2021 Irish Property Market chat - mod warnings post 1

PropQueries · 03-02-2021 04:32PM

Timing belt wrote: »

So now you are arguing that the shared ownership scheme will lower second hand home's where as before you were arguing that all house prices will go up as a result.... Can you please confirm/clarify that you h you think house prices (with the exception of new builds) will decline because of this.

It will increase the price of new builds (isn't that the idea? Higher profit margins apparently means developers will build more which is why absolutely no houses were built between 2015 and 2020... in jest to make the point) but lower the price of second hand homes.

Plus, it's a bit of a con-job really IMO. If the whole purpose of the proposed co-ownership scheme is to increase house building and hence lower house prices and it succeeds, that would mean the first applicants to use the scheme are guaranteed to lose money.

Timing belt · 03-02-2021 04:38PM

Browney7 wrote: »

Whilst 75m seems small, if everyone got a 100k more, that would be 750 first time buyers and if on average it was only 50k more you'd be looking at 1500. Considering just under 6500 new build properties were purchased by FTBers in 2020 (unsure if there is an adjustment for self builds in these figures), it's not an insignificant meddling with the FTB demand side

I have always said that as soon as the government interfere with the market they create two problems for every one problem they solve.

What will be interesting is if there is restrictions on the scheme to specific builds... If there is and it is mid rise apartments in areas that would have difficulty selling without the scheme then this is a total con and brown envelopes must have been past around.

hometruths · 03-02-2021 04:41PM

Timing belt wrote: »

There are People who don't care about ongoing cost.... they care about having a bigger better property that the next guy. Just look at the car market to see that people are not concerned about balloon payments or PCP finance..... Sure we will be in a better position in 5 years lets go for it :cool:

I agree that the majority of people who qualify for it will think about it seriously.
But it sounds like the budget is not there to give it to everyone who wants it.

If I qualified for it I'd go for it, largely because I'd suspect the chances are high that the 30% will be written off in some shape or form in the future, and you have to be in it to win it!

Cyrus · 03-02-2021 04:43PM

PropQueries wrote: »

HTB won't encourage development by the bigger developers as the bigger players e.g. Cairn Homes, Glenveagh etc. purchased their landbanks for a pittance many years ago.

Cairn Homes stated last September that their average site cost was c. €30k and that many of their sites were purchased for c. €15k.

That means, given that construction wages and materials haven't increased by zimbabwean levels of inflation over the past 5 years that they could easily sell their new built houses today for about 20% more than 2015 prices and still walk away with a higher profit margin than in 2015.

If they were willing to accept a lower profit margin in 2015, what has changed, that they now require a higher profit margin with this higher profit margin being paid directly by the state i.e. me?

The only outcome from HTB will be to increase developer profit margins and keep site costs artificially high.

And once HTB is removed (obvious due to budget constraints in 5 years time), any house purchased under HTB will be worth a minimum c. €100k less in 5 years time than today.

you are wilfully ignoring how business works, Cairn may have a large landbank of sites that they bought from nama or elsewhere at low prices but the price and the value are two different things. They also have to replace the sites that they build on to continue in business. So the 'cost' of those sites in any financial model will reflect the replacement cost not the actual cost.

hometruths · 03-02-2021 04:43PM

PropQueries wrote: »

It will increase the price of new builds (isn't that the idea? Higher profit margins apparently means developers will build more which is why absolutely no houses were built between 2015 and 2020... in jest to make the point) but lower the price of second hand homes.

Plus, it's a bit of a con-job really IMO. If the whole purpose of the proposed co-ownership scheme is to increase house building and hence lower house prices and it succeeds, that would mean the first applicants to use the scheme are guaranteed to lose money.

Does anybody really expect it to lower house prices?!

Edit - sorry, I see that you do! but only second hand.

MacronvFrugals · 03-02-2021 05:27PM

Timing belt wrote: »

I have always said that as soon as the government interfere with the market they create two problems for every one problem they solve.

What will be interesting is if there is restrictions on the scheme to specific builds... If there is and it is mid rise apartments in areas that would have difficulty selling without the scheme then this is a total con and brown envelopes must have been past around.

