2021 Irish Property Market chat - mod warnings post 1

Hubertj · 09-03-2021 10:07PM

https://voxeu.org/article/worldwide-building-height-gaps-their-determinants-and-their-implications#.YEd29DdPkGc.mailto

I found this very interesting. An analysis of not building up and impact it can have on cities as well as prices and affordability. Ireland top of list for not building up. It really needs to be done, and done properly, in the right places in our cities. Would be interesting to understand the cost base for different height buildings and at what height cost benefit can factor into more affordable units.

Worth a read as a lot more interesting than scrolling through pages of conspiracy theory, made up facts and misrepresented articles.

Pelezico · 09-03-2021 10:09PM

Interesting Central Bank questioning at Oirechtas hearing today.

Circa 17000 people not paying mortgage due to covid. Seems like a lot of defaulters. How can they kickstart their microeconomies?

MacronvFrugals · 09-03-2021 10:16PM

Hubertj wrote: »

https://voxeu.org/article/worldwide-building-height-gaps-their-determinants-and-their-implications#.YEd29DdPkGc.mailto

I found this very interesting. An analysis of not building up and impact it can have on cities as well as prices and affordability. Ireland top of list for not building up. It really needs to be done, and done properly, in the right places in our cities. Would be interesting to understand the cost base for different height buildings and at what height cost benefit can factor into more affordable units.

Worth a read as a lot more interesting than scrolling through pages of conspiracy theory, made up facts and misrepresented articles.

As mentioned recently by Lorcan Sirr from TUD

The EU average for apartment stock in urban areas is 40% Dublin is currently 35.8% he reckons it’s completely a developer myth talking about height.

Cyrus · 09-03-2021 10:20PM

schmittel wrote: »

As i understand it if profits rise intemationally from IP that apple holds in Ireland they must increase their workforce in Ireland in proportion. Its part of the deal.

I think there is a decent chance that the dedicated tax teams are simply complying with the current tax laws than planning for the future.

As I understand it Apple holds its IP in the US. And anyone that was holding IP here has also moved it back.

PropQueries · 09-03-2021 10:26PM

MacronvFrugals wrote: »

As mentioned recently by Lorcan Sirr from TUD

The EU average for apartment stock in urban areas is 40% Dublin is currently 35.8% he reckons it’s completely a developer myth talking about height.

So we’re not far off the EU average? And the primary reason for apartments in many EU countries was a little thing that happened between 1939 and 1945 and afterwards they were required to house a lot of people quickly.

Subutai · 09-03-2021 10:36PM

MacronvFrugals wrote: »

As mentioned recently by Lorcan Sirr from TUD

The EU average for apartment stock in urban areas is 40% Dublin is currently 35.8% he reckons it’s completely a developer myth talking about height.

Apartment stock here and in other European capitals are very different. A lot of the "Dublin is very dense actually" and "there are loads of apartments" arguments depend on people being piled in to little more than alum accommodation in the likes of Mountjoy square.

The arguments are usually made by ivory Tower academics like Orla Hegarty and Lorcan Sirr who are also, ironically, against co-living. Co-living is modern tenements you see, and we don't currently have modern tenements packed to the gills with precarious workers all over the city.

Hubertj · 09-03-2021 10:36PM

MacronvFrugals wrote: »

As mentioned recently by Lorcan Sirr from TUD

The EU average for apartment stock in urban areas is 40% Dublin is currently 35.8% he reckons it’s completely a developer myth talking about height.

Sorry I don’t follow what you mean. Is Lorcan sirr saying building up isn’t the answer - is there a paper on it or anything as I’d be interested to read differing viewpoints on it. What about other factors such as urban sprawl vs more dense hosing supported by appropriate infrastructure?

PropQueries · 09-03-2021 10:56PM

MacronvFrugals wrote: »

As mentioned recently by Lorcan Sirr from TUD

The EU average for apartment stock in urban areas is 40% Dublin is currently 35.8% he reckons it’s completely a developer myth talking about height.

Actually a very interesting comment. Haven’t really questioned that narrative that has been put out about how we have a low level of apartments compared to continental Europe. Always assumed it was true.

