Dublin - Significant reduction in rents coming?

sk8board · 27-04-2020 8:50pm

LL here.

Why do people think rents will fall once the lockdown lifts?
Perhaps there are LLs who panicked when lockdown happened and cut the rent (to last years level), but that’s merely an aside when discussing the user market over the coming years.

Rents fall when:
1. you have an abundance of houses
or
2. You have a dearth of renters

In ‘08-‘12 we had both.

Post lockdown, we still won’t have either. Far from it.
how much capital spending will the Gov do during a recession, to create housing supply?
How much net migration will there be, like we had in ‘08, when there isn’t somewhere else to go? (If everywhere is in recession).

In reality, accidental LLs will probably continue to exit in higher numbers due to cash squeezes and the number of rentals will continue to fall, further preventing rents from falling, but perhaps dropping house prices.

Ozark707 · 27-04-2020 9:01pm

sk8board wrote: »

the number of rentals will continue to fall, further preventing rents from falling, but perhaps dropping house prices.

Link below details how supply in Dublin has been increasing almost MoM since last May or so. I expect when these figures are updated in early May they will show a further increase again.

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/

Now this might be temporary as you say but it was happening before Corona hit. Also bear in mind that these figures do not take into account multiple listings that the REITs would have (for example over half of Capital Dock was empty 12 months after it was completed). There is a huge amount of supply to come on stream (if builders get back of course) in the next 12-18 months from these professional LL's (now at the rates they charge it is arguable they will even have a worse occupancy rate than Capital Dock).

rtron · 27-04-2020 9:14pm

sk8board wrote: »

LL here.

In reality, accidental LLs will probably continue to exit in higher numbers due to cash squeezes and the number of rentals will continue to fall, further preventing rents from falling, but perhaps dropping house prices.

Why would accidental LLs exit, what types of squeezes?

Hubertj · 27-04-2020 9:29pm

Ozark707 wrote: »

Link below details how supply in Dublin has been increasing almost MoM since last May or so. I expect when these figures are updated in early May they will show a further increase again.

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/

Now this might be temporary as you say but it was happening before Corona hit. Also bear in mind that these figures do not take into account multiple listings that the REITs would have (for example over half of Capital Dock was empty 12 months after it was completed). There is a huge amount of supply to come on stream (if builders get back of course) in the next 12-18 months from these professional LL's (now at the rates they charge it is arguable they will even have a worse occupancy rate than Capital Dock).

This is good news for the rental market even if we didn’t have the current crisis. More units means renters have more choice, rents level off or even reduce etc. Question is does the increased supply meet the demand pre or post Covid? I presume that will determine be how much rents fall?

27-04-2020 9:44pm

Where do Landlords think people will be getting the money to pay the rents people have been paying? I think there's over 750,000 people now getting social welfare.

Rents will reduce, because people literally won't have money to pay 1,200pm for a one bed place, or anything like what has been charged.

This is the new normal, and we're not (as a worldwide society) going to be able to go back to what we had any time soon.

Ozark707 · 27-04-2020 9:58pm

Hubertj wrote: »

This is good news for the rental market even if we didn’t have the current crisis. More units means renters have more choice, rents level off or even reduce etc. Question is does the increased supply meet the demand pre or post Covid? I presume that will determine be how much rents fall?

The main problem I see is what the REITS are looking for. I just can't see them being able to rent them at what they currently look to charge. Will they reduce rents? If I was in one of those rents and paying top dollar I would be looking to move fairly quickly once lockdown is lifted as there is quite a bit out there now.

Time will tell I suppose.

Ozark707 · 27-04-2020 10:04pm

Deleted User wrote: »

Where do Landlords think people will be getting the money to pay the rents people have been paying? I think there's over 750,000 people now getting social welfare.

Rents will reduce, because people literally won't have money to pay 1,200pm for a one bed place, or anything like what has been charged.

It will be interesting to see how quickly they unwind. If you were paying 2.5k+ for a 2 bed pre Corona you will probably be able to get a 10-20% reduction pretty quickly. I suspect we will be left with decent apts at ~2k (for a 2 bed) being taken but a lot then around 2.5k languishing on the market. I won't even bother to comment on the 3k+ market, whoever is bankrolling these must have seriously deep pockets as there is no prospect of capital appreciation on them either (maybe there is some attractive tax policy that makes them worthwhile).

