2021 Irish Property Market chat - mod warnings post 1

Cyrus · 12-02-2021 11:42AM

MacronvFrugals wrote: »

Some interesting points raised regarding retail and tourism going forward in today's IT -

Zombie businesses lurk beneath State supports for economy

https://www.irishtimes.com/business/economy/zombie-businesses-lurk-beneath-state-supports-for-economy-1.4482353?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fzombie-businesses-lurk-beneath-state-supports-for-economy-1.4482353

domestic retail is in big trouble for sure, that was coming but this has accelerated it a lot.

other sectors benefit though, the transport businesses are booming, the more creative cafe's and restaurants are doing ok and will do very well when people can eat on site. Domestic hospitality will boom once people can travel again but are reluctant to abroad.

there will be winners and losers.

Billythekid19 · 12-02-2021 11:54AM

Cyrus wrote: »

this gets trotted out a lot,

which are the countries where people treat houses as basic necessities? Where the main cities dont have more expensive houses than the more rural parts of the country?

Nobody is denying that to live in capital cities all over the world you need to pay a premium
A 4 bed detached house 10km from say cork or Galway city will easily still set you back half a million quid. This isnt the case 10km from capital cities like Copenhagen , Vienna or Berlin.

JimmyVik · 12-02-2021 11:57AM

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

Bet you anything if they lowered CGT to 15 - 20% you would see plenty of sales.
If you stood to make €50K on a sale and would have to hand a third of it to revenue, you might just say screw that, i wont bother selling it.

Villa05 · 12-02-2021 12:01PM

Cyrus wrote:

Where the main cities dont have more expensive houses than the more rural parts of the country?

Are they the ones that are highly developed with very limited supply of land?
There is nothing wrong with people treating housing as more than a basic requirement. There is a market for that

There also needs to be a market for where it is exactly a basic requirement,

We are in trouble because housing is now a luxury product

MacronvFrugals · 12-02-2021 12:03PM

Cyrus wrote: »

domestic retail is in big trouble for sure, that was coming but this has accelerated it a lot.

other sectors benefit though, the transport businesses are booming, the more creative cafe's and restaurants are doing ok and will do very well when people can eat on site. Domestic hospitality will boom once people can travel again but are reluctant to abroad.

there will be winners and losers.

I don't think the government shares your confidence

Government drive to 'upskill and reskill' people in the hospitality sector

https://www.thejournal.ie/reskill-hospitality-5352581-Feb2021/

Cyrus · 12-02-2021 12:05PM

Billythekid19 wrote: »

Nobody is denying that to live in capital cities all over the world you need to pay a premium
A 4 bed detached house 10km from say cork or Galway city will easily still set you back half a million quid. This isnt the case 10km from capital cities like Copenhagen , Vienna or Berlin.

this is 20km from berlin?

https://tranio.com/germany/adt/1930171/

Lyngby 12 km outside of Copenhagen, this is 875k and looks like a sh!thole

https://home.dk/boligkatalog/lyngby-taarbaek/2800/huse-villaer/egegaardsvej_24a_1530000671.aspx

So again, i ask the same question.

Cyrus · 12-02-2021 12:05PM

Villa05 wrote: »

Are they the ones that are highly developed with very limited supply of land?
There is nothing wrong with people treating housing as more than a basic requirement. There is a market for that

There also needs to be a market for where it is exactly a basic requirement,

We are in trouble because housing is now a luxury product

only in parts of the country.

PropQueries · 12-02-2021 12:07PM

JimmyVik wrote: »

Bet you anything if they lowered CGT to 15 - 20% you would see plenty of sales.
If you stood to make €50K on a sale and would have to hand a third of it to revenue, you might just say screw that, i wont bother selling it.

That means it’s probably an investment property and not their normal dwelling. A cheaper and easier way is for the state to put an opportunity cost (i.e. a proper tax e.g an annual 5% tax like Washington D.C.) on what this really is i.e. speculation and hoarding.

Tax reliefs should be primarily aimed at new builds as they add to supply. There’s no benefit to the state, economy or society from granting lower taxes or tax reliefs on an investment property that was built pre-bust IMO.

Villa05 · 12-02-2021 12:12PM

Cyrus wrote:

Domestic hospitality will boom once people can travel again but are reluctant to abroad.

I'd doubt it, Ireland is a high cost destination so it will take time to rebuild the market.
The locals fed up with high costs will be taking their holidays elsewhere

A situation exacerbated by artificially high priced property doing yet more damage to the economy

PropQueries · 12-02-2021 12:13PM

MacronvFrugals wrote: »

I don't think the government shares your confidence

Government drive to 'upskill and reskill' people in the hospitality sector

https://www.thejournal.ie/reskill-hospitality-5352581-Feb2021/

Even pre-Covid this was a growing concern. As more and more retail shut up shop and were being replaced with cafes etc., it just added to the number of cafes etc. competing for the same number of customers which negatively impacted them all.

