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

PommieBast wrote: »

Is that thing in pic 8 & 9 a fireplace or TV?

Think it’s a fireplace. Really nice place.

cnocbui wrote: »

It's a 125 sq m. It's a pokey little cramped hole with a supposed valuation of €520 K.

It's not worth €300K, let alone 450. There must be next to no availability in Cork whatsoever.

Yeah supply is fairly chronic at the moment. An investor could easily get 600 euro per room for that house. 36 grand a year gives a healthy 7 per cent annual yield from investment.

bubblypop wrote: »

Over the years I have lived in many different properties.
My favourites were two old houses, built in the 1850s. Open fires, one did have oil heating. Old sash windows.
Character.
I'd live in one any day before the boring boxes they build now. A rated houses can't even have a fire.
There's some beautiful buildings in Dublin, shops in the ground floor, with 3 storeys empty above. There would be many people that would love to live in the city, in apartments with some character.
It could bring a new life to those buildings.

Speaking of fireplaces - this sort of thing?

HansKroenke wrote: »

Has Dublin Built Too Many Luxury Apartments?

https://www.irishtimes.com/business/personal-finance/has-dublin-built-too-many-luxury-apartments-1.4493278?mode=amp

45% of properties to rent in Dublin have rents in excess of 2k per month, which I think is seen as luxury for the purpose of the article.

In the Docklands, Owen Reilly the estate agent reckons rents fell 13% in the first 9 months of covid restrictions, with higher drops in the 3k+ market.

Goodbody estimates 30% vacancy in luxury new builds.

Estimates for high end properties are for a decline in rents this year and next but for the modest properties perhaps even a little growth. Modest is around 1600 per month according to Ires REIT but even the article questions that claim.

Edit: I notice it was already posted. Will need to set the alarm for earlier in the morning next time.

It's looks like many Irish citizens in their 20s, 30, and 40s are now actually living through one of those dystopian future sci-fi movies we used to watch years ago.

Cyrus wrote: »

No sold one late 6 figure house and moved to the 7 figure house .

Clear now ?

Good lad

So any more 3 year old tv programs to inform the current property market ?

I just watched it he never touched on some of the main differences between 2008 and 2017.

Credit - No 100% mortgages this time
Oversupply - ghost estates anyone

These 2 are not an issue now.


It was comical and seemed really odd from the rock duo intros to the comic with the comb over and in the 4 years since prices have gone up a bit , come down a bit and gone back up a bit. No huge drops and no huge rises year on year. I am all for hearing opinions but he really only concentrated in Dublin just goes to show you how a show like this can date as there was no mention of working from home and how this will change the landscape of Dublin vs the rest of the country and never mentioned the fact that globally usually the capital cities are ones that people want to live in therefore you must pay a premium. He had no one in to dispute his opinion and looking at it 4 years on it was a waste of time making it, watching it and I have lost an hour I will never get back .

PropQueries wrote: »

It's looks like many Irish citizens in their 20s, 30, and 40s are now actually living through one of those dystopian future sci-fi movies we used to watch years ago.

Why? What is the problem?

Was looking at the Richmond Hall apartments and came across this guy from 2006, out of curiosity leaving aside variables how bad/good of a decision was this?

fliball123 wrote: »

I just watched it he never touched on some of the main differences between 2008 and 2017.

Credit - No 100% mortgages this time
Oversupply - ghost estates anyone

These 2 are not an issue now.

In relation to today's Irish Times article on the number of vacant luxury apartments, these two issues i.e. credit and oversupply definitely have parallels with the boom years IMO

Credit: Investors have just replaced the banks.The funds are taking money from investors and pouring it into luxury apartment schemes around the world for which there is apparently very little demand.

Yes, the banks are less exposed this time (still exposed to their boom time loans though), but the property market is definitely exposed once this investor cash stops flowing just like when the banks stopped lending last time.

Will the cash stop flowing? Well, if interest rates do rise, these investors will want their money back if they're getting little to no return from these empty "luxury" apartments. That will lead to a flood of them entering markets in many cities around the world.

