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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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MacronvFrugals

With the UK scheme buyers realized they never needed to pay the government part of the scheme so a lot of loans never had the 2nd part serviced.

It turns out loop jumping from the building industry dosent hold up to well in court and the taxpayer ultimately lost out.

We'd be mad to adopt a similar policy imo.

Marius34

schmittel wrote: »

From beauf's helpful wikipedia link:

So I will put my previous point another way:

Seems pretty likely that in the short to medium term there will be a general decline in economic activity, and a widespread drop in spending.

Seems unlikely that property prices will be immune to this.

Right, on this basis, regarding the recession, economical activity, spending, etc. we have all of this since April. It's not anymore the future, we live in it.
Thus, I just wanted to point out that questions like if we will have recession, it doesn't really make much sense anymore.

old_house

PropQueries wrote: »

Good spot. I thought the same but then the article stated "A total of 12,744 (43.3%) will pay the lowest rate of €99 next year". So, I wonder if it's based on the 2013 figure or have the council now updated the valuations and this is reflected in the article as the article didn't mention the 2013 valuations?

Anyone else know?

The council is not going to update the valuations, this is the responsibility of the individual homeowner. And there is no way of knowing what the valuations for next year will be, since the date for that is set to be the 1st of November. So the numbers in the article are baseless, unless the valuation date will be pushed out again and the 2013 figure will be used for 2021. That would still not be a fair reflection of the market value, though. Clickbait article.

The_Conductor

MacronvFrugals wrote: »

With the UK scheme buyers realized they never needed to pay the government part of the scheme so a lot of loans never had the 2nd part serviced.

It turns out loop jumping from the building industry dosent hold up to well in court and the taxpayer ultimately lost out.

We'd be mad to adopt a similar policy imo.

If/when they want to sell/move (or as part of an estate)- they'll be in right trouble.

Geuze

PropQueries wrote: »

Good spot. I thought the same but then the article stated "A total of 12,744 (43.3%) will pay the lowest rate of €99 next year". So, I wonder if it's based on the 2013 figure or have the council now updated the valuations and this is reflected in the article as the article didn't mention the 2013 valuations?

Anyone else know?

Valuations are based on 2013 figures.

Revaluations have been postponed, at least twice.

Geuze

schmittel wrote: »

Seems pretty likely that in the short to medium term there will be a general decline in economic activity, and a widespread drop in spending.

Seems unlikely that property prices will be immune to this.

The sharp decline in economic activity started in mid-March.

That's nearly six months ago.

I can see little effects on house prices yet.

Note that income tax receipts fell just 1.4%, as most of the people laid off paid very little income tax.

The terrible impact on jobs has not been even across the labour market.

Higher earners, in the mortgage market, have been less affected.

Of course, PUP and TWSS have cushioned the blow, so maybe as PUP is scaled back, we may see more effects on house prices.

IMHO, there will not be 20% house price falls, you might get me to agree that there will be a softer market, and maybe 5% falls.

The_Conductor

Geuze wrote: »

Valuations are based on 2013 figures.

Revaluations have been postponed, at least twice.

+ it was a self-declaration, and I'm guessing pretty much everyone under-declared the value of their property so as to minimise their property tax. They have no idea what they're going to do this time round- but a self-declaration would seem to be off the table- it'll probably be based on 1) the size (floor area) of the property and 2) an average of actual market prices achieved for units in the general area (subject to negotiation/dispute- but keep in mind this is the Revenue Commissioners). I think the proposal is that the new regime will come in from 2022- they can't afford to kick it down the road any further.

hometruths

Marius34 wrote: »

Right, on this basis, regarding the recession, economical activity, spending, etc. we have all of this since April. It's not anymore the future, we live in it.
Thus, I just wanted to point out that questions like if we will have recession, it doesn't really make much sense anymore.

Apologies, misunderstood your post.

Yes, I agree with you - we are in a recession.

PropQueries

Just a bit of blast from the past news. Back in 2005, Davy's stated that "more than 40% of houses built in the past two years are lying vacant as second homes, holiday homes or unlet investment properties".

The link to RTE article back in 2005 is here: https://www.rte.ie/news/business/2005/0524/63495-construction/

And afterwards, most people said "nobody saw it coming".

