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Irish Property Market 2020 Part 2

Graham

Continued from here:

https://www.boards.ie/vbulletin/showthread.php?t=2058041687

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IAmTheReign

PropQueries wrote: »

I'm not sure you're correct about the new builds selling out quickly. Last year the Irish Times published an article titled "Despite shortage, houses being left unsold", where they stated:

"Perhaps the most notable part of the latest Goodbody report on housing is its conclusion that the stock of unsold properties are firmly on the rise. There have been plenty of reports from the industry of developments not selling out, but Goodbody crunched the numbers and found that in the four quarters to the first three months of this year, there were 2,500 more units built than sold nationwide. Most of this occurred in Dublin, where new supply was 6,905 and purchases were 5,093."

Link to Irish Times article here: https://www.irishtimes.com/business/construction/despite-shortage-houses-being-left-unsold-1.3928592

From my experience new builds aren't selling out quickly at all.

As an example, I'm from Lucan originally so naturally I keep an eye on things there as I know the area. There's a recent development Shackleton Park that is aimed squarely at first time buyers that has multiple units available, despite the fact that they were advertising in February of last year that there was only a few left/

At the other end of the scale there is a 'luxury' development of large detached houses called Rokeby Park that still hasn't sold out despite first coming onto the market in 2015!

Bass Reeves

Augeo wrote: »

Extension, attic conversion ........... lots more then painting was likely done. In 2011 it could have been as it was when it was built

More than likely all the work was done after buying. What looks like having being done is an attic extension, paving, outside landscaping, new doors and windows.I imagine there was some money spend inside as well, new Kitchen, flooring, tiling bathrooms etc. If it was done in the he 2012-14 period 50k would have completed a lot if that. Even up to 2017 100k would have covered it. It unlikely that the money was spend in the last 2-3 years as selling a house is not a spontaneous decision.

[Deleted User]

schmittel wrote: »

Spot the difference........

As I said, in 2011 it was as it was for decades before. It got more then a paint job

IAmTheReign

PropQueries wrote: »

Are landlords really leaving the market due to unprofitability or are we reading the landlord registration statistics incorrectly?

Here's the number of landlords registered by year. As you can see, the number of registered landlords fell by only c. 3% between 2016 and 2020. Hardly an avalanche of landlords leaving the sector:

2016: 175,250
2017: 176,946
2018: 173,951
2019: 173 675
2020: 169,593

However, there are some other numbers that are interesting and may skew these figures:

1. REITS and and Pension funds now own and rent out thousands of units. They would be counted as one landlord for hundreds of individual apartments.

2. The investors who purchased investment properties between 2012 and 2014 to avail of the capital gains tax reliefs would most likely have been existing landlords who added to their existing portfolio of rental properties. For example, if an investor previously owned two investment properties and bought a third from another landlord, the number of landlords has gone down by one, but the number of rental properties has not fallen as the three investment properties are now counted as having one landlord in total, while previously, there were two registered landlords.

3. Approved Housing Bodies: The number of these type of tenancies increased by 6,771 from 27,129 to 33,900 between 2018 and 2020.

4. The number of landlords registered between 2019 and 2020 fell by 4,082 i.e only c. 2%. However, this seems to correspond nicely with property investors who purchased between 2012 and 2014 and may now be selling to avail of the tax free capital gain which they can claim c. 6 years after they made their purchase.

5. The county councils. How many have they been renting directly and may not be included in the statistics as individual landlords.

6. Student Accommodation. These are also not included in the RTB landlord statistics and amount to thousands of additional rental units over the past couple of years.

Link to RTB landlord registration statistics is here: https://www.rtb.ie/research/rtb-registration-statistics

Attack at will. I don't mind being corrected. It's how we learn.

It's worth looking at the total number of tenancies registered too, since as you say the number of landlords can be skewed by large investment companies.

The number of private tenancies is down from 310k in Q1 2019 to 302k in Q1 2020. If you include housing bodies it's down from 340k to 336k.See here

So we have a situation where the number of people operating as landlords is down 4k in the last year and the number of properties in private rental is down 8k in the same period. These numbers might not be massive but they are significant.

This despite the fact that rentals across Ireland are at an all time high, and that there was an estimated population increase of 64k in 2019 and these people need somewhere to live. See here

If we know rents are high and there's a demand in the market the question is why are any landlords leaving the market at all?

PropQueries

gourcuff wrote: »

Similarly with new builds, the better units go quick , those little red stickers fly up on the board and you get left with the mid-terrace with tiny garden thats way over-priced.

