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2021 Irish Property Market chat - mod warnings post 1

hometruths

Happy new year to all.

2020 was the year of pent up demand. I think 2021 will be the year the pent up supply comes to market.

I think the pent up supply will exceed the pent up demand and prices will fall. By how much I have no idea!

edit: Mod Warnings

This thread is about the Irish Property Market, it is not about:
* Immigration
* Refugees
* Welfare recipients
* Welfare rates
* General Irish politics beyond its impact on property
* General Irish economy beyond its impact on property
* How wonderful Country X is to buy in

Additionally, the specific issue of Geodirectory vacancy figures has been done to death and is not to be discussed again.

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Graham

PropQueries wrote: »

The figure was quoted in an Irish Independent article two weeks ago

I don't see the part that suggests these will come from the private market or where "DCC have recently stated they're in active negotiations with c. 4,000 property owner in the city".

jill_valentine

Cyrus wrote: »

out of interest and this is a genuine question, what should a single person on the median income be able to buy in your opinion, say in a major urban centre and rurally?

In a major urban centre, I believe it should be possible for a single median earner to purchase a one bedroom or studio flat within reasonable commuting distance of employment.

Rurally, that's probably a lot more variable, but honestly I think bang for buck kinda manages itself out there because the distance from services etc are the flipside of living in something standalone, with more space.

I recognise that single earners and units of that size are not an economically appealing market for most commercial developers, but on a social level there's clearly an urgent need for them. Social good is the government's lookout, it should be an obvious ambition to engineer circumstances where those units get built, rather than just... I don't know what the Gov idea is, hoping everyone on the homelessness list marries each other?

PropQueries

Graham wrote: »

I don't see the part that suggests these will come from the private market or where "DCC have recently stated they're in active negotiations with c. 4,000 property owner in the city".

I had to google the definition of "earmarked":

earmark: "designate (funds or resources) for a particular purpose."

Maybe there's another definition?

Original quote:

"The letter also gives an example of how the €75m could be repurposed, as there are currently 4,000 homes within Dublin City Council which have been earmarked for affordable purchase or rental."

"currently" being the important term IMO

Graham

Mod Note

You've spent the last few days insisting DCC are actively negotiating with 4000 property owners and competing with every private purchaser. That article suggests neither.

Backup your claim or stop making it.

PropQueries

Graham wrote: »

Mod Note

You've spent the last few days insisting DCC are actively negotiating with 4000 property owners and competing with every private purchaser. That article suggests neither.

Backup your claim or stop making it.

The quote:

"The letter also gives an example of how the €75m could be repurposed, as there are currently 4,000 homes within Dublin City Council which have been earmarked for affordable purchase or rental."

"earmarked" means the funds have already been designated to specific properties, but DCC have not yet finalised the purchase i.e. currently in active negotiations.

"currently" means they have already identified these 4,000 properties and given that the sales have not yet been finalised, I assume the property seller will keep the property up for sale (and therefore hope to attract other bidders) until he gets a signed sale or lease agreement from DCC.

Why would the seller remove their property from the market just because DCC have expressed an interest? He/she will want the highest price possible and maybe someone else in the private market will place a higher bid than DCC.

To me, that means DCC is the counter-bidder on many of the less than c. 2,000 homes currently listed for sale in Dublin City on MyHome.ie

L1011

That does not mean they are actively in negotiations - and ignores that many of those are new builds that will never go on public sale. If that is the entire evidence basis you have, you have to stop making the claim. Do not make it again. Do not reply to this post.

HansKroenke

jill_valentine wrote: »

In a major urban centre, I believe it should be possible for a single median earner to purchase a one bedroom or studio flat within reasonable commuting distance of employment.

Rurally, that's probably a lot more variable, but honestly I think bang for buck kinda manages itself out there because the distance from services etc are the flipside of living in something standalone, with more space.

