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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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PropQueries

KnowingWind wrote: »

Anyone have any stats on just how much residential property is held by big investors?

I really think this is a big factor in discussing future prices.

How many investors may move elsewhere, leaving particularly Dublin drastically effected.

This is the closest I can find. It was a documentary on RTÉ 4 years ago.

“The Great Irish Sell-Off (Monday, RTÉ One, 9.35pm) comes to putting a face on the otherwise anonymous financial companies that now control 90,000 mortgages and €200 billion in property and business loans in the country.”

Link to article here: https://www.irishtimes.com/culture/tv-radio-web/the-great-irish-sell-off-turning-the-spotlight-on-ireland-s-vulture-capitalists-1.2931597

If you can find a link to the documentary 4 years ago it would be great as can’t seem to find it at the moment.

KnowingWind

PropQueries wrote: »

“The Great Irish Sell-Off (Monday, RTÉ One, 9.35pm) comes to putting a face on the otherwise anonymous financial companies that now control 90,000 mortgages and €200 billion in property and business loans in the country.”
.

I think investors could well be a catalyst for big drops.

We are in the beginnings of a recession and governments are taking on bigger and bigger debts. Typical in this environment we will see properties go down and banks tighten up lending.
I havent really seen this as yet, some are saying its due to supply. But other assets are also over inflated and will likely see big drops. I think Countries are propping up economies with stimulus, but once this settles we we start seeing the impact, now exacerbated by that very stimulus.

I think its clear big investors are no longer buying property. (I have heard of the odd home owner buying a second property as an investment and this makes me shudder, but the big boys are out of the buying)
Once investors start selling then we could see a big reversal.

When I see articles like this it makes me laugh.
https://www.rsvplive.ie/news/irish-news/financial-expert-carol-brick-reveals-22663182
I mean you get more useful info on this forum then the data this "financial expert" detailed in the interview.

I guess the point I am making is, I try not to listen to any "financial experts". In this mad world, you are better off drawing your own conclusions. On a side note, why does the person in this article run a business that only provides financial advice to woman. This is bizarre to me.

drogon.

PropQueries wrote: »

This is the closest I can find. It was a documentary on RTÉ 4 years ago.

If you can find a link to the documentary 4 years ago it would be great as can’t seem to find it at the moment.

This one ? https://www.rte.ie/player/movie/the-great-irish-sell-off/76850216156

Bass Reeves

KnowingWind wrote: »

I think investors could well be a catalyst for big drops.

We are in the beginnings of a recession and governments are taking on bigger and bigger debts. Typical in this environment we will see properties go down and banks tighten up lending.
I havent really seen this as yet, some are saying its due to supply. But other assets are also over inflated and will likely see big drops. I think Countries are propping up economies with stimulus, but once this settles we we start seeing the impact, now exacerbated by that very stimulus.

I think its clear big investors are no longer buying property. (I have heard of the odd home owner buying a second property as an investment and this makes me shudder, but the big boys are out of the buying)
Once investors start selling then we could see a big reversal.

When I see articles like this it makes me laugh.
https://www.rsvplive.ie/news/irish-news/financial-expert-carol-brick-reveals-22663182
I mean you get more useful info on this forum then the data this "financial expert" detailed in the interview.

I guess the point I am making is, I try not to listen to any "financial experts". In this mad world, you are better off drawing your own conclusions. On a side note, why does the person in this article run a business that only provides financial advice to woman. This is bizarre to me.

Once again you show a complete misunderstanding of property investment. First property is a long-term investment. It not like shares where investors often dump them or take a profit if they smell an issue that will effect there prices.

Property investors look at investment as a 20 year plus cycle. The vast majority will have been through 2-3 downturn in prices. The cost of buying and selling and buying again is 3-20% if CGT is an issue as well as rental loss

What's a large investor if you are talking about REIT's again these are long-term investors and while they may at time offload part of there investment most again look at it in the longer term.

The other investors are those that own multiple properties. Larger investors may have 10+ properties. Most will have been investing 20+years in property. They look at investment again in the long-term. Unless in need of the money must will not sell. Even if they requite cash most will have the option of remortgaging. Thus may be a better option than selling. Older larger investors would have massive CGT bills are on selling and while selling 2006-2016 properties may be an options most of the rest of there portfolios would raise a CGT issue.