Oversupply: These luxury apartment schemes were empty pre-covid. Just because they're labelled "luxury", they're still technically "ghost estates", just high rise "ghost estates" IMO

This investment strategy only works as long as interest rates remain at zero and investors don't ask any questions about when they will get a return. Once they ask, and they will ask once interest rates start rising, then it collapses IMO

Investing in empty luxury apartments is basically a bet on the future direction of interest rates. Very risky given that property is not a very liquid asset IMO

PropQueries wrote: »

In relation to today's Irish Times article on the number of vacant luxury apartments, these two issues i.e. credit and oversupply definitely have parallels with the boom years IMO

Credit: Investors have just replaced the banks.The funds are taking money from investors and pouring it into luxury apartment schemes around the world for which there is apparently very little demand.

Yes, the banks are less exposed this time (still exposed to their boom time loans though), but the property market is definitely exposed once this investor cash stops flowing just like when the banks stopped lending last time.

Will the cash stop flowing? Well, if interest rates do rise, these investors will want their money back if they're getting little to no return from these empty "luxury" apartments. That will lead to a flood of them entering markets in many cities around the world.

Oversupply: These luxury apartment schemes were empty pre-covid. Just because they're labelled "luxury", they're still technically "ghost estates", just high rise "ghost estates" IMO

This investment strategy only works as long as interest rates remain at zero and investors don't ask any questions about when they will get a return. Once they ask, and they will ask once interest rates start rising, then it collapses IMO

Investing in empty luxury apartments is basically a bet on the future direction of interest rates. Very risky given that property is not a very liquid asset IMO

We will see when things open up. I have outlined in my last post what I think their strategy is as in small term pain (leaving it empty or giving a month free) while people have stopped moving around the globe and long term gain when things open up again and people are looking to come back to live and/or visit Dublin.

Villa05 wrote: »

Watched it last night also

Did you miss the title of the programme. I believe it was asking the question, are we in a bubble?

He had developers, mortgage brokers, renters tackling the arguments that we traditionally hear from vested interests. We regularly hear the vested interest argument, however we rarely hear it being questioned on mainstream media

Bubbles are formed in the absence of credit, the credit follows and so it appears to be transpiring, As Dublin prices have moderated Government policy has been evolving to create new ways of driving up price in an already hugely expensive market.

Notable that the biggest issue to solving the crisis in 2017 was the availability of labour which has become far more favourable now, yet the government continue to pursue policies to push up prices rather than putting that labour to use to help ease the pressure on citizens.

WFH presents the danger of transferring the bubble nationwide, with Govt policy that is looking increasingly likely. So what appeared to me to be a potential solution now looks increasingly likely to be another outlet for Government to spread the problem rather than solve the problem, just like nama, state land, 0% interest rates, availability of labour and global stimulus to reboot economies.
So many opportunities to resolve the housing issue twisted and retooled by government policy to make the problem worse

It truly is amazing that a government can get away with it

Economics can be a bit boring to the general populace. Mcwilliams is a good communicator and has the ability to simplify, make it interesting and relevant to a wider audience

That was not relevant as I said his whole shtick was that "are we in a bubble" back in 2017 asking what will be the thing that pricks this Bubble and yet fast forward 2021 after Brexit and Covid two things that if a bubble existed it should of burst any kind of bubble that had been blowing up. The bubble only seems to exist in McWilliams head. As I said he had no one on to debate that we are not in a bubble there are plenty of people out there of that opinion. Proof is in the pudding 4 years on prices went down and then went back up no huge increase or decrease. We have had 2 major events in Brexit and Covid and yet property prices have not dropped.

He never touched on things like over supply and availability of credit pre 08 this is not the same now and regardless of what props says about the thousands of houses and rooms over shops not being used they are simply not part of the current supply for one reason or another and you only have to look at the thread there of "anyone currently buying or selling" on here to see the hoops and the amount of checks everyone now has to undertake to get any kind of credit from a bank.

Without access to easy credit you cannot have a bubble this is what happened pre 08 banks where giving cash out like confetti , 110% mortgages anyone. McWilliams never even touched on this. Yet he can talk about how credit did not play a huge role in the blowing up of the last bubble is completely ridiculous. If banks stopped lending or put in the the current restrictions we currently have back in 08 the property market would of been no where near as disastrous as it was. Fast forward 2021 we have more demand for housing and less supply and yet we are still a good 20% or so off the peak prices of 08 which would go a long way to prove that the prudent lending practices currently imposed on Irish lenders have stopped a bubble from blowing up.