But looking at some sources online and checked the Netherlands given that it’s one of the most densely populated countries in Europe and the housing type statistics are eye opening, to me anyway:

18% detached
58% semi-detached
20% flats

That’s amazing to me as the Netherlands is only about half the size of ireland and has 17 million people.

Link here: https://www.statista.com/statistics/536536/distribution-of-the-population-in-the-netherlands-by-dwelling-type/

Subutai · 09-03-2021 11:14PM

PropQueries wrote: »

Actually a very interesting comment. Haven’t really questioned that narrative that has been put out about how we have a low level of apartments compared to continental Europe. Always assumed it was true.

But looking at some sources online and checked the Netherlands given that it’s one of the most densely populated countries in Europe and the housing type statistics are eye opening, to me anyway:

18% detached
58% semi-detached
20% flats

That’s amazing to me as the Netherlands is only about half the size of ireland and has 17 million people.

Link here: https://www.statista.com/statistics/536536/distribution-of-the-population-in-the-netherlands-by-dwelling-type/

The settlement pattern in the Netherlands is very different, and so is the density pattern. They do not, unlike Ireland, have a primate city. They have a lot of large urban areas none of which are overwhelmingly dominant.

They have 25 cities more populous than Limerick (Ireland's third largest city) but no city as populous as Dublin.

If you've a lot of people living in small and mid sized cities then the kind of suburban settlement pattern characterised by mid-rise and semi Ds is sustainable and doesn't lead to sprawl. If you have really only one large city, overwhelmingly dominant economically, then that same settlement pattern will lead to major sprawl and serious transport problems.

PropQueries · 09-03-2021 11:32PM

Subutai wrote: »

The settlement pattern in the Netherlands is very different, and so is the density pattern. They do not, unlike Ireland, have a primate city. They have a lot of large urban areas none of which are overwhelmingly dominant.

They have 25 cities more populous than Limerick (Ireland's third largest city) but no city as populous as Dublin.

If you've a lot of people living in small and mid sized cities then the kind of suburban settlement pattern characterised by mid-rise and semi Ds is sustainable and doesn't lead to sprawl. If you have really only one large city, overwhelmingly dominant economically, then that same settlement pattern will lead to major sprawl and serious transport problems.

Thanks.

Came across this analysis on eurostat, which gives a nice breakdown summary by EU country:

“In 2018, 46.0 % of people in the EU-27 lived in flats, close to one fifth (18.6 %) in semi-detached houses and over one third (34.7 %) in detached houses.

Among the EU Member States, the proportion of people living in flats in 2018 was at least 60.0 % in Latvia (66.2 %), Spain (64.9 %), Estonia (61.5 %) and Greece (60.6 %), and just below this level in Lithuania (59.5 %); a similarly high proportion of people also lived in flats in Switzerland (62.5 %). The share of people living in detached houses was highest among the EU Member States in Croatia (69.7 %), Slovenia (66.2 %), Romania (65.2 %) and Hungary (64.6 %); Denmark and Poland were the only other Member States where a majority of the population lived in a detached house. North Macedonia (74.6 %), Serbia (63.6 %) and Norway (57.5 %) also reported that high proportions of their populations lived in detached houses. The highest proportions of people living in semi-detached houses in EU Member States were reported in the Netherlands (58.0 %), Ireland (52.1 %), Malta (41.5 %) and Belgium (40.6 %). These were the only Member States where two fifths or more of the population lived in semi-detached houses. In the United Kingdom this share was even higher, reaching 60.8 %.”

First time I’ve looked into this and genuinely surprised that the narrative around our low level of apartments compared to the EU is near enough nonsense and does appear like a developer led narrative at this stage.

But your reasoning on Holland makes sense.

But in relation to some eastern EU, I would assume their higher apartment living is more due to cold war Soviet housing policy.

Edit: I take my last paragraph about Soviet policy back. Even that’s wrong.

We really don’t need any more apartments from looking at the above from eurostat. It’s insane how many of us (mainly me?) actually fell for this nonsense.

