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2021 Irish Property Market chat - *mod warnings post 1*

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  • #1142
    Dwarf.Shortage
    Registered Users, Registered Users 2 Posts: 1,425 ✭✭✭Dwarf.Shortage


    MacronvFrugals wrote: »
    Barcelona: Fill vacant rental units with tenants or we will take over your properties, the city is warning landlords.


    https://www.bloomberg.com/news/articles/2020-07-16/to-fill-vacant-units-barcelona-seizes-apartments


    Is vacant property an issue in Dublin? We only ever hear of these high end sites, it would be different if a normal block of apartments was lying empty but i don't think that's the case.

    The people who'd be living in these if they were rented out are renting somewhere else instead, supply is supply.


  • #1143
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Timing belt wrote: »
    All European cities have this issue....

    Paris dealt with it via property tax
    https://www.fastcompany.com/3067918/paris-has-some-bad-news-for-people-who-keep-a-second-home-in-the-city

    Well that escalated quickly.


  • #1144
    Timing belt
    Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭Timing belt


    schmittel wrote: »
    Well that escalated quickly.

    What do you mean?


  • #1145
    Browney7
    Registered Users, Registered Users 2 Posts: 3,100 ✭✭✭Browney7


    MacronvFrugals wrote: »
    Councillors to Dig Deeper into Bills for Building Social Homes







    https://www.dublininquirer.com/2020/12/16/councillors-to-dig-deeper-into-bills-for-building-social-homes

    The Scribblestown road PPP with Sisk is an example of this. Approx 225k per unit for build costs on the council land but the consortium manage the development and maintain and the state are due to pay 1 million a month for 25 years. The saving grace of this deal is the state get the asset ownership in 25 years but still an expensive build model but better than HAP. This looked quite a straightforward site


  • #1146
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Timing belt wrote: »
    What do you mean?

    Just seems from discussions on here like it was not long ago there was supposedly no issue with vacancies in Dublin which now has rapidly escalated to having a serious vacancy issue in common with all European cities.


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  • #1147
    MacronvFrugals
    Registered Users, Registered Users 2 Posts: 1,045 ✭✭✭MacronvFrugals


    Knex* wrote: »
    I believe it is an issue with REITS deliberately restricting supply to keep yields high


    Hibernia REIT owned these at the time of the article, i wonder whats the current status of them


    A Block of Homes in Dublin 4 Has Been Empty for Two Years



    https://www.dublininquirer.com/2019/11/20/a-block-of-homes-in-dublin-4-has-been-empty-for-two-years


  • #1148
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    schmittel wrote: »
    Just seems from discussions on here like it was not long ago there was supposedly no issue with vacancies in Dublin which now has rapidly escalated to having a serious vacancy issue in common with all European cities.

    I'm not convinced 2 or 3 specific high-end developments are particularly representative of the rental market in general. More so as we don't know the motivation of the REITS that own them.


  • #1149
    Ozark707
    Registered Users, Registered Users 2 Posts: 996 ✭✭✭Ozark707


    MacronvFrugals wrote: »
    Hibernia REIT owned these at the time of the article, i wonder whats the current status of them


    A Block of Homes in Dublin 4 Has Been Empty for Two Years



    https://www.dublininquirer.com/2019/11/20/a-block-of-homes-in-dublin-4-has-been-empty-for-two-years

    It looks like they have never taken down the To Let sign at least (I pass it regularly enough). Whether that is just laziness or it is genuinely still vacant I don't know.


  • #1150
    Ozark707
    Registered Users, Registered Users 2 Posts: 996 ✭✭✭Ozark707


    Graham wrote: »
    I'm not convinced 2 or 3 specific high-end developments are particularly representative of the rental market in general. More so as we don't know the motivation of the REITS that own them.

    I suspect it more than just 2 or 3 specific high end developments. The first 5 pages on daft have numerous examples which have been there for more than a year


  • #1151
    Timing belt
    Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭Timing belt


    schmittel wrote: »
    Just seems from discussions on here like it was not long ago there was supposedly no issue with vacancies in Dublin which now has rapidly escalated to having a serious vacancy issue in common with all European cities.

    Where did I say we have a serious vacancy issue.... I said it is a common issue in nearly all European cities. I showed where the vacant properties were concentrated in Dublin via a piece of analysis a while back. Unlike you I think we need to build to increase supply.... The Vacant properties are only a small amount in the grand scheme of things!!!!!


