2021 Irish Property Market chat - mod warnings post 1

Graham · 24-02-2021 10:52pm

fliball123 wrote: »

Surely this elephant will cause prices to go up as it lessens supply?

I'm not convinced a bunch of investment funds buying bundles of mortgages does reduce supply.

I'm not convinced it does much of anything other than maybe change direct debit details for the people paying those mortgages.

For some reason Props is convinced that by buying the mortgages these investment companies suddenly own the properties.

bilbot79 · 24-02-2021 10:56pm

imfml wrote: »

Has anybody travelled outside 5km to view a property? Would it be considered non essential?

Debatable. You can travel in relation to a house move within the regulations...

DataDude · 24-02-2021 10:56pm

fliball123 wrote: »

Optimism or not the government has put in place financial supports for companies that have been forced to closed and PUP and other payments to employees who are not working. I would hazard a guess they would not of done that if they were not counting on the majority of the closed companies reopening and for the majority of employees on support going back to work. Could they be that stupid to be paying all this time only for a tsunami of companies to go bankrupt and then have to pay out again for redundancies. But maybe I give them too much credit. We will have to wait and see when covid is a thing of the past. What we can see are there have been a number of new jobs coming in both private and public sector so once covid is gone we will have to see where we are.

A line I found interesting in the plan published by the government today. To me this looks like a bit of a euphemism. Reading between the lines I see it as ‘we know we’re keeping a load of zombie companies alive on life support and we really need these to close down and reinvent themselves as something new’. Sounds like at least some short term pain expected. Maybe someone else has a different interpretation.

‘ From an economic perspective, it is also worth highlighting that generalised (rather than targeted supports) hamper the necessary reallocation process (firms and workers need to transition from declining to expanding sectors) and distort work incentives. This means that once the economy has re-opened, supports must become more targeted (also taking into account the fact that household income has actually increased during the pandemic due to transfers from the general government sector).’

Cyrus · 24-02-2021 11:05pm

schmittel wrote: »

So we have a sophisticated buyer who has "already factored in a change in tax and reduced my max budget for a house somewhat" and you are saying that this contradicts my point that "A lot of (most I suspect) buyers and sellers in 2021 will consider potential future tax/legislation changes and implications as part of the decision making criteria"??!!! :rolleyes:

Another roll eyes, we both know and datadude also alluded to it, that’s not what you meant but persist with it if it makes you feel a little better .

fliball123 · 24-02-2021 11:08pm

DataDude wrote: »

A line I found interesting in the plan published by the government today. To me this looks like a bit of a euphemism. Reading between the lines I see it as ‘we know we’re keeping a load of zombie companies alive on life support and we really need these to close down and reinvent themselves as something new’. Sounds like at least some short term pain expected. Maybe someone else has a different interpretation.

‘ From an economic perspective, it is also worth highlighting that generalised (rather than targeted supports) hamper the necessary reallocation process (firms and workers need to transition from declining to expanding sectors) and distort work incentives. This means that once the economy has re-opened, supports must become more targeted (also taking into account the fact that household income has actually increased during the pandemic due to transfers from the general government sector).’

Well if the place was going to be hitting the skids I really do not think over 16k jobs would of been created in 2020. That is the reason why I am optimistic. Look its guess work no one knows how Covid will play out with regard to the live register.

Cyrus · 24-02-2021 11:09pm

decreds wrote: »

The deniers with vested interest

The deniers of what ?

Seriously who are these people that are talking the market up ? Unless you are referring to those of us that dare to argue against the doomsayers ?

But I don’t see any posters pointing to any sort of material price increases .

Milena009 · 24-02-2021 11:09pm

bilbot79 wrote: »

Debatable. You can travel in relation to a house move within the regulations...

Very much depends on gardai you meet
My friend went to see a house, pre going sale agreed and no problems whatsoever on clondalkin side of m50

PropQueries · 24-02-2021 11:14pm

Graham wrote: »

I'm not convinced a bunch of investment funds buying bundles of mortgages does reduce supply.

I'm not convinced it does much of anything other than maybe change direct debit details for the people paying those mortgages.

For some reason Props is convinced that by buying the mortgages these investment companies suddenly own the properties.

They bought 90,000 mortgages AND €200 billion in property and business loans between 2012 and 2016.

I’ll agree the mortgages are meaningless but it’s the other €200 billion in property and business loans they purchased that I’m interested in. And that was only between 2012 and 2016.

The banks and NAMA weren’t selling off many solvent property and business loans.

So, now we have a few American funds who probably control the majority of those investment properties and land banks that were purchased in the latter years of the Celtic Tiger.