27-04-2020 10:19pm

Ozark707 wrote: »

It will be interesting to see how quickly they unwind. If you were paying 2.5k+ for a 2 bed pre Corona you will probably be able to get a 10-20% reduction pretty quickly. I suspect we will be left with decent apts at ~2k (for a 2 bed) being taken but a lot then around 2.5k languishing on the market. I won't even bother to comment on the 3k+ market, whoever is bankrolling these must have seriously deep pockets as there is no prospect of capital appreciation on them either (maybe there is some attractive tax policy that makes them worthwhile).

Maybe.

But if a significant part of the population are earning 350pw, those two beds that cost 2000 and two of you are taking in 2800.… I can't see people doing that.

The cost of rent is relative. People will pay as much as they can, but I can't see people living on 100pw (inc bills etc) and that's if the covid payment lasts.

There is rent allowance/hap of course, but you'll have to accept it as a landlord. And that may mean some pricey outgoings to bring the accommodation up to standard.

Genuine question for Landlords. How long will you leave a property vacant because you can't find tenants at the price you are looking for?

I can see a (pretty big) vacant property tax coming in as a way of getting some money back to the exchequer.

Ozark707 · 27-04-2020 10:31pm

Deleted User wrote: »

I can see a (pretty big) vacant property tax coming in as a way of getting some money back to the exchequer.

I would have no issue with this but I suspect practically this will be next to impossible to implement (look at how slow the Airbnb crackdown was going and many of these should have been a 'slam dunk').

Maybe if the Greens get in they will push for this?

27-04-2020 10:50pm

Ozark707 wrote: »

Maybe if the Greens get in they will push for this?

[Off topic]For the good of the left movement, I hope the Greens do the clever thing and stay far away from the toxic FF/FG mashup[/off topic]

awec · 27-04-2020 10:52pm

Ozark707 wrote: »

I would have no issue with this but I suspect practically this will be next to impossible to implement (look at how slow the Airbnb crackdown was going and many of these should have been a 'slam dunk').

Maybe if the Greens get in they will push for this?

They can push but it won't happen. Too difficult to make it work.

What's the definition of vacant?
Does a property have to be habitable to be taxable?
What's the definition of habitable?
What do you actually tax?

27-04-2020 10:56pm

awec wrote: »

They can push but it won't happen. Too difficult to make it work.

What's the definition of vacant?
Does a property have to be habitable to be taxable?
What's the definition of habitable?

Definition: no one living there, subject to inspection. Fairly obvious if a place is vacant or not.
No, a property doesn't need to be habitable. If you don't want to pay the tax, put it on the market. Hoarding property does society no good.

As for how they'd know? Difficult, but not insurmountable. People snitch all the time. Most addresses are on the electoral roll, so could be checked off that, followed by an inspection if noone's registered to vote at that address

awec · 27-04-2020 11:01pm

Deleted User wrote: »

Definition: no one living there, subject to inspection. Fairly obvious if a place is vacant or not.
No, a property doesn't need to be habitable. If you don't want to pay the tax, put it on the market. Hoarding property does society no good.

As for how they'd know? Difficult, but not insurmountable. People snitch all the time. Most addresses are on the electoral roll, so could be checked off that, followed by an inspection if noone's registered to vote at that address

No one living there for how long?

If a property is vacant for a week between tenants, does it get taxed? A month? What about holiday homes that are vacant for most of the year?

I would think the electoral roll would be useless as there'd be a load of properties with no registered voters that are occupied. Same as the census data that they used to try and figure out how many vacant properties there were, the data turned out to be rubbish.

I'd be all for it, but I think if it were reasonable to achieve we'd be further down the road with it than we currently are.

PommieBast · 28-04-2020 6:42am

rtron wrote: »

Why would accidental LLs exit, what types of squeezes?

Rental income not even covering mortgage repayment is/was a common reason. Many would have left the moment they were out of negative equity.

overkill602 · 28-04-2020 6:42am

They have a vacant tax in Paris for some time and people use a building works loophole to get around it ie just remove a toilet pan, then the building is not fit for human habitation.
So how do you force people to complete a unit to be habitable? will need a lot of inspectors never going to happen.
Would you still pay property tax on a vacant property liable that tax?

JimmyVik · 28-04-2020 8:13am

shenanagans wrote: »

[/B]

Most of us need to rent at some stage in our life. The notion everyone hates landlords is absurd. There's plenty of decent fair landlords out there.