As well most larger property investors will be older maybe in there 60's or 70,'s and not only will selling raise CGT issue in 5-10 years the cash may will be subject to inheritance tax. It much more tx efficient to leave it in property

bobbyy gee

If government give help to buy 85k
Builders will just increase prices

PropQueries

Bass Reeves wrote: »

Once again you show a complete misunderstanding of property investment. First property is a long-term investment. It not like shares where investors often dump them or take a profit if they smell an issue that will effect there prices.

Property investors look at investment as a 20 year plus cycle. The vast majority will have been through 2-3 downturn in prices. The cost of buying and selling and buying again is 3-20% if CGT is an issue as well as rental loss

What's a large investor if you are talking about REIT's again these are long-term investors and while they may at time offload part of there investment most again look at it in the longer term.

The other investors are those that own multiple properties. Larger investors may have 10+ properties. Most will have been investing 20+years in property. They look at investment again in the long-term. Unless in need of the money must will not sell. Even if they requite cash most will have the option of remortgaging. Thus may be a better option than selling. Older larger investors would have massive CGT bills are on selling and while selling 2006-2016 properties may be an options most of the rest of there portfolios would raise a CGT issue.

As well most larger property investors will be older maybe in there 60's or 70,'s and not only will selling raise CGT issue in 5-10 years the cash may will be subject to inheritance tax. It much more tx efficient to leave it in property

I think your analysis would be spot on in a normally functioning housing market. But, as that RTE investigation showed, REITs etc comprised a very small percentage of the €200 billion in property and business loans purchased between 2012 and 2016.

The vulture funds (excl. reits etc.) who purchased tens of billions of euro of investment properties and property development loans are most likely wanting to exit now. Even if they sell at 50% of current market prices, they’re still probably going to walk away with a large return. They’re probably not interested in micro-managing these properties indefinitely.

The main question now is when will they pull the trigger. Maybe they have already or started the process and we won’t know until it’s all done and dusted and we’re left holding the proverbial all over again.

Mic 1972

KnowingWind wrote: »

It seems pretty likely we are about to see a big downturn in prices.
I can see investor class jumping off property....but who knows.

wouldn't investors have jumped off already tho? The future is looking bad and have been so for a year, but prices keep going up

LuasSimon

Are the government through rent allowance keeping property prices up particularly outside Dublin . The government must be throwing out some money each year paying rent for those on social welfare .

Bubbaclaus

bobbyy gee wrote: »

If government give help to buy 85k
Builders will just increase prices

Is that not the entire point of help to buy?

Vieira82

Big Investor Companies will not sell. They literally have billions in surplus waiting for the market to crash to mass buy what goes down. The houses going down, means they will maintain their investments highly priced waiting for the market to rebound. Here from minute 9, Blakcstone Alone has 156 Billion dollars ready to invest in the property market: youtu.be/G-Rp6bGORc8 or youtube Why You Should Be Very Afraid Of A K-shaped Recovery from Economics Explained

Marius34

KnowingWind wrote: »

I think its clear big investors are no longer buying property. (I have heard of the odd home owner buying a second property as an investment and this makes me shudder, but the big boys are out of the buying)
Once investors start selling then we could see a big reversal.

It's not clear at all.

It may be clear that there are less demands for rental market in the past 6 months since beginning on downturn, for obvious reasons in particular Dublin city center, but it won't stay this forever. In 2021 Q3, we may well see revers trends. Big investors looking at the long terms.
Some investors may move out, while others increase their share. This is normal moves even in growing market.

PropQueries

Vieira82 wrote: »

Big Investor Companies will not sell. They literally have billions in surplus waiting for the market to crash to mass buy what goes down. The houses going down, means they will maintain their investments highly priced waiting for the market to rebound. Here from minute 9, Blakcstone Alone has 156 Billion dollars ready to invest in the property market: youtu.be/G-Rp6bGORc8 or youtube Why You Should Be Very Afraid Of A K-shaped Recovery from Economics Explained

Well IRES REIT said recently they’re selling over 150 apartments. We only know this because they’re a public company and like glenveagh recently publicly stating they will reduce their prices, they must inform the market of their plans.

Unfortunately, the majority of the €200 billion in property and business loans bought by the vulture funds between 2012 and 2016 are private companies and we have little knowledge of what they have done to date or plan to do in the very near future.