And, outside of one documentary on RTÉ in January 2017, there’s been no real analysis of what they they bought and now control.

I would put it at a much greater potential risk to the Irish economy than shadow banking is to the world economy IMO

We basically have a few CEOs in boardrooms in the United States with their finger on the trigger of the Irish property market.

If only one of them gets cold feet, it’s armageddon for the Irish property market IMO

Timing belt · 24-02-2021 11:15pm

DataDude wrote: »

A line I found interesting in the plan published by the government today. To me this looks like a bit of a euphemism. Reading between the lines I see it as ‘we know we’re keeping a load of zombie companies alive on life support and we really need these to close down and reinvent themselves as something new’. Sounds like at least some short term pain expected. Maybe someone else has a different interpretation.

‘ From an economic perspective, it is also worth highlighting that generalised (rather than targeted supports) hamper the necessary reallocation process (firms and workers need to transition from declining to expanding sectors) and distort work incentives. This means that once the economy has re-opened, supports must become more targeted (also taking into account the fact that household income has actually increased during the pandemic due to transfers from the general government sector).’

I think a lot depends on when the economy opens up in relation to the rest of the world. Even if this date was known companies could start planning, marketing etc to take full advantage of it.

What I think will happen is that you will end up with a divided country whereby people not impacted make up for wasted time and people impacted get back to work to provide services to this cohort. There will be a lot of jobs and businesses gone for good and banks will take a hit as a result and after a few months of partying the hangover will set in and reality will need to be dealt with and it will see many false starts for the economy but eventually get back to normal.

I don’t see the roaring 20’s but do see mega bonuses for an elite few as billions have been made with little effort thanks to asset prices booming.

hometruths · 24-02-2021 11:18pm

Cyrus wrote: »

Another roll eyes, we both know and datadude also alluded to it, that’s not what you meant but persist with it if it makes you feel a little better .

One of the reasons small time landlords are leaving/not entering the market is due to income tax rates.

Of course income tax is included in what I meant in a buyer considering potential future tax/legislation changes. Obtuse at best to insinuate otherwise.

PropQueries · 24-02-2021 11:30pm

schmittel wrote: »

One of the reasons small time landlords are leaving/not entering the market is due to income tax rates.

Of course income tax is included in what I meant in a buyer considering potential future tax/legislation changes. Obtuse at best to insinuate otherwise.

No it’s not or it shouldn’t be

How many landlords have left the market in the past three years?

Now work backwards on the real reasons for the very small reduction in the number of registered landlords:

1. Celtic tiger property investors where their property has finally exited negative equity selling.

2. Landlords who bought between 2012 and 2014 and could only sell after 6 years in order to avail of he CGT exemption.

3. if a landlord with one property sells to another landlord with three properties, the number of registered landlords has fallen by 50%, but the number of rental properties in the market is exactly as before.

4. And finally

I just came across this. According to DCC and it’s long term lease initiative, when a property owner signs up, DCC is the landlord, not the property owner. Again, the number of registered landlords falls, but the number of rental properties available is the same as before.

Absolutely nothing, zero, nada to do with income taxes

Timing belt · 24-02-2021 11:31pm

PropQueries wrote: »

They bought 90,000 mortgages AND €200 billion in property and business loans between 2012 and 2016.

I’ll agree the mortgages are meaningless but it’s the other €200 billion in property and business loans they purchased that I’m interested in. And that was only between 2012 and 2016.

The banks and NAMA weren’t selling off many solvent property and business loans.

So, now we have a few American funds who probably control the majority of those investment properties and land banks that were purchased in the latter years of the Celtic Tiger.

And, outside of one documentary on RTÉ in January 2017, there’s been no real analysis of what they they bought and now control.

I would put it at a much greater potential risk to the Irish economy than shadow banking is to the world economy IMO

We basically have a few CEOs in boardrooms in the United States with their finger on the trigger of the Irish property market.

If only one of them gets cold feet, it’s armageddon for the Irish property market IMO

Surely the UK must be worried as a large portion of the Nama debt was for Uk lending as they held majority of the non-Irish debt/property that accounts for 47% of the total Nama debt/property

PropQueries · 24-02-2021 11:49pm

For everyone hoping that Ireland will get lucky again during the upcoming negotiations on the OECD global tax reforms, the FT has just reported that:

“UK Chancellor Rishi Sunak will use the election of Joe Biden as partial cover for a big Budget increase in corporation tax rates, arguing that the US president is also planning a hike in business taxes.”

If these tax reforms don’t go our way, how long do people believe the American funds who control our property market will stay around for?

Link to FT article here: https://www.ft.com/content/55f9d53f-b100-4073-814b-156cc6729040

Graham · 24-02-2021 11:56pm

PropQueries wrote: »

If these tax reforms don’t go our way, how long do people believe the American funds who control our property market will stay around for?

