2021 Irish Property Market chat - mod warnings post 1

hometruths · 06-03-2021 08:56PM

PropQueries wrote: »

But I don’t think the institutional investors are interested in buying that one three bed semi that comes up for sale in the middle of an estate in e.g. Stillorgan.

The problem now is that there’s a good chance the state is now directly competing with that family looking to buy that three bed in Stillorgan IMO

Yes and that 3 bed in Stillorgan has a value directly linked to its rental yield. If the state is setting a floor for rental values they are driving the price of that property up whether they are bidding on it or not.

Cyrus · 06-03-2021 09:10PM

schmittel wrote: »

Yes and that 3 bed in Stillorgan has a value directly linked to its rental yield. If the state is setting a floor for rental values they are driving the price of that property up whether they are bidding on it or not.

Are 3 bed semis in desirable suburbs valued at rental yield given the majority are bought by families to live in ?

I’d argue the desirability of the location is the determining factor.

hometruths · 06-03-2021 09:14PM

Cyrus wrote: »

Are 3 bed semis in desirable suburbs valued at rental yield given the majority are bought by families to live in ?

I’d argue the desirability of the location is the determining factor.

Yes, the rental yield is very relevant.

Hubertj · 06-03-2021 09:24PM

schmittel wrote: »

I don't think Prop's is saying (I'm sure he'll correct me if I am wrong) is that the state is bidding on every property, outbidding each and every buyer. That's ridiculous.

But in the market as a whole, where prices are set at the margin, the state is the marginal buyer, which you appear to agree with:

If investors are piling in for yield because the state is to all intents and purposes setting a floor for rents, then the state is essentially setting the price at the margin. The Redrock deal I posted yesterday is a perfect example.

If the state is driving prices upwards by their activity in the market, then Props is bang on the money. Once again.

I thought prices have been pretty much flat or decreased sloughtly since end of 2018? We did see some increase in prices 2nd half of last year but was that not due to reduced supply and “pent up demand”?

Cyrus · 06-03-2021 09:26PM

schmittel wrote: »

Yes, the rental yield is very relevant.

If I am buying a house to live in the theoretical rental yield isn’t a factor in my decision making process, is it in a location that I want to live, does it have desirable amenities, does it meet my space requirements and can I afford it are what matters.

PropQueries · 06-03-2021 09:26PM

Cyrus wrote: »

Are 3 bed semis in desirable suburbs valued at rental yield given the majority are bought by families to live in ?

I’d argue the desirability of the location is the determining factor.

Well, unless the EU, ECB or the bond market puts some manners on the states current spending spree, there will be very few “desirable” locations left in Dublin IMO

Just ask the residents of Ailesbury Road in Ballsbridge (second most expensive street on the monopoly board I believe):

https://independent.ie/irish-news/dermot-desmonds-ballymun-towers-south-dublin-tag-for-plan-on-ex-rte-land-branded-incredible-39510797.html

hometruths · 06-03-2021 09:30PM

Hubertj wrote: »

I thought prices have been pretty much flat or decreased sloughtly since end of 2018? We did see some increase in prices 2nd half of last year but was that not due to reduced supply and “pent up demand”?

Fair point, I should have said if the state is "putting upward pressure on prices" rather than "driving prices upward". The marginal buyer can be putting upward pressure on prices even in a falling market.

The state has pent up demand too. Because they have massive waiting lists for social housing. Oddly enough because rents are so high. And round and round we go.

hometruths · 06-03-2021 09:33PM

Cyrus wrote: »

If I am buying a house to live in the theoretical rental yield isn’t a factor in my decision making process, is it in a location that I want to live, does it have desirable amenities, does it meet my space requirements and can I afford it are what matters.

Sure, but just because you're not planning on renting it out and thus don't consider the rental yield relevant, it's still a factor in the market price that you end up paying for the things that are important to you.

PropQueries · 06-03-2021 09:42PM

schmittel wrote: »

Sure, but just because you're not planning on renting it out and thus don't consider the rental yield relevant, it's still a factor in the market price that you end up paying for the things that are important to you.

I would think it’s definitely a factor in “desirable” locations.

Many desirable locations have relatively older populations and when the time comes for the children / grandchildren to decide whether to rent or sell their inherited property, the expected rental income would definitely be a factor in their decision to either sell or keep it IMO

hometruths · 06-03-2021 09:48PM

PropQueries wrote: »

I would think it’s definitely a factor in “desirable” locations.

Many desirable locations have relatively older populations and when the time comes for the children / grandchildren to decide whether to rent or sell their inherited property, the expected rental income would definitely be a factor in their decision to either sell or keep it IMO

Its a factor in all locations!

PropQueries · 06-03-2021 10:31PM

Interesting article in the Irish Times: “LDA chief executive John Coleman believes he can improve on local authorities’ six-year process and bring a raw piece of land to the stage of having housing on it in four years.”

It’s a subscriber article but you can get the gist from the first paragraph.

