2021 Irish Property Market chat - mod warnings post 1

PropQueries · 03-03-2021 02:50PM

Looks like the opening salvo on Ireland's low tax rates has begun with the Chancellor increasing the UK's corporation tax rates from 19% to 25% from April 2023 in today's budget.

That with the EU member states agreeing last week on new transparency rules for multinational companies reporting tax payments across the bloc, means the big economies are preparing to come after countries like Ireland very quickly IMO

If continued FDI into Ireland has as big an impact on sustaining current property prices as I think it does, I think the above two news items are incredibly important IMO

hometruths · 03-03-2021 02:57PM

Villa05 wrote: »

Regular source of dispute here:

David McWilliams talks through why he believes that we need 50,000 units built per year in the last 12 minutes of this podcast: How Ireland really works

50,000 a year is madness. He's allowing 10,000 a year for obsolescence which is insane. He says this is conservative! His other assumptions are equally bonkers.

awec · 03-03-2021 03:01PM

PropQueries wrote: »

Looks like the opening salvo on Ireland's low tax rates has begun with the Chancellor increasing the UK's corporation tax rates from 19% to 25% from April 2023 in today's budget.

That with the EU member states agreeing last week on new transparency rules for multinational companies reporting tax payments across the bloc, means the big economies are preparing to come after countries like Ireland very quickly IMO

If continued FDI into Ireland has as big an impact on sustaining current property prices as I think it does, I think the above two news items are incredibly important IMO

You're going to have to show your working out on this one I think. Can you explain how the UK (a non-EU state, in case you're unaware) raising it's corpo tax rate is a "salvo" on our (an EU state) tax rate?

One Ireland's competitors for FDI is making it less attractive to invest there. This is terrible news for Ireland?

PommieBast · 03-03-2021 03:12PM

thefridge2006 wrote: »

This is all down to terrible government policies such as HAP. This scheme has done nothing but pump up rent and is still pumping it up. FFFG have done absolutely nothing to help the housing situation and i would go as far as saying if they did nothing for the last 10 years we'd be in a better posit6ion with regards to rental prices and selling prices. They are so incompetent

I disagree about incompetent but otherwise yes. The political pressure has been to get house prices back up so the negative effects are entirely by design because they go hand-in-hand in trying to re-obtain bubble prices for those who bought in the mid-2000s.

Yurt2 · 03-03-2021 03:13PM

combat14 wrote: »

looks like it is time to cut the dole, HAP payments, COVID payments and business supports the country simply afford all these payments at current rates and borrowing any more

serious crisis on the way if we dont tighten our belt

Well that's a one way to breezily waltz a country into chaos.

Cyrus · 03-03-2021 03:13PM

PropQueries wrote: »

That with the EU member states agreeing last week on new transparency rules for multinational companies reporting tax payments across the bloc, means the big economies are preparing to come after countries like Ireland very quickly IMO

why do you think is is important? You do realise the CBCR has been in place since 2016 and this is just advocating making the information public, the tax authorities already have this information for the past 3 or 4 financial years.

PropQueries · 03-03-2021 03:14PM

awec wrote: »

You're going to have to show your working out on this one I think. Can you explain how the UK (a non-EU state, in case you're unaware) raising it's corpo tax rate is a "salvo" on our (an EU state) tax rate?

One Ireland's competitors for FDI is making it less attractive to invest there. This is terrible news for Ireland?

Because it gives us a very clear signal into the mindset of the negotiators from the bigger world economies during the current OECD global tax reforms which are due to be completed by the middle of this year IMO

Low taxes are out. Big government is back. And, big government must be funded.

awec · 03-03-2021 03:17PM

PropQueries wrote: »

Because it gives us a very clear signal into the mindset of the negotiators from the bigger world economies during the current OECD global tax reforms which are due to be completed by the middle of this year IMO

Low taxes are out. Big government is back. And, big government must be funded.

You're overplaying your hand on this one.