Some decent regulation to protect landlords might tempt more to stay in the market. If all small LLs are run out with your 'bleed them dry' outlook.......you see where you'll end up with professional landlords only. Vulture funds buying up blocks of apartments etc.....they want big profit.

You arent reading my posts are you

JimmyVik · 28-04-2020 8:24am

overkill602 wrote: »

They have a vacant tax in Paris for some time and people use a building works loophole to get around it ie just remove a toilet pan, then the building is not fit for human habitation.
So how do you force people to complete a unit to be habitable? will need a lot of inspectors never going to happen.
Would you still pay property tax on a vacant property liable that tax?

There are 3 or 4 hundred people getting infected every day from a killer virus in Ireland. Yet there are many thousands of people running around thinking that the chances of catching it are slim, so they are happy to take the chance. They dont care.

I think the chances of being caught, convicted and punished for having an airbnb or some similar as yet unthought of banned use of property a lot less. AirBnB will be back. Stupid laws pointed at minorities are useless and inefficient.

29-04-2020 10:33am

awec wrote: »

No one living there for how long?

If a property is vacant for a week between tenants, does it get taxed? A month? What about holiday homes that are vacant for most of the year?

I would think the electoral roll would be useless as there'd be a load of properties with no registered voters that are occupied. Same as the census data that they used to try and figure out how many vacant properties there were, the data turned out to be rubbish.

I'd be all for it, but I think if it were reasonable to achieve we'd be further down the road with it than we currently are.

It's not a very satisfying discussion when one's replies are just questions. This is t an interview, I don't have all (any of) the answers.

I think a property that lays idle for 6 months should be subject to a vacant building tax. Maybe a low rate to start off with, which increases after every 6 months.

Holiday homes should be taxed as well. Of course they should. If you have the money for a second home when we're in the middle of a housing crisis, of course you should pay for it. You're depriving the economy of those communities while you're not there, so a tax is only fair.

To be fair, non compliance in Ireland is pretty small across the board. If there were fines issued for non disclosures, building up to seizure, you'd see a lot of people comply pretty quickly.

We don't have a lack of housing in Ireland for everyone, we have a huge problem in hoarding property.

Dav010 · 29-04-2020 10:44am

JimmyVik wrote: »

I think the chances of being caught, convicted and punished for having an airbnb or some similar as yet unthought of banned use of property a lot less. AirBnB will be back. Stupid laws pointed at minorities are useless and inefficient.

Have to agree. I’ve received bookings for Oct/Nov/Dec his month on Airbnb. I’ll be down this year but with a lot of events being rescheduled for 2021, should be a packed year.

Ray Palmer · 29-04-2020 11:09am

[Deleted User] wrote: »

It's not a very satisfying discussion when one's replies are just questions. This is t an interview, I don't have all (any of) the answers.

I think a property that lays idle for 6 months should be subject to a vacant building tax. Maybe a low rate to start off with, which increases after every 6 months.

Holiday homes should be taxed as well. Of course they should. If you have the money for a second home when we're in the middle of a housing crisis, of course you should pay for it. You're depriving the economy of those communities while you're not there, so a tax is only fair.

To be fair, non compliance in Ireland is pretty small across the board. If there were fines issued for non disclosures, building up to seizure, you'd see a lot of people comply pretty quickly.

We don't have a lack of housing in Ireland for everyone, we have a huge problem in hoarding property.

If you are going to come up with an idea and haven't thought it out expect questions. Your idea will sound childish otherwise because it hasn't been thought about like an adult.

There has been serious holes poked in your idea showing it is unworkable . To add to this list I will add people in nursing homes. Due to a lack of thought on the fair deal it means people who have to go into nursing homes and leave their house empty can't rent out the property. People may be in nursing homes for years. In your idea they would pay tax on this property. Then you have people who die and waiting on probate which takes over a year.

Dav010 · 29-04-2020 11:11am

Ray Palmer wrote: »

If you are going to come up with an idea and haven't thought it out expect questions. Your idea will sound childish otherwise because it hasn't been thought about like an adult.

There has been serious holes poked in your idea showing it is unworkable . To add to this list I will add people in nursing homes. Due to a lack of thought on the fair deal it means people who have to go into nursing homes and leave their house empty can't rent out the property. People may be in nursing homes for years. In your idea they would pay tax on this property. Then you have people who die and waiting on probate which takes over a year.