But it does draw up comparisons with Charlie Haughey and how he got the Beaumont Hospital built:

“Haughey established the Beaumont Hospital Board in 1977, to build and equip an acute general hospital in his constituency. Rather than engage more architects to design a new hospital, which would involve a considerable amount of time and expense, Mr. Haughey decided to utilise the existing plans used for the construction of the Cork University Hospital (Wilton) in the early 70's. This inspired decision ensured that the hospital was built without any undue delay at a cost of €52.7 million.”

He basically said that they already built a hospital in Cork, just take those plans and build it in Beaumont. A field is a field whether it’s in Cork, Mayo or Dublin. It’s not brain surgery.

It just shows that with the right person in charge, the housing issue could be resolved quickly and relatively cheaply IMO

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/affordable-housing-can-land-development-agency-succeed-where-others-have-failed-1.4502279

Link to Beaumont Hospital and Charlie Haughey article here: https://www.charlesjhaughey.ie/articles/beaumont-hospital

Timing belt · 06-03-2021 10:38PM

PropQueries wrote: »

Interesting article in the Irish Times: “LDA chief executive John Coleman believes he can improve on local authorities’ six-year process and bring a raw piece of land to the stage of having housing on it in four years.”

It’s a subscriber article but you can get the gist from the first paragraph.

But it does draw up comparisons with Charlie Haughey and how he got the Beaumont Hospital built:

“Haughey established the Beaumont Hospital Board in 1977, to build and equip an acute general hospital in his constituency. Rather than engage more architects to design a new hospital, which would involve a considerable amount of time and expense, Mr. Haughey decided to utilise the existing plans used for the construction of the Cork University Hospital (Wilton) in the early 70's. This inspired decision ensured that the hospital was built without any undue delay at a cost of €52.7 million.”

He basically said that they already built a hospital in Cork, just take those plans and build it in Beaumont. A field is a field whether it’s in Cork, Mayo or Dublin. It’s not brain surgery.

It just show that with the right person in charge, the housing issue could be resolved quickly and relatively cheaply IMO

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/affordable-housing-can-land-development-agency-succeed-where-others-have-failed-1.4502279

Link to Beaumont Hospital and Charlie Haughey article here: https://www.charlesjhaughey.ie/articles/beaumont-hospital

There were a lot of houses built in Cork thanks to the building of CUH back then and it wasn't from the extra employment more the raw materials that went missing....

PropQueries · 06-03-2021 10:51PM

Timing belt wrote: »

There were a lot of houses built in Cork thanks to the building of CUH back then and it wasn't from the extra employment more the raw materials that went missing....

But it does take quite a certain level of incompetence for the current people in charge of housing to make everyone angry, quite literally, everyone from the billionaires living on Ailesbury Road right down to the people living on the street IMO

Cyrus · 06-03-2021 11:10PM

schmittel wrote: »

Sure, but just because you're not planning on renting it out and thus don't consider the rental yield relevant, it's still a factor in the market price that you end up paying for the things that are important to you.

The more relevant factor is the people who also have the same needs and wants and what their spending power is imo .

In areas where the majority are owner occupiers that’s the biggest factor and rental yield is less so.

Cyrus · 06-03-2021 11:11PM

PropQueries wrote: »

Well, unless the EU, ECB or the bond market puts some manners on the states current spending spree, there will be very few “desirable” locations left in Dublin IMO

Just ask the residents of Ailesbury Road in Ballsbridge (second most expensive street on the monopoly board I believe):

https://independent.ie/irish-news/dermot-desmonds-ballymun-towers-south-dublin-tag-for-plan-on-ex-rte-land-branded-incredible-39510797.html

Desmond didn’t want apartments of that scale built in Donnybrook , that doesn’t mean it’s not desirable ? And it doesn’t really impact ailsbury road anyway.

hometruths · 06-03-2021 11:14PM

Cyrus wrote: »

The more relevant factor is the people who also have the same needs and wants and what their spending power is imo .

In areas where the majority are owner occupiers that’s the biggest factor and rental yield is less so.

Yes, but it remains a factor that affects the price.

PropQueries · 06-03-2021 11:27PM

Cyrus wrote: »

Desmond didn’t want apartments of that scale built in Donnybrook , that doesn’t mean it’s not desirable ? And it doesn’t really impact ailsbury road anyway.

While I don’t know the full reasons for any of the objections, I think some objections may have being at least partially to do with DCC agreeing to buy 61 of those c. 600+ apartments. Those 61 apartments are also all to be located in one block in the scheme from my understanding.

It wouldn’t have taken the residents of nearby areas (IMO) long to then realise that the other 500+ apartments would also be most likely social housing in all but name (long-term leasing, HAP etc.), as nobody (with the means to buy them at the proposed asking prices) would then buy any of the remaining apartments due to this plan.

People buy in such areas to live near their own class (in general) so it will definitely end up being primarily social housing, which is also apparently against current government policy of grouping social housing all in one area IMO

Marius34 · 06-03-2021 11:43PM

schmittel wrote: »

If investors are piling in for yield because the state is to all intents and purposes setting a floor for rents, then the state is essentially setting the price at the margin. The Redrock deal I posted yesterday is a perfect example.

