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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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cnocbui

PropQueries wrote: »

Tell that to the European Commission:

"The European Commission has proposed using a hitherto unused treaty provision to circumvent the national veto on taxation issues. The article would allow the need for unanimity on a taxation proposal to be circumvented if it were shown that the absence of the measure was causing a distortion in the single market."

I think our taxation of multinationals, funds etc. would come under 'causing a distortion in the single market'.

Link to article on RTE (July 2020) here: https://www.rte.ie/news/europe/2020/0715/1153554-european-commission-treaty-taxation/

Well I for one would love to see the EU use that provision to tell the Irish government where to go in relation to VRT. That bareley disguised replacement for an import duty well and truly distorts the single market, hindering the free flow of goods.

Timing belt

PropQueries wrote: »

I always looked at it another way or as you say I "always see it differently"

For example, in Q1 2017 (it's all I could find), Alphabet (that's Google) reported $8.1 Billion in sales across Europe, Middle East and Africa. Of this, $2.1 Billion (a quarter) was generated in the UK.

A lot of big companies here make a significant percentage of their revenues in the UK.

If the UK leaves and the EU plays hardball, wouldn't companies based here that currently sell into the UK need to move back to the UK?

I don't know if this would be applicable to Alphabet or related companies, but it does show that FDI can potentially also move in the opposite direction too (back to the UK) in the event of a worst case hard Brexit? Not good for 'more demand for housing'?

They already have company's in the UK so don't think it would make much difference.... Maybe slightly less Corporation Tax but noting that would impact the property market :-)

I think that with all the government spending we are going to see inflation in 12 months time as there is a lot extra cash in the economy chasing the same goods/assets. Previous QE all stayed in the financial Institutions but this time it is getting out to the wider economy and is in circulation.

cnocbui

Timing belt wrote: »

They already have company's in the UK so don't think it would make much difference.... Maybe slightly less Corporation Tax but noting that would impact the property market :-)

I think that with all the government spending we are going to see inflation in 12 months time as there is a lot extra cash in the economy chasing the same goods/assets. Previous QE all stayed in the financial Institutions but this time it is getting out to the wider economy and is in circulation.

That extra cash in the economy is not in the pockets of consumers, which it would have to be to cause inflation. A lot of the economic woes in the world - concentration of wealth, globalisation, governemnts having insufficient revenue streams, MN company wholesale tax avoidance, people not seeing income increases for 30 years, all stem from neo-con policies, particularly the crushing of unions, which were the only force that countered wealth concentration.

stefanovich

cnocbui wrote: »

That extra cash in the economy is not in the pockets of consumers, which it would have to be to cause inflation. A lot of the economic woes in the world - concentration of wealth, globalisation, governemnts having insufficient revenue streams, MN company wholesale tax avoidance, people not seeing income increases for 30 years, all stem from neo-con policies, particularly the crushing of unions, which were the only force that countered wealth concentration.

When everyone is poor there is no wealth to distributed.

Before Maggie tackled the unions the UK economy was completely broken.

PropQueries

S&P sees Irish house prices falling by 1.6% this year

"House prices in Ireland will buck the European trend and fall this year, according Standard & Poor’s (S&P).

In a report on housing across Europe, the ratings agency predicts house prices in most markets are likely to rise further in 2020 despite the Covid-19 lockdowns and the unprecedented fall in economic activity.

However, it pinpoints Ireland, Spain and Portugal as exceptions, suggesting prices in these countries will decline, albeit by a small margin.

In Ireland, house prices had been softening already ahead of the crisis, which now adds to the downward pressure, it says."

Link to Irish Times article here: https://www.irishtimes.com/business/economy/s-p-sees-irish-house-prices-falling-by-1-6-this-year-1.4386124

poker--addict

PropQueries wrote: »

S&P sees Irish house prices falling by 1.6% this year

"House prices in Ireland will buck the European trend and fall this year, according Standard & Poor’s (S&P).

In a report on housing across Europe, the ratings agency predicts house prices in most markets are likely to rise further in 2020 despite the Covid-19 lockdowns and the unprecedented fall in economic activity.

However, it pinpoints Ireland, Spain and Portugal as exceptions, suggesting prices in these countries will decline, albeit by a small margin.

In Ireland, house prices had been softening already ahead of the crisis, which now adds to the downward pressure, it says."

