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Medium & Long Term Property Market Chat

hometruths

Mod Note

there's been lots of discussion about EU corporation tax rates, long-term bank performance, unemployment and other things which might impact the property market in the medium to long term. All things which might effect the property market in the medium - long term.

For unrelated discussion of economic, please use the economics forum.

For discussion of the property market in 2020 we have another thread here:
https://www.boards.ie/vbulletin/showthread.php?t=2058095305

Thanks

There’s been a lot of chat about it recently, but in the context of house prices the future of our 12.5% rate and how it applies to MNCs is significant.

Worst case scenario some Eu directive outlaws it and they upsticks and leave 10s of thousands jobless. That won’t help house prices.

Certainly a relevant discussion in my opinion.

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Bass Reeves

It amazing lads we ho do not own rental properties telling lads that have any number of them bought and often paid for how to run there business

neutral guy

Bubbaclaus wrote: »

This post, like all your other posts, is all over the place and completely lacking any basis in reality. Do you honestly think the gardai are doing tax/NCT checks because the State has cash flow issues? Because that is absolutely hilarious if you do.

I think the same !
Even if economy will die
She will be in paradise after death !
Together with property market for sure !

Bubbaclaus

neutral guy wrote: »

By the number of Garda check points on road ( been stopped twice today )
Just for NCT/tax/insurance check
I think government has serious problems with cash flow at the moment
This was the same during last 2008 recession
The more heavier taxation on property will be
The less money government will have spend to support tennants
At the moment I think the best way get rid of property for rent was pre 2019 Pre Covid time
In 2021 many land lords will have choice or pay all incomes from property due with heavy taxation
Or get rid of the property losing half property price
There will be no any better in 2023/2027
This will be not Recession
This will be Mother of Recessions !

This post, like all your other posts, is all over the place and completely lacking any basis in reality. Do you honestly think the gardai are doing tax/NCT checks because the State has cash flow issues? Because that is absolutely hilarious if you do.

neutral guy

By the number of Garda check points on road ( been stopped twice today )
Just for NCT/tax/insurance check
I think government has serious problems with cash flow at the moment
This was the same during last 2008 recession
The more heavier taxation on property will be
The less money government will have spend to support tennants
At the moment I think the best way get rid of property for rent was pre 2019 Pre Covid time
In 2021 many land lords will have choice or pay all incomes from property due with heavy taxation
Or get rid of the property losing half property price
There will be no any better in 2023/2027
This will be not Recession
This will be Mother of Recessions !

neutral guy

From my opinion many land lords has serious problems with maths
They asking 1500 for rent keeping property empty number of months
What is average 1000 per month
And they looking for another tenants next year also loosing same amount of money
Is it not easier make price 1000 per month and have tenants 12 months per year ?
Because the less tenants changing them property
The less damage of the property landlord has ?
From my own opinion I would never invest to property for rent
The taxation/rules changing every year leaving less profit
The only way I would invest to property
Is investing/buying property were I could use machines for creating product
Because creating product I create money

Bass Reeves

PropQueries wrote: »

Would that mean any property generating a rent of c. €1,300 a month shouldn’t sell for more than c. €150k? To a potential investor anyway.

It would depend on the property and whether there was a possibility of CA (in the long term or not) and the price range the property is in. As well it would depend on what part of the economics cycle you were low in the cycle you be willing to accept lesser returns on the proability that yield and CA will be in play.

A 1300 euro/months is a yield yield if 15600 so an investor should only look at it in the 155-250 range. With rents hight at present any investor should only look at it if it was sub 200K. If there was poor CA then you should only be interested in the 100-150K bracket.

But there may be other factors in play such as if there was investment the yield could rise substantially

PropQueries

Bass Reeves wrote: »

First off if the prices were sub 130-150k these properties would never have been built as development costs were higher than that. Problem was investors who bought them were not clued in to either local rental market or aware of the implications of group/pool rental costs.

Most who bought them assumed that after claiming back Vat (in some cases) and the allowing of capital allowances against other rental income that you could not lose. It was similar to some of the hotel building that went on in locations where there was limited demand.

Costs in pooled rental (PR's) schemes in general are excessively high. In any situation where you are not in control of costs these can climb. There are two area's where PR's are involved. Student accommodation and holiday homes. In the case of Student accomodation some of the places that these were build the demand was not there mostly around institute's of technology especially where there was no summer demand due to tourism. These gave become delapitated. However in other area's demand strong and returns adequate after costs

The other ones were Holiday homes that were bought with the presumption that the returns after claiming back Vat would cover loan repayments a lot of these were bought by people with no other rental income become who found PR returns hardly paid 2-3 months of the year's loan repayments.

Savvy investors know you need a return of 6-10% in area's of fairly good capital appreciation of property and rents but in areas were rents are not so strong and capital appreciation is poor you need a 10% +return.

As a lot of these properties have been repossessed and sold most have washed through the market and any coming at present are bought by either investors at knockdown prices or people who are this opportunity to purchase a holiday home at twice the price of a fancy mobile home with similar costs involved

Would that mean any property generating a rent of c. €1,300 a month shouldn’t sell for more than c. €150k? To a potential investor anyway.

Bass Reeves

PropQueries wrote: »

Tell that to the investors who bought all those properties in Longford in the Celtic Tiger years. Yes, the tax reliefs were great until they figured out they couldn't rent or sell them. The tax reliefs increased the prices of those properties from under c. €100k to €250k+ and right back down again a year or two later and they haven't recovered.