It sends a very clear signal that post-Brexit Britain is starting to move down it's inevitable path to change. You appear under the impression that we're all going to be trying to follow them down that same path, I for one am sceptical of this notion.

Yurt2 · 03-03-2021 03:19PM

fliball123 wrote: »

Your first sentence is wrong overpriced housing in the highly sought after areas in the country..Please stop extrapolation Dublin prices for the rest of the country. Also we have discussed the opinion that we are currently in a bubble with relation to house prices, you are yet to prove that we are currently in one. People have been shouting bubble since 2017 and the price of houses have not shown the same trajectory of being in bubble territory.

Housing agency report. Every major urban area (and more besides if you dig into it) are rated unaffordable by internationally defined and accepted metrics.

Is housing in Leitrim affordable for a median earner? Yes. In the same way a house in Wallagongaroo in rural Queensland is affordable. But that doesn't mean Australia doesn't have the same type of affordability crises in its income generating cities (essentially where their economy is) as Ireland does.

Rightly, people are losing patience with the wheeze that Ireland is affordable to the typical Joe and Mary in the middle of the income distribution just because some people with skin in the game says it is. It's blatantly a large and growing societal problem, and the penny is finally beginning to drop politically.

fliball123 · 03-03-2021 03:21PM

schmittel wrote: »

50,000 a year is madness. He's allowing 10,000 a year for obsolescence which is insane. He says this is conservative! His other assumptions are equally bonkers.

Including the the notion that we are in a bubble that he contends and that cheap and available credit is not needed when all previously bubbles have been predicated on it ..

fliball123 · 03-03-2021 03:22PM

PropQueries wrote: »

Because it gives us a very clear signal into the mindset of the negotiators from the bigger world economies during the current OECD global tax reforms which are due to be completed by the middle of this year IMO

Low taxes are out. Big government is back. And, big government must be funded.

I believe we are still in control of our taxes has anything changed? The drive to stop us with our corpo tax being low has been ongoing for a decade.

fliball123 · 03-03-2021 03:24PM

Yurt! wrote: »

Housing agency report. Every major urban area (and more besides if you dig into it) are rated unaffordable by internationally defined and accepted metrics.

Is housing in Leitrim affordable for a median earner? Yes. In the same way a house in Wallagongaroo in rural Queensland is affordable. But that doesn't mean Australia doesn't have the same type of affordability crises in its income generating cities (essentially where their economy is) as Ireland does.

Rightly, people are losing patience with the wheeze that Ireland is affordable to the typical Joe and Mary in the middle of the income distribution just because some people with skin in the game says it is. It's blatantly a large and growing societal problem, and the penny is finally beginning to drop politically.

Go on show me these international defined metrics please. I did the math on here multiple times with a couple on the median wage they can still get houses in every county even in certain parts of Dublin its just when they want to go to parts that are in demand or houses that are on the higher end of the spec...Unfortunately you pay for quality and location as is the case in every first world country in the world.

https://www.cso.ie/en/releasesandpublications/ep/p-eaads/earningsanalysisusingadministrativedatasources2018/annualearnings/

Currently over 600 in Dublin alone coming in under 275k

Median wage in Ireland in 2018 was 36,095 (note this includes all part time workers as well)

We are conservative with our 3.5 times borrowings and 10% deposit under the ECB rules and when compared to other OCED countries

So the Math - 36k * 2 (as usually nowadays houses are bought by couples) = 72

Multiply by the very conservative 3.5 times you can borrow 72 * 3.5 = 252k

Add in your 10% deposit 252k + 25k = 277k

Now as I say 600 houses currently available for sale under this price in Dublin alone and 6200 well over half the current available stock up for sale on myhome available for under this price. How are we unaffordable again. Is it by some antiquated outdated method where mum must stay at home and look after the kids and not work ever calculation?

So in your analogy the typical Joe and Mary can afford a house at under 275k and there are well over half the current stock available in the country for under this price but I think the Average Joe and Mary want a mansion with a sea view with an A1 energy rating unfortunately these luxuries, add-ons and locations cost money.