I don't think the REITs are here for low corporation tax.

If the companies that hold the mortgages decide to move on, they'll sell the mortgages to another party.

If corporation taxes increase globally that would surely be good for us given the number of international companies based here and our new increased tax take.

Timing belt · 25-02-2021 12:02am

PropQueries wrote: »

For everyone hoping that Ireland will get lucky again during the upcoming negotiations on the OECD global tax reforms, the FT has just reported that:

“UK Chancellor Rishi Sunak will use the election of Joe Biden as partial cover for a big Budget increase in corporation tax rates, arguing that the US president is also planning a hike in business taxes.”

If these tax reforms don’t go our way, how long do people believe the American funds who control our property market will stay around for?

Link to FT article here: https://www.ft.com/content/55f9d53f-b100-4073-814b-156cc6729040

Biden is not going to raise taxes unless very strong economic recovery...even his own party would stop him...even all the pro democrat news have being saying that it won’t happen unless we see the economy boom to do so otherwise would be worse than the Irish government guaranteeing every bank deposit.

Cyrus · 25-02-2021 12:06am

schmittel wrote: »

One of the reasons small time landlords are leaving/not entering the market is due to income tax rates.

Of course income tax is included in what I meant in a buyer considering potential future tax/legislation changes. Obtuse at best to insinuate otherwise.

Well nothing has materially changed with income tax for years , so how does this support your thesis of all of these properties out there coming onto the market and solving the apparent shortage issues ?

Obtuse is on the money .

Cyrus · 25-02-2021 12:07am

PropQueries wrote: »

For everyone hoping that Ireland will get lucky again during the upcoming negotiations on the OECD global tax reforms, the FT has just reported that:

“UK Chancellor Rishi Sunak will use the election of Joe Biden as partial cover for a big Budget increase in corporation tax rates, arguing that the US president is also planning a hike in business taxes.”

If these tax reforms don’t go our way, how long do people believe the American funds who control our property market will stay around for?

Link to FT article here: https://www.ft.com/content/55f9d53f-b100-4073-814b-156cc6729040

I really hope the oecd comes through for you , you’ve gone big on this one in particular.

PropQueries · 25-02-2021 12:11am

Graham wrote: »

I don't think the REITs are here for low corporation tax.

If the companies that hold the mortgages decide to move on, they'll sell the mortgages to another party.

If corporation taxes increase globally that would surely be good for us given the number of international companies based here and our new increased tax take.

Once again

The €200 billion they purchased between 2012 and 2016 were not mortgages. They were property and business loans and obviously mostly property loans.

Ires Reit has a market cap of less than a €1billion so would account, at a maximum, for less than 0.5% of that €200 billion figure. Say even €100 billion of the rest is due to UK loans etc, (it’s not anywhere near that figure though), that still leaves us with at least over €100 billion they bought in Ireland between 2012 and 2016.

I’m not worried about the corporate tax rises in the UK and the USA. I’m worried they will close off every single tax loophole which is why multinationals are here.

No multinationals, no jobs. No jobs, no workers. No workers, no demand for housing. That is, the American funds who control our property market sell up and leave.

PropQueries · 25-02-2021 12:19am

Cyrus wrote: »

I really hope the oecd comes through for you , you’ve gone big on this one in particular.

Don’t blame the messenger

I’m actually a great help to existing landlords and property investors. If I’m right, shouldn’t our fellow Irish property investors make their move before the funds do?

Once the funds make their move, it’s too late IMO

Graham · 25-02-2021 12:22am

PropQueries wrote: »

They were property and business loans and obviously mostly property loans

PropQueries wrote: »

that still leaves us with at least over €100 billion they bought in Ireland between 2012 and 2016.

Even accepting the beermat estimates, an exit would mean the loans got sold on. I don't see the major impact.

I also don't buy the corporation exodus if our corporation tax rates go up in line with a global increase.

We'd no doubt lose some of the virtual/shell operations in the IFSC but outside of that I think we still have enough going for us that the handful of losses would be mitigated by our larger corporation tax take.

Cyrus · 25-02-2021 12:23am

PropQueries wrote: »

Don’t blame the messenger

I’m actually a great help to existing landlords and property investors. If I’m right, shouldn’t our fellow Irish property investors make their move before the funds do?

Once the funds make their move, it’s too late IMO

Well I have no property investments so I’m safe but I’m also pretty sure the results of the global tax reform won’t have anything like the impact that you believe it will either.