If the state is driving prices upwards by their activity in the market, then Props is bang on the money. Once again.

Props was wrong here. He was the one on opposite side over half year ago, saying the Government won't be able to push prices this time. And now it appears they are, and will be a competitors on the demand side.

hometruths · 06-03-2021 11:45PM

Marius34 wrote: »

Props was wrong here. He was the one on opposite side over half year ago, saying the Government won't be able to push prices this time. And now it appears they are, and will be a competitors on the demand side.

So he is right now then?

PropQueries · 06-03-2021 11:49PM

Marius34 wrote: »

Props was wrong here. He was the one on opposite side over half year ago, saying the Government won't be able to push prices this time. And now it appears they are, and will be a competitors on the demand side.

I believe my point was that when the funds (who I believe own a significant percentage of the vacant property in the state) decide to exit, there’s not much the state can do to stop them.

The current situation where the state is actively outbidding private buyers for second-hand properties (with borrowed funds) is a completely different kettle of fish IMO

And when the state is forced to pull back from this current, temporary buying spree (due to budget constraints), there will be significantly fewer buyers than many people believe to make up for their exit and prices will drop significantly IMO

Timing belt · 06-03-2021 11:56PM

PropQueries wrote: »

But it does take quite a certain level of incompetence for the current people in charge of housing to make everyone angry, quite literally, everyone from the billionaires living on Ailesbury Road right down to the people living on the street IMO

Yes they could take out the old rule book and build standard homes on a large scale relatively cheaply but society have decided that they don't want more council estates and want all social classes integrated... The cost of that is DCC paying top dollar for rent/property in high in demand locations.

Marius34 · 07-03-2021 12:04AM

schmittel wrote: »

So he is right now then?

Yes, in the sense that Government competes with buyers. I think this is obvious to almost everyone here. I'll say finally everyone is right on that part, even the ones who thought about the crash finally got it.

PropQueries · 07-03-2021 12:15AM

Marius34 wrote: »

Yes, in the sense that Government competes with buyers. I think this is obvious to almost everyone here. I'll say finally everyone is right on that part, even the ones who thought about the crash finally got it.

Hold on! Are we finally at the “acceptance” stage?

Marius34 · 07-03-2021 12:30AM

PropQueries wrote: »

Hold on! Are we finally at the “acceptance” stage?

On the part that there are and will be demands from Government, REIT's and other organizations.. Always was, since joined this group, as I see lack of properties from many different sectors.

PropQueries · 07-03-2021 12:33AM

Marius34 wrote: »

On the part that there are and will be demands from Government, REIT's and other organizations.. Always was, since joined this group, as I see lack of properties from many different sectors.

Well, once the government starts pulling in the purse strings, it will be interesting to see how long the funds remain interested when the state isn’t the renter of first and last resort IMO

Timing belt · 07-03-2021 12:37AM

PropQueries wrote: »

Well, once the government starts pulling in the purse strings, it will be interesting to see how long the funds remain interested when the state isn’t the renter of first and last resort IMO

I somehow think that funds will have their leases water tight so should be guaranteed income for a long time to come and will probably maintain headline rents because of it ensuring that rent will remain high and off the back of it property valuations.....

Cyrus · 07-03-2021 12:40AM

PropQueries wrote: »

While I don’t know the full reasons for their objections, I think any objections may have being at least partially to do with DCC agreeing to buy 61 of those c. 600+ apartments. Those 61 apartments are also all to be located in one block in the scheme from my understanding.

It wouldn’t have taken the residents of Ailesbury Road and other nearby areas (IMO) long to then realise that the other 500+ apartments would also be most likely social housing in all but name (long-term leasing, HAP etc.), as nobody (with the means to buy them at the proposed asking prices) would then buy any of the remaining apartments due to this plan.

People buy in such areas to live near their own class (in general) so it will definitely end up being primarily social housing, which is also apparently against current government policy of grouping social housing all in one area IMO

DCC agreeing to buy ? The developer was required by law to sell a certain percentage to the council the same as any other new development.

Is marianella in rathgar primarily social housing ? Because it’s the same thing there , is honey park / cualanor in dun laoghaire primarily social housing ?

Hubertj · 07-03-2021 12:41AM

There are at least 1 million vacant properties around the country. The state should CPO them. Problem solved. They could also Airbnb the spares to raise revenue as I believe many local authorities have serious issues with rent arrears so they could net Airbnb revenue against rent arrears. I’m onto something here

Cyrus · 07-03-2021 12:42AM

schmittel wrote: »

So he is right now then?

Well if you take two sides of an argument you have to be right

Timing belt · 07-03-2021 12:43AM

Hubertj wrote: »

There are at least 1 million vacant properties around the country. The state should CPO them. Problem solved. They could also Airbnb the spares to raise revenue as I believe many local authorities have serious issues with rent arrears so they could net Airbnb revenue against rent arrears. I’m onto something here

We are going to heaven lads hooray!!!

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

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2021 Irish Property Market chat - mod warnings post 1