2021 Irish Property Market chat - mod warnings post 1

hmmm · 09-05-2021 04:59PM

Deleted User wrote: »

I've said this elsewhere, but I don't really grasp the conversation on this topic (on the radio at least) always seemingly turning to social housing. Social housing is built-in to new estates. A guaranteed 10% (20% in future) are social houses. Then the other social housing bodies (McVerry, Housing Agency etc.) buy up a load of the houses, also.

I can't get my head around the social housing bodies competing on the market with private purchasers.

Private purchasers are paying tax, which is then being lavished on these bodies who are competing for property with the people paying the tax. It seems designed to funnel taxpayers funds from workers into the hands of property owners.

And if this is happening under a FG/FF government, what happens in a hard-left government?

RichardAnd · 09-05-2021 05:06PM

hmmm wrote: »

And if this is happening under a FG/FF government, what happens in a hard-left government?

Most likely, exactly the same thing.

Ursabear · 09-05-2021 05:09PM

If I read it correctly Google are going to allow employees to choose for themselves whichever city in the world, that Google has a presence in, to work from. Is this correct? If so and if other MNCs follow suit I wonder what the effect on the accomodation market here will be.

09-05-2021 05:25PM

fliball123 wrote: »

What you outline is one way our many left leaning policies which have favored those who are the poorest. What is happening is the poor and disadvantaged are given advantages that working people dont get and for a long time now welfare has been competing with low paying jobs. You only have to look at supermarkets, fast food outlets and other low paying jobs here you can see a shift in the workforce from being Irish to foreign workers. Irish workers dont do cheap labour as they know the system is geared towards them. We need a system where a % of your tax is actually put by for the person paying it and cannot be used for anyone else. There should also be some way of stopping our government from borrowing in our name and being used to pay out to people who dont deserve it (not saying all on welfare dont deserve help, some do some dont)

It gets worse the more you earn before AIW over 50% of what you earn you have to pay back. Ireland has become a country that does not reward working or as Leo says those who get up in the morning. Its like if you are anyway successful in this country your wallet is a target for Poor, Public servants and the Rich who dont want to pay the bill when things go wrong.

The effect is that we now have a good % working who are worse off than some who are not working and that should never be the case in a functioning employment market.

I fight my war against the system and as far I see I am wining.
The Rule is simple Dont spend if you dont earn !
If your takeway brought meal price 50 cents up simply stop buy it
If you cant buy mobile phone for your 2 days earnings simply dont buy it !
I cant listen cryers who craying about hard life telling about how hard life is and keep brand new Iphone for 800 euros which they bought taking loan
If you cant afford it simply keep money in pockets ! And believe me even working for minimal wage you will always have coin in your pocket !
The problem of Ireland is Public Overspending ! Not the debt of the country !
Why rich has to pay for those who cant spend money properly ?

Once everybody will live that life style the property prices also will be normal !
And government will not have borrow money to save banks because somebody cant pay mortgage because he spent more than he earn !
The problem is You ! Not the government,not the bank,not the rich ! You ! Who cant manage his finances

Reins · 09-05-2021 05:30PM

https://twitter.com/TodayFM/status/1390588715077038081?s=19

Dr Rory Hearne laying it bare.

09-05-2021 05:38PM

Ursabear wrote: »

If I read it correctly Google are going to allow employees to choose for themselves whichever city in the world, that Google has a presence in, to work from. Is this correct? If so and if other MNCs follow suit I wonder what the effect on the accomodation market here will be.

No. Exactly the opposite. Told them to get their asses back from out foreign.

Hubertj · 09-05-2021 05:39PM

Ursabear wrote: »

If I read it correctly Google are going to allow employees to choose for themselves whichever city in the world, that Google has a presence in, to work from. Is this correct? If so and if other MNCs follow suit I wonder what the effect on the accomodation market here will be.

That’s not my understanding of their policy. They are allowing a % of workers (20%ish I think) wfh permanently depending on function etc but that means wfh in Ireland. However given that many projects are carried out by teams across multiple sites perhaps there is flexibility for geographic mobility also.

hometruths · 09-05-2021 05:42PM

Ursabear wrote: »

If I read it correctly Google are going to allow employees to choose for themselves whichever city in the world, that Google has a presence in, to work from. Is this correct? If so and if other MNCs follow suit I wonder what the effect on the accomodation market here will be.

I think the WFH decisions of the SMEs rather than the MNCs will be far more significant.

It will be insurance brokers moving to Laois etc that will make a difference.

hometruths · 09-05-2021 05:47PM

Hubertj wrote: »

That’s not my understanding of their policy. They are allowing a % of workers (20%ish I think) wfh permanently depending on function etc but that means wfh in Ireland. However given that many projects are carried out by teams across multiple sites perhaps there is flexibility for geographic mobility also.