I’m genuinely shocked.

awec · 09-03-2021 11:41PM

I think the narrative about needing more apartments has been from the angle that apartments make more efficient use of expensive city land and let you house a great number of people due to higher densities.

It ignores the fact that people here have little to no interest of living in an apartment once they have a family.

Subutai · 09-03-2021 11:44PM

Talk to someone who's lived in apartments in somewhere like Germany and here. My European colleagues have frequently been shocked at what we call apartments.

I've no doubt there are lots of people living in apartments - Dublin is full of old buildings sub divided into apartments and packed as high as possible. That's not a sustainable way to live for small households, which is what the drive for more apartments is meant to accommodate.

awec · 09-03-2021 11:45PM

Subutai wrote: »

Talk to someone who's lived in apartments in somewhere like Germany and here. My European colleagues have frequently been shocked at what we call apartments.

I've no doubt there are lots of people living in apartments - Dublin is full of old buildings sub divided into apartments and packed as high as possible. That's not a sustainable way to live for small households, which is what the drive for more apartments is meant to accommodate.

Apartments here are not designed for families. Even purpose built apartment buildings are not designed for families.

There is generally no storage whatsoever. If you are really lucky you get a cupboard to store a few small items. But there is nowhere to keep the christmas decorations when not being used, suitcases, the child's pram, bicycles, golf clubs etc.

I guess you could say that people don't live in apartments here because apartments aren't designed for family life. Or you could say that apartments aren't designed for family life because families just don't want to live in apartments here. Who knows.

PropQueries · 10-03-2021 12:01AM

awec wrote: »

I think the narrative about needing more apartments has been from the angle that apartments make more efficient use of expensive city land and let you house a great number of people due to higher densities.

It ignores the fact that people here have little to no interest of living in an apartment once they have a family.

But, then we’re back to the nonsense that land is expensive in Dublin because it’s a “city” and there’s not much of it. We’re not London or Tokyo. There’s nothing but land in and around the city. Actually, there’s plenty of land around london. Not sure about Tokyo, but probably plenty of land there as well though.

That makes the “efficient land use” narrative also developer led IMO

awec · 10-03-2021 12:14AM

PropQueries wrote: »

But, then we’re back to the nonsense that land is expensive in Dublin because it’s a “city” and there’s not much of it. We’re not London or Tokyo. There’s nothing but land in and around the city. Actually, there’s plenty of land around london. Not sure about Tokyo, but probably plenty of land there as well though.

That makes the “efficient land use” narrative also developer led IMO

Land is expensive in Dublin because it's the most sought after land in the country. Not all land is equal. Even in Dublin, or around it, not all land is equal.

It's the Midleton Very Rare of land.

If you have land in Dublin zoned for housing you'd have no bother getting rid of it. I have no source to back this up so please forgive me, but I believe a significant chunk of the land around Dublin is not zoned for housing but rather is agricultural.

PropQueries · 10-03-2021 12:35AM

awec wrote: »

Land is expensive in Dublin because it's the most sought after land in the country. Not all land is equal. Even in Dublin, or around it, not all land is equal.

It's the Midleton Very Rare of land.

If you have land in Dublin zoned for housing you'd have no bother getting rid of it. I have no source to back this up so please forgive me, but I believe a significant chunk of the land around Dublin is not zoned for housing but rather is agricultural.

That’s a good point and gets to the crux of the issue.

They don’t appear to zone land based on local demand, which such be the primary and probably only reason for re-zoning land.

They have no problem re-zoning farm land all over Co. Kildare and Co. Meath but appear to have no interest in re-zoning land nearer the city even though the people who will live in all those new built houses in Co. Kildare, Co. Meath etc. will most likely be working in and commuting to Dublin.

Timing belt · 10-03-2021 12:43AM

awec wrote: »

Land is expensive in Dublin because it's the most sought after land in the country. Not all land is equal. Even in Dublin, or around it, not all land is equal.

It's the Midleton Very Rare of land.

If you have land in Dublin zoned for housing you'd have no bother getting rid of it. I have no source to back this up so please forgive me, but I believe a significant chunk of the land around Dublin is not zoned for housing but rather is agricultural.