We have been falling down the corruption leader boards over the last few years :P

Ireland’s rating slips in 2020 international corruption index

https://www.irishexaminer.com/news/arid-40217495.html

justaguy1 · 03-02-2021 05:58PM

I signed accommodation contract with Cloudview management in September and gave them the whole first semester rent upfront as required. Also I paid them the deposit for the whole year (semester 1 + 2) . Afterwards, when Lock-down started and when AIT told everyone to do remote classes, I didn't go to Athlone. I just stayed at home and did my classes remotely. In total I was in the room for 6 nights. For the second semester, I told them that I won't need their room so I went to Athlone and gave them the key to the room. I paid them around 3000 euro for the first semester + deposit for the two semesters. Upon delivering the keys I asked for a reimbursement of my rent (since I was there only 6 nights during the first semester), and my deposit for the second semester since I was not going to be there during the second semester. They replied that they won't give me back any money, even my deposit for the second semester because in their contract there is a clause saying that if you leave the room during the contract, you won't get any money back. Apparently they don't understand that we have a pandemic and these are special circumstances. No you can judge for yourselves if you want to rent a room from these people. In my view, this is theft, taking advantage, and unfair treatment of a poor student.They should have given at least part of my money back but they didn't. They are expecting that I should stay in the room in Athlone, even when there are remote classes and I can't go further than 5 kilometers, and I live in a different town. So watch out!

fliball123 · 03-02-2021 06:05PM

justaguy1 wrote: »

I signed accommodation contract with Cloudview management in September and gave them the whole first semester rent upfront as required. Also I paid them the deposit for the whole year (semester 1 + 2) . Afterwards, when Lock-down started and when AIT told everyone to do remote classes, I didn't go to Athlone. I just stayed at home and did my classes remotely. In total I was in the room for 6 nights. For the second semester, I told them that I won't need their room so I went to Athlone and gave them the key to the room. I paid them around 3000 euro for the first semester + deposit for the two semesters. Upon delivering the keys I asked for a reimbursement of my rent (since I was there only 6 nights during the first semester), and my deposit for the second semester since I was not going to be there during the second semester. They replied that they won't give me back any money, even my deposit for the second semester because in their contract there is a clause saying that if you leave the room during the contract, you won't get any money back. Apparently they don't understand that we have a pandemic and these are special circumstances. No you can judge for yourselves if you want to rent a room from these people. In my view, this is theft, taking advantage, and unfair treatment of a poor student.They should have given at least part of my money back but they didn't. They are expecting that I should stay in the room in Athlone, even when there are remote classes and I can't go further than 5 kilometers, and I live in a different town. So watch out!

Thats hard but you signed a contract and they held you too it ?? In this scenario of Corona A lot landlords have been the ones put out more so than tenants there are a lot of tenants who have stopped paying rent and have stayed in their accommodation free

PropQueries · 03-02-2021 06:24PM

fliball123 wrote: »

Thats hard but you signed a contract and they held you too it ?? In this scenario of Corona A lot landlords have been the ones put out more so than tenants there are a lot of tenants who have stopped paying rent and have stayed in their accommodation free

As have many very solvent big companies e.g. Boots etc. I assume Boots had a contract too.

According to the Irish Times back in August 2020: "Boots stops paying some landlords as it seeks post-Covid rent deals"

When landlords with borrowings are having difficulties, they seek some leeway from their lenders, including write-offs for the bigger borrowers, so I believe tenants (residential or commercial), should also seek new rent deals, write-offs etc. when the market changes.

There are ups and downs in every business, so I don't see why landlords always believe they are some special case and come out seeking sympathy every time things don't go their way. The state nearly always steps in eventually to bail them out with some back-door scheme like HAP etc. in the end anyway.

Link to Irish Times article here: https://www.irishtimes.com/business/retail-and-services/boots-stops-paying-some-landlords-as-it-seeks-post-covid-rent-deals-1.4331618

hometruths · 03-02-2021 06:24PM

fliball123 wrote: »

Thats hard but you signed a contract and they held you too it ?? In this scenario of Corona A lot landlords have been the ones put out more so than tenants there are a lot of tenants who have stopped paying rent and have stayed in their accommodation free

Any proof of that?

MacronvFrugals · 03-02-2021 06:27PM

PropQueries wrote: »

As have many very solvent big companies e.g. Boots etc. I assume Boots had a contract too.

According to the Irish Times back in August 2020: "Boots stops paying some landlords as it seeks post-Covid rent deals"

When landlords with borrowings are having difficulties, they seek some leeway from their lenders, including write-offs for the bigger borrowers, so I believe tenants (residential or commercial), should also seek new rent deals, write-offs etc. when the market changes.