Assetbacked

It would appear that a lot of the new build apartments are vacant, going on Daft. In addition, there are more than a dozen student accommodations which are new builds currently on Daft being advertised for rent. This time it would seem to be different but with similar characteristics.

hometruths

Geuze wrote: »

The sharp decline in economic activity started in mid-March.

That's nearly six months ago.

I can see little effects on house prices yet.

Note that income tax receipts fell just 1.4%, as most of the people laid off paid very little income tax.

The terrible impact on jobs has not been even across the labour market.

Higher earners, in the mortgage market, have been less affected.

Of course, PUP and TWSS have cushioned the blow, so maybe as PUP is scaled back, we may see more effects on house prices.

IMHO, there will not be 20% house price falls, you might get me to agree that there will be a softer market, and maybe 5% falls.

Leaving aside any guesstimate of the size of a % change my view is that prices will be impacted because we will transition from a sellers market to a buyers market.

Does that seem like a reasonable view?

Billythekid19

schmittel wrote: »

Leaving aside any guesstimate of the size of a % change my view is that prices will be impacted because we will transition from a sellers market to a buyers market.

Does that seem like a reasonable view?

It doesnt appear there will be a buyers market in 2020 so far. Strong possibility of it happening in 2021 when layoffs from hotels/tourism sector become realized.

smurgen

Billythekid19 wrote: »

It doesnt appear there will be a buyers market in 2020 so far. Strong possibility of it happening in 2021 when layoffs from hotels/tourism sector become realized.

Brexit negotiations not going well either. Looks like the UK is willing to cut off their nose to spite their faces.

The_Conductor

Assetbacked wrote: »

It would appear that a lot of the new build apartments are vacant, going on Daft. In addition, there are more than a dozen student accommodations which are new builds currently on Daft being advertised for rent. This time it would seem to be different but with similar characteristics.

For proper rent- or some sort of short-term lets outside the remit of the RTB?

MacronvFrugals

The_Conductor wrote: »

If/when they want to sell/move (or as part of an estate)- they'll be in right trouble.

They will but a lot of people buy a house and stay there all their lives in this case the government can do nothing.

I know eventually the bill will fall to the estate but even then this type of arrangement is a legal minefield and its not uncommon for 70-100% write offs on this 2nd loan.

Will the pandering to the developer sector ever end its pathetic at this stage.

awec

MacronvFrugals wrote: »

With the UK scheme buyers realized they never needed to pay the government part of the scheme so a lot of loans never had the 2nd part serviced.

It turns out loop jumping from the building industry dosent hold up to well in court and the taxpayer ultimately lost out.

We'd be mad to adopt a similar policy imo.

What do you mean they realized? That is the whole point of it.

The UK system is designed so you don't pay the government portion back until you either sell, or your mortgage term is up. After 5 years you start paying interest, but there is no obligation to pay back the loan itself on a month-to-month basis.

brisan

Economy contracted by 6.1% in the second quarter according to the CSO

wassie

smurgen wrote: »

Brexit negotiations not going well either. Looks like the UK is willing to cut off their nose to spite their faces.

And how do you think this impacts the property market?

I ask because it gets mentioned a lot but don't think its going to have any significant effect. I believe this is a lot of hype and Jan 1st will come and we may have a few barriers slowing down trade, but we will still trade with UK and life will go on as normal here.

Assetbacked

The_Conductor wrote: »

For proper rent- or some sort of short-term lets outside the remit of the RTB?

Good question, a lot seem to be specifically geared for students (though 800 per room per month is the minimum cost). Here they all are from Daft, all different offerings BTW (I also noticed a shed load of ads from new builds and newly acquired apartments - huge supply just not at the affordable rents needed; a not to dissimilar observation to Davy's back in the day);

The_Conductor

brisan wrote: »

Economy contracted by 6.1% in the second quarter according to the CSO

Thats a remarkably good out-turn, most other OECD economies contracted by significantly more than this.

Assetbacked

smurgen wrote: »

The investment limited partnership bill of 2019 is about to be put to work. It should give renewed interest.

There's more of a chance of a vaccine in the next 12 months than that bill going through.