Part of their tax arrangements requires maintaining a certain number of jobs in Ireland so I'd say whilst international mobility might be possible in theory it's unlikely to materialise in practice.

Villa05 · 09-05-2021 05:48PM

coolshannagh28 wrote:

The state has played an ideological 3 card trick , they have managed to reinflate house prices using tax incentives to investment funds and at the same time offshored the downside risk should things collapse . We are known for this and face headwinds as globally there is a concerted effort to regularise taxation on corporations.

We will be very very lucky if the downside is offshored. These investment funds are short term and they will be offloading these homes at considerable untaxed profit
By soaking up supply they are increasing the pent up demand. They lobby for inflation policies like shard equity and the start selling back into the desperate pent up demand

Hubertj · 09-05-2021 05:52PM

schmittel wrote: »

Part of their tax arrangements requires maintaining a certain number of jobs in Ireland so I'd say whilst international mobility might be possible in theory it's unlikely to materialise in practice.

Don’t forget the IP.... if the IP is actually developed here!! Imagine that.

Sierra Oscar · 09-05-2021 06:02PM

Ursabear wrote: »

If I read it correctly Google are going to allow employees to choose for themselves whichever city in the world, that Google has a presence in, to work from. Is this correct? If so and if other MNCs follow suit I wonder what the effect on the accomodation market here will be.

Not the case whatsoever. In fact, Sundar Pichai has specifically stated that employees will be back in the office by the end of the year and has explicitly ruled out permanent work from home arrangements for the bulk of the workforce.

schmittel wrote: »

It will be insurance brokers moving to Laois etc that will make a difference.

Honestly though, who wants to move to Laois? :P

Villa05 · 09-05-2021 06:13PM

fliball123 wrote:

What you outline is one way our many left leaning policies which have favored those who are the poorest. What is happening is the poor and disadvantaged are given advantages that working people dont get and for a long time now welfare has been competing with low paying jobs. You only have to look at supermarkets, fast food outlets and other low paying jobs here you can see a shift in the workforce from being Irish to foreign workers. Irish workers dont do cheap labour as they know the system is geared towards them. We need a system where a % of your tax is actually put by for the person paying it and cannot be used for anyone else. There should also be some way of stopping our government from borrowing in our name and being used to pay out to people who dont deserve it (not saying all on welfare dont deserve help, some do some dont)

If we had common sense policies

We would build housing on state land and restore the supply demand imbalance. Current policy ensures taxpayers pay more tax, rent, mortgages. Employers are under pressure to pay more wages thus reducing competitiveness

We had the same issue with medicine not so long ago with the state paying maximum price for branded medicine with cheaper substitutes discouraged to facilitate vested interests

After the last crash I do remember large queue's forming for McDonald s jobs
When we are close to full employment it might be popular soundbite but I don't think it is those at the bottom that responsible for the countries ills

hometruths · 09-05-2021 06:32PM

Sierra Oscar wrote: »

Honestly though, who wants to move to Laois? :P

Oddly enough, me: https://www.myhome.ie/residential/brochure/the-abbey-leix-estate-abbeyleix-laois/4345736

I'd have bought it by now, only my wife prefers Wicklow...

:D

hometruths · 09-05-2021 06:58PM

Hubertj wrote: »

Don’t forget the IP.... if the IP is actually developed here!! Imagine that.

Speaking of IP... I was thinking about this the other day in the context of the furore about the REITs tax affairs.

The IP tax scheme - the 'Green Jersey' - is very clever in that it is a win win for both our Revenue and the MNCs.

As part of the arrangement, companies who wish to avail of the scheme have to present a business plan making a case for why Ireland should accept their IP. On the face of it this requirement is a mechanism to stop brass plate companies - i.e Ireland is saying, hang on we're checking that these companies are actually carrying out business in the state.

The reality is the business plan is just a commitment to provide X numbers of jobs in the state, usually with salaries linked to turnover.

Very clever. Win-win. (except for the fact it has reduced our fair share of EU covid bail out, but in fairness you cannot blame them for not forseeing a pandemic.)

My point re REITs is our corporate tax structures have shown us time and again that we have no shortage of clever policy wonks able to design tax laws to the country's benefit.

Why on earth have these guys not been rolled out to sort out the REITs and develop a win win scheme?

We keep being told tinkering with the existing tax arrangements of REITs is complicated, but if we can manage to structure a tax regime to our benefit for the biggest global companies, surely taxing a few institutional landlords with physical assets in the state is not beyond our capabilities?

