Timing belt wrote: The point I have been making is that institutional investors will pile in to property with yields like that which will push up prices and push yields lower.
PropQueries wrote: » Thanks for that. It's just a few posters were stating that the yield accepted by these large funds was much lower than the yield acceptable to the small BTL landlord. Made sense given the amount of money flowing their way. But, apparently the funds are achieving near enough the same yield as the small BTL landlord which means there's no incentive for either to be leaving the market at the moment unless they believe both rents and property values will collapse in the near future. Ires Reit's Gross Yield in 2020 was 5.7%. Link here: https://investorrelations.iresreit.ie/sites/ires-ir/files/reports-presentation/presentations/interim-results-2020.pdf
combat14 wrote: » the trouble is if rental yield is 6.64% which apparently is average rental yield here - According to the Business Insider, Ireland is the eighth best country to invest in rental property, with an average rental yield of 6.64%https://www.4property.com/top-rental-yields-in-dublin/#:~:text=According%20to%20the%20Business%20Insider,average%20rental%20yield%20of%206.64%25. aforementionned properties are worth a lot less at same rents: Rent of €20,000 at 6,64% yield values the property at c. €300k Rent of €15,000 at 6.64% yield values the property at c. €225k but maybe everyone is happier with lower yields in current risk free environment
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
Balluba wrote: » Mic what goes up eventually comes down so I will just bide my time and not bid on houses recklessly
My understanding was that prices (in Dublin anyway) had flat-lined or were falling since c. 2018 up to year end 2019?
Mic 1972 wrote: » it doesn't come as a surprise to me. prices were already increasing before, but now they are crazy
Graham wrote: » Thanks, Reins. I stand corrected. So we have one EA saying a third and and another over three-quarters. It doesn't take much to work out it's not good for renters and it demonstrates that ex-rentals are returning to the market.
Reins wrote: » https://www.businesspost.ie/houses/rents-set-to-rise-again-as-increasing-numbers-of-landlords-sell-up-a9def7e0 It says a third of its sales
Graham wrote: » I vaguely recall it was Sherry Fitz who said two thirds of their listings are landlords selling up but can't find the article. It was discussed earlier in the thread. Similar commentary from another agent but with an even higher proportion: Does go on to suggest some investors are coming back slowly.
CorkRed93 wrote: » "With the supply of properties for sale at a record low and robust demand, we now expect prices to grow this year by 4pc, a significant change from our previous estimate of -2pc"https://www.independent.ie/business/irish/recovery-in-consumer-spending-will-be-swift-40005813.html
schmittel wrote: » What EA is getting 2/3?
Not surprisingly then that landlords selling up accounted for 78pc of the sales of estate agent Owen Reilly through the last 12 months.
JimmyVik wrote: » This kind of think happens with every election in the US. At the end of the day, nothing changes in Ireland that isnt related to the government interfering with the property market. They are the single biggest force acting on it. Anything else doesnt really change. Even Brexit I think will have little impact on the property market. And I think COVID-19 has a big impact on it now, I think that ompact will go away , with the virus. Then its steady as she goes, until the next hair brained domestic rocket up the hole of the irish market.
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.
Graham wrote: Aren't most REITs looking for steady cashflow rather than increased share price / underlying asset value?
Browney7 wrote: » You stated "there is no investment riskier than being a private landlord". Was that a 100k apartment on a standalone property with no loan or a 100k deposit with a 200k loan. It's unfair to compare a leveraged investment with an unleveraged one.