This was a very big issue in the shopping centres in the UK pre-Covid.

JimmyVik · 12-02-2021 12:20PM

PropQueries wrote: »

That means it’s probably an investment property and not their normal dwelling. A cheaper and easier way is for the state to put an opportunity cost (i.e. a proper tax e.g an annual 5% tax like Washington D.C.) on what this really is i.e. speculation and hoarding.

Tax reliefs should be primarily aimed at new builds as they add to supply. There’s no benefit to the state, economy or society from granting lower taxes or tax reliefs on an investment property that was built pre-bust IMO.

I love how the Irish love to solve every problem by slapping a tax on it instead of an incentive. Its no wonder property and rent costs are going through the roof.
Especially given that the greatest success story in the history of the state is what was done with corporate tax.

hometruths · 12-02-2021 12:22PM

Hubertj wrote: »

Listened to David McWilliams and some interesting perspectives in it alright. Good for people to listen to.

I don't like his schtick but he makes a lot of sense on this subject. Essentially his view is when it comes to property we have become a nation of greater fools, as we are buying and selling property to each other at ever increasing prices, whilst failing to realise we are actually all worse off.

He's absolutely right.

Cyrus · 12-02-2021 12:22PM

Villa05 wrote: »

I'd doubt it, Ireland is a high cost destination so it will take time to rebuild the market.
The locals fed up with high costs will be taking their holidays elsewhere

A situation exacerbated by artificially high priced property doing yet more damage to the economy

Im talking about the locals, people may be reluctant to go abroad but they will holiday in ireland, try booking any popular irish hotel for june or july, it was the same last summer.

people have money for holidays, they have had very little else to spend it on.

hometruths · 12-02-2021 12:27PM

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

The opposite is equally true which is why the situation can change very quickly.

If people see prices falling, they'll think I better sell my 500k house now, because it might only be worth 475k in twelve months time.

Which is why I think the idea of a max 5% mini correction/soft landing is unlikely. If prices do drop 5% it will be enough to trigger a much larger drop. IMO.

Cyrus · 12-02-2021 12:29PM

schmittel wrote: »

The opposite is equally true which is why the situation can change very quickly.

If people see prices falling, they'll think I better sell my 500k house now, because it might only be worth 475k in twelve months time.

Which is why I think the idea of a max 5% mini correction/soft landing is unlikely. If prices do drop 5% it will be enough to trigger a much larger drop. IMO.

prices were falling in parts of the market from 18-20 slowly, how do you explain that?

PropQueries · 12-02-2021 12:36PM

JimmyVik wrote: »

I love how the Irish love to solve every problem by slapping a tax on it instead of an incentive. Its no wonder property and rent costs are going through the roof.
Especially given that the greatest success story in the history of the state is what was done with corporate tax.

A tax on vacant investment properties uses the exact same logic as the reason for imposing water charges. It's apparently in limited supply, so a cost must be imposed so the user understands that there's a cost to the wider society and economy of not using it efficiently.

The low taxes on MNC, REITs etc. actually have logic as they wouldn't have set-up here or built those apartments in the first place without such incentives. There's no need to incentivise an owner of an investment property (through lower taxes, reliefs etc.) that was built pre-bust to sell as he can't pick up the property and move it to a lower tax country so an annual vacant tax would definitely work in that case. The MNCs and REITs can pack up and move or invest in building elsewhere.

It's why the plan going forward will be to raise taxes on property, inheritance taxes etc. as the owners can't pack up and leave with their asset. Michael McGrath stated yesterday that he intends to employ c. 70,000 additional public servants on a permanent over the next 2 years. He also said this will need to be paid for. He didn't clarify on how this permanent additional yearly expenditure will be paid for though.

hometruths · 12-02-2021 12:38PM

Cyrus wrote: »

prices were falling in parts of the market from 18-20 slowly, how do you explain that?

I suspect it can be explained because demand was falling, unless you have some sort of greater insight I am missing?

cnocbui · 12-02-2021 12:44PM

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

Wouldn't agree with that in the slightest. The Irish are probably among the least domicile mobile people in the OECD. Australians and Kiwis would treat housing as an investment vehicle to far higher extent than the Irish.

My late brother in law, back in Oz, was an electrician/paramedic, and he had his own home, two investment properties on interest-only mortgages and was looking to buy a third. The number of interest only loans in Oz is terrifying.

McWilliams doesn't speak for me. I am currently trying to sell one property, and as soon as it looks like a sale will progress to completion, I'll be putting my home on the market also. I welcome the trend of rising prices with open arms.

