2021 Irish Property Market chat - mod warnings post 1

HansKroenke · 10-03-2021 11:45AM

yagan wrote: »

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

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.

Long term leases the councils are entering into with the institutionals are similar to the bank bailouts after 2008. The Irish taxpayer is being put on the hook for the speculators again.

yagan · 10-03-2021 11:47AM

More portents of high tide waning.

Housing completions in Dublin hit a 10-year high in the final quarter of last year despite the pandemic causing widespread disruption across the construction sector.
However, the report highlighted a fall-off in housing commencement notices, an indicator of future supply, which were down 25 per cent in the final quarter.

yagan · 10-03-2021 11:52AM

HansKroenke wrote: »

Long term leases the councils are entering into with the institutionals are similar to the bank bailouts after 2008. The Irish taxpayer is being put on the hook for the speculators again.

At least we'd have housing where there's work. In 2008/9 we were left with hundreds of ghost estates in places where the only employment was building houses.

However it would be highly ironic if the WFH switch finally benefits the ghost estates of the last boom while the new Dublin surplus become under subscribed.

Hubertj · 10-03-2021 12:03PM

yagan wrote: »

More portents of high tide waning.

I think the 2 are linked - focus resources on finishing out existing projects in q4, hence the drop off on commencement notices. I think what will be more telling are the commencement notices as this year progresses along with the number of construction workers that remain unemployed / PUP...

Cyrus · 10-03-2021 12:07PM

DataDude wrote: »

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.

yes i agree although it refers to disposable income so will be after tax, the exact definition would be useful though.

DataDude · 10-03-2021 12:12PM

Cyrus wrote: »

yes i agree although it refers to disposable income so will be after tax, the exact definition would be useful though.

Yep, good point. Would be reasonably easy to gross up I guess but a proper definition should be provided.

Without going through the hassle of doing so, I suspect effective tax rates on two income households are fairly small up until the 7th or 8th decile (€70/80k). e.g. effective tax rate on someone earning €40k is only 21%. Unlikely to be enough to rationalize the "affordable housing figures"

Browney7 · 10-03-2021 12:15PM

PropQueries wrote: »

New data (released today), shows that more than 80,000 households are in state-supported private rented accommodation and that the Hap scheme payments to landlords will rise from €436 million last year to in excess of €1 billion by the end of 2021 (this year).

So, it's HAP alone is going to rise from €436m last year to over €1billion this year, and that's from the department of housing very own figures.

So, is the state expecting the number of households receiving HAP to double from 80,000 households to 160,000 households this year or are they expecting rents to double or something in between?

Link to article in Sunday Business Post here:https://www.businesspost.ie/houses/more-than-80000-households-are-in-state-supported-private-rented-accommodation-af10bd9b

1 billion a year in 2021 and likely to keep on increasing after that. Another fine and large ongoing liability that will be classified as current expenditure which realistically the state will have to pay for the next 20 years. If they actually had to set aside the money today that will be paid in HAP it would be easily north of 15 billion unless the plan is to stop HAP come hell or high water in a few years time.

This is another piece of can kicking to go with our pensions timebomb which is ticking away nicely in a cupboard in the department of finance.

yagan · 10-03-2021 12:25PM

Browney7 wrote: »

This is another piece of can kicking to go with our pensions timebomb which is ticking away nicely in a cupboard in the department of finance.

On top of which will be those who were depending on property for their retirement who can't cash out in a saturated market, not to mention the collapse rent farming private pension funds who've been a major player in driving the Dublin bubble.

The "your rent is my pension" won't get much sympathy amongst the working who can't afford to buy.

Villa05 · 10-03-2021 03:04PM

yagan wrote:

However it would be highly ironic if the WFH switch finally benefits the ghost estates of the last boom while the new Dublin surplus become under subscribed.

Hubertj wrote:

I think the 2 are linked - focus resources on finishing out existing projects in q4, hence the drop off on commencement notices. I think what will be more telling are the commencement notices as this year progresses along with the number of construction workers that remain unemployed / PUP...

