2021 Irish Property Market chat - mod warnings post 1

Mic 1972 wrote: »

This morning it was pretty jammed getting out of my estate at 8:30 and i normally work from home so I had forgotten about it.
It looked like a normal pre-covid morning if you ask me.

A lot of this could very well be school traffic- now that primary schools are fully back.

Pelezico wrote: »

Alarmist ....we will slowly inflate ourselves and currency will lose value. Those with debts will be better off and those with savings or fixed incomes will suffer.

That is the only solution....by the way we are not alone in this si that is reassuring.

Property prices will not keep pace with inflation but will increase nominally and property taxes will also increase.

Its hardly alarmist- its purely factual.

Inflating away our debts and weakening our currency? If we had the independence to do this- as we had in the 80s, perhaps- but not with the Euro and the extent of the influence that we have. Honestly- the German pensioners will be spared at the cost of the Irish taxpayer- its delusional to imagine otherwise.

Also- vis-a-vis devaluing our currency- how do devalue a currency when you're tied to a block that has conducted less QE than many of our competitors (such as the US, Japan and even the UK). We could very well end up with our currency going up in value, not down.

Inflation- has a target set by the ECB of 2%, and they will manipulate policies (including interest rates) to achieve this. They do not want rampant inflation- the memories of the post war years are still in the German consciousness- and our say in the matter is minimal.

If you imagine we are going to inflate our way out of this- I'm very sorry, but I think you're going to be sorely disappointed.

Pelezico wrote: »

Alarmist ....we will slowly inflate ourselves and currency will lose value. Those with debts will be better off and those with savings or fixed incomes will suffer.

That is the only solution....by the way we are not alone in this si that is reassuring.

Property prices will not keep pace with inflation but will increase nominally and property taxes will also increase.

I really don't know where this "we are not alone" narrative came from.

The USA, UK and Japan are all large economies with their own currencies.

Most members of the eurozone do not have a debt problem and they're going to get tired fairly quickly of continually bailing "rich" countries like Ireland out IMO

I think what we need to see are large new developments which had been headlined as office space- instead being repurposed at an early stage- delivering cohesive blocks of units- that would be tempting for REITs and/or other investors to take onboard as managed residential units (even at upmarket addresses).

Yes- ye accountant over a shop- could be an option (and there are enough of them out there)- but I'm not convinced that one off units are what is needed- and I feel that the centrally located office blocks- could uniquely be pushed as a means of regenerating urban areas that are going to continue to take a hit from WFH etc. There are already some schemes working (think Eircom down at Heuston) where these type schemes were implemented after the '08 bustup- we have a roadmap, if we're willing to do something with it.

Even less desirable areas (Inchicore etc) managed to upsell themselves to bright young things.

Zenify

Pelezico wrote: »

Alarmist ....we will slowly inflate ourselves and currency will lose value. Those with debts will be better off and those with savings or fixed incomes will suffer.

At what rate will we inflate ourselves out of debt? What inflation percent do you think will achieve this positive result?

Pelezico

The_Conductor wrote: »

We paid a smidgeon under 8 billion in interest last year (2020) and are projected to pay over 7 billion in each year over the next 4 years.

10% of our tax revenue- is going on servicing debt (assuming revenue of circa 80 billion).

Rates may be low- but we're not in a good place if we are hemorrhaging this level of revenue purely on funding debt.

By the way- we got off a 750m bond at -0.58% this week- notwithstanding this- we will be spending circa 22 billion more than our income in 2021.

I know its Covid time and everything- but seriously, our finances are so far out of kilter that they're just not funny.

Alarmist ....we will slowly inflate ourselves and currency will lose value. Those with debts will be better off and those with savings or fixed incomes will suffer.

That is the only solution....by the way we are not alone in this si that is reassuring.

Property prices will not keep pace with inflation but will increase nominally and property taxes will also increase.

The_Conductor wrote: »

Simples- convert a sizable quantity of office space into generous sized apartments, and solve two problems with the one stone.

There is no reason that this particular cloud couldn't have a silver lining.

Someone here posted an excellent point a good while ago and it was that the first impact will be felt in those office spaces above shops etc. that are used by small accountants etc.

Maybe the owners of such space will be incentivised to convert them into residential space fairly quickly as they would already be of the mindset to achieve maximum rental income from their investment property.

The interesting thing would be that, just like the student accommodation units, nobody will see this potentially large supply of new residential units entering the market as it would be a large number of small actors acting individually but all at the same time.

PropQueries wrote: »

How can any commercial office space anywhere be worth more than 50% of it's pre-covid value at this stage? Especially as there must be real uncertainty regarding around any office leases that start expiring over the next few years. Even if they have a 20 year lease remaining, the value of that building in 20 years time is valued at what?

Simples- convert a sizable quantity of office space into generous sized apartments, and solve two problems with the one stone.

There is no reason that this particular cloud couldn't have a silver lining.

fliball123 wrote: »

Once again I pointed out we built up 200Billion worth of debt leading up to and during the 08 crash at a much higher interest rate than now. We have added 20 billion or so, in 2020 and probably the same for 2021 if Corona keeps us in lockddown..So we will have borrowed an extra 40Billion. But as I have pointed out over and over we have refinanced the existing 200Billion worth of debt at a much lower % point now than in 08 and will be borrowing the 40Billion for almost zero %. The amount coming out of the coffers for servicing the debt will be marginal at best. If we are in a position where the economy flat lines after corona goes then the ship will sink but we wont be the only country in this boat. For example the UK borrowed 400Billion for corona alone. Your guessing at best what if the economy takes off?? What if a high % of people go back working at the jobs there were doing pre-lockdown. Was this not the whole point of PUP and support for businesses so that when covid goes they can open up and go back to pre covid levels of consumer activity. Also when they open up people have been saving in record amounts the highest amounts in Irish savings accounts ever. So I can tell you there will a hunger for people to go out and splurg. Your opinion is so negative all the time, with very little factual data to support it. You really should go find a happy place Props.

