2021 Irish Property Market chat - mod warnings post 1

MacronvFrugals · 18-01-2021 12:43AM

From Fine Gael's 2011 manifesto

10 years on could we say the intention of this policy was a success?

Kick-Starting the Property Market: Getting the property market functioning properly again is a condition
of strong economic recovery. This will require MAMA to dispose of property assets secured from developers
in default of their loans into the priwte sectoras quickly as possible. We are open to considering new types
of investment vehicles such as us style Real Estate Investment Trusts , that can help create a new, liquid
investment market in commercial property for Irish pension funds and smaller investors.

hometruths · 18-01-2021 12:50AM

Graham wrote: »

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.

Granted not in a pandemic. But this vacancy thing predates the pandemic.

When we have reports of up to 100 people attending single viewings It suggests renting 300 units would not be difficult.

HansKroenke · 18-01-2021 12:54AM

Notwithstanding the vacant units, prepare to see a significant increase in institutional activity in the residential sector in Ireland. Demand is going to bounce back in Q2 this year as it is clear central banks are going to try to slowly take the foot off the QE gas which means the cheap money and low interest rates will remain as part of the genesis of the post-covid recovery. We still have a lot of demand for rentals in particular in Ireland and it is clear that the current government are going to continue along the path of bringing in the institutional cash (which at least offloads the risk from the Irish tax payer should the whole thing crash) which means it is a win win for investors; demand will bring yield and the property will be a good inflation hedge.

Timing belt · 18-01-2021 12:57AM

schmittel wrote: »

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.

The central bank assume a healthy property market would have vacant properties of 6%.....Dublin had a overall vacancy rate of 7% in the 2016 census.

The figures for Dublin at the 2016 census showed 35,293 vacant properties (including stock for rent and sale) in Dublin even if all of these were released onto the housing market and there was no stock for rent or sale we would still need to build to deal with the housing crisis.

Timing belt · 18-01-2021 01:00AM

HansKroenke wrote: »

Notwithstanding the vacant units, prepare to see a significant increase in institutional activity in the residential sector in Ireland. Demand is going to bounce back in Q2 this year as it is clear central banks are going to try to slowly take the foot off the QE gas which means the cheap money and low interest rates will remain as part of the genesis of the post-covid recovery. We still have a lot of demand for rentals in particular in Ireland and it is clear that the current government are going to continue along the path of bringing in the institutional cash (which at least offloads the risk from the Irish tax payer should the whole thing crash) which means it is a win win for investors; demand will bring yield and the property will be a good inflation hedge.

100% correct but there is limited supply for them to buy so we will see them building..... The QE makes projects that were previously to expensive and risky to build an option as investors will settle for a overall yield as it is still impressive to other asset classes.

hometruths · 18-01-2021 01:05AM

Timing belt wrote: »

The central bank assume a healthy property market would have vacant properties of 6%.....Dublin had a overall vacancy rate of 7% in the 2016 census.

The figures for Dublin at the 2016 census showed 35,293 vacant properties (including stock for rent and sale) in Dublin even if all of these were released onto the housing market and there was no stock for rent or sale we would still need to build to deal with the housing crisis.

If a healthy property market has a 6% vacancy rate what vacancy rate would you expect in one suffering from a chronic shortage of housing stock?

Less than 6%. Hence 7% is abnormally high under the circumstances.

HansKroenke · 18-01-2021 01:08AM

schmittel wrote: »

If a healthy property market has a 6% vacancy rate what vacancy rate would you expect in one suffering from a chronic shortage of housing stock?

Less than 6%. Hence 7% is abnormally high under the circumstances.

It's a bit of a loaded question there.

Is less than 6% actually healthy or just normal in some markets where there are dozens or hundreds of other relevant variables? And what does a "chronic shortage of housing" actually mean?

Marius34 · 18-01-2021 01:14AM

Timing belt wrote: »

The central bank assume a healthy property market would have vacant properties of 6%.....Dublin had a overall vacancy rate of 7% in the 2016 census.

