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2021 Irish Property Market chat - mod warnings post 1

hometruths

Happy new year to all.

2020 was the year of pent up demand. I think 2021 will be the year the pent up supply comes to market.

I think the pent up supply will exceed the pent up demand and prices will fall. By how much I have no idea!

edit: Mod Warnings

This thread is about the Irish Property Market, it is not about:
* Immigration
* Refugees
* Welfare recipients
* Welfare rates
* General Irish politics beyond its impact on property
* General Irish economy beyond its impact on property
* How wonderful Country X is to buy in

Additionally, the specific issue of Geodirectory vacancy figures has been done to death and is not to be discussed again.

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cnocbui

PropQueries wrote: »

If the land is truly needed, compulsory purchase it at agri/amenity prices and rezone it to housing after purchase.

No, you are definitely not a capitalist, let alone more then me, as you claimed. I'd say you are a deep red socialist.

Have you thought of organising a search party for that moral compass you seem to be missing?

Villa05

MacronvFrugals wrote:

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

No one has an issue with inviting them in. The issue is imbalance in how they are treated v local investors

The problem is Govt policy, taxation policy,

CorkRed93 wrote:

Not really on subject but wanting to ask. Do you/anyone see over short-med term that interest rates rise again?

Timing belt wrote:

635k x 248 x52 = 8.2bn

Xmass bonus
53

Hubertj

MacronvFrugals wrote: »

I'm sorry but BAM should be restricted from future state projects, this is becoming a farce

Children's Hospital won't be ready until May 2024

I would also question how the project is being managed the public servants. At the start didn’t they get the contractor to begin work while plans were still being finalised? This resulted in change requests etc?

Villa05

The state is propping up prices/rents and the state is in debt up to its eyeballs and continuing to drive unsustainable spending

I don't think anyone disputes these facts

Then state spending is not only fair game but the only game in town for discussion on this thread

DataDude

Cyrus wrote: »

that would be a turn up for the books, could potentially work for tax staff but a lot of the rest spend more time at client premises than their own office, id expect that to persist.

also a few friends are partners and they have been in more than out, they want their people back in, but who knows.

The below is from Mark Kennedy in Mazars - not quite the big 4, but close enough. Along with PWC today announcing WFH persisting fulltime until September, it certainly doesn't seem like the Audit firms are resisting the "new normal" as much as many people thought.

“I suspect we will not return to full in the office working in the way we were before,” he said. “That said, we do need offices. What you can’t do remotely is get the kind of collaborations that you need with teams. It’s harder to train people etc.

“I think what we’ll probably do is convert our space and use it in a different way going forward. We have offices in Limerick, Galway and Dublin, and we are reflecting at the moment on how much space we need in each, because we have seen our workforce spread around the country.

“I don’t think we’ll see everyone return on masse. I suspect a rhythm will form where people are in the office sometimes and we use the office space in a slightly different way going forward.”

Link - https://www.irishtimes.com/business/financial-services/state-must-not-withdraw-business-supports-abruptly-1.4480354

PropQueries

One of the states first affordable housing schemes are to be built in Lusk, Co. Dublin.

According to the Irish Times:

“Prices will start from €166,000 for two-bedroom apartments; from €206,000 for three-bedroom duplexes; from €250,000 for three-bedroom terraced houses; and from €258,000 for three-bedroom semi-detached houses.”

You must be a FTB and resident in Finglas for at least 12 months.

To put the above prices in perspective and compare to DCC’s idea of affordable housing at O’Devaney Gardens:

“The council report said that the “affordable” homes would be sold with a 30-40% discount.

The council also laid out the cost for the affordable units; €240,000 to €250,000 for a one-bedroom apartment and from €300,000 to €320,000 for a two-bedroom apartment.

And for housing at O’Devaney- €260,000 to €300,000 for a two-bedroom house and €300,000 to €320,000 for a three-bedroom house.“

Link to article on Lusk in Irish Times here: https://www.irishtimes.com/news/social-affairs/affordable-housing-one-of-state-s-first-schemes-to-be-built-in-lusk-1.4480279

[Deleted User]

Big difference in Lusk and O'Devanney gardens.