Link to Irish Times article here: https://www.irishtimes.com/business/economy/s-p-sees-irish-house-prices-falling-by-1-6-this-year-1.4386124

Fake news, how dare they cast down on the irish property market

Springy Turf

More from that article:

"The underlying trend combined with the fall-off in economic activity and consumer demand arising from the pandemic will see prices here decline by 1.6 per cent this year and 1.1 per cent next year, S&P says. However, house price growth is forecast to pick-up again to 4.6 per cent in 2022 and 4.2 per cent in 2023."

This is one of the most optimistic projections that I have seen - if you believe this projection then now is a good time to buy a house.

From what I can see, the price of a house can easily vary by ±5% depending on how well its presented. I wouldn't worry at all about ±2% variations.

KennisWhale

PropQueries wrote: »

S&P sees Irish house prices falling by 1.6% this year

"House prices in Ireland will buck the European trend and fall this year, according Standard & Poor’s (S&P).

In a report on housing across Europe, the ratings agency predicts house prices in most markets are likely to rise further in 2020 despite the Covid-19 lockdowns and the unprecedented fall in economic activity.

However, it pinpoints Ireland, Spain and Portugal as exceptions, suggesting prices in these countries will decline, albeit by a small margin.

In Ireland, house prices had been softening already ahead of the crisis, which now adds to the downward pressure, it says."

Link to Irish Times article here: https://www.irishtimes.com/business/economy/s-p-sees-irish-house-prices-falling-by-1-6-this-year-1.4386124

However;

Property price inflation in Ireland has declined in recent years, falling from nearly 12 per cent in 2017 to 7.2 per cent in 2018 and to 1 per cent in 2019.

The underlying trend combined with the fall-off in economic activity and consumer demand arising from the pandemic will see prices here decline by 1.6 per cent this year and 1.1 per cent next year, S&P says.

However, house price growth is forecast to pick-up again to 4.6 per cent in 2022 and 4.2 per cent in 2023.

Good returns to be made for investors who get in now or already in. Speaking of which;

https://www.irishtimes.com/business/construction/glenveagh-attracts-growing-hedge-fund-interest-1.4385441

Glenveagh attracts growing hedge-fund interest

and of course my post last week; https://www.boards.ie/vbulletin/showpost.php?p=114949617&postcount=7425

Claw Hammer

PropQueries wrote: »

But what if they exchanged the 42 acres they occupy at Cathal Brugha Barracks for 42 acres in Phoenix Park. Actually, give them 100 acres to sweeten the deal. Phoenix Park has 1,752 acres. Then, they would still be within walking distance of Leinster House if security concerns are indeed the prime reason?

This must be the daftest post in this thread. Why not simply build houses on the 100 acres of the Phoenix Park instead of decommissioning an army barracks full of buildings which will have to be preserved and then re-establishing the barracks in another location involving considerable expense.

PropQueries

Claw Hammer wrote: »

This must be the daftest post in this thread. Why not simply build houses on the 100 acres of the Phoenix Park instead of decommissioning an army barracks full of buildings which will have to be preserved and then re-establishing the barracks in another location involving considerable expense.

Not really. The state could do something similar to the existing newish development on the Clancy Quay Barracks site with the Cathal Brugha Barracks site.

If the state wanted to build homes on Phoenix Park, the powers that be would have that stalled for the next 20 years. If an army barracks was built on a few acres in Phoenix Park, there would be less opposition as the Barracks would be mostly open ground anyway. A switch is the best way to go in my opinion.

TheSheriff

PropQueries wrote: »

S&P sees Irish house prices falling by 1.6% this year

"House prices in Ireland will buck the European trend and fall this year, according Standard & Poor’s (S&P).

In a report on housing across Europe, the ratings agency predicts house prices in most markets are likely to rise further in 2020 despite the Covid-19 lockdowns and the unprecedented fall in economic activity.

However, it pinpoints Ireland, Spain and Portugal as exceptions, suggesting prices in these countries will decline, albeit by a small margin.

In Ireland, house prices had been softening already ahead of the crisis, which now adds to the downward pressure, it says."