The figures for Dublin at the 2016 census showed 35,293 vacant properties (including stock for rent and sale) in Dublin even if all of these were released onto the housing market and there was no stock for rent or sale we would still need to build to deal with the housing crisis.

I believe is normal international cities to have higher temporal vacancy. The more international city, the more movement you can expect, as people are more active, and there are more movement.
I don't see the point why to count temporal vacancy, properties ready for demolition, properties under construction. How you can release it, for that temporal vacancy period? Give a fine if person leaves home for a week? Give a fine if construction company delivered house 3 months after roof got constructed? Give a fine if person took 3 months to move in after he received keys?

hometruths · 18-01-2021 01:14AM

HansKroenke wrote: »

It's a bit of a loaded question there.

Is less than 6% actually healthy or just normal in some markets where there are dozens or hundreds of other relevant variables? And what does a "chronic shortage of housing" actually mean?

To be clear - I don’t believe their is a chronic shortage of housing stock. If there was such a shortage our vacancy figures would be about half of what they actually are.

Timing belt · 18-01-2021 01:17AM

schmittel wrote: »

To be clear - I don’t believe their is a chronic shortage of housing stock. If there was such a shortage our vacancy figures would be about half of what they actually are.

are you saying that there is no need to build new properties because you believe that we have enough?

hometruths · 18-01-2021 01:23AM

Timing belt wrote: »

are you saying that there is no need to build new properties because you believe that we have enough?

I am saying we don’t have a crisis. We don’t need to build 30k a year or 50k a year or whatever the latest loony figures thrown about are.

I am saying we don’t need to focus all energies on build, build, build as we are currently doing.

That is different to saying we don’t need to build anything.

Timing belt · 18-01-2021 01:49AM

schmittel wrote: »

I am saying we don’t have a crisis. We don’t need to build 30k a year or 50k a year or whatever the latest loony figures thrown about are.

I am saying we don’t need to focus all energies on build, build, build as we are currently doing.

That is different to saying we don’t need to build anything.

You advocate lower property prices so how do you achieve this with your vacant properties?

I am of the opinion that the more we build the lower prices in rent and property prices will be in the long term. I have shared the research papers that back up this opinion https://research.stlouisfed.org/wp/more/2020-047

Even if property developers are keeping properties of the rental market they will be less reluctant to do that if there is an increase in supply coming.

Timing belt · 18-01-2021 01:54AM

Marius34 wrote: »

I believe is normal international cities to have higher temporal vacancy. The more international city, the more movement you can expect, as people are more active, and there are more movement.
I don't see the point why to count temporal vacancy, properties ready for demolition, properties under construction. How you can release it, for that temporal vacancy period? Give a fine if person leaves home for a week? Give a fine if construction company delivered house 3 months after roof got constructed? Give a fine if person took 3 months to move in after he received keys?

This is what I found on the internet for vacancy levels for major cities

hometruths · 18-01-2021 01:58AM

Timing belt wrote: »

You advocate lower property prices so how do you achieve this with your vacant properties?

I am of the opinion that the more we build the lower prices in rent and property prices will be in the long term. I have shared the research papers that back up this opinion https://research.stlouisfed.org/wp/more/2020-047

Even if property developers are keeping properties of the rental market they will be less reluctant to do that if there is an increase in supply coming.

My vacant properties?

I am against prices being sustained artificially high, rather than an advocate of lower prices for the sake of them.

hometruths · 18-01-2021 02:00AM

Timing belt wrote: »

This is what I found on the internet for vacancy levels for major cities

Source?

MacronvFrugals · 18-01-2021 02:02AM

Timing belt wrote: »

I am of the opinion that the more we build the lower prices in rent and property prices will be in the long term.