O'D is good value at those prices.
The prices in Lusk sound about the same as prices are out there anyway.

Cyrus

DataDude wrote: »

The below is from Mark Kennedy in Mazars - not quite the big 4, but close enough. Along with PWC today announcing WFH persisting fulltime until September, it certainly doesn't seem like the Audit firms are resisting the "new normal" as much as many people thought.

Not quite the big 4 is an understatement:D

But let’s see

hometruths

DataDude wrote: »

The below is from Mark Kennedy in Mazars - not quite the big 4, but close enough. Along with PWC today announcing WFH persisting fulltime until September, it certainly doesn't seem like the Audit firms are resisting the "new normal" as much as many people thought.

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

cnocbui

bubblypop wrote: »

Big difference in Lusk and O'Devanney gardens.

O'D is good value at those prices.
The prices in Lusk sound about the same as prices are out there anyway.

Do they come with a 20 year ban on on-selling?

jill_valentine

schmittel wrote: »

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

I've posted before here about my involvement in the quite-big-old-company-I-work-for's rollout into WFH - today we were officially told not to expect our current in-office staffing levels to change until March next year (ie a rotating skeleton crew for stuff involving physical documents, equipment etc).

In reality though, we've already physically changed the office and hardware models we have, and the company clearly expects this to be how it is for good. Staff are starting to make decisions about where they live from now on around it.

Not an immediate sea change or anything, and of no benefit to me personally, but from my company's POV the commuter belt has expanded by at least a county or so on all sides.

Edit - was talking to a chap last week who now lives in Belfast, for a job in Dublin, which was new to me.

decreds

Timing belt wrote: »

I agree but they can't change it without crashing everything.

Agreed, but one has to wonder how long they can kick the can down the road? It's all well and good for property owners to smugly feel hubris due to the rise in house prices but these same people need to think long term, if they want to upgrade that new property is going to cost them more and how will their children fair when they try leave the nest?

I have a feeling we may see adults staying at home until at least 30 become the norm in future generations by the way things are going, only a massive correction can stop this.

decreds

schmittel wrote: »

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

Hundred percent agree. I assume the people that disagree don't work in tech. The cat is out of the bag that permanent WFH will be on the table once all this ends. My company who don't have a huge presence this side of the water have hired roughly 80 people in Europe within the past year (WFH is all in their contracts).

The vast majority of jobs that can be done remotely will continue to be WFH when the virus subsides. This will likely have an impact on the Dublin housing market and many capital cities/tech hubs around the world.

[Deleted User]

cnocbui wrote: »

Do they come with a 20 year ban on on-selling?

Don't know! Presume there is some restrictions on selling on.

Timing belt

decreds wrote: »

Agreed, but one has to wonder how long they can kick the can down the road? It's all well and good for property owners to smugly feel hubris due to the rise in house prices but these same people need to think long term, if they want to upgrade that new property is going to cost them more and how will their children fair when they try leave the nest?

I have a feeling we may see adults staying at home until at least 30 become the norm in future generations by the way things are going, only a massive correction can stop this.

It's all relative as even if they stopped kicking the can down the road and housing, stock market and all other asset classes re-priced so would salary and wages as you would have mass unemployment and as people went go to back to work it would be for lower salaries IMO

It is like looking at a cheap house in another country.... it is only cheap if you have foreign purchasing power but if you are a local in that country it would not be cheap... As I say it's all relative.

And believe it or not there are less young adults living at home compared to 15 years ago. It's hard to believe with media reports but it is true.

Mic 1972

decreds wrote: »

Hundred percent agree. I assume the people that disagree don't work in tech. The cat is out of the bag that permanent WFH will be on the table once all this ends. My company who don't have a huge presence this side of the water have hired roughly 80 people in Europe within the past year (WFH is all in their contracts).

