Graham wrote: » I've no doubt REITs are taking up some of the slack from departing private landlords and reducing the reliance on private landlords was one of the aims of the tax treatment. Problem 1 is private landlords are leaving faster than their rental properties are being replaced (by REITs). Problem 2 is the REITS are obviously concentrating on the most profitable cities. Problem 3 is the REITs are concentrating on the higher end of the market.
schmittel wrote: » I agree. I suspect the volume will be large enough that govt has another problem on their hands here, knowing there is a record number of tenancies about to be terminated in one go. Very difficult for them to handle the fallout.
JimmyVik wrote: » One micro market is the council. Micro might be a bit much, they are significant. And I think a major cause of both rent and purchase price rises. Rent rising costs the govt a lot less than it costs the average punter. The govt get half the higher rent in tax for a start. Then when they pay out rent to a private landlord for social welfare, they get half that back in tax anyway. A nice little con they have going on. I know one person who sold their rental about 2 years ago. It was a 2 bed apartment. One of the couples who were renting it we were having a baby so moved out. The other couple moved out about 3 months later. As soon as it was empty he put it on the market. When he put it on the market the council contacted him and offered to buy it. He accepted. There is now one very noisy and annoying woman living in the apartment on her own. He also owns the apartment beside it and has decided to sell that as soon as the current tenants moves out, which he thinks will be soon, because the one next is making their lives hell. He will offer it to the council first. If not he will put it on the market.
fago wrote: » These properties don't disappear into the ether so surely they help the apt/starter home market. I read all of the 2021 predictions/shills and don't recall any of the same agents mentioning supply being helped by the increase in rentals for sale. I've seen one auctioneer in a local paper predict flat for 2021, but then 4% in a national paper. Even within Ireland there's a good few micro markets, in my opinion you re best off understand where you are buying what sells, what struggles and watch the PPR.
Graham wrote: » Can't say I've looked but previous landlord-exit figure were at the lower end of the scale and more likely to be mixed with higher volumes of standard residential transactions. If an EA is getting two-thirds of current listings as a result of landlord-exits, it's going to be a lot more noticeable.
schmittel wrote: » Recently yes, but this has been going on for a few years. Were EAs saying this in 2018/9?
Graham wrote: » Some EAs have already reported a very significant proportion of their sales are a result of landlords exiting the market.
schmittel wrote: » If 5-8k rentals have been leaving the market per annum, that's equivalent of about 10% of annual sales volume. But with supply at historic lows it is clear they have not been entering the sales market. What's happening to all these properties?
PropQueries wrote: » No, I think you're right in relation to the small BTL landlords. I think someone here said before that REITS operate under a smaller yield so when discussing the REITS I stuck with the lower figure.
combat14 wrote: » always thought historic rental yields were at least 6% has that changed ..?
PropQueries wrote: » If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO Rent of €20,000 at 3,5% yield values the property at c. €600k Rent of €15,000 at 3.5% yield values the property at c. €400k They could lose c. €200k just by lowering the rent by €5k. They really are better off keeping them vacant and pretending they’re worth something, in the short-term at least. Unless there’s a very real upfront cost to keeping them vacant I.e. a vacant property tax
mcsean2163 wrote: » Stock market, capital gains tax is less
PropQueries wrote: » If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO Rent of €20,000 at 3,5% yield values the property at c. €600k Rent of €15,000 at 3.5% yield values the property at c. €400k They could lose c. €200k just by lowering the rent by €5k.
PropQueries wrote: » It 100% has got nothing to do with the “low” levels of returns in the Irish rental market IMO.
PropQueries wrote: » If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO Rent of €20,000 at 3,5% yield values the property at c. €600k Rent of €15,000 at 3.5% yield values the property at c. €400k They could lose c. €200k just by lowering the rent by €5k. They really are better off keeping them vacant and pretending they’re worth something, in the short-term at least. Unless there’s an opportunity cost to keeping them vacant I.e. a vacant property tax
Graham wrote: » And yet we're losing landlords and tenancies at a rate of knots. So either your hypothesis isn't reflective of the reality, or the landlords leaving the market have got it all wrong.
Timing belt wrote: » If rental yields are so high compared to other asset classes then the institutional investors have the ability to develop property that was previously deemed to expensive to invest in or cut rents.... but don't see rents being cut.
PropQueries wrote: » The rental yields are so high in this country, a tenant would have to get away with not paying rent for at least the next 5 years to make it a problem for any landlord who purchased their RIP for cash IMO.
PropQueries wrote: » I’d say it’s more to do with the landlords who purchased between 2012 and 2014 and can now sell without paying CGT. Even if a tenant hadn’t paid any rent for 10 months in 2020, the landlord would be still better off than if he had sold last January and placed the proceeds in the bank. He could have risked it in the S&P and got. c. 2% with significant more risk attached. The rental yields are so high in this country, a tenant would have to get away with not paying rent for at least the next 5 years to make it a problem for any landlord who purchased their RIP for cash IMO.
Graham wrote: » Given the volumes of landlords leaving the markets that doesn't appear to be a significant enough motivator to stay in the market. I assume it will matter even less to any landlord that's spent the guts of the last year providing private COVID support to tenant/s unable to pay rent.
PropQueries wrote: » But what could they invest the proceeds in to get a similar return and also pay less tax? Also, how many landlords are selling because they bought between 2012 and 2014 and can now sell without paying CGT? There should be a lot more landlords selling up and leaving the market than there currently are based on those purchases between 2012 and 2014 alone which IMO would mean the returns of being a landlord in Ireland at the moment must be exceptional.
PropQueries wrote: » But what could they invest the proceeds in to get a similar return and also pay less tax?
Graham wrote: » I'm sure some landlords thinking about exiting the market would be incentivised to stay if tax rates were adjusted in their favour. Better solution may be to address the imbalance.
PropQueries wrote: » Also, the decline in the number of registered landlords is not as correlated with the decline in the number of available rental properties as in the past due to the rise of the more professional landlord who own several rental properties instead of one or two.
Villa05 wrote: » The article does mention tax as a factor. Do you think the perceived landlord/tennant imbalance would be cushioned if reits and private landlords had tax equality ie both pay 25% That would be significant gain for the private landlord
Graham wrote: I think it's fair to say most private landlords aren't leaving the market because of the tax treatment of REITs anyway. More the imbalance in the landlord/tenants rights and to a lesser extent the now counterproductive RPZs.
Graham wrote: » I strongly suspect the reason it's not mentioned is because it's not happening. The number of private tenancies has been decreasing by 5000 - 8000 a year for the last few years.
Fuzzy_Dunlop wrote: » Is this in Dublin?