I would advise you budget a year for house hunting.

I'm not sure you're correct about the new builds selling out quickly. Last year the Irish Times published an article titled "Despite shortage, houses being left unsold", where they stated:

"Perhaps the most notable part of the latest Goodbody report on housing is its conclusion that the stock of unsold properties are firmly on the rise. There have been plenty of reports from the industry of developments not selling out, but Goodbody crunched the numbers and found that in the four quarters to the first three months of this year, there were 2,500 more units built than sold nationwide. Most of this occurred in Dublin, where new supply was 6,905 and purchases were 5,093."

Link to Irish Times article here: https://www.irishtimes.com/business/construction/despite-shortage-houses-being-left-unsold-1.3928592

Hubertj

schmittel wrote: »

Spot the difference...

and

ah, Sky, that explains it

gourcuff

when people say they would have bought if it wasn't for Covid, i am not sure they understand how competitive it is for housing when you are trying to buy.

Even if you find a place you really like, in my experience there are 20+ other couples at the viewings all with the same idea, and many with deeper pockets than you.

We got outbid on maybe 7 properties before we got our place. In the end we had to increase the amount we wanted to spend to get a nice place in an area we liked and to outbid the competiton.

Similarly with new builds, the better units go quick , those little red stickers fly up on the board and you get left with the mid-terrace with tiny garden thats way over-priced.

I would advise you budget a year for house hunting.

PropQueries

Are landlords really leaving the market due to unprofitability or are we reading the landlord registration statistics incorrectly?

Here's the number of landlords registered by year. As you can see, the number of registered landlords fell by only c. 3% between 2016 and 2020. Hardly an avalanche of landlords leaving the sector:

2016: 175,250
2017: 176,946
2018: 173,951
2019: 173 675
2020: 169,593

However, there are some other numbers that are interesting and may skew these figures:

1. REITS and and Pension funds now own and rent out thousands of units. They would be counted as one landlord for hundreds of individual apartments.

2. The investors who purchased investment properties between 2012 and 2014 to avail of the capital gains tax reliefs would most likely have been existing landlords who added to their existing portfolio of rental properties. For example, if an investor previously owned two investment properties and bought a third from another landlord, the number of landlords has gone down by one, but the number of rental properties has not fallen as the three investment properties are now counted as having one landlord in total, while previously, there were two registered landlords.

3. Approved Housing Bodies: The number of these type of tenancies increased by 6,771 from 27,129 to 33,900 between 2018 and 2020.

4. The number of landlords registered between 2019 and 2020 fell by 4,082 i.e only c. 2%. However, this seems to correspond nicely with property investors who purchased between 2012 and 2014 and may now be selling to avail of the tax free capital gain which they can claim c. 6 years after they made their purchase.

5. The county councils. How many have they been renting directly and may not be included in the statistics as individual landlords.

6. Student Accommodation. These are also not included in the RTB landlord statistics and amount to thousands of additional rental units over the past couple of years.

Link to RTB landlord registration statistics is here: https://www.rtb.ie/research/rtb-registration-statistics

Attack at will. I don't mind being corrected. It's how we learn.

hometruths

Augeo wrote: »

Extension, attic conversion ........... lots more then painting was likely done. In 2011 it could have been as it was when it was built

Spot the difference...

and

[Deleted User]

schmittel wrote: »

400k buys a lot of paint.

Extension, attic conversion ........... lots more then painting was likely done. In 2011 it could have been as it was when it was built

IAmTheReign

OwlsZat wrote: »

The stock on daft is pitiful at the moment.
1) Tennament landlords exiting the market
2) Houses not renovated since 70s or 80s
3) Flippers that bought at elevated prices last year trying to scalp another 100k.

Very few genuine properties.

Very little to get excited about alright. Anything half decent I'd been keeping an eye on during lockdown seems to have gone sale agreed in the last month or two with nothing coming onto the market of note. Will be interesting to see what kind of price they go for.

hometruths

Stark wrote: »

I wonder did they put a lot of work into that? Looks very shiny and new on the inside.

400k buys a lot of paint.

Stark

I wonder did they put a lot of work into that? Looks very shiny and new on the inside.

hometruths

Another who did just fine by waiting last time - 15 Eden Park Drive

Bought June 2011 for €337k. Sold August 2020 €750k.