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  • #1152
    Marius34
    Registered Users, Registered Users 2 Posts: 1,173 ✭✭✭Marius34


    MacronvFrugals wrote: »
    Barcelona: Fill vacant rental units with tenants or we will take over your properties, the city is warning landlords.


    https://www.bloomberg.com/news/articles/2020-07-16/to-fill-vacant-units-barcelona-seizes-apartments


    Is vacant property an issue in Dublin? We only ever hear of these high end sites, it would be different if a normal block of apartments was lying empty but i don't think that's the case.

    Unlikely an issue. I'll say its more of an issue that there is low number of vacancy, and cities with high vacancy tend to be cheaper.
    There used to be lots articles about old vacant projects and ghost towns. Those days mostly gone, and people now able to find only recent high end built, with constantly mentioned the same few projects around city center. As it appears regular homes doesn't stay empty for long anymore.


  • #1153
    Ozark707
    Registered Users, Registered Users 2 Posts: 996 ✭✭✭Ozark707


    Timing belt wrote: »
    All European cities have this issue....

    Paris dealt with it via property tax
    https://www.fastcompany.com/3067918/paris-has-some-bad-news-for-people-who-keep-a-second-home-in-the-city

    Something like that would set the cat amongst the pigeons if it was implemented here...


  • #1154
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    Ozark707 wrote: »
    I suspect it more than just 2 or 3 specific high end developments. The first 5 pages on daft have numerous examples which have been there for more than a year

    As if they're trying to keep a constant flow of applicants for lever developments?


  • #1155
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Graham wrote: »
    I'm not convinced 2 or 3 specific high-end developments are particularly representative of the rental market in general. More so as we don't know the motivation of the REITS that own them.

    The motivation of the REITs is the million dollar question.

    The motivation of the small time landlord is easier to understand. The opportunity cost of keeping the property vacant is not significant, and it's currently not worth the hassle.


  • #1156
    MacronvFrugals
    Registered Users, Registered Users 2 Posts: 1,045 ✭✭✭MacronvFrugals


    The chief executive of Ires Reit, Ireland’s largest private landlord, said in late 2016, “We’ve never seen rental increases like this in any jurisdiction” and “I truly feel badly for the Irish people.” Over the next two years, rents nationwide rose about 14 percent, the government reported.

    https://www.nytimes.com/2019/08/08/world/europe/housing-crisis-ireland.html


  • #1157
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    MacronvFrugals wrote: »
    Barcelona: Fill vacant rental units with tenants or we will take over your properties, the city is warning landlords.


    https://www.bloomberg.com/news/articles/2020-07-16/to-fill-vacant-units-barcelona-seizes-apartments


    Is vacant property an issue in Dublin? We only ever hear of these high end sites, it would be different if a normal block of apartments was lying empty but i don't think that's the case.

    It's a huge issue.


  • #1158
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    schmittel wrote: »
    The motivation of the small time landlord is easier to understand. The opportunity cost of keeping the property vacant is not significant, and it's currently not worth the hassle.

    I guess there could be landlords still hoping to return to the STL market when things re-open. Personally I think suck landlords are being overly optimistic but that's an entirely different discussion.


  • #1159
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Ozark707 wrote: »
    Something like that would set the cat amongst the pigeons if it was implemented here...

    Could alleviate the housing crisis in a matter of months.


  • #1160
    PropQueries
    Registered Users, Registered Users 2 Posts: 2,203 ✭✭✭PropQueries


    Timing belt wrote: »
    Where did I say we have a serious vacancy issue.... I said it is a common issue in nearly all European cities. I showed where the vacant properties were concentrated in Dublin via a piece of analysis a while back. Unlike you I think we need to build to increase supply.... The Vacant properties are only a small amount in the grand scheme of things!!!!!

    It appears the belief that building more units to increase supply will resolve the “housing supply problem” won’t solve the problem either if the developers building them just leave the completed units empty anyway.

    It seems most countries in the developed world have recognised this problem and are aggressively acting to resolve the issue unlike Ireland for whatever reason.


  • #1161
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Graham wrote: »
    I guess there could be landlords still hoping to return to the STL market when things re-open. Personally I think suck landlords are being overly optimistic but that's an entirely different discussion.

    Presumably they'll be using all this WFH time to get their planning permission in order!


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  • #1162
    MacronvFrugals
    Registered Users, Registered Users 2 Posts: 1,045 ✭✭✭MacronvFrugals


    'Aggressive' site tax needed to force speculators to build
    The head of Nama dramatically accused funds, which his agency sold billions of euro worth of property assets to, of now hoarding the lands to beef up their profits.

    Just 6pc of land bought from Nama has been built on, according to CEO Brendan McDonagh, who was speaking at the launch of Nama's annual report yesterday.