Hubertj · 03-03-2021 03:28PM

schmittel wrote: »

50,000 a year is madness. He's allowing 10,000 a year for obsolescence which is insane. He says this is conservative! His other assumptions are equally bonkers.

Is 50k the highest number so far? Are the developers even stating that?!?

As for obsolescence perhaps he considers an acceleration in buildings having to be replaced? Georgian / Victorian houses become economically unviable to renovate / modernise?

PropQueries · 03-03-2021 03:31PM

awec wrote: »

You're overplaying your hand on this one.

It sends a very clear signal that post-Brexit Britain is starting to move down it's inevitable path to change. You appear under the impression that we're all going to be trying to follow them down that same path, I for one am sceptical of this notion.

Don’t get me wrong

I’m no fan of big government as I know where it leads.

But that’s the way the wind is blowing IMO

JimmyVik · 03-03-2021 03:32PM

Villa05 wrote: »

I think both situations are dire. Overpriced housing in a country with massive debt and costly future issues such as health and pensions or even higher rents
Every bubble needs a bit of a push factor to help it blow larger

Rents are that factor and will continue to be unless supply is addressed. If supply is not addressed it will be an added factor as well as health and pensions.
Home owners and renters will then have to pay much higher taxes in the future to cover these 3 issues amongst others

It all could be so very different, we could run the country in a way that helps our citizens or continue to pander to landowner interests to the detriment of everyone else including home owners

There's a show on rte called how to be good with money where the presenter uses sugar cubes to explain financial conundrums to viewers

If sugar cubes are used to purchase houses and you give customers more sugar cubes for this specific purpose. What do you think happens houses where supply is restricted

Do you think they need more less or the same amount

That has me in knots

Excellent post.

Meet salt and Pepper.
Both Salt and Pepper have 5 sugar lumps to buy a house.
The government give Salt 2 sugar lumps, but nothing to Pepper.

Teapot the builder is watching this. What is the outlook for Pepper?

awec · 03-03-2021 03:33PM

fliball123 wrote: »

I believe we are still in control of our taxes has anything changed? The drive to stop us with our corpo tax being low has been ongoing for a decade.

We still have the veto but it's not like we could veto proposals and they'd turn around and be like "ah that's grand lads, we'll just forget about it".

There will be changes around taxation, compromises will be made. Saying no all the time won't work, we'll have to engage. The corpo rate may go up or it may stay the same.

The idea that Ireland is set to be absolutely shafted is tenuous. The fixation on what the UK is doing is tenuous and ignorant of the huge elephant in the room on that front.

hometruths · 03-03-2021 03:40PM

Hubertj wrote: »

Is 50k the highest number so far? Are the developers even stating that?!?

As for obsolescence perhaps he considers an acceleration in buildings having to be replaced? Georgian / Victorian houses become economically unviable to renovate / modernise?

He's actually saying 55k a year, which I think is the highest I have heard.

Re obsolescence he's not talking about an acceleration, or Georgian/Victorian, just going with the old chestnut based on long term average of 0.5% houses becoming obsolete every year.

MacronvFrugals · 03-03-2021 03:41PM

Hubertj wrote: »

Is 50k the highest number so far? Are the developers even stating that?!?

As for obsolescence perhaps he considers an acceleration in buildings having to be replaced? Georgian / Victorian houses become economically unviable to renovate / modernise?

The housing minister said a blatant lie in an interview last week stating if we don't open up construction we'd be missing out on 800 new builds a week.

42k a year sure we're grand

fliball123 · 03-03-2021 03:53PM

awec wrote: »

We still have the veto but it's not like we could veto proposals and they'd turn around and be like "ah that's grand lads, we'll just forget about it".

There will be changes around taxation, compromises will be made. Saying no all the time won't work, we'll have to engage. The corpo rate may go up or it may stay the same.