Wasn't it John Maynard Keynes who said "In the long run (term) we are all dead"

Timing belt · 18-01-2021 02:55AM

Vacancy Rates by EU Country

2011 census data (This is the most recent data that I can find on the EUROSTAT website that shows all countries and regions)

(Source: https://ec.europa.eu/eurostat/databrowser/view/CENS_11DWOB_R3__custom_463235/default/table?lang=en))

Timing belt · 18-01-2021 03:08AM

To see the vacancy rate for any US city on yearly basis up-to 2018 go to Table 5. Gross Vacancy Rates by State the source is the US CENSUS website.

The Vacancy rates for the USA as a total is as follows:

Source
Fred - the equivalent of Eurostat for USA

Link:
https://fred.stlouisfed.org/series/ETOTALUSQ176N

If you click on this link it will show you the total housing stock.
If you then go to edit Graph and
1) add the data source Housing Inventory Estimate: Vacant Housing Units for the United States,
2) divide the vacant housing units by total housing stock to give you the vacant rate as shown in the above chart

Timing belt · 18-01-2021 04:26AM

Timing belt wrote: »

Vacancy Rates by EU Country

2011 census data (This is the most recent data that I can find on the EUROSTAT website that shows all countries and regions)

(Source: https://ec.europa.eu/eurostat/databrowser/view/CENS_11DWOB_R3__custom_463235/default/table?lang=en))

If you want to see more up-to date data for each country you can find it on there national statistics website
e.g.
Germany - https://www.destatis.de/EN/Themes/Society-Environment/Housing/Tables/vacancy-rate.html

France

https://www.insee.fr/en/statistiques/serie/001687214#Telechargement

Metropolitan France
Total Stock Vacancy Vacancy rate

2020 36054 P 2998 P 8.32%
2019 35687 P 2939 P 8.24%
2018 35333 P 2882 P 8.16%
2017 34981 A 2826 A 8.08%
2016 34646 A 2783 A 8.03%
2015 34307 A 2718 A 7.92%
2014 33943 A 2647 A 7.80%
2013 33575 A 2570 A 7.65%
2012 33212 A 2482 A 7.47%
2011 32860 A 2386 A 7.26%
2010 32520 A 2304 A 7.08%
2009 32174 A 2208 A 6.86%
2008 31819 A 2104 A 6.61%
2007 31449 A 2014 A 6.40%
2006 31060 A 1949 A 6.27%
2005 30687 A 1920 A 6.26%
2004 30339 A 1926 A 6.35%
2003 29994 A 1931 A 6.44%
2002 29660 A 1954 A 6.59%

Billythekid19 · 18-01-2021 09:06AM

Fairly mixed predictions in todays papers for property prices 2021:
Irish Times- Irish house prices set to rise by 4% in 2021, surveyors say
Examiner- Munster house prices expected to increase by 5% this year
Irish Independent- House prices to rise by up to 6pc as more people work from home

bilbot79 · 18-01-2021 09:36AM

Billythekid19 wrote: »

Fairly mixed predictions in todays papers for property prices 2021:
Irish Times- Irish house prices set to rise by 4% in 2021, surveyors say
Examiner- Munster house prices expected to increase by 5% this year
Irish Independent- House prices to rise by up to 6pc as more people work from home

I find some articles say people are moving out of Dublin, driving up the national house price while another would say 'we see no evidence of flight from Dublin to the country' yada yada yada

HansKroenke · 18-01-2021 10:08AM

bilbot79 wrote: »

I find some articles say people are moving out of Dublin, driving up the national house price while another would say 'we see no evidence of flight from Dublin to the country' yada yada yada

"Resilience" is the word I see most in the sponsored articles across the media.