    He said the agency had sold enough land to build 50,000 homes but so far only 3,000 had been delivered.

    https://www.independent.ie/business/irish/aggressive-site-tax-needed-to-force-speculators-to-build-35780690.html


    Is he referring to REITs in the above quote folks?


  • #1163
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Knex* wrote: »
    I believe it is an issue with REITS deliberately restricting supply to keep yields high

    Yep but the odd thing is that they are still buying. Keeping a proportion of units empty keeps the yield high per individual occupied unit, but if they are adding units and keeping some of them empty, they are reducing the yield on the total capital invested.

    You can argue that this is the trade off they are happy to accept for returns measured in capital appreciation.

    But if so, what is the end game? If they're chasing paper profits at some stage they'll want to bank them. Does not exactly scream long term commitment to rental market in Dublin.


  • #1164
    Villa05
    Registered Users, Registered Users 2 Posts: 4,909 ✭✭✭Villa05


    MacronvFrugals wrote:
    'Aggressive' site tax needed to force speculators to build

    So many supply side solutions yet the government feed the beast with more and more demand side incentives


  • #1165
    Timing belt
    Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭Timing belt


    PropQueries wrote: »
    It appears the belief that building more units to increase supply will resolve the “housing supply problem” won’t solve the problem either if the developers building them just leave the completed units empty anyway.

    It seems most countries in the developed world have recognised this problem and are aggressively acting to resolve the issue unlike Ireland for whatever reason.

    The RPZ's contribute to the issue... If they were not there a landlord would be more willing to rent at a lower price as he would not be locked in at a lower price.

    The vacant properties for Dublin is not abnormally high at least at the last census and as I have pointed out that even if all this was released onto the market it still would not be sufficient


  • #1166
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Timing belt wrote: »
    The RPZ's contribute to the issue... If they were not there a landlord would be more willing to rent at a lower price as he would not be locked in at a lower price.

    The vacant properties for Dublin is not abnormally high at least at the last census and as I have pointed out that even if all this was released onto the market it still would not be sufficient

    It's abnormally high for a city in a housing crisis.

    And it's not too far off the rate at which Paris thought it necessary to triple their vacant property tax.

    It's pretty high.


  • #1167
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    When it comes to new developments I suspect there's a few forces at play here:

    Yield management
    Not flooding the market when a new development is completed
    RPZs


  • #1168
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,697 ✭✭✭hometruths


    Graham wrote: »
    When it comes to new developments I suspect there's a few forces at play here:

    Yield management
    Not flooding the market when a new development is completed
    RPZs

    Yield management and RPZ are fairly correlated I would think.

    Why on earth would a REIT be worried about flooding the market when demand is at record levels? Doesn't make any sense at all.


  • #1169
    Browney7
    Registered Users, Registered Users 2 Posts: 3,100 ✭✭✭Browney7


    schmittel wrote: »
    Yep but the odd thing is that they are still buying. Keeping a proportion of units empty keeps the yield high per individual occupied unit, but if they are adding units and keeping some of them empty, they are reducing the yield on the total capital invested.

    You can argue that this is the trade off they are happy to accept for returns measured in capital appreciation.

    But if so, what is the end game? If they're chasing paper profits at some stage they'll want to bank them. Does not exactly scream long term commitment to rental market in Dublin.

    From reading the Kennedy Wilson Q3 report it seems they only have a 50% ownership of most of their Dublin residential holdings. It's a summary report so I know no more. 2020 year end reports will be interesting for IRES - they had a low vacancy in Q2 but 6 months is a long time in this pandemic so will be interesting to see any trends


  • #1170
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    schmittel wrote: »
    Why on earth would a REIT be worried about flooding the market when demand is at record levels? Doesn't make any sense at all.

    Local demand isn't the same as overall demand.

    I seriously doubt you're going to let 300 units simultaneously unless you take a serious hit on rents.

    Drip feeding them to market sounds like a sensible option. Even more so with a pandemic going on around us.


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  • #1171
    Browney7
    Registered Users, Registered Users 2 Posts: 3,100 ✭✭✭Browney7


    Timing belt wrote: »
    The RPZ's contribute to the issue... If they were not there a landlord would be more willing to rent at a lower price as he would not be locked in at a lower price.

    The vacant properties for Dublin is not abnormally high at least at the last census and as I have pointed out that even if all this was released onto the market it still would not be sufficient

    It was pointed out at the time of the RPZ legislation implementation that a literal reading of the legislation was that the 4% increase mechanism didn't apply to properties added to the market after the legislation was enacted. Not sure if this is still the case

    If rent inflation is below a certain % in an area for two years doesn't the RPZ disappear? (of course if it's likely to happen the gov will pass some other fudge)


This discussion has been closed.
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