PropQueries wrote: » How do people believe this may impact the manufacturing FDI jobs in Ireland going forward and hence the demand for future housing in the areas where these facilities are currently operating from? For example, would it also apply to pharma supplies which would impact future housing demand in rural areas more so than Dublin? According to the FT today: "Biden set for ‘buy American’ push to boost domestic manufacturing. US president Joe Biden is set to tighten “buy American” provisions as part of a push to boost domestic manufacturing, in a move that risks straining relations with key US allies. Mr Biden is on Monday expected to order an increase in domestic content requirements for federal procurement contracts, following a campaign pledge to boost the US manufacturing industry as he aimed to outflank Donald Trump in key swing states. Administration officials said Mr Biden would also reiterate his support for the Jones Act, which requires goods shipped within the US to be transported on American vessels." You can read the article in the FT here: https://www.ft.com/content/5cb92834-ddba-4d34-ab8d-cbf11305a888
Browney7 wrote: » One man's blame is another man's credit. I thought from the talk on this forum is it's Sinn Féin's fault for the high prices and high rents and housing shortage. Plenty blame to go round these days!
JimmyVik wrote: » Leverage? And you want to talk about risk? You go do that. Make yourself rich if you think its so easy.
JimmyVik wrote: » Wasnt it on FFs watch that the push to make it the norm for two people to be working to afford a house was made. What did they think was going to happen to prices? Oh of course , they knew. The blame is totally with FF if you ask me.
Browney7 wrote: » Were you adding leverage to your initial 100k and didn't you assess the risk of borrowing a similar level of cash with your 100k to add to the equity market investment for your comparison? As a rough Proxy, IRES REIT is roughly flat from this time three years ago with a 4% gross div p.a. yield or so over that time. Eurostoxx 50 is also flat with a lower dividend yield whilst S&P 500 is up about 35% (adjusted for currency) before dividends. A lot of that S&P growth driven by FAANG and tech stocks over the past nine months. Nice gain on your S&P 500
MacronvFrugals wrote: » Darragh O'Brien: Ambitious aims and imaginative solutions can solve housing woes Darragh O Brien in the Examiner this morning speaking to the 18/35s demo - https://www.irishexaminer.com/opinion/commentanalysis/arid-40212971.html The increase in the average age of buying a home from 26 in 1991 to 35 today reflects the much harder path that young people must travel to own their own place. This is a demographic financial time-bomb when these households retire and need state support for their rent. The political implications of the age divide can be seen in a more profound crisis of democratic legitimacy.
PropQueries wrote: » Ok, according to the RTB, the number of registered private landlords in Q3 2020 was 166,615 and in Q3 2017, it was 176,251, so a fall of c. 20,000 over 3 years. Isn't it a real possibility that the investors who purchased properties between 2012 and 2014 to avail of the CGT tax exemption from 2018 onwards (i.e. they can now sell without paying CGT) are now a significant percentage of these sellers? i.e. it's not the "unfair" tax system, but more due to cashing in their profits from their investments during 2012 and 2014.
He said: "For about 20 years, every single year, the total number of rental tenancies registered with the Rental Tenancies Board [RTB] increased right up until 2016 — partly because there were tax breaks during the Celtic Tiger era. "What happened literally from quarter one of 2017, every single quarter since then — 2017, 2018, 2019, and 2020 — has seen a loss of tenancies."
JimmyVik wrote: » There is no investment that is more risky than being a private landlord in Ireland. I had about €100k ready to invest 3 years ago. I wanted to invest it in an investment property in Ireland. While i did my research I left it in ETFs. S&P and world UCITS. I probably could have found a more tax efficient way to invest it, but that was nice and easy. Anyway I couldnt make the risk/reward on residential property work for me so i left it there. I am glad now that it worked out that way.
Data from the US and UK show that millennials are financially worse off than their parents were at the same age after housing costs are factored into account. More diverse, liberal and better educated than any previous generation, they are also faced with the bleakest economic prospects and an increasingly greasy housing ladder. Covid-19 has had a disproportionate impact on them.
The increase in the average age of buying a home from 26 in 1991 to 35 today reflects the much harder path that young people must travel to own their own place. This is a demographic financial time-bomb when these households retire and need state support for their rent. The political implications of the age divide can be seen in a more profound crisis of democratic legitimacy.
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.
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