I recognise that single earners and units of that size are not an economically appealing market for most commercial developers, but on a social level there's clearly an urgent need for them. Social good is the government's lookout, it should be an obvious ambition to engineer circumstances where those units get built, rather than just... I don't know what the Gov idea is, hoping everyone on the homelessness list marries each other?

It should be possible for people to rent their own place on an affordable budget, let alone be able to purchase one, for all of the social benefits you refer to in your post. Looking at avaergae rents for one bedroom apartments in Dublin of 1600, I feel we should be targeting, based on today's average salaries, for rents of such dwellings to drop 30/40% at least.

Anecdotally, from my own experience in Ireland growing up and renting versus what I have experienced with Germans who grew up renting and moving out younger, living by themselves if they wanted to as they can afford it in Germany, Irish people take a lot longer to mature and settle down, have kids and gain that confidence one gains from living alone as an adult. Even without a huge amount of money there is a much higher quality of life as not a lot of cash is sucked up in property and therefore people seem to be less dependent on handouts so therefore they don't have the howiya class we have in Ireland. I think housing should be over supplied relative to demand and if that results in cost of housing dropping significantly, that is a positive thing. I do not think I am alone in this view, it just makes sense to me as I'm sure it does to others.

Pelezico

awec wrote: »

I would think the bank would want an explanation on where the money for the difference is coming from.

That is nonsense. Why would the bank seek an explanation for early repayment of a mortgage?

When interest rates were higher about a thousand years ago early payment was very good strategy.

Pelezico

Graham wrote: »

I don't see the part that suggests these will come from the private market or where "DCC have recently stated they're in active negotiations with c. 4,000 property owner in the city".

I doubt there are 4000 sellers in Dublin right now. The stock on the market has quite simply collapsed.

I reckon it must be having a big impact on daft.ie and myhome profits. Total properties for sale nationwide circa 12000.

Little wonder that two houses on my street went sale agreed in a few weeks.

Actually I also wonder what can kickstart the market.How do we get back to 25000 homes on sale?

Cyrus

Pelezico wrote: »

That is nonsense. Why would the bank seek an explanation for early repayment of a mortgage?

When interest rates were higher about a thousand years ago early payment was very good strategy.

It’s still a good strategy it’s a gteed 2-3 percent net return on your investment

Pelezico

Graham wrote: »

I don't see the part that suggests these will come from the private market or where "DCC have recently stated they're in active negotiations with c. 4,000 property owner in the city".

Cyrus wrote: »

It’s still a good strategy it’s a gteed 2-3 percent net return on your investment

It used to be 17%. Yes , I had a 17% mortgage and used to do small overpayments every month.

Timing belt

Villa05 wrote: »

The taxpayer provides essential services to these buildings like water, waste, transport services and infrastructure. Without these services the properties are worthless, its not unreasonable for business that benefit from these services and provision/maintenence of infrastructure to make a contribution to their cost like every other citizen

Do you agree that landlords pay for these services? If the answer is yes then I don't see where the issue with a REIT is as they have to distribute income to their investors who in turn pay tax.

If the REIT was to pay the tax then the investor would be paying tax twice by using a company or corporate vehicle.

Do you think individual Landlords should pay double the tax they are paying?

Timing belt

Pelezico wrote: »

That is nonsense. Why would the bank seek an explanation for early repayment of a mortgage?

To ensure that another loan was not taken out with the property being used as collateral.

Pelezico

Timing belt wrote: »

To ensure that another loan was not taken out with the property being used as collateral.

Nonsense. The deeds are with the bank and cannot be used as collateral.

Going in with loads of cash is a different matter but that would be the same for any transaction

Timing belt

Pelezico wrote: »

Nonsense. The deeds are with the bank and cannot be used as collateral.

Going in with loads of cash is a different matter but that would be the same for any transaction

After the 08 crash they found that multiple banks all had claims on the same property and none knew about the other claims and to enforce anything would be a legal nightmare..... So it is not rubbish.