The vast majority of jobs that can be done remotely will continue to be WFH when the virus subsides. This will likely have an impact on the Dublin housing market and many capital cities/tech hubs around the world.

i'm working for a major big tech company, we all work from home now.
However they are still advertising internal roles that are office based and that will require giving up WFH. All these roles are currently done from home, so there is no apparent reason why they sholdnt be done from home in the fututre

HansKroenke

decreds wrote: »

Hundred percent agree. I assume the people that disagree don't work in tech. The cat is out of the bag that permanent WFH will be on the table once all this ends. My company who don't have a huge presence this side of the water have hired roughly 80 people in Europe within the past year (WFH is all in their contracts).

The vast majority of jobs that can be done remotely will continue to be WFH when the virus subsides. This will likely have an impact on the Dublin housing market and many capital cities/tech hubs around the world.

https://www.irishtimes.com/business/economy/leo-varadkar-i-want-to-make-sure-this-pandemic-is-a-lost-year-or-so-not-a-lost-decade-1.4480399?mode=amp

Varadker's interview in the IT today regarding the likelihood of restrictions into next year should also throw cold water on any claims that returning to offices in meaningful numbers will be part of the return to life after covid, particularly as he references the winter surge and seasonality of covid. To me that indicates no chances will be taken next winter and people will be told to stay off public transport and out of offices during the winter period.

It will take nearly two years in total to get fully back to normal (ie no more restrictions), it looks like. While it has been a year WFH, I don't think this experience is an indicator of what it will be like after covid. For example, people weren't ready to WFH, needed to get screens, chairs, desks etc. Also, there is little to no recreation outside of the home so people can feel that all they do is work. That is not a normal WFH experience. Finally, people may have paid more for their home in buying or renting to be close to the office but of course, given the option, they will look to move somewhere they would prefer to live as proximity to the office won't be anywhere near as big a factor.

In short, with 2 years pandemic-induced WFH, the very most of a change we will see post-covid will be a hybrid model of WFH/part time in the office. There are huge ramifications for this in property, particularly Dublin City office rentals and the €2k per month one bedroom rentals. Somehow I think that Dublin City centre will be reborn in terms of retail, cafes and pubs, as public transport and cycling/scooter infrastructure is enhanced making it easier and more pleasant to get in and out.

cnocbui

Timing belt wrote: »

It's all relative as even if they stopped kicking the can down the road and housing, stock market and all other asset classes re-priced so would salary and wages as you would have mass unemployment and as people went go to back to work it would be for lower salaries IMO

It is like looking at a cheap house in another country.... it is only cheap if you have foreign purchasing power but if you are a local in that country it would not be cheap... As I say it's all relative.

And believe it or not there are less young adults living at home compared to 15 years ago. It's hard to believe with media reports but it is true.

The figure was higher than 70% 15 years ago?

https://extra.ie/2020/02/07/news/irish-news/i-wouldnt-be-able-to-afford-any-kind-of-rent-over-70-of-irish-young-adults-living-with-their-parents

Timing belt

cnocbui wrote: »

The figure was higher than 70% 15 years ago?

https://extra.ie/2020/02/07/news/irish-news/i-wouldnt-be-able-to-afford-any-kind-of-rent-over-70-of-irish-young-adults-living-with-their-parents

Cyrus

schmittel wrote: »

I think some people who reckon office work will go back to normal will be a bit blindsided when they realise just how much employers are going to embrace WFH.

I don’t think anyone is saying it’ll go back to the way it was but to think there will be wholesale wfh 5 days a week is incredibly naive aswell, there will have to be some sort of blend and the blend will be more weighted towards the office.

I’m sure there are certain interact with no one jobs that can be done entirely remotely but thankfully we don’t all work like that .

hometruths

Cyrus wrote: »

I don’t think anyone is saying it’ll go back to the way it was but to think there will be wholesale wfh 5 days a week is incredibly naive aswell, there will have to be some sort of blend and the blend will be more weighted towards the office.

I’m sure there are certain interact with no one jobs that can be done entirely remotely but thankfully we don’t all work like that .

Nobody is saying there will be wholesale WFH 5 days a week.

Cyrus

schmittel wrote: »

Nobody is saying there will be wholesale WFH 5 days a week.

Well what are you saying ?

What does embrace wfh mean ?

TheSheriff

The WFH effect and its impact on property has come up again - we are none the wiser since it did a few weeks back.