Every 5/6 years the city planners rezone extra land for residential to meet the housing needs for that period in their Development Plan.

Source https://www.corkcity.ie/en/media-folder/cork-city-development-plan/process-overview.pdf

South Dublin County next Development Plan is for the period 2022-2028 and Hibernia Reit (and the IRFU as they will get a bonus if the land is developed within 10 years after selling it to the REIT) are hoping that they rezone a chunk of land by newlands cross that is already serviced for residential purposes so they can build 3,500 homes on it.

https://www.echo.ie/news/article/new...-hibernia-site

Timing belt · 10-03-2021 12:48AM

PropQueries wrote: »

That’s a good point and gets to the crux of the issue.

They don’t appear to zone land based on local demand, which such be the primary and probably only reason for re-zoning land.

They have no problem re-zoning farm land all over Co. Kildare and Co. Meath but appear to have no interest in re-zoning land nearer the city even though the people who will live in all those new built houses in Co. Kildare, Co. Meath etc. will most likely be working in and commuting to Dublin.

Different Councils/Corporations have different priorities and the system is so rigid it can take 8+ years to rezone. If it is not in a city development plan it won't happen for the next 6+ years.

The last plan for Dublin would have been written 2014/2015 when housing would not have been as hot a topic as now and it would appear that the city planners under estimated the housing needs.

PropQueries · 10-03-2021 12:51AM

Timing belt wrote: »

Different Councils/Corporations have different priorities and the system is so rigid it can take 8+ years to rezone. If it is not in a city development plan it won't happen for the next 6+ years.

The last plan for Dublin would have been written 2014/2015 when housing would not have been as hot a topic as now and it would appear that the city planners under estimated the housing needs.

So it’s a good (probably primary) argument for establishing the LDA?

Timing belt · 10-03-2021 01:27AM

PropQueries wrote: »

So it’s a good (probably primary) argument for establishing the LDA?

Well when you consider that there is a fully serviced site, just outside the M50, that could deliver 3500+ affordable housing units and it was purchased in 2018 by the REIT from the IRFU. The Government could easily have purchased this site and delivered 3,500+ homes if there was political will and co-operation by all of the political parties.

Another prime example is Clonburris (a massive land bank between Clondalkin and Lucan) that has the potential to deliver 8,400 homes. This has been fast tracked and designated a Strategic Development Zone (SDZ). Despite this being rezone in 2008 the fact that the they were not implemented within the 6 year development plan timeline meant that they need to go back to the start and do a new plan which meant another 3/4 years of the political parties rejecting each others plans. (And anyone that thinks SF being in power would make a difference should have a look at this case as they were as bad as all the other political parties in rejecting plans) The first houses (274 homes) only got approved by SCD in may 2020.

https://www.newsgroup.ie/first-new-housing-development-in-clonburris/

Timing belt · 10-03-2021 05:54AM

Link to Dublin City Development Plan 2016-2022

https://www.dublincity.ie/sites/default/files/2020-08/dublin-city-development-plan-2016-2022-volume-2.pdf

(Note this is DCC and does not include Fingal, DLR, SCD etc)

Some interesting points:

Population growth
- The Development Plan estimated a increase of 50k in population over the 6 years.
- If I use the CSO estimated population growth rates it would mean that the actual increase was 22k for the first 4 years

no of Housing Units
- The development plan estimated that 4,217 units were needed each year (They use a occupancy of 2 people per unit)
- The total actual no of units delivered for the first 4 years as per the CSO was 7,464 (This is a shortfall of 9k)
- Will we see 4,217 units delivered each year for 2021 & 2022 (Probably not)

The following is there projection of Affordable housing

The Following is their projection of Disposable household Income

10-03-2021 09:52AM

awec wrote: »

Land is expensive in Dublin because it's the most sought after land in the country. Not all land is equal. Even in Dublin, or around it, not all land is equal.

It's the Midleton Very Rare of land.

If you have land in Dublin zoned for housing you'd have no bother getting rid of it. I have no source to back this up so please forgive me, but I believe a significant chunk of the land around Dublin is not zoned for housing but rather is agricultural.