JimmyVik · 18-01-2021 10:11AM

bilbot79 wrote: »

I find some articles say people are moving out of Dublin, driving up the national house price while another would say 'we see no evidence of flight from Dublin to the country' yada yada yada

Thats because nobody actually knows.
Well noone whos not retired off their property prediction fortune already and living in the Bahamas. So that would be none of us in this thread then

tigger123 · 18-01-2021 10:24AM

https://www.irishtimes.com/news/environment/days-of-three-bed-semis-in-dublin-are-over-as-high-density-housing-plans-take-hold-1.4460746

Really interesting, and great to see tbh;

"The days of the three-bed semi-detached house “are over” in Dublin, the city council’s most senior planner has said, as work gets under way on plans for new high-density neighbourhoods across the capital."

Villa05 · 18-01-2021 10:39AM

Marius34 wrote:

I believe is normal international cities to have higher temporal vacancy. The more international city, the more movement you can expect, as people are more active, and there are more movement. I don't see the point why to count temporal vacancy, properties ready for demolition, properties under construction. How you can release it, for that temporal vacancy period? Give a fine if person leaves home for a week? Give a fine if construction company delivered house 3 months after roof got constructed? Give a fine if person took 3 months to move in after he received keys?

Can you explain why one landlord/investment trust would have a vacancy rate of greater than 50% on a development in a City with an apparent housing crisis?

Can you explain why same would be getting preferential tax treatment from the state?

It does seem a bit of an obscene situation

Cyrus · 18-01-2021 10:44AM

Billythekid19 wrote: »

Fairly mixed predictions in todays papers for property prices 2021:
Irish Times- Irish house prices set to rise by 4% in 2021, surveyors say
Examiner- Munster house prices expected to increase by 5% this year
Irish Independent- House prices to rise by up to 6pc as more people work from home

maybe mixed but they are all forecasting increases

PropQueries · 18-01-2021 10:51AM

Villa05 wrote: »

Can you explain why one landlord/investment trust would have a vacancy rate of greater than 50% on a development in a City with an apparent housing crisis?

Can you explain why same would be getting preferential tax treatment from the state?

It does seem a bit of an obscene situation

As one poster recently made the point, once interest rates move up to zero, not 1%, 4% etc. but zero, the investors sitting on these vacant properties will start demanding some level of return i.e. they will have to/be forced to rent them out.

It would appear there is a big supply of currently vacant properties ready to re-enter the market in such a scenario. And we still built c. 20,000 additional units in 2019 and 2020 and most likely another c. 20,000 in 2021 and most likely another 20,000 again in 2022.

If these investors are sitting on properties hoping for a return to normal in 2022, they may be surprised by the amount of supply that already exists that might also be ready to flood the market around the same time.

While the number of economists predicting a rise in interest rates in the near future are currently in the minority, they do exist and they’re not some crank economists, but some of the more respected ones and their theories are gaining ground contrary to popular opinion.

Timing belt · 18-01-2021 11:02AM

PropQueries wrote: »

As one poster recently made the point, once interest rates move up to zero, not 1%, 4% etc. but zero, the investors sitting on these vacant properties will start demanding some level of return i.e. they will have to/be forced to rent them out.

Which poster said this as I know I mentioned rates going to zero would cause issues for company's, governments, mortgage holders would have major difficulty with debt repayments.

Marius34 · 18-01-2021 11:13AM

Villa05 wrote: »

Can you explain why one landlord/investment trust would have a vacancy rate of greater than 50% on a development in a City with an apparent housing crisis?

Can you explain why same would be getting preferential tax treatment from the state?

It does seem a bit of an obscene situation

I have seen no information about it, why some takes longer to fill up empty properties, others quicker. I'm not a fan of conspiracy, thus can't answer your question, nor I'm interested in unique high end properties, for me it's more important what's going on with majority regular properties, as that's where regular citizens live.

Timing belt · 18-01-2021 11:17AM

Marius34 wrote: »

I have seen no information about it, why some takes longer to fill up empty properties, others quicker. I'm not a fan of conspiracy, thus can't answer your question, nor I'm interested in unique high end properties, for me it's more important what's going on with majority regular properties, as that's where regular citizens live.

Which landlord has 50% occupancy?

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

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2021 Irish Property Market chat - mod warnings post 1