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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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cnocbui

Shelga wrote: »

https://www.daft.ie/for-sale/end-of-terrace-house-9-ossory-road-north-strand/3199810

Just had a call back from the EA about this one, currently at €60k over asking, it was listed 3 days ago.

How much longer can this go on for?

As long as it takes to build a shed load of 3-4 bedroom houses that will actually be offered for sale to normal people without competitition from councils, the government or REITs.

SmokyMo

Shelga wrote: »

https://www.daft.ie/for-sale/end-of-terrace-house-9-ossory-road-north-strand/3199810

Just had a call back from the EA about this one, currently at €60k over asking, it was listed 3 days ago.

How much longer can this go on for?

Until there are protests that grind this city to a halt, nothing will change. Humans are adaptive creatures.

Reins

Shelga wrote: »

https://www.daft.ie/for-sale/end-of-terrace-house-9-ossory-road-north-strand/3199810

Just had a call back from the EA about this one, currently at €60k over asking, it was listed 3 days ago.

How much longer can this go on for?

Am really hoping when viewings resume on the 10th May it will pour some cold water on the crazy increases but there's no gaurantee that it will.

[Deleted User]

cnocbui wrote: »

As long as it takes to build a shed load of 3-4 bedroom houses that will actually be offered for sale to normal people without competitition from councils, the government or REITs.

So, forever, then.

PropQueries

[Deleted User] wrote: »

So, forever, then.

I wouldn’t think that long

Just look at the housing waiting list. Down from c. 100k a few years ago to I think c. 60k last year.

As more and more of those are moved into newer properties, the properties they were renting in the private market will come into play. We also built c. 21k new units last year. Another 21k (according to Goodbody) are expected this year.

Throw in probate, investment fund sales etc. etc., this “housing crisis” could be all over by August IMO

Unfortunately, once this is resolved, we then move on to how to solve our over half a trillion euro national debt problem (split between actual debt and our hidden unfunded pension liabilities) and life for the under 40’s won’t get much easier IMO

combat14

Shelga wrote: »

https://www.daft.ie/for-sale/end-of-terrace-house-9-ossory-road-north-strand/3199810

Just had a call back from the EA about this one, currently at €60k over asking, it was listed 3 days ago.

How much longer can this go on for?

walk away - most houses still not even listed yet while lockdown still on

woejus

Cyrus wrote: »

what a site this is,

someone obviously ran out of cash

https://www.myhome.ie/residential/brochure/buena-vista-killiney-hill-road-killiney-co-dublin/4498408

meant to reply to this

it's not that they ran out of cash, there was planning issues & a lack of interest of the owners to develop - overlooks The Edge's gaff.

it was a right mess for a long time, they've cleaned it up well. The building that is there is "insulation on the outside" which was duly set on fire by teenagers.

https://thepropertypin.com/t/buena-vista-killiney-then-and-now/42332

The right-of-way runs down the south-east side, there's a holy path to the ancient church apparently. I've seen cult-like heads in white robes walking it around Easter! Whopper of a site!

Browney7

PropQueries wrote: »

I wouldn’t think that long

Just look at the housing waiting list. Down from c. 100k a few years ago to I think c. 60k last year.

As more and more of those are moved into newer properties, the properties they were renting in the private market will come into play. We also built c. 21k new units last year. Another 21k (according to Goodbody) are expected this year.

Throw in probate, investment fund sales etc. etc., this “housing crisis” could be all over by August IMO

Unfortunately, once this is resolved, we then move on to how to solve our over half a trillion euro national debt problem (split between actual debt and our hidden unfunded pension liabilities) and life for the under 40’s won’t get much easier IMO

That housing list stat is quite possibly very spurious. As far as I know, in order to be eligible for HAP, you have to be on the housing list. Once you're in receipt of HAP, you're no longer on the housing list.

hometruths

PropQueries wrote: »

I wouldn’t think that long

Just look at the housing waiting list. Down from c. 100k a few years ago to I think c. 60k last year.

As more and more of those are moved into newer properties, the properties they were renting in the private market will come into play. We also built c. 21k new units last year. Another 21k (according to Goodbody) are expected this year.

Throw in probate, investment fund sales etc. etc., this “housing crisis” could be all over by August IMO

Unfortunately, once this is resolved, we then move on to how to solve our over half a trillion euro national debt problem (split between actual debt and our hidden unfunded pension liabilities) and life for the under 40’s won’t get much easier IMO

All roads lead to August! I ask again, in case you missed previous post, what is happening in August?!