There are ups and downs in every business, so I don't see why landlords always believe they are some special case and come out seeking sympathy every time things don't go their way. The state nearly always steps in eventually to bail them out with some back-door scheme like HAP etc. in the end anyway.

Link to Irish Times article here: https://www.irishtimes.com/business/retail-and-services/boots-stops-paying-some-landlords-as-it-seeks-post-covid-rent-deals-1.4331618

Hugo Boss also received a 24% rent reduction for their Grafton Street store

https://www.irishtimes.com/business/commercial-property/hugo-boss-secures-24-rent-cut-in-new-grafton-street-lease-1.4456393

Villa05 · 03-02-2021 06:40PM

Timing belt wrote:

How much are they attributing to the scheme? The last I heard it was something like 75m which is not exactly going to send our Bond yields through the roof.... We are yet to see what is the plan for the roll out of this is.... If it is priced at the low end of the market and for specific builds only then it may not impact overall housing prices and may just just give people that are trapped in rent a leg up...If this was the case it is just a different form of social housing however if it is priced higher than an entry level FTB house then we all know that it will lead to house prices going up and is only lining he pockets of developers.

All independent advise advised against scheme as it was inflationary,
Unusual to then use it as sulution to affordability

Again a report in UK found that 60% of receipients did not need the program

Another taxpayer funded waste of money that does the opposite to what we are told it is

Hubertj wrote:

Also need to consider enabling people to purchase a larger property to account for families. FTBer or HTBer or shared equity applicant could have children.

I think the opposite is proposed
Single or couple applicant restricted to 1 or 2 bed unit

MacronvFrugals wrote:

We have been falling down the corruption leader boards over the last few years

Does it count as corruption if the money is passed on systemically rather than under the table brown envelope

Timing belt · 03-02-2021 07:45PM

Villa05 wrote: »

All independent advise advised against scheme as it was inflationary,
Unusual to then use it as sulution to affordability

Again a report in UK found that 60% of receipients did not need the program

Another taxpayer funded waste of money that does the opposite to what we are told it is

I think the opposite is proposed
Single or couple applicant restricted to 1 or 2 bed unit

Does it count as corruption if the money is passed on systemically rather than under the table brown envelope

We don’t have all the details yet do we?

Hubertj · 03-02-2021 07:59PM

US embassy to move to old Jurys Hotel site in Ballsbridge
via The Irish Times
https://www.irishtimes.com/business/construction/us-embassy-to-move-to-old-jurys-hotel-site-in-ballsbridge-1.4475283

Nice piece of business by chartered considering the difficulties they seem to have shifting the apartments next door. Huge site for an embassy although the operation in Ireland is quite large considering border control is carried out in Dublin.

Idbatterim · 03-02-2021 09:16PM

https://www.irishtimes.com/business/construction/construction-shutdown-will-lead-to-housing-shortage-lasting-years-builders-say-1.4474368

Massive drop in housing output expected over the next few years... much of what does become available will be bought for social housing, as they are the only numbers that matter. Carnage ahead...

combat14 · 03-02-2021 10:15PM

looks like significant drag on irish economy for another while....

the ESRI now forecasts an average unemployment rate this year of 17.4%, up significantly from its earlier forecast of 14.5%, "

Covid-19 unemployment shock to last until end of 2023, ESRI warns

https://www.irishexaminer.com/business/economy/arid-40219892.html?type=amp

combat14 · 03-02-2021 10:21PM

Idbatterim wrote: »

https://www.irishtimes.com/business/construction/construction-shutdown-will-lead-to-housing-shortage-lasting-years-builders-say-1.4474368

Massive drop in housing output expected over the next few years... much of what does become available will be bought for social housing, as they are the only numbers that matter. Carnage ahead...

might have less of an effect if zero immigration and 15% out of work

Timing belt · 03-02-2021 10:54PM

combat14 wrote: »

might have less of an effect if zero immigration and 15% out of work

The ESRI are predicting 10% unemployment by the end of the year.... The 17.5% is an average for the year which is impacted by the lockdowns in the first half of the year with 25%+ unemployed.