Cantstandsya

The_Conductor wrote: »

Thats a remarkably good out-turn, most other OECD economies contracted by significantly more than this.

I think it's been said enough by now that GDP isn't an accurate measure of the Irish economy. From the Irish Times:

"The CSO said the impact of Covid-19 on overall economic activity was partly offset by an increase of €37.8 billion in net exports of goods and services in the quarter, largely driven by a fall in Intellectual Property Product (IPP) imports.

This was put down to the impact of multinational subsidiaries here paying less royalties to their parent entities.

As a result GDP, the standard yardstick of activity, fell by just 6.1 per cent.

However, modified domestic demand, arguably a more realistic reading of domestic activity as it strips out some of the multinational distortions, fell by 16.4 per cent."

https://www.irishtimes.com/business/economy/ireland-now-officially-in-recession-as-economy-shrinks-by-6-1-1.4348513

The_Conductor

Assetbacked wrote: »

Good question, a lot seem to be specifically geared for students (though 800 per room per month is the minimum cost). Here they all are from Daft, all different offerings BTW (I also noticed a shed load of ads from new builds and newly acquired apartments - huge supply just not at the affordable rents needed; a not to dissimilar observation to Davy's back in the day);

EUR750 Amazon voucher when you move in, if you sign a 51 week lease, EUR500 voucher if you sign a 41 week lease (on some, not all of them)...........

Aka- they're at the stage that they are acknowledging that they have to offer some sort of an inducement.

If you were not being asked to sign a 41 or 51 week lease- and were simply there on a week-to-week lease, it would be good value- but as a co-living solution where you're being asked to sign up to a fairly substantial lease- it just doesn't add up.

I do see what you mean about a large number of them hitting the market- some of those advertisements are for >20/30 units- they're not for single units.

Its kind of funny how this has been done with the minimum of fuss/noise/advertising (and those adds are up there since early June).

Assetbacked

The 750EUR voucher is essentially a month's rent for free so that's around 9% off asking for committing to a full year.

Kennedy Wilson have also done a big apartment drop on Daft, lovely apartments but starting at around 1900 for one bedrooms! Here are their advertised listings (Central Park seems to have two separate listings);

PropQueries

Cantstandsya wrote: »

I think it's been said enough by now that GDP isn't an accurate measure of the Irish economy. From the Irish Times:

"The CSO said the impact of Covid-19 on overall economic activity was partly offset by an increase of €37.8 billion in net exports of goods and services in the quarter, largely driven by a fall in Intellectual Property Product (IPP) imports.

This was put down to the impact of multinational subsidiaries here paying less royalties to their parent entities.

As a result GDP, the standard yardstick of activity, fell by just 6.1 per cent.

However, modified domestic demand, arguably a more realistic reading of domestic activity as it strips out some of the multinational distortions, fell by 16.4 per cent."

https://www.irishtimes.com/business/economy/ireland-now-officially-in-recession-as-economy-shrinks-by-6-1-1.4348513

All true. It also shows how much Ireland relies on multinationals. It's a bit of a double edged sword especially with the looming changes to the international tax regime.

Multinationals are fantastic for Ireland's economy, but we appear to have squandered the tax revenues year in, year out since the beginning. If we had invested these tax revenues in e.g. broadband, proper and affordable housing, properly funded universities, hospitals, schools etc. over the years, we would have been much better prepared for any eventuality.

There's little to no chance of being prepared now and we're not in a very good position. At least prior to the last crash the state had relatively little debt. Now, both the public and the state are indebted up to our eyeballs.

And if the mortgage free proportion of the population think it's all fine, it's our homes and pensions that will be taxed to the hilt to pay for any fallout if the multinationals ever do leave. There's nothing left to tax.

Our "mortgage free" homes are already basically owned or will be owned by the state under whatever version of the "fair deal" scheme exists in ten years time. Only thing left to tax will be our pensions.

Hubertj

Assetbacked wrote: »

The 750EUR voucher is essentially a month's rent for free so that's around 9% off asking for committing to a full year.