We paid a smidgeon under 8 billion in interest last year (2020) and are projected to pay over 7 billion in each year over the next 4 years.

10% of our tax revenue- is going on servicing debt (assuming revenue of circa 80 billion).

Rates may be low- but we're not in a good place if we are hemorrhaging this level of revenue purely on funding debt.

By the way- we got off a 750m bond at -0.58% this week- notwithstanding this- we will be spending circa 22 billion more than our income in 2021.

I know its Covid time and everything- but seriously, our finances are so far out of kilter that they're just not funny.

PropQueries wrote: »

Given that the government advice is WFH until June...

Imagine after then, if it's already jammed now

Mic 1972 wrote: »

This morning it was pretty jammed getting out of my estate at 8:30 and i normally work from home so I had forgotten about it.
It looked like a normal pre-covid morning if you ask me.

Given that the government advice is WFH until June...

PropQueries wrote: »

People who previously used public transport now less likely to use public transport due to the pandemic?

Lots of people who previously used public transport didn't have a car and continue not to have one

This morning it was pretty jammed getting out of my estate at 8:30 and i normally work from home so I had forgotten about it.
It looked like a normal pre-covid morning if you ask me.

fliball123 wrote: »

Once again any proof of this, did you stop everyone in a car over the last week and ask them this? Also arent they still going into work. Kind of puts a fly in your ointment that WFH is here now and no one will do blended or have to come into the office at all. Well at least not in the world according to props

All I ever said was that if a company introduces hybrid working, they will quickly realise that it's either full time in the office or full time WFH. 2 days in the office and 3 days at home still makes absolutely no sense to me.

And no, it hasn't been "tried" in the past and worked. That was some people working hybrid, not 90%+ of the employees.

Once they try 90%+ of the employees on 2 days in the office and 3 days at home and if it works, within 12 months, they will quickly shift to full time WFH and maybe one day a month in a meeting room at the local hotel for collaboration (whatever that is) etc. But even that will gradually disappear after a while IMO

I still stand by my either full time in the office or full time WFH.

Hubertj

yagan wrote: »

Type in Dublin in the drop down.
https://covid19.apple.com/mobility

Whatever about wfh, I presume plenty of people aren’t driving or using public transport to go to work as they have no work to go to.

yagan

fliball123 wrote: »

Once again any proof of this, did you stop everyone in a car over the last week and ask them this? Also arent they still going into work. Kind of puts a fly in your ointment that WFH is here now and no one will do blended or have to come into the office at all. Well at least not in the world according to props

Type in Dublin in the drop down.
https://covid19.apple.com/mobility

fliball123

PropQueries wrote: »

People who previously used public transport now less likely to use public transport due to the pandemic?

Once again any proof of this, did you stop everyone in a car over the last week and ask them this? Also arent they still going into work. Kind of puts a fly in your ointment that WFH is here now and no one will do blended or have to come into the office at all. Well at least not in the world according to props

Mic 1972 wrote: »

With all these WFH people one has to wonder why traffic is still so bad at rush hour

People who previously used public transport now less likely to use public transport due to the pandemic?

Graham

PropQueries wrote: »

That's only because they're taking investors money, buying a building they know will be worth nothing in 10 years and pocketing their bonuses for the year

Or you're wrong and residential property won't lose 75% and commercial property won't lose 50% of their respective values.

PropQueries wrote: »

More news from the WFH front. According to the Sunday Business Post:

"Reach, the UK publisher which owns the Irish Mirror, the Irish Daily Star and RSVP as well as a string of regional and online publications, will close two of its main Irish offices as part of a move towards permanent home working.".

How can any commercial office space anywhere be worth more than 50% of it's pre-covid value at this stage? Especially as there must be real uncertainty regarding around any office leases that start expiring over the next few years. Even if they have a 20 year lease remaining, the value of that building in 20 years time is valued at what?

Link to article here: https://www.businesspost.ie/media-marketing/newspaper-publisher-to-close-two-irish-offices-in-move-to-permanent-home-working-7b18ab7a

With all these WFH people one has to wonder why traffic is still so bad at rush hour

DataDude wrote: »

Unfortunately for someone much richer than I! It was sold in September 2019 for €895k. Planning obtained and then straight back on market it seems, not a tap done. How much does value does the hassle of doing that add to someone with the money to take this on? €50k? €1m wouldn't surprise me in the slightest.

I honestly wouldn't even be able to hazard a guess at the cost of renovating and extending it would be, but I'd be pretty confident it's (well) north of €500k. Someone will end up with a smashing 200sqm house on Sorrento Road though so huge interest no doubt.

Personally, whilst I love the area, houses on Sorrento and Coliemore (even the small ones) carry huge premiums which aren't worth it to me. I'd prefer a house on a less prestigious road nearby with more off street parking! Priorities I guess.

Prices have gone up quite significantly in the last 2 years it seems

Graham wrote: »

The market generally disagrees with your outlook?

That's only because they're taking investors money, buying a building they know will be worth nothing in 10 years and pocketing their bonuses for the year

Graham

PropQueries wrote: »

How can any commercial office space anywhere be worth more than 50% of it's pre-covid value at this stage?

The market generally disagrees with your outlook?