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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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[Deleted User]

thefridge2006 wrote: »

Of course it will unless the price of rent in the country matches the price of rent in Dublin. Money talks and if it makes financial sense why wouldn't they. God they'd be very foolish not to.

You think the only motivating factor is the cost of rent? For people earning very large amounts of money as it is?

Browney7

Sleepy wrote: »

I can see a nice little black market in mail forwarding developing as people charge MNC workers on permanent work-from-home contracts a few quid to send on their official mail to their actual (oversees) residence.

Not much use if there's a record of your passport leaving the country in April 20 and no proof of return.

Bass Reeves

jill_valentine wrote: »

I've seen a few folks bringing up the fact full WFH isn't likely for many, and while I know it's not wholly the thrust of this conversation, I think it's worth pointing out again that jobs being only partially WFH does still open up a huge big chunk of the country vs full WIO and would still represent a major shift.

It means people can't just up sticks to Spain, grand, but if you only have to be in office 1 or 2 day out of five, of course you're not going to pay Dublin house prices for the sake of 2 or 4 journeys.

Edit - great minds think alike

While what you say is correct that WFH will open a large chunk of the country to people there will still be limits.

Some are saying here that it will cause a collapse in house prices in the short to medium term. However the ability to cater for this exodus' is limited. It will be an option for those renting who have a limited ability to purchase in Dublin.

However to every action there is an equal and opposite reaction. If house prices drop in Dublin they will rise in places that are commutable. This will close the gap on the viability of the option. Rental properties outside Dublin are as tight as in Dublin. Extra demand will cause rents to spiral very fast. If housing demand moves from Dublin to outside house costs in these areas will rise and again vlose down the viability of the move.

That 200/ +sq meter bungalow in Donegal was sold at a receiver auction. It was still sold below building cost. The new owner had to have all there ducks in a row to purchase it especially if they did not have the price in accessible money. Ideally they should have got an engineer survey and legal check done costing 1-1.5k with the price it reached there was 2-3 underbidders at least each paying the same costs unless they are not rush adverse of issues that can arise.

If rental and housing prices rise 10-15%in places that are commutable and drop 5-10%in Dublin how viable is moving from Dublin. As well for people with children access to schools would be vital.

Little changes on both sides of an equation change the viability of any option

Assetbacked

Interested Observer wrote: »

You think the only motivating factor is the cost of rent? For people earning very large amounts of money as it is?

Exactly, the socialising is a bigger factor than cost alone as a lot are single people under the age of 40 in professional jobs with disposable income live in Dublin. However, from the government guidance, nightclubs and late bars aren't going to be open for what looks like 6 months at least - it will be sit-down pubs until 11:30pm Friday and Saturday nights if people want to go out partying.

I think we will have an economic v-shaped recovery post-covid from spring next year as a lot of these younger people are saving additional money (as well as clearing credit cards and overdrafts) and will likely splurge once the economy is allowed to reopen in 6 months. Covid is just one shock but there are more fundamental issues in the Irish and global economy which existed and still exist regardless of covid (i.e. the rise of populism, the masses of zombie corporations addicted to cheap bond market debt and the looming focus on Big Tech from regulators in the EU and US as well as the OECD tax alignment plan).

JimmyVik

Leozord wrote: »

If all Irish IT engineers decide to move out from the Big Smog and head to their hometown, Dublin will become a real babel tower of the 21st century.

I personally can't find myself living outside Dublin anymore (lived about 3 years in the midlands) and despite the violence against some immigrants done by few sc*mbags, the city has so much to give when it comes to entertainment, access to goods, people and so on. Don't see myself anywhere else in the island.

Bust just a personal preference. If I had family + mates in the countryside, I would definitely move out as well.

I know what you mean.

I was like that until about 35 years old.
Would never even think of living anywhere but Dublin.
At 35 I was happy enough to move to the suburbs.
Then over 40 I am starting to really get with the idea of moving down the country somewhere. Not too quiet, but not a city.
I think its just phases of life.

Potatoeman

mees2020 wrote: »

I work for MNC. Just to add couple points to WFH discussion, which are probably obvious.

