the limits of the HAP scheme.

    65% of all LL’s only have one rental, which is a very risky situation from an investment income perspective (120k from the 165k total LLs), and this explains why average LL incomes are so low. The notion of profiteering LL’s isn’t bourne out by the facts.



  • Registered Users Posts: 6,205 ✭✭✭ Flinty997


    REITs target the most profitable end which is the high end. Which makes perfect sense for a business. There was talk if them expanding into other sections of the market, like social housing. But were almost not existent at that end at the time of the article (a year or more so) I was reading.

    My point is the LL who are leaving will have a bigger impact on social and affordable housing availability as a result.

    Is like to see some detail on that.



  • Registered Users Posts: 2,264 ✭✭✭ sk8board


    Yep, that’s correct for sure.

    the RTB annual report details the LL exodus, it started in 2016 and was 4,500 LLs in the 2020 report. There were 220,000 registered LLs in 2012 (exceptional circumstances), and it’s 165,000 today - nothing suggests that hasn’t decreased further in 2021 given the end of Covid lockdowns (it was difficult to exit the market in 2020 when you were blocked from removing a tenant).



  • Registered Users Posts: 6,205 ✭✭✭ Flinty997


    The problem with a bad tenant is they can wipe out any gains for not simply the year or two they are in the property but also the years it takes you to make it back.

    So that along with the dates and hassle makes it not worth the grief.

    Then over the length of the investment you might have 2 or 3 of those tenants in the space of 20 years or you might have none.

    If a landlord can reap some capital gains now leave the market then get back in, in 2-3 years the prices might have fallen. (Unlikely) or just invest in a REIT.



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  • Registered Users Posts: 15,319 ✭✭✭✭ Donald Trump



    Well that report was on the average net rental income for "landlords", not their average income. You can't be realistically proposing that every individual with a single additional property to rent out should be able to live off the back of solely that property - they will need an additional income rather than the passive rental income of a single house.

    Average house price is about 300k. 20% deposit is 60k. So if you have 60k lying around, get a mortgage of 240k. buy that house and then deduct all your expenses, including interest etc, and have 10k coming in, that's not a bad return on your 60k. Lets even suppose you go mad and have another 40k upfront costs you burn through. You're still netting 10k per year on that 100k.


    I presume the notion of "profiteering" comes from the fact that many would have bought their properties for far less than current values and would have been able to make it work on rental incomes far less than todays rental levels. The cost of the money they borrowed has fallen if anything, and their money coming in has shot up



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