Student accommodation left unoccupied for 4 months/property in planning phase/property for sale which cannot be rented/property willed but waiting on probate etc etc etc

Claw Hammer · 29-04-2020 11:23am

Ray Palmer wrote: »

If you are going to come up with an idea and haven't thought it out expect questions. Your idea will sound childish otherwise because it hasn't been thought about like an adult.

There has been serious holes poked in your idea showing it is unworkable . To add to this list I will add people in nursing homes. Due to a lack of thought on the fair deal it means people who have to go into nursing homes and leave their house empty can't rent out the property. People may be in nursing homes for years. In your idea they would pay tax on this property. Then you have people who die and waiting on probate which takes over a year.

People in nursing homes can rent out their property if they want. I would be of the view that if someone is in a nursing home for more than 3 years the property should be sold, the state should take its 22.5 % and the rest should be held in trust for the old person.

Dav010 · 29-04-2020 11:48am

Claw Hammer wrote: »

People in nursing homes can rent out their property if they want. I would be of the view that if someone is in a nursing home for more than 3 years the property should be sold, the state should take its 22.5 % and the rest should be held in trust for the old person.

State forces elderly to sell homes. That’s a catchy election slogan.

29-04-2020 1:07pm

Ray Palmer wrote: »

If you are going to come up with an idea and haven't thought it out expect questions. Your idea will sound childish otherwise because it hasn't been thought about like an adult.

Instead of questions, you could come up with alternative solutions. I thought this was a discussion forum, or would you just like fully formed ideas where people don't want to change anything? :Rolleyes:

There has been serious holes poked in your idea showing it is unworkable . To add to this list I will add people in nursing homes. Due to a lack of thought on the fair deal it means people who have to go into nursing homes and leave their house empty can't rent out the property. People may be in nursing homes for years. In your idea they would pay tax on this property. Then you have people who die and waiting on probate which takes over a year.

I don't agree. It's at a very early stage of discussion. To consider it unworkable already shows an unwillingness to listen, compromise or put forward ideas yourself.

As someone else said, people in nursing homes can rent out their property. And yes, if they choose not to, they should pay a vacant property tax on that. Owning a home is a privilege, as far as I'm aware, no one has the right to a second home. (Or even a first home, legally speaking)

Can you admit we have a problem with people hoarding homes? That there are more than enough homes to go around, but a lot are being left idle?

Ray Palmer · 29-04-2020 1:20pm

Claw Hammer wrote: »

People in nursing homes can rent out their property if they want. I would be of the view that if someone is in a nursing home for more than 3 years the property should be sold, the state should take its 22.5 % and the rest should be held in trust for the old person.

Sorry you are correct they can rent them out. Absolutely no incentive to do so and many disadvantages so legal advice and financial advise says it is a bad idea. Any rent money is taken by the state and the still take a portion of the property sale.
You can have that view all you like but relatives may want to move into the home they grew up in. Try and get that through the dail would be impossible.

Ray Palmer · 29-04-2020 1:29pm

[Deleted User] wrote: »

Instead of questions, you could come up with alternative solutions. I thought this was a discussion forum, or would you just like fully formed ideas where people don't want to change anything? :Rolleyes:

So sorry that the world and the internet don't comply with the way you want. If you come up with an idea you should really think it out and not expect others to fix it for you.

People asking how it work is your opportunity to complete your thoughts and form a full idea. Your idea to me is very flimsy and requires a lot of ignoring real world details.

Fix your idea and it can be discussed. If you can't handle the details required then you aren't discussing it. Personally I think your idea is naive and lacks consideration of real issues.

I can say evict tenants immediately if they miss rent and just repeat without acknowledging it would mean people would be on the streets. It wouldn't be a discussion much like what you are doing.

29-04-2020 2:18pm

Ray Palmer wrote: »

So sorry that the world and the internet don't comply with the way you want. If you come up with an idea you should really think it out and not expect others to fix it for you.

People asking how it work is your opportunity to complete your thoughts and form a full idea. Your idea to me is very flimsy and requires a lot of ignoring real world details.

Fix your idea and it can be discussed. If you can't handle the details required then you aren't discussing it. Personally I think your idea is naive and lacks consideration of real issues.

I can say evict tenants immediately if they miss rent and just repeat without acknowledging it would mean people would be on the streets. It wouldn't be a discussion much like what you are doing.

Ridiculous opinion. I'd say you're very welcoming to new ideas and approaches.

I work in theatre, we start with a basic concept, and stretch it and stretch it and investigate it before committing it to paper. Maybe you should be open to exploration instead of shutting down debating an issue before it's expanded?