Link to Irish Times article here: https://www.irishtimes.com/business/economy/s-p-sees-irish-house-prices-falling-by-1-6-this-year-1.4386124

Good time to buy based on that article PropQueries, perhaps you should delete your post

PropQueries

TheSheriff wrote: »

Good time to buy based on that article PropQueries, perhaps you should delete your post

But then again, S&P are always a bit late to the party as per below from January 2010:

"IRELAND’S BANKING system has been downgraded by international credit rating agency Standard & Poor (SP) over concerns that continued weakness in the economy will push up the number of problem loans. Little more than 12 months ago, Ireland was ranked alongside Canada and Sweden in group one, which includes those countries considered by S&P to have the strongest banking systems in the world."

Link to Irish Times article here: https://www.irishtimes.com/business/ireland-s-bank-system-downgraded-by-s-p-1.1273434

HotDudeLife

Do people foresee a crash in the rental market and it perhaps cascading onto house prices?

I know a handful of people who have managed to negotiate 10-20% reductions off their rent when it came to renewing the lease, all reductions were none covid related (couples still working, not impacted).

Personally most younger workers in my org from down the country have all stopped renting in Dublin or left their house share and returned home, that and the lack of students/tourists will surely drive rents down a lot? Maybe i am wrong but if i was a landlord i would sell now and if i was an investor a buy to let would be one of the last items on my list to invest in.

handlemaster

HotDudeLife wrote: »

Do people foresee a crash in the rental market and it perhaps cascading onto house prices?

I know a handful of people who have managed to negotiate 10-20% reductions off their rent when it came to renewing the lease, all reductions were none covid related (couples still working, not impacted).

Personally most younger workers in my org from down the country have all stopped renting in Dublin or left their house share and returned home, that and the lack of students/tourists will surely drive rents down a lot? Maybe i am wrong but if i was a landlord i would sell now and if i was an investor a buy to let would be one of the last items on my list to invest in.

Handful wouldn't represent the market. Rents will remain around where they are is my guess.

Marius34

HotDudeLife wrote: »

Do people foresee a crash in the rental market and it perhaps cascading onto house prices?

I know a handful of people who have managed to negotiate 10-20% reductions off their rent when it came to renewing the lease, all reductions were none covid related (couples still working, not impacted).

Personally most younger workers in my org from down the country have all stopped renting in Dublin or left their house share and returned home, that and the lack of students/tourists will surely drive rents down a lot? Maybe i am wrong but if i was a landlord i would sell now and if i was an investor a buy to let would be one of the last items on my list to invest in.

It might be that rental prices is going and will go down in the short term, but it's likely to return to pre-covid levels in August/Septermber of 2021.

PropQueries

Marius34 wrote: »

It might be that rental prices is going and will go down in the short term, but it's likely to return to pre-covid levels in August/Septermber of 2021.

But by September 2021 we will also have an additional c. 20,000 new build homes, thousands of additional probate sales and probably a very small increase in (if any) net inward migration.

Marius34

PropQueries wrote: »

But by September 2021 we will also have an additional c. 20,000 new build homes, thousands of additional probate sales and probably a very small increase in (if any) net inward migration.

That's a low number for growing population.
And you forgot to add obsolescence property.

PropQueries

Marius34 wrote: »

That's a low number for growing population.
And you forgot to add obsolescence property.

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

Hubertj

HotDudeLife wrote: »

Do people foresee a crash in the rental market and it perhaps cascading onto house prices?

I know a handful of people who have managed to negotiate 10-20% reductions off their rent when it came to renewing the lease, all reductions were none covid related (couples still working, not impacted).

Personally most younger workers in my org from down the country have all stopped renting in Dublin or left their house share and returned home, that and the lack of students/tourists will surely drive rents down a lot? Maybe i am wrong but if i was a landlord i would sell now and if i was an investor a buy to let would be one of the last items on my list to invest in.

I thought a daft.ie report already showed prices for some types had already dropped about 20%.

Hubertj

PropQueries wrote: »

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

Average age of a house buyer in Ireland?

PropQueries

Hubertj wrote: »

Average age of a house buyer in Ireland?

But we also built c. 70,000 residential units over the past 4 years or enough new units to accommodate c. 200,000 persons (based on an average of one couple plus one child per unit).

Add in probate sales and refurbished units over the past 4 years and...

Marius34

PropQueries wrote: »

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

You know what to factor and what not, but obsolescence is as well a factor, and many other things that you don't like to factor. A year will pass and you won't see those supplies flooding the market.

I'm not sure why would you exclude people over 35 year. It's quite common to buy property over 35, and even 45 wouldn't be unusual.
Apart from this older house owner are saving more money during Covid as well, which may help their kids financially to find their new homes.

