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

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    #1862
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Whatever you or I think the reason may be one thing is for certain. It's not good for renters.


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    #1863
    PropQueries
    Registered Users Posts: 2,203 ✭✭✭PropQueries


    Graham wrote: »
    Whatever you or I think the reason may be one thing is for certain. It's not good for renters.


    Unless the demand from renters isn't as large as we're being told. I've not seen many queues of renters reported in the media over the past 3 years.


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    #1864
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    PropQueries wrote: »
    Unless the demand from renters isn't as large as we're being told.

    That's one theory.


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    #1865
    hometruths
    Registered Users, Subscribers Posts: 5,818 ✭✭✭hometruths


    Graham wrote: »
    Yet the small BTL landlords are leaving in droves and the REITS appear quite happy to stay where they are.

    Something else driving out the small BTL investors?

    If things go tits up the in small BTL investor will feel the pain personally. The REIT shareholders, rather than the execs, will feel the pain.


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    #1866
    Villa05
    Registered Users Posts: 4,534 ✭✭✭Villa05


    PropQueries wrote:
    You're right. The fact that the investors who purchased their investment properties between 2012 and 2014 can now sell then without incurring CGT

    If you purchased 2012/14 prices and have 2020 rents, where will you get the returns you are currently getting on the property.

    Would cgt exemption offset the massive returns you are achieving now



    Could the drop be linked to the Accidental landlord moving into positive equity


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    #1867
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Villa05 wrote: »
    Could the drop be linked to the Accidental landlord moving into positive equity

    I reckon it's a combination of factors.

    Imbalance of power between tenants/landlords
    Accidental landlords out of negative equity
    Landlords cashing out to avail of CGT exemptions

    All of which is likely to be exacerbated by some of the landlords who haven't received rent for months yet can't even begin an to get their property back.

    I don't think the rental market is going to be looking pretty in the second half of this year.


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    #1868
    hometruths
    Registered Users, Subscribers Posts: 5,818 ✭✭✭hometruths


    Villa05 wrote: »
    If you purchased 2012/14 prices and have 2020 rents, where will you get the returns you are currently getting on the property.

    Would cgt exemption offset the massive returns you are achieving now



    Could the drop be linked to the Accidental landlord moving into positive equity

    I suspect it s a combination of all of the above - cgt, accidental LLs moving into positive equity, but most of all I'd say it is a case of the risks currently outweigh the rewards.

    Unless you've large amounts of cash burning a hole in your bank account I think you'd be mad to be a BTL landlord now.


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    #1869
    Timing belt
    Registered Users Posts: 3,426 ✭✭✭Timing belt


    Graham wrote: »
    I reckon it's a combination of factors.

    Imbalance of power between tenants/landlords
    Accidental landlords out of negative equity
    Landlords cashing out to avail of CGT exemptions

    All of which is likely to be exacerbated by some of the landlords who haven't received rent for months yet can't even begin an to get their property back.

    I don't think the rental market is going to be looking pretty in the second half of this year.

    17% of residential rentals are 4/5 in arrears in USA... 10m that face the prospect of homelessness


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    #1870
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    schmittel wrote: »
    I suspect it s a combination of all of the above - cgt, accidental LLs moving into positive equity, but most of all I'd say it is a case of the risks currently outweigh the rewards.

    Unless you've large amounts of cash burning a hole in your bank account I think you'd be mad to be a BTL landlord now.

    When you say risk do you mean current restrictions around evictions due to COVID, tenants not paying rent etc? From what I have read laws and regs seemed to be changing a lot pre COVID with rent pressure zones and changes to legislation every year. This must be difficult to manage on an annual basis.... and a pain in the boll*x


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    #1871
    hometruths
    Registered Users, Subscribers Posts: 5,818 ✭✭✭hometruths


    Hubertj wrote: »
    When you say risk do you mean current restrictions around evictions due to COVID, tenants not paying rent etc? From what I have read laws and regs seemed to be changing a lot pre COVID with rent pressure zones and changes to legislation every year. This must be difficult to manage on an annual basis.... and a pain in the boll*x

    All risks - strengthening tenant laws, evictions bans whether covid related or not, diminishing capital gains, falling rents or rent freezes, political risks etc etc.

    I just think there are more headwinds than tailwinds facing the sector. I don't see too many positives.


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    #1872
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    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

    IRES current yield is 4.1 % , how come more money isnt buying this ?

    am i missing something , that seems like an excellent return considering the diversification , never mind not having to worry about rogue tenants or all the BS that goes with managing property

    is it a case of REIT,s being relatively new to this country that people dont know enough about them ?


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    #1873
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    I think the appeal of a physical asset in BTLs is part of the attraction for some. That and leverage. You can't get a mortgage to buy shares in a REIT.


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    #1874
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Graham wrote: »
    I think the appeal of a physical asset in BTLs is part of the attraction for some. That and leverage. You can't get a mortgage to buy shares in a REIT.

    thats true , perhaps the fact that IRES has been so poor at tracking the real property market is another reason ?

    its barely moved in three years where as property is way up


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    #1875
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Mad_maxx wrote: »
    its barely moved in three years where as property is way up

    steady and reliable dividends rather than capital appreciation. You're buying cashflow.