A lot of Irish employees also return to their home towns. I personally know two Irish colleagues, who dropped their lease in Dublin in a favor of going back to their small towns in Kilkenny and Galway counties. Saving lot of money now according to them and they also can see their relatives and friends every day.
Secondly, we just hired three engineers and two of them based outside the Big Smoke. Company doesn't ask them to relocate to Dublin or visit the office once a week/month, they are perfectly fine to WFH as long as they are employed.
This is a "new normal" for IT industry as it seems to me. So, if someone can save 1k+ per month by moving out of Dublin, they will surely do.
Imho, for IT industry an exodus from Dublin is inevitable.
All IT companies are now conducting internal surveys re WFH and WFH wins by big from what I know, 95% of employees prefer to work from home forever. No wonder there is buying queue for houses with a good broadband.

https://www.irishtimes.com/news/social-affairs/more-than-30-people-queue-overnight-to-secure-property-in-carlow-1.4365816
https://www.independent.ie/business/personal-finance/property-mortgages/broadband-home-office-garden-house-buyers-quit-cities-for-home-towns-as-remote-working-trend-continues-39567484.html

And there is no discrimination over location in terms of the payment, i.e. engineer from Leitrim will be paid as much as a Dublin based worker.

I know some people that moved home and many seem to forget that if you can WFH then they can outsource your job. No point paying high salaries in Ireland when you can pay cheaper salaries in southern or Eastern Europe and still get employees with good English.

awec

thefridge2006 wrote: »

Of course it will unless the price of rent in the country matches the price of rent in Dublin. Money talks and if it makes financial sense why wouldn't they. God they'd be very foolish not to.

Many of these people have been living in Dublin for years. They are completely settled there. Their partner is employed in Dublin, their kids go to school in Dublin, they are members of local clubs and societies, their kids play with the local sports team, they have friends there, they enjoy the hustle and bustle of city life.

You also have young professionals who enjoy the lifestyle in the city, with the networking opportunities plus the nightlife (which will eventually return). These people, at their stage in life, have absolutely no interest whatsoever in quiet rural life.

I am sure there are many people who'd jump at the chance to leave, but I am also sure that there is a far greater number of people completely content with where they are.

[Deleted User]

awec wrote: »

Many of these people have been living in Dublin for years. They are completely settled there. Their partner is employed in Dublin, their kids go to school in Dublin, they are members of local clubs and societies, their kids play with the local sports team, they have friends there, they enjoy the hustle and bustle of city life.

You also have young professionals who enjoy the lifestyle in the city, with the networking opportunities plus the nightlife (which will eventually return). These people, at their stage in life, have absolutely no interest whatsoever in quiet rural life.

I am sure there are many people who'd jump at the chance to leave, but I am also sure that there is a far greater number of people completely content with where they are.

Yeah it's a bizarre idea. Young people probably earning 6 figures and living with or in close proximity to their friends in the commercial/retail/restaurant/nightlife centre of the country are going to scatter to the four winds to save a few hundred quid a month. Eh no.

brisan

Potatoeman wrote: »

I know some people that moved home and many seem to forget that if you can WFH then they can outsource your job. No point paying high salaries in Ireland when you can pay cheaper salaries in southern or Eastern Europe and still get employees with good English.

Workers have to be resident in the country for tax purposes

6ix

mees2020 wrote: »

And there is no discrimination over location in terms of the payment, i.e. engineer from Leitrim will be paid as much as a Dublin based worker.

While this is the case now, it may change. For example, Stripe pay for relocation of employees who leave major cities, but also apply a 10% pay cut:

https://www.bloomberg.com/news/articles/2020-09-15/stripe-employees-who-relocate-to-get-20-000-bonus-and-a-pay-cut

Zuckerberg has also been hinting at Facebook applying a similar policy of tiered salary based on location.

If someone really wanted to live in the countryside I don't think this would be a deal breaker (reduction in housing costs would easily compensate), but I think it's still a consideration for some.