Mic 1972 · 09-05-2021 07:05PM

Ursabear wrote: »

If I read it correctly Google are going to allow employees to choose for themselves whichever city in the world, that Google has a presence in, to work from. Is this correct? If so and if other MNCs follow suit I wonder what the effect on the accomodation market here will be.

that's not even allowed from a legal standpoint
you have to be resident in the country you work from, at least 6 months + 1 day per year

Hubertj · 09-05-2021 07:06PM

schmittel wrote: »

Speaking of IP... I was thinking about this the other day in the context of the furore about the REITs tax affairs.

The IP tax scheme - the 'Green Jersey' - is very clever in that it is a win win for both our Revenue and the MNCs.

As part of the arrangement, companies who wish to avail of the scheme have to present a business plan making a case for why Ireland should accept their IP. On the face of it this requirement is a mechanism to stop brass plate companies - i.e Ireland is saying, hang on we're checking that these companies are actually carrying out business in the state.

The reality is the business plan is just a commitment to provide X numbers of jobs in the state, usually with salaries linked to turnover.

Very clever. Win-win. (except for the fact it has reduced our fair share of EU covid bail out, but in fairness you cannot blame them for not forseeing a pandemic.)

My point re REITs is our corporate tax structures have shown us time and again that we have no shortage of clever policy wonks able to design tax laws to the country's benefit.

Why on earth have these guys not been rolled out to sort out the REITs and develop a win win scheme?

We keep being told tinkering with the existing tax arrangements of REITs is complicated, but if we can manage to structure a tax regime to our benefit for the biggest global companies, surely taxing a few institutional landlords with physical assets in the state is not beyond our capabilities?

On the IP piece, note that there are IRS requirement which also have to be fulfilled to satisfy transfer pricing etc.

On the REITs and others being “tax efficient” is it not a case of loose or ambiguous regs (intentionally so) vs some genius in dept of finance? So the challenge is changing tax regs to a point that they will still invest but their scope is limited. They have teams of tax lawyers to work on it and interpret it.. why does nobody comment on Germany and the difference between their headline rates and effective rates?

Mic 1972 · 09-05-2021 07:08PM

Deleted User wrote: »

I've said this elsewhere, but I don't really grasp the conversation on this topic (on the radio at least) always seemingly turning to social housing. Social housing is built-in to new estates. A guaranteed 10% (20% in future) are social houses. Then the other social housing bodies (McVerry, Housing Agency etc.) buy up a load of the houses, also.

Those on social housing are (as usual in Ireland) being disproportionately taken care of in comparison to private purchasers. The Covid rules even prevented private estates from working, but allowed social housing to continue. In other words: Those on the social housing list are more important.

The government either need to stop fulfilling social housing for a year or so and put all those houses on the private market, or change the rules so that people who are working, earning a wage, but still can't get anywhere near a house, can apply and get a new social house.

I quote every word

Amadan Dubh · 09-05-2021 07:26PM

schmittel wrote: »

I think the WFH decisions of the SMEs rather than the MNCs will be far more significant.

It will be insurance brokers moving to Laois etc that will make a difference.

Yes, I think the bigger impact will be for those SMEs not bothering to renew their leases on the smaller office premises. Think of those Georgian buildings around Merrion Square, by way of example, which would have a lot of small companies renting office space like a ten man solicitor firm or whatever. They could save thousands per year not renewing. Where would that leave all these smaller premises?

awec · 09-05-2021 07:34PM

schmittel wrote: »

Oddly enough, me: https://www.myhome.ie/residential/brochure/the-abbey-leix-estate-abbeyleix-laois/4345736

I'd have bought it by now, only my wife prefers Wicklow... :D

No photos of the kitchen either! Avoid.

tom1ie · 09-05-2021 07:45PM

So if rents weren't so high I presume people would be happier to pay rent.
Therefore what is the reason rent is so high?
Is it due to the fact there is a high baseline due to HAP?
If HAP was lowered LL'S would have to lower rent as the money they indirectly get off the government aka taxpayer has been lowered.
This would then make rents more affordable and take the pressure off the housing market as people would not be in such a rush to take out massive mortgages at historically low interest rates.
The question is will HAP be lowered. My opinion is no way as there is way too many vested interests now working in this sector and the media would absolutely destroy whatever politician even suggested this. Also you would have the likes of manix flynn cracking up on the airwaves talking about the vulnerable in society etc.
Lowering HAP would lead to lower rents for everyone and lower amounts of tax payers money going into LL pockets (albeit LL pay a hefty amount of tax back to the government anyway).

MacronvFrugals · 09-05-2021 08:06PM

Full speed ahead with the leasing locomotive!

Council to sign home leasing deal dubbed 'a scandalous waste of taxpayers' money'

One of the country's largest councils says it will continue with a deal to lease 159 homes in west Dublin, despite the deal being dubbed "a scandalous waste of taxpayers' money".

https://www.irishexaminer.com/news/arid-40284983.html

hometruths · 09-05-2021 08:09PM

DataDude wrote: »

Interesting piece in the Sunday Independent titled ‘Bank of mum and dad is propping up South Dublin’. Pretty much as expected but nice to see it confirmed by an EA.

