Housing Madness

DataDude

https://www.boards.ie/discussion/comment/118654623#Comment_118654623

Investing in lots of stuff isn't attractive with small money - hospitals, roads etc. Which is where either the government steps up or big business gets involved to do it efficiently. REITs are a great way for small investors being able to collectively get exposure to a diversified property portfolio with a good running yield.

There's no real solution here. Anytime you have joe public coming along and having a whirl at being a landlord using someone else's money is clearly going to be inefficient. Inefficiencies always get stamped out.

Even if you went and did what all the the landlords want - "0% income tax on property"...money would plough in from all corners of the globe (mine included) to try to get this mythical 6% running yield with 0 tax...and so prices would rise massively...and the yield would fall...and we'd be back to the start again with the only winners being existing landlords and property/land owners. Suggestions like this (not saying you did suggest, but many do) just come from those with 0 grasp of basic economics.

timmyntc

https://www.boards.ie/discussion/comment/118654533#Comment_118654533

Small landlords leaving the market and REITS coming in is nothing but the rental market moving towards a more efficient state.

Efficient is not good for the state and rarely good for the consumer, at least as far as rentals go.

Efficient REITs pay no tax on rental incomes, and as many investors are not resident in Ireland the dividends are not taxed either. Then for the consumer, well these REITs have yield to make, they will up prices at any opportunity. And they are very unwilling to drop prices, even if it means leaving some units empty. Its better that market rents are held higher than letting them drop, due to RPZ rules and the valuation of rental property being based on the achievable rent (as % yield), lowering the charged rent even temporarily will cause the asset price to drop.

Market price on an apartment might be based around a 6% yield - if the rent drops, well then the valuations will too as any prospective buyers will have a minimum yield they target. So the price they are willing to pay for the apartment drops too. Small landlords cannot get away with this, institutionals can.

timetogo1

https://www.boards.ie/discussion/comment/118654655#Comment_118654655

Is there no issue with the government interfering? The different tax rates on smaller landlords and REITs isn't an inefficiency? It seems like a benefit to one part of the competition. Obviously they get benefits with economies of scale but is tax one of the benefits that they should get?

I'm not sure if we want REITs squeezing every drop of profit out of renters as they work towards being efficient. That's a different issue though. For the direction we're going the government seems to be favouring the bigger businesses with a result that the smaller "inefficient" landlords that could function previously are moving on.

We did have inefficient landlords leaving tenants alone but with recent RPZs they have to be efficient and raise the rent 4% a year if their peers are doing so or else lose out in the future.

DataDude

https://www.boards.ie/discussion/comment/118654702#Comment_118654702

https://www.boards.ie/discussion/comment/118654722#Comment_118654722

REITs don't pay taxes because the owners of stakes in REITs do. The same way equity funds can buy and sell without taxes because the tax event occurs when the owner of the fund buys or sells. If the investment vehicle had to pay tax within itself, it would be getting taxed twice and be completely un-investable and cease to exist.

Your point around profits to foreign investors is understandable and nationalistic, but it's in keeping with the global financialization of everything. Sure Ireland could ban non-irish citizens from investing in Irish REITS...but how would we feel if the US then decided to stop Irish people investing in US equities? Everything becomes very tribal and insular and I don't know if that's a desirable thing - I'd certainly miss my access to US Equities...

On the leaving vacant thing. Perhaps that is true, although I'm pretty sure it's overegged as a REIT generating no income wouldn't last long. It could be an unintended consequence of negative interest rates where leaving something idol isn't such a terrible thing anymore. The solution to that is simple though - an extremely heavy and relentlessly enforced vacancy tax. How that hasn't come in yet is a national disgrace.

Bit cynical

From a renter's perspective the ideal scenario would probably be a market dominated by large institutional investors. Not good for people trying to get on the housing ladder initially, but good in the long run in that these large investors would have access to far more money to invest in the market (thereby increasing supply) than small amateur landlords.

PommieBast

https://www.boards.ie/discussion/comment/118654463#Comment_118654463

Get some rental property over in the UK. My parents over there are in that game and one of the delights is mandatory eviction upon three months rent arrears. No sob stories they are out.

riclad

The government has pledged to spend billions on building social housing or providing housing subsidys to people on lower incomes . The problem is no one knows if they can build houses at the scale to effect the housing crisis . The market needs 15 to 20 k housing units built every year to keep up with demand. Most of the market is governed by simple economics low supply high demand equals rising prices Young people will vote for the party that promises to tackle the housing crisis in future elections , this is not just an Irish problem. In America its becoming more difficult and expensive for ordinary working people or young people to buy a house .

