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cuckoo property

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  • 09-05-2019 11:42am
    #1
    maestroamado
    Registered Users Posts: 4,426 ✭✭✭


    I just wonder what is the view here as i have read lately that these companies have bought 3000 properties that were originally developed for people to call home?


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    #2
    Amirani
    Moderators, Society & Culture Moderators Posts: 12,521 Mod ✭✭✭✭Amirani


    maestroamado wrote: »
    I just wonder what is the view here as i have read lately that these companies have bought 3000 properties that were originally developed for people to call home?

    Do people who rent properties not call them home?

    We have a chronic under-supply of rental properties, which has manifested itself it rents that are now far higher relative to incomes than property purchase prices. We need extra rental supply to address this and these funds are increasing the supply of rentals.


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    #3
    Interested Observer
    Registered Users Posts: 13,021 ✭✭✭✭Interested Observer


    The way this discussion gets framed is just amazing. The Indo ran an extremely negative front page article last week on this. The substance was that 2300 apartments were to be built (not bought, built) for rent. This is quite obviously a good thing imo, it would represent a massive proportional increase in the number of available units for rent. The way it gets framed though - "buyers locked out".

    There is just no way to win with some people.


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    #4
    jester77
    Registered Users Posts: 11,262 ✭✭✭✭jester77


    This is normal in most civilised countries and wouldn't even warrant a mention in a passing conversation. It is an attractive investment for large pension and insurance firms.


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    #5
    JimiMac
    Registered Users Posts: 237 ✭✭JimiMac


    Amirani wrote: »
    Do people who rent properties not call them home?

    We have a chronic under-supply of rental properties, which has manifested itself it rents that are now far higher relative to incomes than property purchase prices. We need extra rental supply to address this and these funds are increasing the supply of rentals.

    The cuckoo funds are not doing anything for supply. Are they building EXTRA units to rent out? Are they concerned about the drastic under-supply?
    They only see the housing crisis as an opportunity to make vast profits.Cuckoo funds buying up properties does not do one iota for supply. It merely changes the ownership of such properties. Even if these properties are being bought to rent out as opposed being bought to own by struggling citizens with no tax breaks, do you think that this is somehow going to increase supply, ease demand and somehow bring down rents??? Not a chance!! They are buying them knowing that they will make fat profit margins and renters will be left with fewer and fewer alternatives. I'm not normally political but this housing situation is driving me nuts. I cannot believe anybody even remotely defending these cuckoo funds??? At the next election I will be voting for ANYBODY but Fine Gael!!


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    #6
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    You're assuming the same number of apartments would be built over the same timeline without the security of pre-selling (and financing) entire blocks/developments.


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    #7
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    Graham wrote: »
    You're assuming the same number of apartments would be built over the same timeline without the security of pre-selling (and financing) entire blocks/developments.

    exactly

    imagine how the funding conversation with a bank goes when you have presold the whole development versus taking your chances with the market.


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    #8
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    Cyrus wrote:
    imagine how the funding conversation with a bank goes when you have presold the whole development versus taking your chances with the market.

    Cyrus wrote:
    imagine how the funding conversation with a bank goes when you have presold the whole development versus taking your chances with the market.

    Taking your chance in a market that is undersupplied and that requires a lot of appartments to meet the current demand.

    The issue here isn't about those funds buying full blocks, the real issue is that the timing is very bad as people are looking to buy a property that they can afford - in this case appartments.

    The government should intervene to stop this practice for few years, they can at least make sure that 50% goes to these funds while the other 50% can be sold to individuals/families.


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    #9
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    alwald wrote: »
    Taking your chance in a market that is undersupplied and that requires a lot of appartments to meet the current demand.

    You could argue the demand for apartments is predominantly generated by the property funds.
    alwald wrote: »
    The issue here isn't about those funds buying full blocks, the real issue is that the timing is very bad as people are looking to buy a property that they can afford - in this case appartments.

    The government should intervene to stop this practice for few years, they can at least make sure that 50% goes to these funds while the other 50% can be sold to individuals/families.

    There probably is a case to be made for this kind of mixed owned/rented approach.

    I'm not sure if there are figures anywhere that measure the demand for privately owned apartments. Anectotally (even from this forum) demand always appears to lean towards the 3 bed semi 'forever home'.


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    #10
    Rew
    Moderators, Sports Moderators Posts: 8,679 Mod ✭✭✭✭Rew


    Selling 2300 units to 2300 people takes a lot of time, effort and money v's selling them to 1 means the builder gets in and out very quickly and moves on the build more sooner. Supply is supply regardless of who buys them.


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    #11
    PhoenixParker
    Registered Users Posts: 2,671 ✭✭✭PhoenixParker


    Selling 50% to individual families is a terrible idea.
    The corporate investor would retain full control of the management company leaving all the other owners extremely vulnerable to a range of underhanded tactics.