There may well be a realisation by the industry that the governmentd housing policy is unsustainable given the states increased debt. Paying up to 3/4 of a million for 2 bed units for social/affordable housing can't last. Private ppr buyers won't be buying 2 bed units at that price and they definitely won't be paying anything like that if there is social housing element to the development

Would make sense for developers to baten down the hatches. Get out while your ahead and see how things pan out

Browney7 wrote:

1 billion a year in 2021 and likely to keep on increasing after that. Another fine and large ongoing liability that will be classified as current expenditure which realistically the state will have to pay for the next 20 years. If they actually had to set aside the money today that will be paid in HAP it would be easily north of 15 billion unless the plan is to stop HAP come hell or high water in a few years time.

The emergency housing budget also doubled from the previous year to 275million with 220m budgeted for this year

There were 6300 FTB in 2019. Let's assume they got an average grant of 15,000. That's another 100million with the grant being increased to 30k by this gov. This will obviously double in the coming years.

Reits and investment funds pay little or no tax so this is more money lost through reduced tax revenue

Shared equity will be triple the cost of the FTB buyer grant, now this is supposed to be repaid, but also this will be the riskiest 30% of the price of the house so in a downturn you can kiss alot of this money goodbye

What are the other supports to the industry?

In the last boom construction was a massive revenue generator, it appears to be a major drain now

Would be good to get a full picture of what all this is costing the taxpayer

yagan · 10-03-2021 03:32PM

Villa05 wrote: »

In the last boom construction was a massive revenue generator, it appears to be a major drain now

Would be good to get a full picture of what all this is costing the taxpayer

Two years from now we could be on the other side of the equation with a surplus where the only housing activity is retrofitting for WFH.

International market forces were allowed to lead planning in Dublin in this boom and it's very likely that a lot of what's being completed now will be obsolete to requirement. Was it last summer that planning permission was sought for a 500 student apartment complex in the docks be switched to private rental?

Vertical ghost estates.

Hubertj · 10-03-2021 04:03PM

yagan wrote: »

Two years from now we could be on the other side of the equation with a surplus where the only housing activity is retrofitting for WFH.

International market forces were allowed to lead planning in Dublin in this boom and it's very likely that a lot of what's being completed now will be obsolete to requirement. Was it last summer that planning permission was sought for a 500 student apartment complex in the docks be switched to private rental?

Vertical ghost estates.

What do you mean by market forces in relation to planning? Only regarding student accommodation? If we ignore the ridiculous rents is purpose built student accommodation not common in most cities?

PropQueries · 10-03-2021 04:32PM

Timing belt wrote: »

From the UK Data Flats have remained Static Year on year in London whilst other property types have risen... But no sign of a collapse yet.

Source: https://data.london.gov.uk/dataset/uk-house-price-index#:~:text=The%20UK%20House%20Price%20Index%20%28UK%20HPI%29%20captures,transactions%2C%20whether%20for%20cash%20or%20with%20a%20mortgage.

Looks like the house price falls have started in London. According to Bloomberg today:

"House Prices Are Plummeting in London’s Financial Districts.

House prices in the City of London slumped 10.8% in the year through January, while Tower Hamlets, where rival financial district Canary Wharf is based, saw values drop 9.5%, according to a report by chartered surveyors e.surv.

The best bargains are to be found in City of Westminster, the heart of the nation’s government. Prices there tumbled 37% compared with a year earlier - the sharpest drop seen in the capital."

Link to article in Bloomberg here: https://www.bloomberg.com/news/articles/2021-03-10/house-prices-are-plummeting-in-london-s-financial-districts

fliball123 · 10-03-2021 04:41PM

PropQueries wrote: »

Looks like the house price falls have started in London. According to Bloomberg today:

"House Prices Are Plummeting in London’s Financial Districts.

House prices in the City of London slumped 10.8% in the year through January, while Tower Hamlets, where rival financial district Canary Wharf is based, saw values drop 9.5%, according to a report by chartered surveyors e.surv.