Mad_maxx

Problem is multi faceted

Planning takes too long and allows too much pandering to crank objectors ,needs serious reform

Height restrictions, these are often supported by public left wing commentators like Frank Mcdonald

Onerous building refs, while nobody would desire pitiful low standards like in New Zealand, houses today are too expensive to build due to excessively high standards, local authority builds should be constructed to a cheaper more modest standard but of course this would be opposed by the likes of SF and PBP as an example of housing apartheid

Landlords leaving the market, tenant protection is now too strong and protects rogue tenants for years ,this is driving out small landlords and again the left wing parties support the policies contributing to this

If the government are to embark on a mass building programme, they should set up a sort of sovereign fund whereby savings holders are invited to invest in BTL through a government controlled fund ,there are Billions sitting on deposit earning nothing, if these savers saw a potential return of say 3.5 % , there is no reason funding could not be generated, I honestly think a lot of people would be civic minded enough to partake ,not before reforms were put in place to both evict rogue tenants and force council tenants to pay outstanding rent

Unfortunately the left wing parties oppose any sort of consequences for deadbeat tenants, beit private or local authority

AckwelFoley

https://www.boards.ie/discussion/comment/118642023#Comment_118642023

Rearranging deck chairs on the titanic

We need more houses not change of ownership of already occupied houses

dxhound2005

I'm reading that we cannot build enough new houses to solve the problem quickly. My suggestion is to use vacant houses, not ones which are already occupied.

Wanderer78

https://www.boards.ie/discussion/comment/118658357#Comment_118658357

....we actually need to build in excess of 30k units a year for the foreseeable, in order to keep up with demand, and theres nothing simply about the economics of our property markets, for example pricing varies for various different reasons, and cannot be simplified down to just supply and demand, the supply and demand of economics are also not laws, compared to the laws of science etc. the money supply plays a significant part in the price of property, we found this out the hard way in the previous boom, by allowing the private sector money supply, i.e. the credit supply, run riot, now we have both the public and private sector money supplies, playing a critical role in pushing up prices, amongst other things, inflation etc

vriesmays

https://www.boards.ie/discussion/comment/118658562#Comment_118658562

Loads of vacant house in Leitrim.

https://www.boards.ie/discussion/comment/118659020#Comment_118659020

Not as many as there are in Dublin

onedmc

We need a proper property tax. Owner-occupier should then only pay 50%. This would balance the power of the owner over corporates and those that own multiple properties.

It's the middle class who are fuc!!!d now ..the working class always had a tough time....poverty is seeping through the classes very quickly...

dxhound2005

The middle class are workers as well.

Cheerful S

https://www.boards.ie/discussion/comment/118650921#Comment_118650921

Poor mouth rhetoric landlords spout. Renting a home/flat was considerably reasonably priced during the Celtic tiger growth period. Landlords had the same expenses to cover.

Is there substantial information costs are higher for them? The building end of the day does not belong to the renter will never profit from the stay, yet landlords demand the renter to cover the costs of monthly mortgage payments and other expenses.. The reality is landlords will find a long list of excuses as to why high rents should stay.

This is the mindset . “Personal funds will have to be used to cover all the costs” Again may be the way things are but the home does not belong to the renter. I just think something wrong with how it all works when someone else is paying another person's mortgage off and see no return nothing from it the end.  Simple view it may be. How I see it.

Cheerful S

https://www.boards.ie/discussion/comment/118651284#Comment_118651284

Difference Ray. Transfer of goods deal with a business. You'll hand over cash for a service or a product. Renting a home is not a business. End of the day Someone paying your monthly mortgage payment why is that not sufficient for a landlord? Is that not an advantage a renter willing to do that? Landlords are just happy to be in the mindset of not paying for their home.

Cheerful S

https://www.boards.ie/discussion/comment/118652206#Comment_118652206

Exactly. Landlords want it all that's the issue snow.

Jim2007

https://www.boards.ie/discussion/comment/118661896#Comment_118661896

This is a warped view at best. Of course you get a benefit of renting an apartment or a house, you get the use of the property for the period you rent it.

Follow your logic, why would you ever go on holidays for instance? After all your money is going to be used pay of some companies loans, the mortgage on the property you stay in, the dividends paid to the shareholders etc. Or how about buying a paper, magazine or book? After all the newsagent might use your money to pay off his mortgage or take holiday…

Nobody goes on holiday, buys a paper or rents a property without receiving something in return and to claim otherwise is utter nonsense. The only way you end up with nothing is if you rented a property and allowed some random individual to stay in it and that would be foolish. You can question whether renting represents value for money etc but not that you get nothing out of the exercise.

If you want to start questioning anything start by asking yourself why you thing a housing policy based on people taking on huge amounts of debt or relying on social assistance to put a roof over your head is such a great idea? It has not worked in the past, it’s clearly not working now nor has it worked in any other Anglo Sphere country.

jim-mcdee

Definitely. Political backlash. That's what we need. What were the government thinking trying to incentivise job growth when there was high unemployment a few years ago? Didn't they see that if there were too many jobs rent would go up? We need a government that focuses on cheaper rent. Clearly the government got it wrong. They should forced builders to build houses at a loss or build and leave empty until someone could afford to buy the house. And then tried to get some more jobs for people. That would be the right way. The government did it wrong way around. Get the SF in they will sort everything out.

Cheerful S

https://www.boards.ie/discussion/comment/118661930#Comment_118661930

You have highlighted the issue Jim “You get the use of the property.” My first position is value for money. Wrote in the second paragraph. Purchases never feel got ripped off. Before going on any holiday, shop around and typically do find great deals at good prices. It is not really an appropriate comparison to compare.