MacronvFrugals

Who would've thought without the 'student life' those big rents arent very attractive.

Some students with reduced campus hours backtrack on decision to live away from home

https://www.thejournal.ie/student-accommodation-ireland-coronavirus-5217759-Sep2020/

Potatoeman

brisan wrote: »

Workers have to be resident in the country for tax purposes

Depends on the business, banking for example have offices in multiple countries and can move entire departments to save money.

Assetbacked

MacronvFrugals wrote: »

Who would've thought without the 'student life' those big rents arent very attractive.

Some students with reduced campus hours backtrack on decision to live away from home

https://www.thejournal.ie/student-accommodation-ireland-coronavirus-5217759-Sep2020/

The quote at the end in relation to the emergency meeting response to the group congregating at Spanish Arch sums up the fcuk up by the government and NPHET with respect to covid in general;

“The university, the government, the mayor – they have had six months to plan for things like this to happen, why only now when something has happened are they asking for an emergency meeting?” Nic Lochlainn said.

An absolute farce that they allowed campuses to operate if they were leaving the option on the table to instruct them to move online. I cannot get over how much of a disgrace that is from NPHET and the government; if you were leaving this as an option, why not let people know this and let them plan accordingly instead of throwing money at unnecessary rents?

jill_valentine

Anecdata I know, but a huge number of people in my industry and cohort are "trapped" in Dublin for work and well beyond the years of Coppers - but can't buy because they're renting, and a good chunk of them have kids. They're not complaining about missing pubs and clubs even now.

There's a lot to be said for the amenities and infrastructure, but my generation are would-be first time buyers coming up on being locked out of useful mortgages by their ages. The stuff you're talking about is a concern for 20-early 30s, not the people I'm talking about here who've only ever rented and would chew off a foot not to have to. The lack of services and social life is something they may come to repent at leisure but it's not something anybody will GAF about if they have a chance to get a house, that they can live in, that's theirs, whether it's in Carlow or Louth or wherever.

There is a not insignificant number of people who would jump at the chance to buy in the suburbs etc but simply have not had the ability to do so due to work demands and affordability. The choice is not between work from a home you own in Dublin, or work from a home you own somewhere less cool, it's work from a home you own somewhere else or carry on paying a fortune to rent a crappy apartment forever. I don't know how many people will see having to drive to a shop as worse than a drive to work. People who have spent 15+ years renting feel fairly urgent about buying, as soon as it's remotely possible they will. Theoretical social life stuff isn't an immediate tangible, especially now, but the very real misery of renting in Dublin (rent cost, can't get repairs, weird flatmates, weird smells, bockety furniture, perpetually precarious living situation) is, no matter what you earn.

I like Whelans and the Luas too, but not more than I'd like to never have to engage with a landlord or letting agent ever again in my life.

JimmyVik

6ix wrote: »

While this is the case now, it may change. For example, Stripe pay for relocation of employees who leave major cities, but also apply a 10% pay cut:

https://www.bloomberg.com/news/articles/2020-09-15/stripe-employees-who-relocate-to-get-20-000-bonus-and-a-pay-cut

Zuckerberg has also been hinting at Facebook applying a similar policy of tiered salary based on location.

If someone really wanted to live in the countryside I don't think this would be a deal breaker (reduction in housing costs would easily compensate), but I think it's still a consideration for some.

Our company has been trying to get us back to the office since mid August, but the virus keeps thwarting them. An email went out last week asking if anyone would like to work from home on a permanent basis.
Speaking on the phone to one of the HR girls who I know very well about something else and I asked her what the story was with this.
She told me that people can apply and if picked will have to come to the office one day per week but, wait for it, 10% pay cut, plus reduction in travel allowances to 1/5th of the current allowance.

hometruths

awec wrote: »

Many of these people have been living in Dublin for years. They are completely settled there. Their partner is employed in Dublin, their kids go to school in Dublin, they are members of local clubs and societies, their kids play with the local sports team, they have friends there, they enjoy the hustle and bustle of city life.