To assess the impact of WFH we should look at industries which have this already; I have mentioned Pharma before, we had 2+ days WFH per week pre-Covid in my particular company. This gives people more scope in the area they can live yes, but geographically, they will still be tied to a region. I suspect if Tech embrace's this model (which is all but certain), you will see an exodus from the city centre and a movement outwards. I would expect previously desirable areas (thinking areas like malahide, wicklow etc.) to become more popular as the work-home balance will be more important.

If I had a house in a desirable south Dublin location I wouldn't be too worried.

If I had a high end apartment in the city centre which was previously bringing in 2k+ per month I would be very worried.

hometruths

Cyrus wrote: »

Well what are you saying ?

What does embrace wfh mean ?

A lot of comment on WFH is "It's a flash in the pan, my coworkers and I are gagging to get back to the office, it wont have any meaningful effect on anything" etc etc.

This is looking at it from an employees point of view, I think uptake of WFH will be driven from an employers point of view, and by embrace I mean they will try and restructure working practices to take as much advantage of the WFH situation as possible.

Obviously how each company does this depends on industry/function etc but I think it will boil down to them using it as a way to cut significant property and human resources costs.

I suspect younger workers will be encouraged into the office, and probably these are the workers who most want to be in there anyway. I suspect middle management will be culled/put out to grass.

Or to quote the Mazars guy:

I don’t think we’ll see everyone return on masse. I suspect a rhythm will form where people are in the office sometimes and we use the office space in a slightly different way going forward.

Using the office in a slightly different way going forward will mean mean cutting down on its use simply to keep an eye of everybody and making sure they're putting the hours in, far better to have smaller offices for meetings/training/clients etc and make sure to hire employees that we don't need to keep an eye on.

If you're in a job whose primary function is to keep an eye on your coworkers I'd say the impact of WFH on Dublin property prices is the least of your worries!

DataDude

TheSheriff wrote: »

The WFH effect and its impact on property has come up again - we are none the wiser since it did a few weeks back.

To assess the impact of WFH we should look at industries which have this already; I have mentioned Pharma before, we had 2+ days WFH per week pre-Covid in my particular company. This gives people more scope in the area they can live yes, but geographically, they will still be tied to a region. I suspect if Tech embrace's this model (which is all but certain), you will see an exodus from the city centre and a movement outwards. I would expect previously desirable areas (thinking areas like malahide, wicklow etc.) to become more popular as the work-home balance will be more important.

If I had a house in a desirable south Dublin location I wouldn't be too worried.

If I had a high end apartment in the city centre which was previously bringing in 2k+ per month I would be very worried.

Would be in agreement with this generally. But I do think the ‘desirable’ bit could be really tested (as has been posted by others before). Pseudo ‘nice’ places in South Dublin like Dundrum, Stillorgan, Goatstown etc. could be badly hit. Even within the nice places, there could become bigger distinctions. I.e. ‘Blackrock’ but nearer the N11 than Village which is, when you look past the fancy address, a 40 min walk from anywhere you’d want to spend your day.

I think there will always be a premium to be paid for the truly nice places like Dalkey/Sandycove/Monkstown etc. And indeed I keep them in my filters. But once WfH becomes more widespread, I don’t know why anyone would pay the SCD premium to live in a Dundrum anymore vs an actually nice seaside town on the commuter belt. Just a personal opinion!

Timing belt

schmittel wrote: »

A lot of comment on WFH is "It's a flash in the pan, my coworkers and I are gagging to get back to the office, it wont have any meaningful effect on anything" etc etc.

This is looking at it from an employees point of view, I think uptake of WFH will be driven from an employers point of view, and by embrace I mean they will try and restructure working practices to take as much advantage of the WFH situation as possible.

Obviously how each company does this depends on industry/function etc but I think it will boil down to them using it as a way to cut significant property and human resources costs.

I suspect younger workers will be encouraged into the office, and probably these are the workers who most want to be in there anyway. I suspect middle management will be culled/put out to grass.

Or to quote the Mazars guy:

Using the office in a slightly different way going forward will mean mean cutting down on its use simply to keep an eye of everybody and making sure they're putting the hours in, far better to have smaller offices for meetings/training/clients etc and make sure to hire employees that we don't need to keep an eye on.