If the bank know that you got 50k of a loan from a relative and 150k of a mortgage from them then they will be reluctant to lend to you because the relative could claim that he owns 25% house and argue in court for years and years.

hometruths

BPFI have published their latest housing market monitor, confirming the fall in individual BTL investors:

At the peak of the mortgage activity in 2006, BTL loans accounted for around 20% of total mortgage drawdowns compared to less than 1% in 2020. At the same time, there has been a marked increase in the role of non-household buyers which includes private companies, charitable organisations, and state institutions who now account for 23% of all market transactions, up from 3% in 2010.”

Also confirming the state as a major buyer as indicated by many posters on here.

Knowing the wasteful attitude of the councils, what worries me is that I suspect Graham might be correct - there was no such thing as active negotiations, they were just earmarked for purchase and paid whatever price the vendor asked.

Graham

schmittel wrote: »

there was no such thing as active negotiations, they were just earmarked for purchase and paid whatever price the vendor asked.

I understand a very significant chunk were not to be purchased at all, they are council owned sites earmarked for social/affordable housing.

JimmyVik

schmittel wrote: »

BPFI have published their latest housing market monitor, confirming the fall in individual BTL investors:

Also confirming the state as a major buyer as indicated by many posters on here.

Knowing the wasteful attitude of the councils, what worries me is that I suspect Graham might be correct - there was no such thing as active negotiations, they were just earmarked for purchase and paid whatever price the vendor asked.

When I was buying I was given a list by a friend who works in the council (in the department that procures private property for the council) of estates to avoid. The list included old estates that now or soon would have had 20% of the properties bought or rented by the council and, to my surprise, entire sections (up to half) of estates with new builds that were bought or agreed to be bought by the council even before they were built. And there were a lot of estates on that list.
The council have so many properties either bought or rented in many estates that they cannot actually buy or rent anymore in those estates. I think the term they used was "socially satisfied" for the estates like this. Basically means full to the brim of council rentals/ council owned.

PropQueries

Graham wrote: »

I understand a very significant chunk were not to be purchased at all, they are council owned sites earmarked for social/affordable housing.

If the pre-covid regularly media reported figures of c. 5,000 AirBnB homes in Dublin was correct and the Minister for Housing said back in July that:

“The Airbnb properties that are now not being used – is there an opportunity for the state to buy more of them? It’s something that I’m looking at, absolutely. It is something that I want to do frankly,” said O’Brien. If there are opportunities for the state to buy, at reasonable prices, so we can house people and then they can rent them on a secure basis from the state, then we should.”

Wouldn't that number of former AirBnB houses and apartments fit in nicely with the c. 4,000 homes figure DCC stated they had currently earmarked for purchase or rental? It is 8 months later at this stage.

Link to Minister for Housing interview in July 2020 here: https://www.thejournal.ie/darragh-o-brien-housing-minister-5146915-Jul2020/

JimmyVik

PropQueries wrote: »

If the pre-covid regularly media reported figures of c. 5,000 AirBnB homes in Dublin was correct and the Minister for Housing said back in July that:

“The Airbnb properties that are now not being used – is there an opportunity for the state to buy more of them? It’s something that I’m looking at, absolutely. It is something that I want to do frankly,” said O’Brien. If there are opportunities for the state to buy, at reasonable prices, so we can house people and then they can rent them on a secure basis from the state, then we should.”

Wouldn't that number of former AirBnB houses and apartments fit in nicely with the c. 4,000 homes figure DCC stated they had currently earmarked for purchase or rental? It is 8 months later at this stage.

Link to Minister for Housing interview in July 2020 here: https://www.thejournal.ie/darragh-o-brien-housing-minister-5146915-Jul2020/

I always thought there was something amiss here.
State passes legislation and stamps the foot down to make it extremely difficult and unprofitable for the people who own rentals or airbnbs to continue to operate their business.
Make the environment unbearable so owners are pressure to sell. All so that the state can swoop in and buy them up.
Something definitely wrong with that picture. Major bullying going on there.

fliball123

schmittel wrote: »

I wonder why.