The best bargains are to be found in City of Westminster, the heart of the nation’s government. Prices there tumbled 37% compared with a year earlier - the sharpest drop seen in the capital."

Link to article in Bloomberg here: https://www.bloomberg.com/news/articles/2021-03-10/house-prices-are-plummeting-in-london-s-financial-districts

AND what connection has your brain made to the Irish property market?

yagan · 10-03-2021 04:59PM

Hubertj wrote: »

What do you mean by market forces in relation to planning? Only regarding student accommodation? If we ignore the ridiculous rents is purpose built student accommodation not common in most cities?

I don't have a link for the numbers now but an awful lot of the apartment developments of the last few years were not for private marker sales, bypassing the domestic market for the international investors like pensions funds looking for yield.

For example the Marlot group which recently had I believe over 50 developments on the go at one time in Dublin alone is financed by London based M&G Investments, which in turn are a subsidiary of the global Prudential Insurance group.

Before Covid Marlot was selling developments to such funds before the foundations had even been dug.

Yes, other cities have student accommodations, but mostly it tends to be on campus. However in this Dublin bubble student accommodation was used a pretext for building as many rent yielding units to be sold to international suckers in as short a time as possible.

In the shakedown we're going to end up with loads of buildings not fit for long term rental.

hometruths · 10-03-2021 05:11PM

fliball123 wrote: »

AND what connection has your brain made to the Irish property market?

Odd how prices rising in London is held up as an example why prices rising in Dublin is perfectly normal, but if somebody points out prices are falling in London you come out with a comment like that.

Hubertj · 10-03-2021 05:25PM

schmittel wrote: »

Odd how prices rising in London is held up as an example why prices rising in Dublin is perfectly normal, but if somebody points out prices are falling in London you come out with a comment like that.

House prices increased in London during 2020.

hometruths · 10-03-2021 05:28PM

Hubertj wrote: »

House prices increased in London during 2020.

Whether house prices went up or down is not the point I was making.

Hubertj · 10-03-2021 05:33PM

schmittel wrote: »

Whether house prices went up or down is not the point I was making.

Sorry, I don’t follow.

Browney7 · 10-03-2021 06:08PM

PropQueries wrote: »

Looks like the house price falls have started in London. According to Bloomberg today:

"House Prices Are Plummeting in London’s Financial Districts.

House prices in the City of London slumped 10.8% in the year through January, while Tower Hamlets, where rival financial district Canary Wharf is based, saw values drop 9.5%, according to a report by chartered surveyors e.surv.

The best bargains are to be found in City of Westminster, the heart of the nation’s government. Prices there tumbled 37% compared with a year earlier - the sharpest drop seen in the capital."

Link to article in Bloomberg here: https://www.bloomberg.com/news/articles/2021-03-10/house-prices-are-plummeting-in-london-s-financial-districts

To be fair, not exactly a surprise. My own expectation is that properties in "City of London" would be primarily one bed and 2 bed apartments on not desirable family suburban homes in a time of lockdowns. With the exodus of people from London (why would you WFH for 12 hours a day in your shoebox 1 bed in the city which you used to use for just crashing in Monday to Friday as you were in the office 8 till 8?). Didn't stamp duty change in England also and werent changes made to BTL tax reliefs over the past while? Investors probably sitting on hefty gains and were happy to cash in somewhat.

Whether such a step change occured in the IFSC and GCD remains to be seen but Owen Reilly the estate agent seemed to think it happened to some extent although different market dynamics here with government interference on RPZs HAP etc.

hometruths · 10-03-2021 06:24PM

Hubertj wrote: »

Sorry, I don’t follow.

Perhaps you missed the relevant post if you have Props on ignore?

Hubertj · 10-03-2021 06:27PM

schmittel wrote: »

Perhaps you missed the relevant post if you have Props on ignore?

Ah thank you for clarifying. Makes sense now.

Mic 1972 · 10-03-2021 07:02PM

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.