Link to ires reit Selling apartments article here: https://m.independent.ie/business/commercial-property/ires-reit-to-sell-off-50m-in-assets-after-buoyant-first-half-39432452.html

Vieira82

PropQueries wrote: »

Well IRES REIT said recently they’re selling over 150 apartments. We only know this because they’re a public company and like glenveagh recently publicly stating they will reduce their prices, they must inform the market of their plans.

Unfortunately, the majority of the €200 billion in property and business loans bought by the vulture funds between 2012 and 2016 are private companies and we have little knowledge of what they have done to date or plan to do in the very near future.

Link to ires reit Selling apartments article here: https://m.independent.ie/business/commercial-property/ires-reit-to-sell-off-50m-in-assets-after-buoyant-first-half-39432452.html

Let's see what happens, though I'm sure they'll be sucked by vulture funds and we'll see the price of property maintain itself. They have no reason to lower the price of their assets all they have to do is hold on until the end of the crysis that's why it's a K recovery, the richer will get richer at the cost of people that will loose everything. If you can watch that video I linked it explains this.

Marius34

PropQueries wrote: »

Well IRES REIT said recently they’re selling over 150 apartments. We only know this because they’re a public company and like glenveagh recently publicly stating they will reduce their prices, they must inform the market of their plans.

Unfortunately, the majority of the €200 billion in property and business loans bought by the vulture funds between 2012 and 2016 are private companies and we have little knowledge of what they have done to date or plan to do in the very near future.

Link to ires reit Selling apartments article here: https://m.independent.ie/business/commercial-property/ires-reit-to-sell-off-50m-in-assets-after-buoyant-first-half-39432452.html

It's 150 apartment across nine developments. It could be well be the case that they selling small Portfolios, which are more difficult to manage and consolidating under bigger investment. Don't be surprised to see in coming year, investing in bigger residential projects over 150 apartments for Build-to-Rent, as those are easier to manage for big landlords.

The_Conductor

Marius34 wrote: »

It's 150 apartment across nine developments. It could be well be the case that they selling small Portfolios, which are more difficult to manage and consolidating under bigger investment. Don't be surprised to see in coming year, investing in bigger residential projects over 150 apartments for Build-to-Rent, as those are easier to manage for big landlords.

Its a smathering of properties that they bought off Marathon Asset Management last year- which they had to borrow EUR137m to fund. They've written down the asset value of these in Q1- which led them to report a Q2 loss of over 10.2million. They will still own a further 676 properties from the Asset Management portfolio- mostly houses rather than apartments- in a further 12 developments.

Despite their healthy rent roll- they have been burning cash lately- and they do have upcoming repayments on debt coming up- hence the sale.

All of the 150 apartments for sale are rent controlled- and in groups of less than 20 units (part of the NAMA sale of the original Plum portfolio- google it, you can see what was in it).

smellyoldboot

bobbyy gee wrote: »

If government give help to buy 85k
Builders will just increase prices

Sadly both these things will happen. Especially under a FF government.

KnowingWind

Marius34 wrote: »

It's 150 apartment across nine developments. It could be well be the case that they selling small Portfolios, which are more difficult to manage and consolidating under bigger investment. Don't be surprised to see in coming year, investing in bigger residential projects over 150 apartments for Build-to-Rent, as those are easier to manage for big landlords.

If you think there will be big investments over next year you are not living in reality.
The only way that would happen is after a big crash.

KnowingWind

Its always the way, even when the writing is on the wall, people still think property will go up and up.

Marius34

KnowingWind wrote: »

If you think there will be big investments over next year you are not living in reality.
The only way that would happen is after a big crash.

Go back, read comments from 6 month ago at the post saying that my head was down in the sand not seeing back than the beginning of major falls in residential property price.
We "know" what will happen , but later looking for the reasons to defend why is not happening. Nothing new. Future will tell, but future is endless

Reversal

A friend of mine closed last week on a house in a desirable area of Dublin. Asking price was 500k, they closed at 420k.

Had originally lost out to someone offering asking, but that sale fell through due to COVID.

brisan

KnowingWind wrote: »

I think investors could well be a catalyst for big drops.

We are in the beginnings of a recession and governments are taking on bigger and bigger debts. Typical in this environment we will see properties go down and banks tighten up lending.
I havent really seen this as yet, some are saying its due to supply. But other assets are also over inflated and will likely see big drops. I think Countries are propping up economies with stimulus, but once this settles we we start seeing the impact, now exacerbated by that very stimulus.