Demand for housing won't drop because of unemployment it will just shift from the private sector to public sector with an increase in HAP payments and a shortage of properties pushing rents higher.... No matter which way you look at it a drop in supply when demand is high is a sh1t shower as people need to live somewhere. And with a supply shortage we are looking at higher rents for everyone including the tax man

Marius34 · 03-02-2021 11:05PM

combat14 wrote: »

might have less of an effect if zero immigration and 15% out of work

High prolonged unemployment is bad news for most of residents, especially tax payers.

Regarding for property price, you need to look at this issue from multiple sides. While due to some factors it could reduce price, other factors may cause price to increase.

combat14 · 03-02-2021 11:10PM

Timing belt wrote: »

The ESRI are predicting 10% unemployment by the end of the year.... The 17.5% is an average for the year which is impacted by the lockdowns in the first half of the year with 25%+ unemployed.

Demand for housing won't drop because of unemployment it will just shift from the private sector to public sector with an increase in HAP payments and a shortage of properties pushing rents higher.... No matter which way you look at it a drop in supply when demand is high is a sh1t shower as people need to live somewhere. And with a supply shortage we are looking at higher rents for everyone including the tax man

No gaurantee rents will continue to rocket up - they are already very high and rent pressure zones in place across many parts of the state

Rents grew at slowest rate in almost eight years in last quarter

https://www.google.com/amp/s/www.irishtimes.com/business/economy/rents-grew-at-slowest-rate-in-almost-eight-years-in-last-quarter-1.4442735%3fmode=amp

Timing belt · 03-02-2021 11:22PM

combat14 wrote: »

No gaurantee rents will continue to rocket up - they are already very high and rent pressure zones in place across many parts of the state

Rents grew at slowest rate in almost eight years in last quarter

https://www.google.com/amp/s/www.irishtimes.com/business/economy/rents-grew-at-slowest-rate-in-almost-eight-years-in-last-quarter-1.4442735%3fmode=amp

Yes rents are very high and will remain high as the government will end up paying more HAP if we end up with high unemployment and not enough social houses being built... Not good for the people unemployed, the government, tax payers...

It is as I said a sh1t shower and that is before rental supply gets reduced further by banks putting the squeeze on BTL investors who are in arrears because tenants are in rent arrears.

combat14 · 03-02-2021 11:42PM

Timing belt wrote: »

Yes rents are very high and will remain high as the government will end up paying more HAP if we end up with high unemployment and not enough social houses being built... Not good for the people unemployed, the government, tax payers...

It is as I said a sh1t shower and that is before rental supply gets reduced further by banks putting the squeeze on BTL investors who are in arrears because tenants are in rent arrears.

Sinn Fein looking to freeze rents for 3 years ..

govt proposing to replace rent-pressure-zones with new protections (paywall)

https://www.google.com/amp/s/www.irishtimes.com/news/ireland/irish-news/minister-may-replace-rent-pressure-zones-with-new-protections-1.4451571%3fmode=amp

PropQueries · 03-02-2021 11:45PM

Timing belt wrote: »

Yes rents are very high and will remain high as the government will end up paying more HAP if we end up with high unemployment and not enough social houses being built... Not good for the people unemployed, the government, tax payers...

It is as I said a sh1t shower and that is before rental supply gets reduced further by banks putting the squeeze on BTL investors who are in arrears because tenants are in rent arrears.

All depends on how many of the immigrant workers remain here if there are no opportunities.

The vast vast majority are here to advance themselves and have little to no interest in remaining here if those opportunities don’t exist.

Not only was much of the pre-Covid projections for housing demand based upon continued mass immigration, it was also highly reliant on our existing immigrant workers remaining here. Their numbers here as a percentage of the population are among the highest of any country in the EU and we’re very susceptible if it should reverse IMO

According to the economist magazine last week;

“In 2020 Europe saw a great reverse migration, as those who had sought work abroad returned home. Exact numbers are hard to come by. An estimated 1.3m Romanians went back to Romania—equivalent to three times the population of its second-biggest city. Perhaps 500,000 Bulgarians returned to Bulgaria—a huge number for a country of 7m. Lithuania has seen more citizens arriving than leaving for the first time in years. Other measures show the same. In Warsaw, dating apps brim with returning Poles looking for socially undistanced fun. Politicians in eastern Europe had long complained of a “brain drain” as their brightest left in search of higher wages in the west.”