Praetorian22

Did you spot any Venetian masks on the go? I believe the "eyes wide shut" hooligans hang around up there...

hometruths

Good to see the vacancy problem getting airtime as well as the repo problem.

Officials have found investment funds are not breaking competition rules by leaving Dublin luxury apartments vacant.

It’s estimated that hundreds of high-priced flats around the capital are empty. Rents for many of these properties are over €2,000 per month or higher. They are typically owned by large investment funds.

It has been reported that owners are afraid to drop prices and get stuck with lower rents. As all of Dublin is designated as a rent pressure zone, landlords cannot increase rent prices by more than 4% per year.

https://www.newstalk.com/news/leaving-dublin-luxury-apartments-vacant-doesnt-break-competition-rules-review-finds-1188114

These are the sort of properties that GeoDirectory does not "consider" vacant of course, leading to some on here to claim there is no problem with vacancies in Dublin.

woejus

Praetorian22 wrote: »

Did you spot any Venetian masks on the go? I believe the "eyes wide shut" hooligans hang around up there...

Haha that's in the Martello Tower, every full moon during the summer

Here's what it used to look like (2017)

https://imgur.com/a/RB9IMsi

There was a mental guy living there who caused us unending hassle in 2017-2018. He cut down most of the election posters on the roads, cut the heads out, mounted them on sticks and created this bizarre forest of politician heads. I cannot find the pics!

PropQueries

schmittel wrote: »

All roads lead to August! I ask again, in case you missed previous post, what is happening in August?!

Just something in my head about everything aligning around that time.

It could be anything. It could become apparent to all that Covid has been masking the decline that was well underway (in Dublin) pre-covid, Biden/EU tax reforms, maybe the way the American funds solving our over-supply problem c. 8 years ago on their way in to solving our “under-supply” problem on their way out etc.

yagan

Vertical ghost estates, but we won't know the exact scale of the unutilised until institutional investors like pension funds start noticing their property yields performing way below their projected returns.

I have a feeling the shutters are already coming down at that kiosk.

PropQueries

schmittel wrote: »

Good to see the vacancy problem getting airtime as well as the repo problem.

https://www.newstalk.com/news/leaving-dublin-luxury-apartments-vacant-doesnt-break-competition-rules-review-finds-1188114

These are the sort of properties that GeoDirectory does not "consider" vacant of course, leading to some on here to claim there is no problem with vacancies in Dublin.

Interesting that they said “Despite the size of Ires Reit's portfolio, its market share in the greater Dublin area accounted for less than 5% of the total available (rental) properties.”.

As if Ires REIT is the only player in town. Read during the week about one fund “Orange Capital Partners’ portfolio includes more than 530 apartments in inner-city Georgian terraces, bought in batches from a joint venture made up of Lugus Capital and Bain Capital.”

There are many many more such funds currently involved in all parts of the housing market in Dublin.

And I would guess they’re more worried about the large fall in the value of their property portfolios should they reduce their rents than the 4% rent rule IMO

hometruths

PropQueries wrote: »

Interesting that they said “Despite the size of Ires Reit's portfolio, its market share in the greater Dublin area accounted for less than 5% of the total available (rental) properties.”.

As if Ires REIT is the only player in town. Read during the week about one fund “Orange Capital Partners’ portfolio includes more than 530 apartments in inner-city Georgian terraces, bought in batches from a joint venture made up of Lugus Capital and Bain Capital.”

There are many many more such funds currently involved in all parts of the housing market in Dublin.

And I would guess they’re more worried about the large fall in the value of their property portfolios should they reduce their rents than the 4% rent rule IMO

Yep, it's more of the nothing to see here sure it's only a tiny %, without considering the total impact.

You can be sure that IRES are not the only landlords happy to leave units vacant rather than drop rents. It makes total sense for them to do so.

PropQueries

schmittel wrote: »

Yep, it's more of the nothing to see here sure it's only a tiny %, without considering the total impact.

You can be sure that IRES are not the only landlords happy to leave units vacant rather than drop rents. It makes total sense for them to do so.

I think Ires REIT are fairly sorted either way. Back in 2018, they stated that 11% were rented through HAP.