Tax has been the major driver of both house prices and employment in Ireland over the past 20 years. Both are under threat at the moment.

First off if the prices were sub 130-150k these properties would never have been built as development costs were higher than that. Problem was investors who bought them were not clued in to either local rental market or aware of the implications of group/pool rental costs.

Most who bought them assumed that after claiming back Vat (in some cases) and the allowing of capital allowances against other rental income that you could not lose. It was similar to some of the hotel building that went on in locations where there was limited demand.

Costs in pooled rental (PR's) schemes in general are excessively high. In any situation where you are not in control of costs these can climb. There are two area's where PR's are involved. Student accommodation and holiday homes. In the case of Student accomodation some of the places that these were build the demand was not there mostly around institute's of technology especially where there was no summer demand due to tourism. These gave become delapitated. However in other area's demand strong and returns adequate after costs

The other ones were Holiday homes that were bought with the presumption that the returns after claiming back Vat would cover loan repayments a lot of these were bought by people with no other rental income become who found PR returns hardly paid 2-3 months of the year's loan repayments.

Savvy investors know you need a return of 6-10% in area's of fairly good capital appreciation of property and rents but in areas were rents are not so strong and capital appreciation is poor you need a 10% +return.

As a lot of these properties have been repossessed and sold most have washed through the market and any coming at present are bought by either investors at knockdown prices or people who are this opportunity to purchase a holiday home at twice the price of a fancy mobile home with similar costs involved

Hubertj

schmittel wrote: »

They’re tangential indeed.

But only an utter fool would suggest Ireland’s corporate tax rate and the jobs it supports was tangential to the Irish property market.

Though some might say the thread is a free for all for utter fools.

We also need to consider changes to US tax system in the event of Biden winning election. I don’t think it puts at risk existing jobs in Ireland, recession aside, but could impact future FDI and jobs. Future FDI is where I think the real risk is as opposed to MNCs leaving.

Graham

Mod Note

Thread split from Property Market 2020.

hometruths

Pelezico wrote: »

Why dont we discuss the presidential election or new supreme court judge? These are relevant in a very tangential way to the Irish property market.

Let it be a complete free for all.

They’re tangential indeed.

But only an utter fool would suggest Ireland’s corporate tax rate and the jobs it supports was tangential to the Irish property market.

Though some might say the thread is a free for all for utter fools.

PropQueries

Pelezico wrote: »

Why dont we discuss the presidential election or new supreme court judge? These are relevant in a very tangential way to the Irish property market.

Let it be a complete free for all.

The budget is on 13th October. That budget will decide whether developers slash their prices or not come the 14th October for the remainder of the year.

Tax, help-to-buy etc. which will be made public knowledge on the 13th October will decide the prices charged for the remainder of the year i.e. will the smaller developers follow Glenveagh's lead and slash prices?

But I do agree with you that it's not a discussion until that date: REMEMBER - 6p.m. on the 13th October will be very very interesting here and as sad as my life appears to be, I'm actually looking forward to seeing and debating the discussion on here...

PropQueries

Graham wrote: »

You should definitely start a thread to discuss the long-term implications of tax on the Irish property market.

I don't think it's long term. More immediate term (we'll find out in a few weeks time with the budget). But until then, you're right.

Graham

schmittel wrote: »

If I was a buyer in 2020 entering into a 30 year mortgage all these long term factors would be relevant to me.

But I sense you are saying it is irrelevant?

PropQueries wrote: »

Tell that to the investors who bought all those properties in Longford in the Celtic Tiger years. Yes, the tax reliefs were great until they figured out they couldn't rent or sell them. The tax reliefs increased the prices of those properties from under c. €100k to €250k+ and right back down again a year or two later and they haven't recovered.

Tax has been the major driver of both house prices and employment in Ireland over the past 20 years. Both are under threat at the moment.

There should definitely be a thread to discuss the long-term implications of taxation on the Irish property market.

I'll see if I can split out some of the recent posts.....

hometruths

Graham wrote: »

How much of that is likely to happen in 2020 ?

I suspect none of it, as all parties concerned have bigger issues on their mind.

But it is certainly relevant on the day the EU appeal a court ruling saying our tax arrangements are in order.

And often in this thread long term considerations are discussed that might impact the value of a new build housing estate, like future planning permissions in the area or long term plans for public transport upgrAdes.

Or we often discuss the need to build 30k houses a year for the next decade with impunity.

Equally it seems to be an acceptable comment that prices will not fall in the short term because pharma and tech buyers are going gangbusters.

If I was a buyer in 2020 entering into a 30 year mortgage all these long term factors would be relevant to me.

But I sense you are saying it is irrelevant?

PropQueries

Graham wrote: »

How much of that is likely to happen in 2020 ?

Tell that to the investors who bought all those properties in Longford in the Celtic Tiger years. Yes, the tax reliefs were great until they figured out they couldn't rent or sell them. The tax reliefs increased the prices of those properties from under c. €100k to €250k+ and right back down again a year or two later and they haven't recovered.

Tax has been the major driver of both house prices and employment in Ireland over the past 20 years. Both are under threat at the moment.

Graham

schmittel wrote: »

There’s been a lot of chat about it recently, but in the context of house prices the future of our 12.5% rate and how it applies to MNCs is significant.

Worst case scenario some Eu directive outlaws it and they upsticks and leave 10s of thousands jobless. That won’t help house prices.

Certainly a relevant discussion in my opinion.

How much of that is likely to happen in 2020 ?