The idea that Ireland is set to be absolutely shafted is tenuous. The fixation on what the UK is doing is tenuous and ignorant of the huge elephant in the room on that front.

Well its been apparent that they have been trying to stop us using such a low corpo tax rate for a decade and have not been able to.. so what exactly has changed in the last month or so? The UK have shot themselves in the foot with Brexit and face 400 billion covid bill when we get out of this , their future is looking a hell of lot more bleak than Ireland's

MacronvFrugals · 03-03-2021 03:56PM

fliball123 wrote: »

Well its been apparent that they have been trying to stop us using such a low corpo tax for a decade and have not been able to.. so what exactly has changed in the last month or so? The UK have shot themselves in the foot with Brexit and face 400 billion covid bill when we get out of this , their future is looking a hell of lot more bleak than Ireland's

Having a direct phone line to the BOE printing press does offer a level of flexibility we don't have in fairness

Hubertj · 03-03-2021 03:59PM

schmittel wrote: »

He's actually saying 55k a year, which I think is the highest I have heard.

Re obsolescence he's not talking about an acceleration, or Georgian/Victorian, just going with the old chestnut based on long term average of 0.5% houses becoming obsolete every year.

Has there been a proper study done on actual obsolescence? So instead of x% estimate an actual analysis?

PropQueries · 03-03-2021 04:03PM

Its quite frankly amazing that public servants can indeed sometimes talk some sense. But, apparently when it's only impacting on their own back pockets i.e. the Dublin Bus pension fund deficit.

In an interview with the Irish Times today, Dublin Bus chief executive Ray Coyne said:

"Dublin Bus is planning to look at the feasibility of developing its prime property sites for residential and commercial purposes"

He then went on to say some very common sense things like:

"In the city centre environment, there’s lots of room above the depot and there’s also room below a depot. What we’ve seen in a number of other cities is that you can build above a bus depot and house your buses below ground level. You can then build mixed use residential above."

"If you look at Ringsend, there’s high rise apartments around that. So you can decant your buses out of Ringsend, do some retrofitting, build above and put your buses back in. There’s depot assets there, what’s the best use of those for the company and for the city?”

This is a prime example of why civil servants shouldn't get free pensions. Once they have skin in the game, they become very intelligent overnight which benefits all of society IMO

Link to interview in the Irish Times here: https://www.irishtimes.com/business/transport-and-tourism/dublin-bus-to-examine-developing-its-prime-property-sites-1.4500089

fliball123 · 03-03-2021 04:04PM

MacronvFrugals wrote: »

Having a direct phone line to the BOE printing press does offer a level of flexibility we don't have in fairness

And when they do use this mechansm what happens to everything else in relation to it. Will they keep printing to solve all of their problems until they get to a point where they have to stop using the 1 Pound coin as it has no value anymore like our 1 and 2 cents and go like the the pesato of old where it was 10000 pesatos to buy a lollipop. There are serious ramifications if they do this but I agree it is nice to have that flexibility. Although when they go away on holidays and its cost 200 Pound for a beer they might not be so happy .. But its all guess work. (and I am being a little over the top) What we know is they have added 400 Billion in debt over the last 2 years for covid. It will be interesting to see how they work through this.

JimmyVik · 03-03-2021 04:07PM

PropQueries wrote: »

Its quite frankly amazing that public servants can indeed sometimes talk some sense. But, apparently when it's only impacting on their own back pockets i.e. the Dublin Bus pension fund deficit.

In an interview with the Irish Times today, Dublin Bus chief executive Ray Coyne said:

"Dublin Bus is planning to look at the feasibility of developing its prime property sites for residential and commercial purposes"

He then went on to say some very common sense things like:

"In the city centre environment, there’s lots of room above the depot and there’s also room below a depot. What we’ve seen in a number of other cities is that you can build above a bus depot and house your buses below ground level. You can then build mixed use residential above."