    A single owner responsible for the whole development is a decent way to go. There's a lot of new housing stock at planning and actually being built but we desperately need new rental units.


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    #12
    maestroamado
    Registered Users Posts: 4,426 ✭✭✭maestroamado


    Personally i think this should be addressed at the planning stage as it is in other countries.
    If a corporation want to build 50,000 apartments let them do the development and sell or rent.
    There was something like 290 houses around Lepardstown sold to one of these funds.
    I wonder what was in the original planning application...


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    #13
    jim o doom
    Registered Users Posts: 1,474 ✭✭✭jim o doom


    Rew wrote: »
    Selling 2300 units to 2300 people takes a lot of time, effort and money v's selling them to 1 means the builder gets in and out very quickly and moves on the build more sooner. Supply is supply regardless of who buys them.

    And bowing to the whims of developers and builders during the boom period, which ended up in developments with major issues like Priory hall are a MAJOR part of what contributed to the "crunch" in Ireland.

    Just because supply is supply, doesn't mean the government can't or shouldn't legislate. If there's profit to be made, the builders and corporate purchasers will adhere to that legislation in order to make the profit that is available.

    Massive vulture and other sorts of funds are getting heavily into the rental market in the US, The last week tonight with John Oliver did an episode on it recently, and greedy funds controlling rent is NOT a recipe for success or reasonable priced rents.

    I'm not offering a solution here, I'm just pointing out that it's not all rosy and perfectly fine.


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    #14
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    alwald wrote: »
    Taking your chance in a market that is undersupplied and that requires a lot of appartments to meet the current demand.

    The issue here isn't about those funds buying full blocks, the real issue is that the timing is very bad as people are looking to buy a property that they can afford - in this case appartments.

    The government should intervene to stop this practice for few years, they can at least make sure that 50% goes to these funds while the other 50% can be sold to individuals/families.

    government intervention in the property market, what could go wrong....

    the only sensible intervention we have had has been from the central bank.


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    #15
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    Graham wrote:
    You could argue the demand for apartments is predominantly generated by the property funds.

    Because most of the well located appartments are bought by these property funds and didn't hit the sale market.

    This might be irrelevant as it's a bit old but in 2015 and 2016 buyers were queuing for days to buy appartments in Baldoyle which is only 15 min by Dart to the city center.

    Location is key, there are B rated new appartments (1 to 3 beds I think) in Clonee that went for sale about a month ago and are still not sold out due to the distance to the city center and the poor public transport from and to Clonee.
    Graham wrote:
    There probably is a case to be made for this kind of mixed owned/rented approach.

    I'm not sure if there are figures anywhere that measure the demand for privately owned apartments. Anectotally (even from this forum) demand always appears to lean towards the 3 bed semi 'forever home'.

    Traditionally yes, however with the new building regulations, proper insulation and noise proof walls I can see more buyers being interested in appartments than houses - especially due to the affordability factor.

    People are desperate to stop paying over 1k to rent a room in a shared 2 bed flat and would rather buy to invest their hard earned cash.

    What I also see in the forum is the split regarding this topic between those interested in buying appartments and others who are hoping for an increase in the rental supply with the hope to rent a better and/or cheaper place.


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    #16
    JimiMac
    Registered Users Posts: 237 ✭✭JimiMac


    Graham wrote: »
    You're assuming the same number of apartments would be built over the same timeline without the security of pre-selling (and financing) entire blocks/developments.

    You're assuming that I am assuming.
    Cuckoo funds are buying up properties to take advantage of an extremely dysfunctional property market. They are doing this to maximise profit at the expense of tenants with no other choice but to pay extortionate rents. They are not buying with the intention of increasing rental supply to bring down rents!


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    #17
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    JimiMac wrote: »
    You're assuming that I am assuming.
    Cuckoo funds are buying up properties to take advantage of an extremely dysfunctional property market. They are doing this to maximise profit at the expense of tenants with no other choice but to pay extortionate rents. They are not buying with the intention of increasing rental supply to bring down rents!

    Their intention is irrelevant. Offering units for rent increases the supply of rental accommodation in itself.


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    #18
    James Bond Junior
    Registered Users Posts: 5,130 ✭✭✭James Bond Junior


    4ensic15 wrote: »
    Their intention is irrelevant. Offering units for rent increases the supply of rental accommodation in itself.

    Which in turn will depress prices down. Increased supply means more competition means price competition.


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    #19
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Cyrus wrote: »
    government intervention in the property market, what could go wrong....

    the only sensible intervention we have had has been from the central bank.

    The central bank sat on their hands for a couple of decades and slept though a financial crisis of epic proportions before finally doing something. They are right up there with successive government's in how badly things have been handled.