Kennedy Wilson have also done a big apartment drop on Daft, lovely apartments but starting at around 1900 for one bedrooms! Here are their advertised listings (Central Park seems to have two separate listings);
https://www.daft.ie/dublin/multi-units-for-rent/capital-dock-82-sir-john-rogersons-quay-grand-canal-dock-dublin-162025/

https://www.daft.ie/dublin/multi-units-for-rent/south-circular-road-dublin-8-dublin-185433/

https://www.daft.ie/dublin/multi-units-for-rent/the-gasworks-barrow-street-dublin-4-dublin-178641/

https://www.daft.ie/dublin/multi-units-for-rent/by-kennedy-wilson-dublin-8-dublin-178864/

https://www.daft.ie/dublin/multi-units-for-rent/sandford-lodge-ranelagh-dublin-178957/

https://www.daft.ie/dublin/multi-units-for-rent/central-park-leopardstown-dublin-178465/

https://www.daft.ie/dublin/multi-units-for-rent/central-park-leopardstown-dublin-181051/

https://www.daft.ie/dublin/multi-units-for-rent/castleforbes-road-dublin-1-dublin-178958/

https://www.daft.ie/dublin/multi-units-for-rent/brewery-road-stillorgan-dublin-179192/

I suppose the question is do the prices represent value in the current market. Some of the locations are good while others are not..

The_Conductor

Assetbacked wrote: »

The 750EUR voucher is essentially a month's rent for free so that's around 9% off asking for committing to a full year.

Kennedy Wilson have also done a big apartment drop on Daft, lovely apartments but starting at around 1900 for one bedrooms! Here are their advertised listings (Central Park seems to have two separate listings);
https://www.daft.ie/dublin/multi-units-for-rent/capital-dock-82-sir-john-rogersons-quay-grand-canal-dock-dublin-162025/

https://www.daft.ie/dublin/multi-units-for-rent/south-circular-road-dublin-8-dublin-185433/

https://www.daft.ie/dublin/multi-units-for-rent/the-gasworks-barrow-street-dublin-4-dublin-178641/

https://www.daft.ie/dublin/multi-units-for-rent/by-kennedy-wilson-dublin-8-dublin-178864/

https://www.daft.ie/dublin/multi-units-for-rent/sandford-lodge-ranelagh-dublin-178957/

https://www.daft.ie/dublin/multi-units-for-rent/central-park-leopardstown-dublin-178465/

https://www.daft.ie/dublin/multi-units-for-rent/central-park-leopardstown-dublin-181051/

https://www.daft.ie/dublin/multi-units-for-rent/castleforbes-road-dublin-1-dublin-178958/

https://www.daft.ie/dublin/multi-units-for-rent/brewery-road-stillorgan-dublin-179192/

The Kennedy Wilson stuff- isn't aimed at us mortals- they're high end executive units, complete with concierge teams, security to keep the riff-raff out and dripping in high end furnishings, appliances and white goods.

Most normal people aren't looking for this sort of letting.

awec

The_Conductor wrote: »

The Kennedy Wilson stuff- isn't aimed at us mortals- they're high end executive units, complete with concierge teams, security to keep the riff-raff out and dripping in high end furnishings, appliances and white goods.

Most normal people aren't looking for this sort of letting.

Kennedy Wilson undertook a big refurbishment in Central Park in the past number of years, when a tenant left the place would be re-decorated entirely and all new furniture brought in. Brought in concierge etc.

Really been trying to target the higher end of the market more.

But it's not executives letting these, by and large it's just young professionals.

Assetbacked

The_Conductor wrote: »

The Kennedy Wilson stuff- isn't aimed at us mortals- they're high end executive units, complete with concierge teams, security to keep the riff-raff out and dripping in high end furnishings, appliances and white goods.

Most normal people aren't looking for this sort of letting.

Unfortunately one beds for 1900 aren't actually miles off average rent for one beds in Dublin which, for D1-D14 vary from 1500-1900 (https://www.daft.ie/report/ronan-lyons-2020q1-daftrentalprice) . These KW rentals are market standard prices unfortunately but seeing so much supply being advertised to rent could be like the Davy report comment in 05 about there being plenty of supply.

handlemaster

Are agents still at the same messing about when people call them for property ? A friend was interested in some property and left emails, phone number etc, agents not calling back. I thought agents had moved on from this un-professionalism !