It was a one sided, out dated program that has absolutely no relevance to 2021 property market, too many things have changed, such as WFH, Increased global competition with REITS/hedgefunds and local competition with the lefties leaning on government to buy now instead of been building. Add in the 2 events brexit and covid which have not brought down prices., McWilliams whole premise looking back at it now does not add up and looking at it in hindsight he is like the rest of us he doesn't know his ass from his elbow when it comes to the property market.

PropQueries wrote: »

In relation to today's Irish Times article on the number of vacant luxury apartments, these two issues i.e. credit and oversupply definitely have parallels with the boom years IMO

Credit: Investors have just replaced the banks.The funds are taking money from investors and pouring it into luxury apartment schemes around the worldfor which there is apparently very little demand.

Yes - I agree with you here except the point about demand but you must remember that property is only one asset class and the same is happening in every other asset class at a quicker pace than property.

Yes, the banks are less exposed this time (still exposed to their boom time loans though), but the property market is definitely exposed once this investor cash stops flowing just like when the banks stopped lending last time.

Banks are just as exposed this time as they are lending to funds and there are no CBI caps involved. Furthermore Ireland and Luxembourg have the majority of funds in Europe.

Will the cash stop flowing? Well, if interest rates do rise, these investors will want their money back if they're getting little to no return from these empty "luxury" apartments. That will lead to a flood of them entering markets in many cities around the world.

This is what started to happen last March before central banks jumped in to save the day. And since then the funds have set up new credit facilities, improved liquidity and even changed T&C’s to introduce notice periods for investors to redemptions all which have/should prevent any fire sale

Oversupply: These luxury apartment schemes were empty pre-covid. Just because they're labelled "luxury", they're still technically "ghost estates", just high rise "ghost estates" IMO

only a small % of the overall property held by funds would be luxury apartment and are mainly held by a handful of funds.

This investment strategy only works as long as interest rates remain at zero and investors don't ask any questions about when they will get a return. Once they ask, and they will ask once interest rates start rising, then it collapses IMO

It all depends on when rates rise...if they don’t know rise or rise slowly then it is probably the best investment available at present. Also remember that stock markets, commodities, bonds and the very other asset class will loose value when rates rise.

Investing in empty luxury apartments is basically a bet on the future direction of interest rates. Very risky given that property is not a very liquid asset IMO

for the past 45 years investing in most asset classes has been a bet on the direction of interest rates. Why is it different now?

PropQueries wrote: »

In Ireland's case, in the past, the vast majority of residential investment properties were owned by thousands of mom and pop type investors.

Now the funds own a relatively massive share of the residential investment property market in Ireland. And, I'm not talking just about the REITs etc. The vulture funds have also swallowed up a significant share of this market under the radar.

If interest rates do rise, last time, many of the mom and pop type investors would probably hunker down until better times. If a few did decide to sell, it wouldn't really impact the market given that each investor owned a tiny share of the market.

This time, we have a few funds who control a significant share of the market. If just one fund decides to get out, suddenly we have thousands of properties entering the market.

Basically these funds leaving would have the same impact on the market as if we had proper repossession laws last time. Property prices wouldn't have fallen by 50%, they would have fallen by at least 75% and probably much more.

This time is much different IMO

Let me get this right:
- interest rates will rise so fast that a 4% yield on property will look unattractive
- investors pull their money from the funds as they can make more money elsewhere
- this will lead to a fire sale of property owned by the funds
- funds will need cash so badly they will sell for 25c on the €
- investors take 25% of their original investment ( as the rest is now a loss due to fire sale) and invest in a different asset class with a higher yield

You do know that regulation is in place to ensure funds have adequate liquidity and that funds have the ability to implement redemption suspensions to specifically avoid the scenario you are outlining.

schmittel wrote: »

There are hundreds of thousands of residential properties that are not "part of the current supply for one reason or another".

But they do exist. At some stage they will become part of the current supply for one reason or another.

And when that happens, you will have your oversupply.

there will always be properties like this, so as to whether they will become part of current supply or not, on the basis of the current framework of taxes and legislation i dont see any reason that will change.