"If you look at Ringsend, there’s high rise apartments around that. So you can decant your buses out of Ringsend, do some retrofitting, build above and put your buses back in. There’s depot assets there, what’s the best use of those for the company and for the city?”

This is a prime example of why civil servants shouldn't get free pensions. Once they have skin in the game, they become very intelligent overnight which benefits all of society IMO

Link to interview in the Irish Times here: https://www.irishtimes.com/business/transport-and-tourism/dublin-bus-to-examine-developing-its-prime-property-sites-1.4500089

Wait til they cost that idea

Cyrus · 03-03-2021 04:10PM

JimmyVik wrote: »

Wait til they cost that idea

indeed

subterranean storage for buses, there is no way that wont cost an arm and a leg if the govt are paying for it.

Villa05 · 03-03-2021 04:14PM

schmittel wrote:

Re obsolescence he's not talking about an acceleration, or Georgian/Victorian, just going with the old chestnut based on long term average of 0.5% houses becoming obsolete every year.

Is this because of high prices, there is added incentives to restore an old house as opposed to buying a new one.

What should the rate be. Do we have a rate for the UK for example

Wanderer78 · 03-03-2021 04:17PM

PropQueries wrote: »

Its quite frankly amazing that public servants can indeed sometimes talk some sense. But, apparently when it's only impacting on their own back pockets i.e. the Dublin Bus pension fund deficit.

In an interview with the Irish Times today, Dublin Bus chief executive Ray Coyne said:

"Dublin Bus is planning to look at the feasibility of developing its prime property sites for residential and commercial purposes"

He then went on to say some very common sense things like:

"In the city centre environment, there’s lots of room above the depot and there’s also room below a depot. What we’ve seen in a number of other cities is that you can build above a bus depot and house your buses below ground level. You can then build mixed use residential above."

"If you look at Ringsend, there’s high rise apartments around that. So you can decant your buses out of Ringsend, do some retrofitting, build above and put your buses back in. There’s depot assets there, what’s the best use of those for the company and for the city?”

This is a prime example of why civil servants shouldn't get free pensions. Once they have skin in the game, they become very intelligent overnight which benefits all of society IMO

Link to interview in the Irish Times here: https://www.irishtimes.com/business/transport-and-tourism/dublin-bus-to-examine-developing-its-prime-property-sites-1.4500089

podcast version

https://player.fm/series/irish-times-inside-business/dublin-bus-ceo-ray-coyne-on-the-future-of-transport-in-the-city

hometruths · 03-03-2021 04:19PM

Hubertj wrote: »

Has there been a proper study done on actual obsolescence? So instead of x% estimate an actual analysis?

I'm sure somebody somewhere must have attempted it, but never see anything referenced. The only thing I found which is still being cited today, was a count from 2012. Using that today is pretty silly.

The impact is obviously pretty easy to measure in changes in the housing stock. As latest Geodirectory report showed more houses were brought back in to use than became derelict. If you discount this fact housing need forecasts are wildly over estimated.

It is also important to recognise that the market is pretty good at controlling obsolescence. Properties in Longford are far more likely to become obsolete than those in Dublin, for obvious reasons.

PropQueries · 03-03-2021 04:19PM

Villa05 wrote: »

Is this because of high prices, there is added incentives to restore an old house as opposed to buying a new one.

What should the rate be. Do we have a rate for the UK for example

You should see how quickly and cheaply they could bring these derelict buildings up to scratch if there was an annual 10% derelict property tax on them.

And no, it's not some, way out there, unworkable, socialist idea. Washington D.C. has a 10% annual property tax if the building is derelict

hometruths · 03-03-2021 04:23PM

Villa05 wrote: »

Is this because of high prices, there is added incentives to restore an old house as opposed to buying a new one.

What should the rate be. Do we have a rate for the UK for example

As mentioned to Hubertj, more to do with houses in Longford falling nto disrepair where there is no demand for them. But this has to be balanced with houses elsewhere being brought back into use.

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

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2021 Irish Property Market chat - mod warnings post 1