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    #20
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Lets not pretend this will do anything for rents. These properties will be marketed as 'luxury' accommodation with premium rents. People are getting exactly what they want, an end to the small time Landlord and it being done 'properly' by large investors.

    Be careful what you wish for.


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    #21
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    ....

    People wanted supply and they want large "professional" companies in the market. That's exactly what's happening. That they will focus on the high most profitable section was inevitable.

    What we need was the govt to deliver balanced supply for different types of housing that are needed. But they are awol as usual.


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    #22
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Samuel T. Cogley wrote: »
    Lets not pretend this will do anything for rents. These properties will be marketed as 'luxury' accommodation with premium rents. People are getting exactly what they want, an end to the small time Landlord and it being done 'properly' by large investors.

    Be careful what you wish for.

    The people who will live in them must be migrating from other rental accommodation. The important thing is to get as much accommodation on stream as quickly as possible. If the market will only build to rent and student units, then that is what must go up.


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    #23
    JimiMac
    Registered Users Posts: 237 ✭✭JimiMac


    4ensic15 wrote: »
    Their intention is irrelevant. Offering units for rent increases the supply of rental accommodation in itself.

    Their intention is irrelevant if you don't care what you're paying for rent. The whole point of increasing supply is to bring down rents. If you apply a standard model increased supply should eventually ease demand and bring down rent. But this is not a standard situation. Fewer and fewer landlords controlling the majority of rental properties. The reason they are here in the first place is because of the ridiculously high rents being paid. Do you think they are buying them up to bring down rents ?? So if you care about rent levels then their intention IS relevant.


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    #24
    JimiMac
    Registered Users Posts: 237 ✭✭JimiMac


    James Bond Junior wrote: »
    Which in turn will depress prices down. Increased supply means more competition means price competition.

    Fewer landlords controlling more units leads to LESS competition !


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    #25
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    JimiMac wrote: »
    Their intention is irrelevant if you don't care what you're paying for rent. The whole point of increasing supply is to bring down rents. If you apply a standard model increased supply should eventually ease demand and bring down rent. But this is not a standard situation. Fewer and fewer landlords controlling the majority of rental properties. The reason they are here in the first place is because of the ridiculously high rents being paid. Do you think they are buying them up to bring down rents ?? So if you care about rent levels then their intention IS relevant.

    The cuckoos are not driving out other landlords. there are other factors involved in that exercise. If it wasn't for the cuckoos there would be fewer housing units built. Nobody is forced to live in a cuckoo owned unit.


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    #26
    PhoenixParker
    Registered Users Posts: 2,671 ✭✭✭PhoenixParker


    JimiMac wrote: »
    Fewer landlords controlling more units leads to LESS competition !

    More units leads to more competition.

    Fewer landlords may lead to less competition if they act as a cartel or it may lead to more competition if their economies of scale allow them to truly start to compete on price.

    How the balance between more units and fewer landlords plays out in terms of actual levels of competition remains to be seen.


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    #27
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    4ensic15 wrote: »
    If it wasn't for the cuckoos there would be fewer housing units built.

    I believe you are making an assumption here unless you have any proof that this is the case.


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    #28
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 67,816 Mod ✭✭✭✭L1011


    Samuel T. Cogley wrote: »
    Lets not pretend this will do anything for rents. These properties will be marketed as 'luxury' accommodation with premium rents. People are getting exactly what they want, an end to the small time Landlord and it being done 'properly' by large investors.

    Be careful what you wish for.

    The current takeup level in Capital Dock shows that there is bog all market for super-premium rentals.


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    #29
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    PhoenixParker wrote: »
    More units leads to more competition

    That's not true because it's the demand VS supply that will create that competition. The real question is what's the required rental supply to satisfy the demand and thus create that competition.


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    #30
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    alwald wrote: »
    I believe you are making an assumption here unless you have any proof that this is the case.

    The builders are selling to cuckoos because of the funding issues in spec building. That much is obvious and has been commented on by a government minister recently. What is wrong in this country is begrudgery. If begrudgery was outlawed and there wasn't an attitude that it is wrong to make a profit the housing problem could be solved easily.


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    #31
    Colonel Claptrap
    Registered Users Posts: 945 ✭✭✭Colonel Claptrap


    Taking bets on the next boogeyman term coined by the indo. Vulture and cuckoo just don't cut it anymore.

    Scarecrow funds anybody?

    How about dodo funds? Making the irish property owner extinct. That could be an angle.

    Ostrich funds? Bury their head in the sand until the media storm blows over?

    Golden goose funds?

    My money is on woodpecker funds - those new timber framed houses are surely lucrative.

    Fowl play i say.
    Somebody at Indo HQ is clearly bored.


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