Ireland has unusual demographic with high number of population in the age of 35-45. They was 25-34 some years ago, but it doesn't mean that they fall-out of the property market.

fliball123

PropQueries wrote: »

Obsolescence wouldn’t be much of a factor for new builds or new probate sales.

Between new builds and probate sales over the next twelve months there’s enough new housing supply entering the market to accommodate at least 90,000 persons (average of one couple and one child per unit) based on c. 20,000 new builds and c. 10,000 potential probate sales.

In relation to the “growing population”:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

Here you go a little update for you so you can stop copying and pasting as its out of date

so in 2019 the population can be broken down roughly as follows below have a look at the stats yourself

about 1 million 0-14
About 600k 15-24
about 1.4 Million 25-44 (quite possibly the demographic most like to buy)
about 1.2 Million 45 to 64 (quite possibly the 2nd most likely to buy)
about 700K over 65

Please dont copy and paste this again

https://www.statista.com/statistics/710767/irish-population-by-age/

and before you go saying but yours in from the CSO this was also got from data from the CSO

https://statbank.cso.ie/multiquicktables/quickTables.aspx?id=pea01

Idbatterim

PropQueries wrote: »

But by September 2021 we will also have an additional c. 20,000 new build homes, thousands of additional probate sales and probably a very small increase in (if any) net inward migration.

Thousands of extra probate sales? From what? If you think its covid, its a drop in the ocean compared to all other daily deaths ...

PropQueries

Idbatterim wrote: »

Thousands of extra probate sales? From what? If you think its covid, its a drop in the ocean compared to all other daily deaths ...

Not relating the increase to Covid. There have been delays with probate sales over the past several years and this backlog should start entering supply over the next twelve months:

“Some 30,000 people pass away every year in Ireland with up to 86% of them owning a home. This potentially leaves some 26,000 homes affected by these delays in probate.”

Link here from 2018: https://www.thejournal.ie/probate-2-3870061-Feb2018/?amp=1

Timing belt

PropQueries wrote: »

Not relating the increase to Covid. There have been delays with probate sales over the past several years and this backlog should start entering supply over the next twelve months:

“Some 30,000 people pass away every year in Ireland with up to 86% of them owning a home. This potentially leaves some 26,000 homes affected by these delays in probate.”

Link here from 2018: https://www.thejournal.ie/probate-2-3870061-Feb2018/?amp=1

Or Less than 15k if we apply your rule of a couple & child per housing unit.

PropQueries

Timing belt wrote: »

Or Less than 15k if we apply your rule of a couple & child per housing unit.

I actually knocked the figure back by two thirds to c. 10,000 potential probate sales or enough homes to accommodate c. 30,000 persons at an average of one couple and one child. Basically enough new supply (before any new builds are built) to house the total population of an additional new large town in Ireland each year.

And most of these properties would be located in what many would consider prime locations.

Timing belt

PropQueries wrote: »

I actually knocked the figure back by two thirds to c. 10,000 potential probate sales or enough homes to accommodate c. 30,000 persons at an average of one couple and one child. Basically enough new supply (before any new builds are built) to house the total population of an additional new large town in Ireland each year.

And most of these properties would be located in what many would consider prime locations.

Here is a breakdown of the funds in Ireland I was correct when I said mainly Debt and Equity

https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/other-financial-sector-statistics/investment-funds/information-release-investment-fund-statistics---2020q2.pdf?sfvrsn=6

PropQueries

Timing belt wrote: »

Here is a breakdown of the funds in Ireland I was correct when I said mainly Debt and Equity

https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/other-financial-sector-statistics/investment-funds/information-release-investment-fund-statistics---2020q2.pdf?sfvrsn=6

That’s not related the so-called vulture funds. The line “The Net Asset Value (NAV) of Irish-resident investment funds (IFs) increased by €266 billion, or 12 per cent, to €2,423 billion in Q2 2020” is the giveaway.

Timing belt

PropQueries wrote: »

That’s not related the so-called vulture funds. The line “The Net Asset Value (NAV) of Irish-resident investment funds (IFs) increased by €266 billion, or 12 per cent, to €2,423 billion in Q2 2020” is the giveaway.

Yes some of these funds business model is to buy debt at a discount and max the return. The NAV is the net asset values of what the funds own Globally and they are only described as Irish resident because the legal entity is registered here.