You also have young professionals who enjoy the lifestyle in the city, with the networking opportunities plus the nightlife (which will eventually return). These people, at their stage in life, have absolutely no interest whatsoever in quiet rural life.

I am sure there are many people who'd jump at the chance to leave, but I am also sure that there is a far greater number of people completely content with where they are.

Completely agree - many would love to leave for all sorts of reasons. But the majority will stay - to pluck figure from thin air 90% will stay in Dublin, 10% will scatter across the country.

So that right off the bat is a big hit to sales and rental demand. Simply taking 10% of demand away is more than enough to move a market where prices are set at the margin. Not enough to cause 50% crash or anything but enough to be noticeable.

But consider who might be in that 10%? As Interested Observer correctly points out it is unlikely to be the highest earners.

Whilst I agree the majority of people love it in Dublin, there is no shortage of people complaining about it is bit of a struggle for them. The vast majority of these are complaining for one reason - unable to buy a house.

It follows that those most content to stay where they are, are those who are comfortably off and already bought their house.

So a significantly disproportionate amount of the 10% who leave are likely to be both renters and potential FTBers.

Taking that number of renters and FTBers out of the Dublin market will undoubtedly have a larger impact than simply a random 10%.

I repeat time and time again, nobody is suggesting that Dublin will be empty, because everyone who lives there hates it, but the significance of WFH is that it enables a relatively small amount of people to leave Dublin, and those people will have a disproportionate effect on the market.

PropQueries

JimmyVik wrote: »

Our company has been trying to get us back to the office since mid August, but the virus keeps thwarting them. An email went out last week asking if anyone would like to work from home on a permanent basis.
Speaking on the phone to one of the HR girls who I know very well about something else and I asked her what the story was with this.
She told me that people can apply and if picked will have to come to the office one day per week but, wait for it, 10% pay cut, plus reduction in travel allowances to 1/5th of the current allowance.

That actually appears reasonable and would benefit both sides. Even if you were within a 20 minute walk of your workplace, you're saving at least 4 to 5 hours a week in travel alone, never mind savings on lunch, suits etc. For example, if you're WFH, you can put your dinner in the oven at 4 p.m. every day and have every evening for yourself.

Win-Win in my opinion.

JimmyVik

PropQueries wrote: »

That actually appears reasonable and would benefit both sides. Even if you were within a 20 minute walk of your workplace, you're saving at least 4 to 5 hours a week in travel alone, never mind savings on lunch, suits etc. For example, if you're WFH, you can put your dinner in the oven at 4 p.m. every day and have every evening for yourself.

Win-Win in my opinion.

Yeah, im kinda thinking about it myself.
I sort of miss the office, but less and less as i get used to WFH.
And 10% is only 5% after tax.

Bass Reeves

Assetbacked wrote: »

The quote at the end in relation to the emergency meeting response to the group congregating at Spanish Arch sums up the fcuk up by the government and NPHET with respect to covid in general;

An absolute farce that they allowed campuses to operate if they were leaving the option on the table to instruct them to move online. I cannot get over how much of a disgrace that is from NPHET and the government; if you were leaving this as an option, why not let people know this and let them plan accordingly instead of throwing money at unnecessary rents?

The problem in Galway is that since June the college authorities have put out a belief that it would be business as normal.

https://www.google.com/amp/s/extra.ie/2020/09/11/news/irish-news/irish-college-students-home-weekends/amp

They have promoted the idea that Students needed to be in Galway for college. They gave the impression that college life would continue as normal and that little of the lecturing would be online. I am not sure was the same emphasis put on return by Cork and Dublin Universities. However UL in Limerick highlighted from early on that most tutorial would be online with students returning for 1week in 3-4of leactures. My son is in NUIG and has two hours a week every week of lectures. He was given the impression that college and access to college would be fairly normal

It is not government's job to micro manage sectors within Education. Universities and Colleges are automonous bodies. It is within there remit to manage college life. It is a bit rich blaming government for the action of institutions which are virtually independent of them

Government has bought back primary and secondary education fulltime with limited issues at present. However we have Universities with supposedly the best and brightest in charge and in NUIG's case they stuck there head in the sand and considered it business as usual.