If you're in a job whose primary function is to keep an eye on your coworkers I'd say the impact of WFH on Dublin property prices is the least of your worries!

I thought the days of keeping and eye on your coworkers in an office went out the window 20 years ago when they got rid of the lower level management roles and introduced performance reviews where the work speaks for its self.

hometruths

DataDude wrote: »

Would be in agreement with this generally. But I do think the ‘desirable’ bit could be really tested (as has been posted by others before). Pseudo ‘nice’ places in South Dublin like Dundrum, Stillorgan, Goatstown etc. could be badly hit. Even within the nice places, there could become bigger distinctions. I.e. ‘Blackrock’ but nearer the N11 than Village which is, when you look past the fancy address, is a 40 min walk from anywhere you’d want to spend your day.

I think there will always be a premium to be paid for the truly nice places like Dalkey/Sandycove/Monkstown etc. And indeed I keep them in my filters. But once WfH becomes more widespread, I don’t know why anyone would pay the SCD premium to live in a Dundrum anymore vs an actually nice seaside town on the commuter belt. Just a personal opinion!

I think you've hit the nail on the head here.

Whilst I suspect city centre apartment rents will fall, they'll still be in demand from young workers and corporate lets. D4 and 6 etc will be fine as will premium sea front.

Long established leafy streets with period houses will hold up well. It's the cookie cutter semi d's that will suffer.

TheSheriff

schmittel wrote: »

A lot of comment on WFH is "It's a flash in the pan, my coworkers and I are gagging to get back to the office, it wont have any meaningful effect on anything" etc etc.

And indeed alot of the counter arguments are, "The cat is out of the bag with regards WFH; its going to change everything; we can all live in the commuter belt; I am moving to Leitrim etc."

Ok, so I haven't seen that last one yet. The point being it will likely release a pressure valve in Dublin, but I wouldn't underestimate the desire of professionals to want to live around other similar professionals.

I don't see a mass exodus of tech workers; similarly as I didn't see a mass exodus of pharma workers when WFH became relatively norm a number of years ago.

WFH will be a god send for those who simply cannot afford to live in Dublin, and great for them.

I think Goatstown will be just fine, and I have absolutely zero vested interested in somewhere like Goatstown!

TheSheriff

schmittel wrote: »

I think you've hit the nail on the head here.

Whilst I suspect city centre apartment rents will fall, they'll still be in demand from young workers and corporate lets. D4 and 6 etc will be fine as will premium sea front.

Long established leafy streets with period houses will hold up well. It's the cookie cutter semi d's that will suffer.

I don't see the logic here; surely within the same local region e.g. South Dublin, the market price of each property will be set by the high end properties in that area.

So, if a period house is for example 1 million and someone pays this in a post-covid world, the price of the semi-D on the street behind this period house will also be influenced by this price.

Are you suggesting people will only buy high end properties in South Dublin and all other demand will fall away?

This is highly unlikely.

Timing belt

TheSheriff wrote: »

And indeed alot of the counter arguments are, "The cat is out of the bag with regards WFH; its going to change everything; we can all live in the commuter belt; I am moving to Leitrim etc."

Ok, so I haven't seen that last one yet. The point being it will likely release a pressure valve in Dublin, but I wouldn't underestimate the desire of professionals to want to live around other similar professionals.

I don't see a mass exodus of tech workers; similarly as I didn't see a mass exodus of pharma workers when WFH became relatively norm a number of years ago.

WFH will be a god send for those who simply cannot afford to live in Dublin, and great for them.

I think Goatstown will be just fine, and I have absolutely zero vested interested in somewhere like Goatstown!

It is the rental market that will suffer the most and as the rental market has been driving houses prices it will release pressure in Dublin like you say and generate pressure outside Dublin in other cities and large towns which will generate it's own issues as it will push the price up beyond the reach of locals.

I don't believe it will be a mass exodus from Dublin but even if 10% of renters took advantage of WFH it would create prices rises through out the country... I don't think this will be the last we hear about it for this reason.