Anyway, as has been pointed out, homes can be rented out by old folk in nursing homes, however you say there's no financial incentive to, or maybe the families want to move in?

Nothing stopping their family moving in, and if it were to stay vacant, where a tax would be charged, surely that is a financial incentive to rent it out?

You didn't answer my last question btw.

Muahahaha · 29-04-2020 2:27pm

Deleted User wrote: »

As for how they'd know? Difficult, but not insurmountable. People snitch all the time. Most addresses are on the electoral roll, so could be checked off that, followed by an inspection if noone's registered to vote at that address

One way it could be done is do an analysis of properties not using any electricity or very low levels of it like a couple of lightbulbs left switched on. It wouldnt be fool proof but it would capture the essence of a vacant building. You'd probably have some landlords thinking of heating empty buildings then but that would probably cost more than a vacant tax anyway.

JimmyVik wrote: »

I think the chances of being caught, convicted and punished for having an airbnb or some similar as yet unthought of banned use of property a lot less. AirBnB will be back. Stupid laws pointed at minorities are useless and inefficient.

I wouldnt be so sure, there was a clear shift in policy from Eoghan Murphy last week. When he introduced the Airbnb legislation there was an amendment put down by Sinn Fein that Airbnb supply the addresses of properties so that could be tabulated with Revenue and Land Registry records to implement enforcement. FG voted down that amendment instead preferring that DCC do enforcement using more manual methods. Enforcement was thus a lot harder and DCC had little to no resources to carry it out, in fact Galway City Council said they had no resources for enforcement whatsoever thus signalling to STL landlords there that it was business as usual.

But now Murphy signaled last week that the it is the online platforms themselves that need to be regulated. So he has done a 180 and come around to the Sinn Fein view. If that happens then the Govt. can regulate the STL market in a streamlined fashion, instead of spending huge resources with inspectors they can get all relevant information from Airbnb on a spreadsheet.

Of course Murphy wont be the next Minister of Housing but his policy shift last week was of note. Whatever Govt is incoming needs to try to fix the housing market. Regulation of online platforms is an easy win in that regard. The next Minister for Housing will have an opportunity to ensure all STLs in Dublin are put back on the rental market, its a no brainer way of going some way to increasing supply.

JimmyVik · 29-04-2020 2:46pm

Muahahaha wrote: »

One way it could be done is do an analysis of properties not using any electricity or very low levels of it like a couple of lightbulbs left switched on. It wouldnt be fool proof but it would capture the essence of a vacant building. You'd probably have some landlords thinking of heating empty buildings then but that would probably cost more than a vacant tax anyway.

I wouldnt be so sure, there was a clear shift in policy from Eoghan Murphy last week. When he introduced the Airbnb legislation there was an amendment put down by Sinn Fein that Airbnb supply the addresses of properties so that could be tabulated with Revenue and Land Registry records to implement enforcement. FG voted down that amendment instead preferring that DCC do enforcement using more manual methods. Enforcement was thus a lot harder and DCC had little to no resources to carry it out, in fact Galway City Council said they had no resources for enforcement whatsoever thus signalling to STL landlords there that it was business as usual.

But now Murphy signaled last week that the it is the online platforms themselves that need to be regulated. So he has done a 180 and come around to the Sinn Fein view. If that happens then the Govt. can regulate the STL market in a streamlined fashion, instead of spending huge resources with inspectors they can get all relevant information from Airbnb on a spreadsheet.

Of course Murphy wont be the next Minister of Housing but his policy shift last week was of note. Whatever Govt is incoming needs to try to fix the housing market. Regulation of online platforms is an easy win in that regard. The next Minister for Housing will have an opportunity to ensure all STLs in Dublin are put back on the rental market, its a no brainer way of going some way to increasing supply.

Im pretty sure alright.

The only way you have to make that happen is to scare people into thinking getting caught, convicted , punished is more likely than unlikely.
And that is not and will never be the case.

29-04-2020 2:46pm

Muahahaha wrote: »

One way it could be done is do an analysis of properties not using any electricity or very low levels of it like a couple of lightbulbs left switched on. It wouldnt be fool proof but it would capture the essence of a vacant building. You'd probably have some landlords thinking of heating empty buildings then but that would probably cost more than a vacant tax anyway.

That's a good idea. Don't police monitor electricity usage to find growhouses? No reason it couldn't be used for this.

Dublin - Significant reduction in rents coming?

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