OwlsZat

IAmTheReign wrote: »

[*]I can't (easily) view property in person. I have viewed several remotely and had family members attend viewings for me but so far nothing has really caught my eye.
[/LIST]

The stock on daft is pitiful at the moment.
1) Tennament landlords exiting the market
2) Houses not renovated since 70s or 80s
3) Flippers that bought at elevated prices last year trying to scalp another 100k.

Very few genuine properties.

IAmTheReign

Springy Turf wrote: »

For those who are 100% certain the market will fall significantly within the next year - do you plan on making investments to capitalise on this?

I can't speak for anyone else on here but at the start of this year I had started planning on moving ahead with purchasing sometime in the summer of this year. Had COVID not happened I would probably have been well along in the process of buying something. I have now decided that I will continue saving until the end of the year and reevaluate then, unless I find something that I really want. Given the quality of housing stock available right now I think this is unlikely to happen.

I am in a very different situation to a lot of other buyers though. I am currently working in Switzerland and would be applying for a non resident mortgage with a view to moving back in the short to medium term which means;

I need a significant (>35%) deposit. I do have a large amount saved but my savings are increasing faster than house prices are right now. Even if prices only stay static for 6 months there's no value in me buying now.
I still will have to rent somewhere where I am living now. there's no saving in rent if I purchase immediately as I won't be living there full time for a while.
I can't (easily) view property in person. I have viewed several remotely and had family members attend viewings for me but so far nothing has really caught my eye.

[Deleted User]

mcsean2163 wrote: »

With no charge in circumstances we were told we would be eligible for €100k less of a mortgage. If that's happening to other people too.....

Maybe it's as well we hold out for the crash.

If this crash happens do you think you'll somehow be immune to it?

tobsey

Browney7 wrote: »

Anyone know how the council decide who actually gets allocated these properties...a 2 bed apartment in Donnybrook is wholly different to a 2 bed apartment in other council areas. How is it determined who wins this lottery benefit?

I can’t imagine the council will actually buy these. The developer is obliged to offer 10% of the development at cost price to the council. They may be able to claim that those are the cost prices of those apartments. The council don’t have to buy them as far as I know. A similar case happened a couple of years ago and Eoin O’Broin agreed that the council shouldn’t buy them for social housing due to the high cost.

tobsey

mcsean2163 wrote: »

With no charge in circumstances we were told we would be eligible for €100k less of a mortgage. If that's happening to other people too.....

Maybe it's as well we hold out for the crash.

I’m guessing you have 100k combined income and now being told exceptions are no longer available? We’re applying now and would have liked an LTV exception but all the banks said there’s no exceptions being offered now. That just means that you’re at the central bank limits which is the same for most applicants.

Smouse156

cnocbui wrote: »

So that vested interest sh1te sceptical of price falls was accurate sh1te?

Reminds me of a joke my mother once told me.

Turns out that they were right! Not that most of them had a clue though, just peddling what they wanted to believe!

mcsean2163

With no charge in circumstances we were told we would be eligible for €100k less of a mortgage. If that's happening to other people too.....

Maybe it's as well we hold out for the crash.

Bass Reeves

Mic 1972 wrote: »

you don't know anybody you owns montage-free properties?

I think it hilarious all these people making assumptions about people who own rental properties and are not involved in the sector. Assumptions are the mother in law if all f@@,lips. I am involved in the sector and know another half dozen with anything from 2-6 properties. The single property owner is the vast exception now rather than the normal. Yes tax is an issue but most investors have some properties 20+ years. Most have been through 2-3 recession's/downturns. Very few are selling, most are looking for opportunities to add to there portfolios.

cnocbui

Smouse156 wrote: »

Been reading a lot of vested interest ****e on this thread the last few months plus doing some real research and as a FTB working in FS, I see the following:

1) Sadly house prices will not fall much despite the job losses due to severe supply issues

...

Overall for a FTB it’s a pretty sad state of affairs I’m afraid for the next while!

So that vested interest sh1te sceptical of price falls was accurate sh1te?

Reminds me of a joke my mother once told me.

Bass Reeves

The_Conductor wrote: »

And RTE, also owned by the taxpayer- is across the road.........

Once upon a time Donnybrook was out in the countryside and land was plentiful. Why not banish RTE to somewhere in Meath- they'd be welcomed with open arms- and why does Dublin Bus need a depot in Donnybrook? Because they had one 50 years ago? Times change.

We need high density developments, a removal of height restrictions- and public bodies to stop hoarding improbably valuable sites in the manner in which Dublin Bus, RTE and others are doing.