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    #1876
    Timing belt
    Registered Users Posts: 3,426 ✭✭✭Timing belt


    Mad_maxx wrote: »
    thats true , perhaps the fact that IRES has been so poor at tracking the real property market is another reason ?

    its barely moved in three years where as property is way up

    The other thing is that the shares are not that liquid


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    #1877
    combat14
    Registered Users Posts: 2,136 ✭✭✭combat14


    Mad_maxx wrote: »
    IRES current yield is 4.1 % , how come more money isnt buying this ?

    am i missing something , that seems like an excellent return considering the diversification , never mind not having to worry about rogue tenants or all the BS that goes with managing property

    is it a case of REIT,s being relatively new to this country that people dont know enough about them ?

    perhaps the reits have to by law pay out a significant portion of profits to shareholders each year and then investors have to pay very high tax on that ..?


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    #1878
    Villa05
    Registered Users Posts: 4,534 ✭✭✭Villa05


    Mad_maxx wrote:
    IRES current yield is 4.1 % , how come more money isnt buying this ?


    Is that a good return though, these reits started when property prices were much lower. Alot of their portfolios were purchased at knockdown/ fires ale prices.

    Is the growth/high returns phase over?


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    #1879
    hometruths
    Registered Users, Subscribers Posts: 5,818 ✭✭✭hometruths


    Villa05 wrote: »
    Is that a good return though, these reits started when property prices were much lower. Alot of their portfolios were purchased at knockdown/ fires ale prices.

    Is the growth/high returns phase over?

    surely unlikely to see the same level of growth in the near term.

    be interesting to know what their long term plans are.

    if stories of reits buying properties and keeping them vacant to prop up rents in tenanted units are true it sounds like they might have one eye on the exit doors.


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    #1880
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Graham wrote: »
    steady and reliable dividends rather than capital appreciation. You're buying cashflow.

    the dividend is of course excellent but could it be argued that a REIT is not really a proper way to track the overall market , thats fine but they are sort of marketed as being a way for anyone to invest in BTL ?


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    #1881
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Timing belt wrote: »
    The other thing is that the shares are not that liquid

    Horribly so


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    #1882
    Timing belt
    Registered Users Posts: 3,426 ✭✭✭Timing belt


    Villa05 wrote: »
    Is that a good return though, these reits started when property prices were much lower. Alot of their portfolios were purchased at knockdown/ fires ale prices.

    Is the growth/high returns phase over?

    Have a look at slide 10

    https://investorrelations.iresreit.ie/sites/ires-ir/files/2021-01/davy-conference-presentation.pdf


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    #1883
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Villa05 wrote: »
    Is that a good return though, these reits started when property prices were much lower. Alot of their portfolios were purchased at knockdown/ fires ale prices.

    Is the growth/high returns phase over?

    yet the share price has barely moved and last March was at an all time low


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    #1884
    Timing belt
    Registered Users Posts: 3,426 ✭✭✭Timing belt


    Mad_maxx wrote: »
    Horribly so

    was just looking at the order book for today 9 orders open. 2 Bid's of 1.32 and 7 ask price ranging from 1.45-1.80 :eek::eek:

    The buyers and sellers are no where near each other.


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    #1885
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Timing belt wrote: »
    was just looking at the order book for today 9 orders open. 2 Bid's of 1.32 and 7 ask price ranging from 1.45-1.80 :eek::eek:

    The buyers and sellers are no where near each other.

    which REIT is that ?

    Ires ranged between 1.39 and 1.43 today


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    #1886
    Timing belt
    Registered Users Posts: 3,426 ✭✭✭Timing belt


    Mad_maxx wrote: »
    which REIT is that ?

    Ires ranged between 1.39 and 1.43 today

    https://live.euronext.com/en/product/equities/IE00BJ34P519-XMSM


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    #1887
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Timing belt wrote: »
    https://live.euronext.com/en/product/equities/IE00BJ34P519-XMSM

    im confused reading that , i always just went by the range and that still reads 1.39 - 1.43 unless yahoo finance is incorrect ?

    the stock has never reach 1.80 so its meaningless is someone was asking that amount ?


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    #1888
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Mad_maxx wrote: »
    the dividend is of course excellent but could it be argued that a REIT is not really a proper way to track the overall market , thats fine but they are sort of marketed as being a way for anyone to invest in BTL ?

    Can't say I've ever thought of REITs as anything other than buying future cashflow. Only really suitable if you've got cash and you're looking for a steady longterm return.


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    #1889
    Timing belt
    Registered Users Posts: 3,426 ✭✭✭Timing belt


    Mad_maxx wrote: »
    im confused reading that , i always just went by the range and that still reads 1.39 - 1.43 unless yahoo finance is incorrect ?

    what they are showing are the open orders that have not been filled at the end of the day.

    There was only 3 main trades during the day and all need a broker from the looks of it.
    115k shares @ 12:20 1.42 and 10k x 2 09:23 1.429


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    #1890
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Timing belt wrote: »
    what they are showing are the open orders that have not been filled at the end of the day.

    There was only 3 main trades during the day and all need a broker from the looks of it.
    115k shares @ 12:20 1.42 and 10k x 2 09:23 1.429

    Thought all trades always need a broker?


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    #1891
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Graham wrote: »
    Can't say I've ever thought of REITs as anything other than buying future cashflow. Only really suitable if you've got cash and you're looking for a steady longterm return.

    Cash can also buy actual BTL property

    Which is better, REITs or a BTL purchased with cash ?

    I'm not sure ,suppose they both have there advantages and disadvantages


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