I think its clear big investors are no longer buying property. (I have heard of the odd home owner buying a second property as an investment and this makes me shudder, but the big boys are out of the buying)
Once investors start selling then we could see a big reversal.

When I see articles like this it makes me laugh.
https://www.rsvplive.ie/news/irish-news/financial-expert-carol-brick-reveals-22663182
I mean you get more useful info on this forum then the data this "financial expert" detailed in the interview.

I guess the point I am making is, I try not to listen to any "financial experts". In this mad world, you are better off drawing your own conclusions. On a side note, why does the person in this article run a business that only provides financial advice to woman. This is bizarre to me.

She has skin in the game and wants to keep the game going

shatners bassoon

I've been looking for about a year and I've decided to bow out for now. I've bid on three properties in the last few months. One in Marino went sale agreed at 95k over the asking, one in the Liberties and one in Drumcondra went for 50k over.

manniot2

shatners bassoon wrote: »

I've been looking for about a year and I've decided to bow out for now. I've bid on three properties in the last few months. One in Marino went sale agreed at 95k over the asking, one in the Liberties and one in Drumcondra went for 50k over.

surprised by this. the irish indo saying today that there is a mass exodus from Dublin, I would have assumed the market in Dublin was dead atm.

Danger781

shatners bassoon wrote: »

I've been looking for about a year and I've decided to bow out for now. I've bid on three properties in the last few months. One in Marino went sale agreed at 95k over the asking, one in the Liberties and one in Drumcondra went for 50k over.

My cousin went through something similar recently. They were looking at a beautiful house in a fairly rural area that's still only 30 mins from Cork City. Asking was €260k and by the time she bowed out the highest bid was €400k. Now that's obviously the extreme case but it just goes to show that people have money at the moment.

However on the flip side the houses we've had our eyes on over the last few months have all gone for asking +- €15k. The majority have gone for asking price. I guess the houses / areas we're considering aren't high on people's priorities. Just offering my 2c that it's not all doom & gloom, at least outside Dublin anyway.

[Deleted User]

shatners bassoon wrote: »

I've been looking for about a year and I've decided to bow out for now. I've bid on three properties in the last few months. One in Marino went sale agreed at 95k over the asking, one in the Liberties and one in Drumcondra went for 50k over.

Sorry to hear that, it's very demoralising. Took me the guts of 18 months from serious starting looking to getting the keys. All I can say is stick with it.

Dave3030

Pelezico wrote: »

Houses will be ....snapped up. I love the use of language.

Cant send a link but google Irish Times and carlow. Looks like they werent lying about the queues-madness!

shatners bassoon

Interested Observer wrote: »

Sorry to hear that, it's very demoralising. Took me the guts of 18 months from serious starting looking to getting the keys. All I can say is stick with it.

Cheers. It's frustrating but I'm happy enough to wait for now. Anything in good condition is being snapped up straight away in my experience.

TheSheriff

manniot2 wrote: »

surprised by this. the irish indo saying today that there is a mass exodus from Dublin, I would have assumed the market in Dublin was dead atm.

The irish indo saying three couples bought a house in Carlow who where from Dublin, is this the mass exodus or am I missing an article ? (Genuine q)

The_Conductor

Dave3030 wrote: »

Cant send a link but google Irish Times and carlow. Looks like they werent lying about the queues-madness!

They were obviously priced to meet the market.
If/when prices and people are aligned- then you have a synergy.
Many developers are reading the writing on the wall- and setting their expectations accordingly.
The other aspect is- there are a large cohort of FTBs out there who were waiting to buy- but who are now terrified that if they wait any longer, there may not be mortgages available- and are willing to take the plunge right here, right now. This is a specific cohort though, and once they have been satiated, you're going to have the people who refused to be the first to blink.

Of most interest would be the number of sites opened by developers this year- as-in, new sites, as opposed to continued delivery from pre-existing sites. I suspect it tells a very different story to that being peddled in the media.

hometruths

TheSheriff wrote: »

The irish indo saying three couples bought a house in Carlow who where from Dublin, is this the mass exodus or am I missing an article ? (Genuine q)

Broadband, home office, garden: House buyers quit cities for home towns as remote working trend continues