I have concern (not a renter by the way) I feel their selfishness and greed here. Just an example property owner bank loan is 500 to 600 Euros every month. And, the property owner decides to advertise the house just bought for 1000 Euros a month or more, above the actual contract repayment. The landlord mortgage payment is already getting paid and presumably, little profit thereafter expenses. I don't get it personally why landlords would be leaving the market if someone took over mortgage payments for you? Maybe investors would if they want quick gains. Very profitable in the long run keep renting the house to individuals long term. It's more of a punch had to repay all of it yourself?

I not arguing landlords do not get something out of it renting a home to a stranger. I figure that’s an issue the government should address from.. A lot of people work 9/5 jobs and have other bills, and rents are just too high for people. I would agree taking on huge debt is a problem. I think social assistance is more about people not having the income to get a loan for a home and they need help.. That's another debate.

malinheader

https://www.boards.ie/discussion/comment/118662018#Comment_118662018

No one works for free. But sadly a large majority in this country have copped on that if you don't work at all and the more needy and disadvantaged you portray yourself gives you a massive advantage of being housed in this country. Fact.

Cheerful S

https://www.boards.ie/discussion/comment/118662039#Comment_118662039

Warped sense of entitlement. Landlords love the investment of a second home but hate having to pay anything back. It's the landlord's asset is not the renter's. Should be happy there is a stream of cash coming in to help you pay off most of those things you listed.

Cheerful S

https://www.boards.ie/discussion/comment/118662099#Comment_118662099

According to what said, homes rented before getting sold. They decided to sell up when prices are high. Covid probably had a knock-on effect that some people lost work, not afford rents and landlords got out. The landlord maybe an old pensioner and decided the time was right to retire and the loan was mostly paid back to the bank. Plenty of factors. Investor's goal is profit, and see an knock-on effect coming with their own pocket, they get out. That's a problem itself that renting is viewed in that way. How much can I squeeze out of a stranger. not enough there out. Others stick around because the renters helping them pay off their mortage. Unfortunately the profiteers jumping ship will cause a problem like we see now.

DrumSteve

My two cents is that people in general would like the opportunity to buy a house in advance of a foreign investment fund coming in, buying the whole estate and renting it to them instead.

riclad

The government has to face supply chain issues , inflation, everything is getting more expensive, shortage of experienced building workers. Many builders went home to Poland and EU countrys 2 years ago. will they come back. Who knows. Landlords can only claim the interest on a mortgage against revenue as a tax credit The days when local authority councils could build 1000s of houses are gone. The tax system here is not encouraging small landlords with one or 2 units

AckwelFoley

https://www.boards.ie/discussion/comment/118658562#Comment_118658562

All these vacant houses are vacant or a reason. With rent so incredibly high wouldn't it make natural sence to forbthe owners to get them rented? More housing stock would reduce the level of rent people pay.

The problem goes back to my initial point. The cost of taking a vacant house from its current position and getting it market ready for sale or rent is simply too high

Duncan Stewart was on his TV show promoting said idea standing outside a derelict building absolutely waffling on about how it's cheaper to get these ready for market than new builds, which is nothing more than waffle. In many cases it would cost the same, if not even more if the property are a very old with stone walls.

Some of the suggestions of selling these to the state doesn't solve the problem. Going full Richard boyd barrett and expecting the state to be able to afford to supply a house to everyone isn't the answer either.

The housing crisis is like a plane crash, its not one single problems that's causing it, nor is it one single fix that will resolve it. The end result needed obviously is more units, but no single stroke of a pen will get is there.

Planning will be involved, the city needs more high density multi occupancy units that will have young single people, young couples, and elderly that want to downsize suitable accommodation where they're not occupying houses more suitable for families. There is far too much NIMBYism in the planning process and nothing ever gets accomplished

The private sector builds houses, they're not doing so, we need to get the private sector building again, but by doing so, being careful we don't get into a Priory Hall situation either.

BattleCorp1

https://www.boards.ie/discussion/comment/118662089#Comment_118662089

Tell me, why do you think it's a landlord's job to provide renters with cheap accommodation?

After all, it's the landlord who has fronted the cash to buy/build the building. It's the landlord who has to pay for the maintenance. It's the landlord who has to insure the building. It's the landlord who has to make up any shortfall if money coming in is less than money going out. It's the landlord who has to shoulder the cost of bad tennants who won't pay/damage the property. It's the landlord who can't get bad tennants out of the building for two or three years should the tennant act the bo11ix. It's the landlord who has to pay the mortgage if the tennant stops paying.

You've a very negative view of landlords. Agreed, there are some greedy landlords but it's not the land of milk and honey. It's not worth it for many smalltime landlords. If there was such good money in it, you would have people fighting hand over fist to get into the rental market, and not exiting it as is now happening.

BattleCorp1

https://www.boards.ie/discussion/comment/118661944#Comment_118661944

They should forced builders to build houses at a loss or build and leave empty until someone could afford to buy the house.

The most stupid statement I've seen on boards in a long time.