Also- if/when RTE/Dublin Bus (and others) sell property in Donnybrook (or elsewhere) the funds should revert to the exchequer- and not into the black hole of the finances of the organisation- as has been tradition.

Hi density developments are more expensive than town houses or semi detached to build. Yes in places like Donnybrook site costs comes into play but high density is not a cheaper option

Browney7

PropQueries wrote: »

Developer to sell 14 apartments to Dublin City Council for social housing at an indicative cost of €9.18 million.

The developers have put an indicative price tag of €762,916 on each of the nine two-bedroom apartments it proposes to provide for social housing and €469,177 on each of the five one-bedroom apartments it is proposing to sell to the council.

The Irish Times article is here: https://www.irishtimes.com/business/construction/two-bed-donnybrook-social-housing-units-priced-at-762-916-each-1.4344960

Anyone know how the council decide who actually gets allocated these properties...a 2 bed apartment in Donnybrook is wholly different to a 2 bed apartment in other council areas. How is it determined who wins this lottery benefit?

Mic 1972

Pelezico wrote: »

If..ah yes, that word ....if a cow had balls, it would be a bull.

you don't know anybody you owns montage-free properties?

Pelezico

Mic 1972 wrote: »

Lots of assumptions then.
If you stripped down all the assumptions you are left with the very possible scenario of paying 20% + UCS + PRSI
If i was renting 3 mortgage-free properties i might not even bother to have a daytime job

If..ah yes, that word ....if a cow had balls, it would be a bull.

Mic 1972

The_Conductor wrote: »

+ USC on the gross rental income, + PRSI

Also- the vast majority of landlords do in fact have daytime jobs- so most, if not all, rental income is subject to the higher tax rate- less any allowable costs and deductions.

If a landlord had 3 units, without loading them up with debt- aka if they prudently pay down their debt- they could potentially end up paying anything up to 58% on the rental income (depending on what their USC goes to- thanks to whatever income they get from their day job).

Even people with 3 rental units- wouldn't be classified as employed in the property sector- its investment income- and treated in this manner by the Revenue Commissioners as 'unearned income'. This is despite the fact that over 75% of all the units in the Irish rental market being owned by landlords with 3 or fewer units (according to the RTB statistics).

Speaking of the RTB- what in gods name are they doing with the 2019 Annual Report? It was due in July. I accept there could very well be delays with Covid etc- however, surely they should be in a position to advise when it might be published at this stage?

Lots of assumptions then.
If you stripped down all the assumptions you are left with the very possible scenario of paying 20% + UCS + PRSI
If i was renting 3 mortgage-free properties i might not even bother to have a daytime job

Taylor365

The_Conductor wrote: »

+ USC on the gross rental income, + PRSI

Also- the vast majority of landlords do in fact have daytime jobs- so most, if not all, rental income is subject to the higher tax rate- less any allowable costs and deductions.

If a landlord had 3 units, without loading them up with debt- aka if they prudently pay down their debt- they could potentially end up paying anything up to 58% on the rental income (depending on what their USC goes to- thanks to whatever income they get from their day job).

Even people with 3 rental units- wouldn't be classified as employed in the property sector- its investment income- and treated in this manner by the Revenue Commissioners as 'unearned income'. This is despite the fact that over 75% of all the units in the Irish rental market being owned by landlords with 3 or fewer units (according to the RTB statistics).

Speaking of the RTB- what in gods name are they doing with the 2019 Annual Report? It was due in July. I accept there could very well be delays with Covid etc- however, surely they should be in a position to advise when it might be published at this stage?

What if said person created their own management company and funneled into into that?

The_Conductor

PropQueries wrote: »

RTE are way way ahead of you. They sold a part of their Donneybrook site to Cairn Homes for €100 million back in 2017. The next year, they were back in deficit blaming the low cost of the licence fee.

Just why are they allowed get away with this.
Its stealing from the taxpayers of the country.
Also, with respect of the license fee- if they managed to get it tagged onto property tax, so it was unavoidable, it might successfully assist with their collection of it (its sort of hard to argue with the Revenue Commissioners).
Dee Forbes really needs to cop on- she is getting a generous fee from people, given the fare that is produced and how its not exactly tailored towards most people other than limited programming). Other state broadcasters who get a state fee- do not pollute their programming with advertising in the manner RTE see fit to do.

Anyhow- my little rant about RTEs abuse of the Irish people- is far off the remit of this thread, so I'll shut up.