Completely agree with this. Apartments in France, Spain, Italy are a completely different type of concept. They are bigger, better layout, sound proof and insulated.

Apartments in Dublin are a short term arrangement for most because they badly made

combat14 · 10-03-2021 07:28PM

PropQueries wrote: »

Looks like the house price falls have started in London. According to Bloomberg today:

"House Prices Are Plummeting in London’s Financial Districts.

House prices in the City of London slumped 10.8% in the year through January, while Tower Hamlets, where rival financial district Canary Wharf is based, saw values drop 9.5%, according to a report by chartered surveyors e.surv.

The best bargains are to be found in City of Westminster, the heart of the nation’s government. Prices there tumbled 37% compared with a year earlier - the sharpest drop seen in the capital."

Link to article in Bloomberg here: https://www.bloomberg.com/news/articles/2021-03-10/house-prices-are-plummeting-in-london-s-financial-districts

by all accounts london has seen a drop in its population ot 700,000 in the last year - the uk an overall drop in 1m - that tends to have some effect eventually

yagan · 10-03-2021 07:37PM

combat14 wrote: »

by all accounts london has seen a drop in its population ot 700,000 in the last year - the uk an overall drop in 1m - that tends to have some effect eventually

I have been wondering if the whole HK visa offer was partly driven by business looking for a replacement for EU workers. The Tories sell it as wealthy HKers adding to the national wealth etc.. but wealthy HKers never needed help siphoning their money out of China with many countries around the world competing with Golden Visas.

The Hong Konger most likely to move is an average worker looking for a change.

Marius34 · 10-03-2021 08:55PM

ReturnOfThe wrote: »

So if someone is looking for house prices to fall, they would have to be looking out for at least one of the below headlines in the papers..

Economic outlook deteriorating
Population growth being reversed
Demand falling
Mortgage approvals falling
Supply increasing and outpacing demand
Interest rates rising

PropQueries wrote: »

I'm calling it

Every single one of those boxes will be ticked by August 2021.

I'm giving a chance to change your opinion, otherwise I'll remind you in 5 months

PropQueries · 10-03-2021 09:43PM

Marius34 wrote: »

I'm giving a chance to change your opinion, otherwise I'll remind you in 5 months

Just give me until the 31st of the month

Even though I understand there's normally not much movement in any markets during August, It's my call...

Thinking about it now, I should have said end of October, but I'll stick with it and see where it goes.

10-03-2021 10:36PM

Reading today news as

Irish Life seeks buyer for Cork city centre retail investments
European investor to seek €1bn from sale of Irish residential rental portfolio
Sharp decline in investors using buy-to-let mortgages to fund investments
Irish mortgage interest rates highest in euro zone again

Keep me working hard creating bag of cash and any PA will not prove me that property prices will up

MacronvFrugals · 10-03-2021 10:51PM

How long before AIB and BOI have a defacto duopoly

'State's two main banks ‘cannot be trusted’, Fine Gael parliamentary party is told'

THE State’s two pillar banks “cannot be trusted” and the banking and investment system has “utter contempt” for the Government, the Fine Gael parliamentary party has been told.

https://www.independent.ie/irish-news/politics/states-two-main-banks-cannot-be-trusted-fine-gael-parliamentary-party-is-told-40182761.html

fliball123 · 10-03-2021 11:01PM

schmittel wrote: »

Odd how prices rising in London is held up as an example why prices rising in Dublin is perfectly normal, but if somebody points out prices are falling in London you come out with a comment like that.

When have I ever compared London prices to Dublin prices? Why not Sydney prices, or New York prices, or Paris prices or Manchester prices..What correlation has London got to Dublin or Irish property prices? If you are to compare to Dublin to London how many people left London recently

10-03-2021 11:05PM

MacronvFrugals wrote: »

THE State’s two pillar banks “cannot be trusted” and the banking and investment system has “utter contempt” for the Government, the Fine Gael parliamentary party has been told.

Lol

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

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2021 Irish Property Market chat - mod warnings post 1