I would imagine many more at this stage which would go a long way towards explaining their 99% occupancy rate last year IMO

Hubertj

schmittel wrote: »

Good to see the vacancy problem getting airtime as well as the repo problem.

https://www.newstalk.com/news/leaving-dublin-luxury-apartments-vacant-doesnt-break-competition-rules-review-finds-1188114

These are the sort of properties that GeoDirectory does not "consider" vacant of course, leading to some on here to claim there is no problem with vacancies in Dublin.

I’m amazed nobody has thrown in the c 500k vacant units that are hiding in plain sight around the country. Or could it be more at this stage?

cnocbui

Hubertj wrote: »

I’m amazed nobody has thrown in the c 500k vacant units that are hiding in plain sight around the country. Or could it be more at this stage?

The supply is near infinite; in actuality, its only limited by ones imagination.

handlemaster

Isn't this waht people voted for larger investment companies taking over the rental market. There is no end to the complaining by some people. They can leave the property empty if they want. The laws championed by the popular vote that cause this is now been understood.

PropQueries

handlemaster wrote: »

Isn't this waht people voted for larger investment companies taking over the rental market. There is no end to the complaining by some people. They can leave the property empty if they want. The laws championed by the popular vote that cause this is now been understood.

According to NewsTalk today:

“Mr Sirr said properties should not be left deliberately vacant when there is a severe shortage of housing.

In places like Paris and Copenhagen if you leave a property empty, you will pay significant additional tax for leaving it vacant. In Ireland, we’ve been very reluctant to tax empty properties, (although) there’s a good case to say we should be doing”

Also, Washington D.C. has a 5% tax on vacant homes and a 10% tax on derelict property.

So, it’s easily introduced and already implemented in many other countries IMO

And, given yesterday’s Biden’s plan to increase estate taxes in the states, all property owners here should be wary where this is heading. Where America leads, the rest of the free world generally follows.

All the Government has to do now is point to the regular property taxes, vacant property taxes, inheritance taxes etc. in the states to justify increasing them here to pay for our housing problems (that they created IMO). And our definition of wealthy is much lower than the American’s definition.

The funds will most likely win but all other small property owners will pay IMO

On top of that we have an in excess of half a trillion euro real debt problem (real debt and unfunded pension liabilities) to manage.

Throw in Biden’s corporation tax plans where the estimated cost is between Paschal’s €2 billion per year and John Fitzgerald’s €6 billion per year. It’s obviously going to be John Fitzgerald’s estimate as after Biden now going after Americans earning in excess of $400k per year, do we really think his going to leave €4 billion of American cash per annum on the table for Ireland to collect?

Property taxes (occupied properties and vacant properties) are increasing and increasing dramatically IMO

yagan

handlemaster wrote: »

Isn't this waht people voted for larger investment companies taking over the rental market. There is no end to the complaining by some people. They can leave the property empty if they want. The laws championed by the popular vote that cause this is now been understood.

Many of those companies weren't interested in renting them out though, but rather keep vacant while asset prices rise and then sell out before the peak.

The failure is a lack of punitive vacancy charges for property classed as rental.

hometruths

Hubertj wrote: »

I’m amazed nobody has thrown in the c 500k vacant units that are hiding in plain sight around the country. Or could it be more at this stage?

Closer to 180k at last thorough count in 2016, but GeoDirectory reports suggest that number has been rising since then.

Hubertj

schmittel wrote: »

Closer to 180k at last thorough count in 2016, but GeoDirectory reports suggest that number has been rising since then.

I’m rounding up

hometruths

Hubertj wrote: »

I’m rounding up

I'm treading carefully.

PropQueries

Cian O’Callaghan of the Social Democrats has a free to read opinion piece on leasing in the SBP tonight titled: “State’s over-reliance on leasing to address social housing crisis is dangerous”

An interesting point raised what many people may not know was that:

“Even Part V of the Planning and Development Act, under which local authorities purchase 10 per cent of new developments for social housing, has been amended to facilitate long-leasing.”

He also states that:

“Locking local authorities into long-term leasing arrangements, when rents in Dublin are more than 30 per cent higher than their 2008 peak, may make sense for investors seeking a good return but it makes little sense for the state.”

Link to his article in SBP here: https://www.businesspost.ie/houses/cian-ocallaghan-states-over-reliance-on-leasing-to-address-social-housing-crisis-is-dangerous-455255ec

PropQueries

Browney7 wrote: »

That housing list stat is quite possibly very spurious. As far as I know, in order to be eligible for HAP, you have to be on the housing list. Once you're in receipt of HAP, you're no longer on the housing list.