Link to economist article here: https://www.economist.com/europe/2021/01/30/how-the-pandemic-reversed-old-migration-patterns-in-europe

HansKroenke · 03-02-2021 11:51PM

The good people of Sandymount and Merrion blocking progress again. This time? A school;

https://www.thejournal.ie/permission-granted-for-two-new-schools-in-sandymount-despite-local-opposition-5344444-Feb2021/

So now we have a cycle lane along the strand, co-living on Merrion Road and Bus Connect. There needs to be a steamrolling of objectors via reform of the planning system. These people are the elite of society, whether they believe they are or not. These people of course I'm referring to home owning objectors to any planning application out of a phobia of change.

Timing belt · 03-02-2021 11:58PM

PropQueries wrote: »

All depends on how many of the immigrant workers remain here if there are no opportunities.

The vast vast majority are here to advance themselves and have little to no interest in remaining here if those opportunities don’t exist.

Not only was much of the pre-Covid projections for housing demand based upon continued mass immigration, it was also highly reliant on our existing immigrant workers remaining here. Their numbers here as a percentage of the population are among the highest of any country in the EU and we’re very susceptible if it should reverse IMO

According to the economist magazine last week;

“In 2020 Europe saw a great reverse migration, as those who had sought work abroad returned home. Exact numbers are hard to come by. An estimated 1.3m Romanians went back to Romania—equivalent to three times the population of its second-biggest city. Perhaps 500,000 Bulgarians returned to Bulgaria—a huge number for a country of 7m. Lithuania has seen more citizens arriving than leaving for the first time in years. Other measures show the same. In Warsaw, dating apps brim with returning Poles looking for socially undistanced fun. Politicians in eastern Europe had long complained of a “brain drain” as their brightest left in search of higher wages in the west.”

Link to economist article here: https://www.economist.com/europe/2021/01/30/how-the-pandemic-reversed-old-migration-patterns-in-europe

The issue is that if even if you take into account low immigration we still need 22k+ housing for the next few years according to the ESRI. On top of this a lot if the immigration are high end jobs in tech & pharma so these will still exists so you can't assume immigrants will just leave.

bilbot79 · 04-02-2021 12:00AM

Timing belt wrote: »

Everyone goes on about Irelands debt levels despite the fact that we have one of the lowest yields in Europe due to the management of our debt. A credit default swap (CDS) for Ireland will cost you less than one for France. Add on top of this We have one of the youngest demographics in Europe. All these issues are present in most EU states and everyone is happy to kick the can down the road and hope that we see inflation sometime soon.

The reality is that the system is broken at its core and QE is not resolving the issues like they hoped due to liquidity getting trapped in the banks because they are not lending. I would be a lot more concerned about what is coming down the road in the short to medium term as an awful lot of wealth will be destroyed but in the meantime house prices will rise with investors chasing yield.

The post Covid superboom will catapult us out of the doldrums into inflation

Timing belt · 04-02-2021 12:04AM

bilbot79 wrote: »

The post Covid superboom will catapult us out of the doldrums into inflation

no sign of it for the next year or two....at the moment its a fight against deflation.

Hubertj · 04-02-2021 12:07AM

HansKroenke wrote: »

The good people of Sandymount and Merrion blocking progress again. This time? A school;

https://www.thejournal.ie/permission-granted-for-two-new-schools-in-sandymount-despite-local-opposition-5344444-Feb2021/

So now we have a cycle lane along the strand, co-living on Merrion Road and Bus Connect. There needs to be a steamrolling of objectors via reform of the planning system. These people are the elite of society, whether they believe they are or not. These people of course I'm referring to home owning objectors to any planning application out of a phobia of change.

I agree. Although I do think the cycle lane (a good idea) will make sh*t of traffic in the area.
NIMBYism does my head in and I think is a major part of the issue with planning and development in Ireland. People should have a right to object but under specific criteria.

bilbot79 · 04-02-2021 01:04AM

Timing belt wrote: »

no sign of it for the next year or two....at the moment its a fight against deflation.

Mass vaccination will be akin to the euro in giving businesses like hospitality the opportunity to jack up prices and swallow up peoples massive savings. I think there will be an enormous splurge that will defy the natural descent into depression and hyperstimulate the economy at ground level.

Villa05 · 04-02-2021 01:06AM

Timing belt wrote:

We donâ€™t have all the details yet do we?

Not yet, but the government's senior officials have advised against it.

I'm sure they may have seen some detail

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

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2021 Irish Property Market chat - mod warnings post 1