North Dublin is basically a great big farm. North of say Malahide/Swords you've a few towns on the coast and then a whole lot of agriculture.

IAmTheReign · 10-03-2021 10:03AM

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/

No it wouldn't fit nicely. DCC reported back in November that 70% of those 5,000 properties are already back in the long term rental market. They now reckon there is only 900 properties breaking the Airbnb rules in Dublin.

https://www.breakingnews.ie/ireland/70-of-airbnbs-back-on-long-term-rental-market-says-dublin-city-council-1044141.html

johnnyskeleton · 10-03-2021 11:25AM

Timing belt wrote: »

The following is there projection of Affordable housing

The Following is their projection of Disposable household Income

Am I reading that right? The average wage of say the 3rd percentile is around 35k and they think that the affordability threshold for them is around 240k i.e. 6 times their income? Those in the 8th decile earn on average 92k and should be able to afford 640k i.e. nearly 7 times their income?

I wonder how, in practical terms DCC think that those on 92k should be able to buy the 640k house. Do they save up a deposit of 272k while also renting etc?

The whole thing is madness!

Cyrus · 10-03-2021 11:27AM

johnnyskeleton wrote: »

Am I reading that right? The average wage of say the 3rd percentile is around 35k and they think that the affordability threshold for them is around 240k i.e. 6 times their income? Those in the 8th decile earn on average 92k and should be able to afford 640k i.e. nearly 7 times their income?

I wonder how, in practical terms DCC think that those on 92k should be able to buy the 640k house. Do they save up a deposit of 272k while also renting etc?

The whole thing is madness!

basis what you are saying it would appear they are referring to couples?

2*35k = 70k * 3.5 = 245k + deposit.

edit/ looking at the post it appears not, although it refers to net income not gross

HansKroenke · 10-03-2021 11:32AM

https://www.irishtimes.com/business/personal-finance/why-controls-are-preventing-rents-from-falling-faster-1.4505727?mode=amp

This is the first article I've seen in the main Irish media which makes claims about the RPZs stopping rents from falling and explaining how the declines in rents from the recorded metrics might not tell the whole story about the actual state of the rental market due to the covid restrictions. The anecdotal accounts in the other thread in the Significant Falls in Rent (or whatever it is titled) did get at the rental market being in the process of crashing but the media did not seem to match these anecdotal accounts until now.

Extracts;

Why controls are preventing rents from falling faster

Landlords getting imaginative when it comes to reductions – but at no small cost to tenants

Indeed back in January, Minister for Housing Darragh O’Brien said that the issue with rent pressure zones was that “4 per cent nearly became a target for landlords”.

But since the advent of the pandemic a further issue has arisen.

Not only have rent controls failed to rein in rental growth, now they’re also stopping rents from falling.

With hundreds of thousands on wage subsidies, a switch to working from home, more short-term lets back on the long-term market, not to mention significant uncertainty as the economy starts to unwind from the pandemic, and there’s no doubt that the market has softened.

Official statistics do not show the scale, however. According to the latest index of rents from the Residential Tenancies Board (RTB), rents are still increasing, up by 1.4 per cent in the third quarter of 2020, with an average rent in Dublin of €1,758 a month, up by 1 per cent on the year. More recent figures from Daft.ie show a drop of 3.3 per cent in the capital, but there are several reasons why the real rate of decline may be even greater.

Rather than drop rents in line with market demand, landlords are trying to find other ways of offering discounts to tenants without touching the “formal” rental rate.

As reported earlier this month, US property investment company Greystaris offering up to six weeks free rent on its Dublin Landings development, where rents are about €3,800 for a two-bed. And it’s not the only one.

Another option, for tenants who run into financial difficulties during the pandemic is to offer a deferred payment plan, rather than a rent reduction. This is the approach favoured by some of the larger institutional landlords, including Ires Reit.

Another option is to simply leave the unit vacant. A recent RTÉ report found that two of landlord Kennedy Wilson’s developments – Capital Dock on the docklands where rents start at about €2,970 and Clancy Quay in Dublin 8 – are only about half full, while another, from Goodbody Stockbrokers, found a vacancy level of about 30 per cent in newly built luxury developments.