Well thats just how its gone and its not just Ireland that is unique in this , all first world countries property is set for sale for a couple as apposed to a singleton.

PropQueries

schmittel wrote: »

BPFI have published their latest housing market monitor, confirming the fall in individual BTL investors:

Also confirming the state as a major buyer as indicated by many posters on here.

Knowing the wasteful attitude of the councils, what worries me is that I suspect Graham might be correct - there was no such thing as active negotiations, they were just earmarked for purchase and paid whatever price the vendor asked.

I'll agree that it's entirely possible that I'm giving DCC too much credit

But given that it's so hard to get actual up to date real data in this country, in most cases, we have to read between the lines whenever someone involved in such issues releases a statement or makes an off the cuff comment in order to see what's really going on at the present time IMO

JimmyVik

I'll see if i can find that "Socially satisfied" list and post up a snippet.

Edit, Here is a screenshot of part of it.
Donabate and Lusk arent in that shot, but is choc full..

Pretty sure under FOI you could probably get the full updated list off each council.

Villa05

Timing belt wrote:

If the REIT was to pay the tax then the investor would be paying tax twice by using a company or corporate vehicle.

You do regularly post about the attractive returns for these Reits. These returns are partly a product of not having to pay for inputs provided by the state. It is only fair and proper that they make a contribution to cover that cost.

Private landlords are taxed quiet heavily

hometruths

Graham wrote: »

I understand a very significant chunk were not to be purchased at all, they are council owned sites earmarked for social/affordable housing.

I have no doubt its true that a big chunk of the 4000 referenced in the article Props linked are council owned, but I am equally sure that a chunk are earmarked to be bought from a third party. The BFPI figures indicate this.

It is undeniable that the state is an elephant in the market place either by direct purchase, or by agreeing to lease the properties that charities and private companies purchase.

Reading the exchange between you and Props about active negotiations vs earmarking made me think that a big part of the problem is that the state is unlikely to be negotiating actively enough.

PropQueries

schmittel wrote: »

I have no doubt its true that a big chunk of the 4000 referenced in the article Props linked are council owned, but I am equally sure that a chunk are earmarked to be bought from a third party. The BFPI figures indicate this.

It is undeniable that the state is an elephant in the market place either by direct purchase, or by agreeing to lease the properties that charities and private companies purchase.

Reading the exchange between you and Props about active negotiations vs earmarking made me think that a big part of the problem is that the state is unlikely to be negotiating actively enough.

And given that there are less than c. 3,000 homes for sale in all of Co. Dublin (on MyHome.ie) and DCC is just one of 4 councils in Co. Dublin, it doesn't take much activity on the part of the 4 Dublin councils to move the market price significantly in either direction.

As they're buying, it drives prices up, as they exit, it drives prices down.

Graham

PropQueries wrote: »

Wouldn't that number of former AirBnB houses and apartments fit in nicely with the c. 4,000 homes figure DCC stated they had currently earmarked for purchase or rental? It is 8 months later at this stage.

DCC Target for 'acquisitions' this year is 295.

That's not my guess. That's not my interpretation. That's not a number I've contrived by smushing together 37 random facts and sentences from assorted news sources.

That's the number from DCC.

295 Acquisitions

PropQueries

Graham wrote: »

DCC Target for 'acquisitions' this year is 295.

That's not my guess. That's not my interpretation. That's not a number I've contrived by smushing together 37 random facts and sentences from assorted news sources.

That's the number from DCC.

295 Acquisitions

As I'm regularly asked. Do you have a source/link for that? I'm sure you have or you wouldn't have mentioned it

Graham

PropQueries wrote: »

As I'm regularly asked. Do you have a source/link for that? I'm sure you have or you wouldn't have mentioned it

DCC housing report Jan 2021.

hometruths

Graham wrote: »

DCC housing report Jan 2021.

A link would be helpful?