Timing belt · 25-02-2021 12:26am

PropQueries wrote: »

Once again

The €200 billion they purchased between 2012 and 2016 were not mortgages. They were property and business loans and obviously mostly property loans.

Ires Reit has a market cap of less than a €1billion so would account, at a maximum, for less than 0.5% of that €200 billion figure. Say even €100 billion of the rest is due to UK loans etc, (it’s not anywhere near that figure though), that still leaves us with at least over €100 billion they bought in Ireland between 2012 and 2016.

I’m not worried about the corporate tax rises in the UK and the USA. I’m worried they will close off every single tax loophole which is why multinationals are here.

No multinationals, no jobs. No jobs, no workers. No workers, no demand for housing. That is, the American funds who control our property market sell up and leave.

Irish housing stock is about 1.8m 1/3 of people rent. If you assume 50% of these are owned by government and 50% by funds then you get to about 100bn assuming avg house being 350k. So we are talking about c 300,000 properties in Ireland. So why will they sell and leave all at once? And won’t another fund just buy the property so it has zero impact or are you saying no-one will buy them because they will get a better return elsewhere?

PropQueries · 25-02-2021 12:29am

Graham wrote: »

Even accepting the beermat estimates, an exit would mean the loans got sold on. I don't see the major impact.

I also don't buy the corporation exodus if our corporation tax rates go up in line with a global increase.

We'd no doubt lose some of the virtual/shell operations in the IFSC but outside of that I think we still have enough going for us that the handful of losses would be mitigated by our larger corporation tax take.

So the American and UK governments are going to increase their corporation taxes and still allow the Googles etc. to keep pretending that they makes all their worldwide profits outside the United States in Ireland?

Possible but highly unlikely IMO

We can increase corporation taxes all we like. But 90% of zero is still zero.

Cyrus · 25-02-2021 12:34am

PropQueries wrote: »

So the American and UK governments are going to increase their corporation taxes and still allow the Googles etc. to keep pretending that they makes all their worldwide profits outside the United States in Ireland?

Possible but highly unlikely IMO

We can increase corporation taxes all we like. But 90% of zero is still zero.

Google pretends it makes all its profits in Ireland? That’s a misnomer and a half .

PropQueries · 25-02-2021 12:36am

Timing belt wrote: »

Irish housing stock is about 1.8m 1/3 of people rent. If you assume 50% of these are owned by government and 50% by funds then you get to about 100bn assuming avg house being 350k. So we are talking about c 300,000 properties in Ireland. So why will they sell and leave all at once? And won’t another fund just buy the property so it has zero impact or are you saying no-one will buy them because they will get a better return elsewhere?

I reckon their exit strategy will be to first ask the government what they want to buy and then flog the rest on MyHome at c. 25% of current market prices.

Given what they probably initially purchased them for, they’ll probably still walk away with double their initial investment IMO

PropQueries · 25-02-2021 12:37am

Cyrus wrote: »

Google pretends it makes all its profits in Ireland? That’s a misnomer and a half .

Said outside the states

Timing belt · 25-02-2021 12:39am

PropQueries wrote: »

So the American and UK governments are going to increase their corporation taxes and still allow the Googles etc. to keep pretending that they makes all their worldwide profits outside the United States in Ireland?

Possible but highly unlikely IMO

We can increase corporation taxes all we like. But 90% of zero is still zero.

UK and USA designed most of the international tax loop holes. Even China has its version of Vegas to get funds out and into other countries to avail of tax loopholes....The OECD is a smoke screen and as effective as a chocolate tea pot.

PropQueries · 25-02-2021 12:43am

Timing belt wrote: »

UK and USA designed most of the international tax loop holes. Even China has its version of Vegas to get funds out and into other countries to avail of tax loopholes....The OECD is a smoke screen and as effective as a chocolate tea pot.

Maybe we’re entering a new era?

Timing belt · 25-02-2021 12:45am

PropQueries wrote: »

I reckon their exit strategy will be to first ask the government what they want to buy and then flog the rest on MyHome at c. 25% of current market prices.

Given what they probably initially purchased them for, they’ll probably still walk away with double their initial investment IMO

Another fund would buy...the properties change hands regularly and loads of institutional investors out there.

Timing belt · 25-02-2021 12:53am

PropQueries wrote: »

Maybe we’re entering a new era?

Maybe... let’s wait and watch to see if Biden closes all the loopholes in his home state of Delaware... the uk closes tax loopholes with BVI, CI, IOM... oh wait that’s not happening because everyone is using the loopholes.

It would be hard to find a property on the high streets in London that is not registered to a company/fund/trust in one of these locations.

Lobbying and political donations would need stop if they were ever serious as to much money in play.

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

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2021 Irish Property Market chat - mod warnings post 1