As well any person with there eyes open would have know that most college would be on line this year. Because if hygiene reasons it would be either a week in 4 or a one day a week attendance

thefridge2006

Interested Observer wrote: »

You think the only motivating factor is the cost of rent? For people earning very large amounts of money as it is?

I'm talking about people who are from the country who have the opportunity to move home and work from home beside family and friends and support if they had kids etc.

Be ridiculous not to move imo

thefridge2006

Potatoeman wrote: »

I know some people that moved home and many seem to forget that if you can WFH then they can outsource your job. No point paying high salaries in Ireland when you can pay cheaper salaries in southern or Eastern Europe and still get employees with good English.

Big job losses coming i think

[Deleted User]

JimmyVik wrote: »

......... plus reduction in travel allowances to 1/5th of the current allowance.

What travel allowance do they give?

Bass Reeves

thefridge2006 wrote: »

I'm talking about people who are from the country who have the opportunity to move home and work from home beside family and friends and support if they had kids etc.

Be ridiculous not to move imo

Very few are saying that people will not take up this option where it is an option. However some saying that there will be a mass exodus over a short period and that this will cause a price collapse. Yes some will take the option but the IT expert married to the nurse, doctor or teacher more than likely will not. It will remove some of the demand . However as people move the economics change if house prices in Dublin drop 10 % and prices outside Dublin increase by 15%+. Most of these people may have been targeting houses in the 4-500k bracket take 30-50k off the price of a Dublin and add it to a house 50+ miles from Dublin and the economics change completely. As well those with children at school or college age will be reluctant to up sticks

tom1ie

PropQueries wrote: »

That actually appears reasonable and would benefit both sides. Even if you were within a 20 minute walk of your workplace, you're saving at least 4 to 5 hours a week in travel alone, never mind savings on lunch, suits etc. For example, if you're WFH, you can put your dinner in the oven at 4 p.m. every day and have every evening for yourself.

Win-Win in my opinion.

A 10% paycut plus a cut in travel expenses is a win win in your opinion?

[Deleted User]

tom1ie wrote: »

A 10% paycut plus a cut in travel expenses is a win win in your opinion?

If you are on a big wedge and WFH suited you a 10% pay cut mightn't be too bad. As mentioned it's 5% after tax..........

If you saved 4/5 hours a week commuting it's 10% ish less work/commute.

Now given that Dublin WFH is likely to be a thing for the foreseeable the short term gain is defo for the company and not the employee.

PropQueries

Bass Reeves wrote: »

The problem in Galway is that since June the college authorities have put out a belief that it would be business as normal.

https://www.google.com/amp/s/extra.ie/2020/09/11/news/irish-news/irish-college-students-home-weekends/amp

They have promoted the idea that Students needed to be in Galway for college. They gave the impression that college life would continue as normal and that little of the lecturing would be online. I am not sure was the same emphasis put on return by Cork and Dublin Universities. However UL in Limerick highlighted from early on that most tutorial would be online with students returning for 1week in 3-4of leactures. My son is in NUIG and has two hours a week every week of lectures. He was given the impression that college and access to college would be fairly normal

It is not government's job to micro manage sectors within Education. Universities and Colleges are automonous bodies. It is within there remit to manage college life. It is a bit rich blaming government for the action of institutions which are virtually independent of them

Government has bought back primary and secondary education fulltime with limited issues at present. However we have Universities with supposedly the best and brightest in charge and in NUIG's case they stuck there head in the sand and considered it business as usual.

As well any person with there eyes open would have know that most college would be on line this year. Because if hygiene reasons it would be either a week in 4 or a one day a week attendance

I thought it was a bit devious at the time. But, I think it's down to the amount they have borrowed over the past number of years to "invest" in their universities.

In relation to UCD, the Irish Times reported that "The university is currently constructing new residences and a student village. This development is costing in the region of €500m and is funded largely through bank loans,”

On top of that, it was also recently reported that the UCD president splashed "€5.5m on Residential Properties in South Dublin".