Cian O’Callaghan of the Social Democrats made your point in the SBP today: “There are more than 140,000 households on waiting lists for social housing and living in insecure HAP tenancies. More than 8,000 people, including 2,000-plus children, are homeless and living in emergency accommodation.”

Link here (free to read): https://www.businesspost.ie/houses/cian-ocallaghan-states-over-reliance-on-leasing-to-address-social-housing-crisis-is-dangerous-455255ec

standardg60

PropQueries wrote: »

Cian O’Callaghan of the Social Democrats has a free to read opinion piece on leasing in the SBP tonight titled: “State’s over-reliance on leasing to address social housing crisis is dangerous”

An interesting point raised what many people may not know was that:

“Even Part V of the Planning and Development Act, under which local authorities purchase 10 per cent of new developments for social housing, has been amended to facilitate long-leasing.”

He also states that:

“Locking local authorities into long-term leasing arrangements, when rents in Dublin are more than 30 per cent higher than their 2008 peak, may make sense for investors seeking a good return but it makes little sense for the state.”

Link to his article in SBP here: https://www.businesspost.ie/houses/cian-ocallaghan-states-over-reliance-on-leasing-to-address-social-housing-crisis-is-dangerous-455255ec

Amazing that it is actually the left side of politics who are seeing the fallacy in this 'housing the population at all costs' policy!

C14N

PropQueries wrote: »

According to NewsTalk today:

“Mr Sirr said properties should not be left deliberately vacant when there is a severe shortage of housing.

In places like Paris and Copenhagen if you leave a property empty, you will pay significant additional tax for leaving it vacant. In Ireland, we’ve been very reluctant to tax empty properties, (although) there’s a good case to say we should be doing”

Also, Washington D.C. has a 5% tax on vacant homes and a 10% tax on derelict property.

So, it’s easily introduced and already implemented in many other countries IMO

And, given yesterday’s Biden’s plan to increase estate taxes in the states, all property owners here should be wary where this is heading. Where America leads, the rest of the free world generally follows.

All the Government has to do now is point to the regular property taxes, vacant property taxes, inheritance taxes etc. in the states to justify increasing them here to pay for our housing problems (that they created IMO). And our definition of wealthy is much lower than the American’s definition.

I think vacancy as a cause of shortage tends to be overblown as a problem in almost all jurisdictions that have housing shortages. An EY report from earlier this year put it at only 1.6%, which is quite low: https://www.ey.com/en_ie/news/2021/01/residential-property-transactions-fall-by-over-20-percent-2020#:~:text=Vacancy%20Rates&text=At%201.6%25%2C%20Dublin%20had%20the,vacancy%20rates%20outside%20of%20Dublin.

There doubtless are some, and they're more likely to be concentrated at the higher end of the market where insitutional investors can afford vacancies for a few months, and where they will be most reluctant to drop rates due to RPZ restrictions, but I'd need to see more evidence of hard figures to believe it's really a widespread issue that's contributing much to shortages.

In any case, I think a vacancy tax is a pretty poor way of addressing the problem. We have a similar tax in place for vacant land already and it's virtually unenforced: https://www.thejournal.ie/vacant-site-levy-5104669-May2020/

These kinds of highly targeted taxes get too bogged down in bureaucracy to ever be effective. What would likely be far more effective imo would just be a blanked land value tax on all property that can't be avoided or have conditions that can be disputed or worked around, but it won't happen because no part in Ireland will make people pay substantial tax on their houses.

C14N

PropQueries wrote: »

Cian O’Callaghan of the Social Democrats made your point in the SBP today: “There are more than 140,000 households on waiting lists for social housing and living in insecure HAP tenancies. More than 8,000 people, including 2,000-plus children, are homeless and living in emergency accommodation.”

Link here (free to read): https://www.businesspost.ie/houses/cian-ocallaghan-states-over-reliance-on-leasing-to-address-social-housing-crisis-is-dangerous-455255ec

I suspect its still quite spurious though. My partner and I both separately joined housing lists years ago and we're still on them, even though we have no need to be anymore. We wouldn't even be eligible if we tried to sign up today, but once you go on a housing list you tend to stay on there.

I agree with the main point of the article that this replacing of purchasing with leasing seems like a very poorly thought-out idea that appears to be costing the state a lot more than it's worth. I'd love to know what the justification is for these changes to allow for this over purchasing property to keep in perpetuity.