Why not cut rents?

If a landlord was to formally recognise a cut in rents, by notifying the RTB of the new rent, then they would be bound by the aforementioned [RPZ] rules, which limit their ability to raise them again. It’s understood, however, that informal reductions do not carry this same weight.

This is complicated further by the Government’s mooted proposals come next December. Time is running out on rent-pressure zones and the Government must come up with a replacement by year-end.

Mr O’Brien said the Government is looking at “broader market protections”, which include linking rents to the consumer price index (CPI). Given the outlook for inflation this could be good news for tenants and is supported by organisations such as Threshold, which supports tenant rights.

If a landlord could only increase rents in line with the CPI then a €200 reduction last year would mean that by 2023 rent could only have increased to €2,046.

Landlords are trying to hold tight to the headline rents, until (if and when) the economy recovers, even if they must incentivise new and existing tenants in other ways.

Of course how long they can manage to do this will depend on market forces, which in turn will likely depend on the ultimate fall-out from the pandemic.

JimmyVik · 10-03-2021 11:33AM

johnnyskeleton wrote: »

Am I reading that right? The average wage of say the 3rd percentile is around 35k and they think that the affordability threshold for them is around 240k i.e. 6 times their income? Those in the 8th decile earn on average 92k and should be able to afford 640k i.e. nearly 7 times their income?

I wonder how, in practical terms DCC think that those on 92k should be able to buy the 640k house. Do they save up a deposit of 272k while also renting etc?

The whole thing is madness!

And being taxed up to their balls to provide the grants and social houses for everyone else.

DataDude · 10-03-2021 11:38AM

Cyrus wrote: »

basis what you are saying it would appear they are referring to couples?

2*35k = 70k * 3.5 = 245k + deposit.

edit/ looking at the post it appears not, although it refers to net income not gross

I thought this too but it does seem to very clearly state "annual Household income" in the table header so it would be weird to present it as half the total income.
Also think it's unlikely for the 5th decile household income to be (51*2 = 102k), for example.

JimmyVik · 10-03-2021 11:38AM

HansKroenke wrote: »

https://www.irishtimes.com/business/personal-finance/why-controls-are-preventing-rents-from-falling-faster-1.4505727?mode=amp

This is the first article I've seen in the main Irish media which makes claims about the RPZs stopping rents from falling and explaining how the declines in rents from the recorded metrics might not tell the whole story about the actual state of the rental market due to the covid restrictions. The anecdotal accounts in the other thread in the Significant Falls in Rent (or whatever it is titled) did get at the rental market being in the process of crashing but the media did not seem to match these anecdotal accounts until now.

Extracts;

Maybe if they didnt fcuk over the landlords who were actually charging below market rent last time then more would do so this time. They had so long to fix that and make it right, but they refused and let the the good guys suffer.
Once bitten ...

And of course everyone saw this and now nobody is going to want to let that happen to them.

Also, I dont see rents dropping from €3,800 to €3000pm in high end apartments, helping out ordinary renters much.

yagan · 10-03-2021 11:42AM

Interesting piece about oncoming supply to the market by the Marlet group.

With demand for Dublin’s private rented sector (PRS) market undimmed by the Covid-19 pandemic, developer Pat Crean’s Marlet Property Group will be hoping to take advantage of the continuing appetite of institutional investors for prime opportunities in the capital by bringing Ireland’s largest-ever PRS portfolio to the market. The forward sale, which is being handled by sole adviser Cantor Fitzgerald, is expected to attract offers in excess of €1 billion.

A little bird tells me that there's a good few Marlet sites around Dublin that never restarted after the first lockdown as they probably knew the WFH option had become part of business cost savings, so now they're focusing on getting what good residential developments finished and to market ASAP.

International pension funds who had being buying developments off Marlet before the cement mixers were churning are not snapping. It's entirely likely that the Dublin bust has already happened but as in 2006 only those at building site level can see that.

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

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2021 Irish Property Market chat - mod warnings post 1