UCD president buying residential properties: https://www.universitytimes.ie/2020/02/ucd-splashes-e5-5m-on-residential-properties-in-south-dublin/

UCD bank loans: https://www.irishtimes.com/news/education/ucd-to-increase-campus-rent-by-12-over-three-years-1.4163042

Potatoeman

Augeo wrote: »

If you are on a big wedge and WFH suited you a 10% pay cut mightn't be too bad. As mentioned it's 5% after tax..........

If you saved 4/5 hours a week commuting it's 10% ish less work/commute.

Now given that Dublin WFH is likely to be a thing for the foreseeable the short term gain is defo for the company and not the employee.

But the business saves on office space and you pay extra on electricity.

brisan

PropQueries wrote: »

That actually appears reasonable and would benefit both sides. Even if you were within a 20 minute walk of your workplace, you're saving at least 4 to 5 hours a week in travel alone, never mind savings on lunch, suits etc. For example, if you're WFH, you can put your dinner in the oven at 4 p.m. every day and have every evening for yourself.

Win-Win in my opinion.

My nephew and his wife (both in financial sector ) both work from home and given the choice will continue to do so even with a paycut.
They have a 6 year old child in school
Previously child was dropped to childminder at 8am and picked up around 6
200 A WEEK which was reasonable
60 euro in transport expenses every week
Now they take it in turns to drop the child and pick him up.
No transport costs ,no clothing costs for his wife (regarding work clothes),none for him ,less food costs etc.
More time with their son for him and her and more sleep time as they do not get up till 8am
All in all a much cheaper and less stressful life
They still live in Dublin but if WFH became a permanent option it opens up a much bigger area for them to live in.
He said even if wages went down 20k between them they would stay WFH
He misses the few pints on the odd Friday but its something he can live without

PropQueries

Potatoeman wrote: »

But the business saves on office space and you pay extra on electricity.

Interesting article in the Irish Times yesterday where "The Roscommon-Galway TD said there was an opportunity through remote working to take pressure off Dublin’s infrastructure and bring life back to rural communities. He said the Government should aim to have one third of employees working remotely within five years."

He also spouted some nonsense: "He said that properties with home office potential “are being snapped up around the country” and an estate agent in Roscommon named Séamus Carthy has now 43 potential buyers on a waiting list for homes with garden space but this needs direction and support from government if it’s going to happen."

But he also stated "Mr Naughten asked if the Minister’s concern about empty offices “could be a vehicle used to undermine the objective of blended working and remote working to shore up the pension funds."

But the government is clearly worried about the impact of WFH on Dublin with "Former minister for housing Eoghan Murphy expressed concern about the long-term impact on the city centre “where people may not be returning to work at least five days a week, and that’s a permanent reduction in footfall."

Link to Irish Times article here: https://www.irishtimes.com/news/politics/donohoe-to-examine-tax-reliefs-for-people-working-remotely-1.4367874

Potatoeman

PropQueries wrote: »

Interesting article in the Irish Times yesterday where "The Roscommon-Galway TD said there was an opportunity through remote working to take pressure off Dublin’s infrastructure and bring life back to rural communities. He said the Government should aim to have one third of employees working remotely within five years."

He also spouted some nonsense: "He said that properties with home office potential “are being snapped up around the country” and an estate agent in Roscommon named Séamus Carthy has now 43 potential buyers on a waiting list for homes with garden space but this needs direction and support from government if it’s going to happen."

But he also stated "Mr Naughten asked if the Minister’s concern about empty offices “could be a vehicle used to undermine the objective of blended working and remote working to shore up the pension funds."

But the government is clearly worried about the impact of WFH on Dublin with "Former minister for housing Eoghan Murphy expressed concern about the long-term impact on the city centre “where people may not be returning to work at least five days a week, and that’s a permanent reduction in footfall."

Link to Irish Times article here: https://www.irishtimes.com/news/politics/donohoe-to-examine-tax-reliefs-for-people-working-remotely-1.4367874

You could argue the salary drop is because your expenses working remotely down the country are much less than in Dublin and your salary reflects that.