Cyrus · 12-02-2021 12:46PM

schmittel wrote: »

I suspect it can be explained because demand was falling, unless you have some sort of greater insight I am missing?

bravo

and why did they fall slowly rather than trigger larger falls as you suggested may happen now?

Villa05 · 12-02-2021 12:47PM

JimmyVik wrote:

I love how the Irish love to solve every problem by slapping a tax on it instead of an incentive. Its no wonder property and rent costs are going through the roof. Especially given that the greatest success story in the history of the state is what was done with corporate tax.

I await the success stories of allowing rents and investment funds collect rent and profits tax free

Cyrus wrote:

Im talking about the locals, people may be reluctant to go abroad but they will holiday in ireland, try booking any popular irish hotel for june or july, it was the same last summer.

Aided by the travel ban I'm sure. Is there figures available on the level of cancellations for last year

June/July is open season on families with kids. What happens when everywhere is open

Cyrus · 12-02-2021 12:48PM

cnocbui wrote: »

Wouldn't agree with that in the slightest. The Irish are probably among the least domicile mobile people in the OECD. Australians and Kiwis would treat housing as an investment vehicle to far higher extent than the Irish.

My late brother in law, back in Oz, was an electrician/paramedic, and he had his own home, two investment properties on interest-only mortgages and was looking to buy a third. The number of interest only loans in Oz is terrifying.

McWilliams doesn't speak for me. I am currently trying to sell one property, and as soon as it looks like a sale will progress to completion, I'll be putting my home on the market also. I welcome the trend of rising prices with open arms.

im still waiting for a location that treats houses as basic necessities, as the copenhagen and berlin example didnt hold up.

people also need to realise mcwilliams lives in a 7 figure house on the southside so he doesnt speak for most of them either :P

Cyrus · 12-02-2021 12:49PM

Villa05 wrote: »

I await the success stories of allowing rents and investment funds collect rent and profits tax free

Aided by the travel ban I'm sure. Is there figures available on the level of cancellations for last year

June/July is open season on families with kids. What happens when everywhere is open

yes aided by the travel ban no doubt. but people will holiday wherever they can, if thats local, they will do that.

when every where is open we will have foreign tourists coming back.

hometruths · 12-02-2021 12:49PM

Cyrus wrote: »

bravo

and why did they fall slowly rather than trigger larger falls as you suggested may happen now?

because they did not reach a tipping point. What's your point?

Villa05 · 12-02-2021 12:51PM

schmittel wrote:

I don't like his schtick but he makes a lot of sense on this subject. Essentially his view is when it comes to property we have become a nation of greater fools, as we are buying and selling property to each other at ever increasing prices, whilst failing to realise we are actually all worse off.

schmittel wrote:

He's absolutely right.

All other arguments fall flat on their face when you realise that.

All the noise on this thread and all around us is just a distraction from that core point. Just fear and greed when in reality we are all suckers

cnocbui · 12-02-2021 12:51PM

PropQueries wrote: »

That means it’s probably an investment property and not their normal dwelling. A cheaper and easier way is for the state to put an opportunity cost (i.e. a proper tax e.g an annual 5% tax like Washington D.C.) on what this really is i.e. speculation and hoarding.

Tax reliefs should be primarily aimed at new builds as they add to supply. There’s no benefit to the state, economy or society from granting lower taxes or tax reliefs on an investment property that was built pre-bust IMO.

Oh, ffs! What is the difference between an investment property for sale and a new builf for sale? They both add to the pool of houses for sale.

The question was rehtorical, I'm not actually interested in one of your twisted logic replies.

Cyrus · 12-02-2021 12:54PM

schmittel wrote: »

because they did not reach a tipping point. What's your point?

the point i'm making is obvious.

hometruths · 12-02-2021 12:57PM

Cyrus wrote: »

i dont think i need to spell it out?

Please do, I am not as smart as you give me credit for.

MacronvFrugals · 12-02-2021 01:07PM

Cyrus wrote: »

the point i'm making is obvious.

Get over yourself!

Cyrus · 12-02-2021 01:09PM

MacronvFrugals wrote: »

Get over yourself!

after you :rolleyes:

Cyrus · 12-02-2021 01:10PM

MacronvFrugals wrote: »

I don't think the government shares your confidence

Government drive to 'upskill and reskill' people in the hospitality sector

https://www.thejournal.ie/reskill-hospitality-5352581-Feb2021/

“The sector has temporarily had to close and I want to ensure we use this time to support the sector in preparing for when they can resume business. The hospitality and tourism sectors are vital to the Irish economy and we must support it to recover and grow.”

Looks like they do share my confidence.

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

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2021 Irish Property Market chat - mod warnings post 1