Owen O’Reilly saying in the properties he’s selling it’s routine for parents to be gifting €400k-€1m for their kids to live nearby and that prices would be considerably lower without this.

Same article has a mortgage broker saying 7 out of 10 applications they process have considerable gifts attached. Finding now that the vast majority of applicants who don’t have sizeable gifts are not renewing their applications when approval lapses and that, although they have lots of applications, very few are being drawn down and most just sit in the cabinet unused.

Wonder will it ever lead to a conversation about inheritance taxes if property ownership becomes an inherited, rather than an earned right!

https://m.independent.ie/irish-news/bank-of-mum-and-dad-is-propping-up-south-dublin-housing-market-40403979.html

Very interesting article, and like a lot of the trends in the market, it only comments on what the effect is right now, and not enough consideration of the consequences should this trend continue.

Fair play to the parents for giving the kids a leg up, but where is the money coming from? If it is profits from their businesses good luck to them, but article suggests vast majority is capital from savings and pensions.

Parents are probably thinking, well we're all right, we have a decent nest egg and sure we can always sell the SCD family home if push comes to shove. And that works out fine as long as the majority of SCD parents feel the same and have the same healthy pensions.

But the article says 7/10 have big parental gifts and the rest are starting to give up because they can't compete, saying we'll take a step back and wait and see.

Logic dictates this trend plays out that at some stage it becomes 6/10, then 5/10 etc with gifts, whilst the number waiting and seeing rises.

And then there is a tipping point when the number of buyers with family gifts is less than the number of buyers without.

Are impoverished pensioners in SCD going to be the next big thing?

eg "My pension is worth nothing because I needed to cash it in to help my kids, and now my house has fallen in value and I can't afford to sell it?, where's my NAMA etc etc"

Wouldn't surprise me in the slightest.

Sierra Oscar · 09-05-2021 08:09PM

tom1ie wrote: »

So if rents weren't so high I presume people would be happier to pay rent.
Therefore what is the reason rent is so high?
Is it due to the fact there is a high baseline due to HAP?
If HAP was lowered LL'S would have to lower rent as the money they indirectly get off the government aka taxpayer has been lowered.
This would then make rents more affordable and take the pressure off the housing market as people would not be in such a rush to take out massive mortgages at historically low interest rates.
The question is will HAP be lowered. My opinion is no way as there is way too many vested interests now working in this sector and the media would absolutely destroy whatever politician even suggested this. Also you would have the likes of manix flynn cracking up on the airwaves talking about the vulnerable in society etc.
Lowering HAP would lead to lower rents for everyone and lower amounts of tax payers money going into LL pockets (albeit LL pay a hefty amount of tax back to the government anyway).

I think you're forgetting why HAP was introduced in 2014 in the first place - i.e. a greater number of people couldn't afford to make ends meet and were becoming homeless due to being unable to afford basic accommodation costs. This was brought about as a result of a critical shortage in the rental market.

The problem is HAP was always meant to be a short term solution to a supply crisis. It was envisaged that the rental market would reach a stable equilibrium with rents falling back once supply began to outpace demand. This was to be coupled with an increase in housing stock held by Local Authorities for further alleviate the pressure on the market. I think it's clear for all to see that not nearly enough progress has been made on this. In fact I would argue we are in a much, much worse position now than in 2014.

If you remove HAP, what do you propose to do with the people who become homeless as a result of that decision? I'd argue we still don't have near the level of rental supply needed to drive down rental costs to an affordable level in a post-HAP world. Sure, the costs would fall but probably not by nearly enough.

L1011 · 09-05-2021 08:11PM

If money is actually being "lent" to children rather than gifted, there are potential tax implications for non-repayment and also likely people lying to their mortgage provider.

Bass Reeves · 09-05-2021 08:12PM

tom1ie wrote: »

So if rents weren't so high I presume people would be happier to pay rent.
Therefore what is the reason rent is so high?
Is it due to the fact there is a high baseline due to HAP?

Many countries have historical property rental capacity that has been put in place decades ago. Because of this investors are often only looking for modest returns.

Take a new three bed apartment being put up for rent. Assuming an average interest rate of 3% over the next thirty years. Interest will be approximately 157k on the purchase. Repayments will be 1410 euro/month. ( This is assuming no equity by LL, I know this nevers happens buts it's for illustration purposes). Add to this management charges(1.5k/ year.or 125/ month) Add in maintenance for next 30 years, risk of non payment by tenants and other costs and this adds 250+/ month in costs. There fore for this property to pay for itself over 30 years it costs about 1800/ month in costs.

Assuming an investment buy and puts up a 20% deposit he has 75k in equity,.his repayments will drop to 1150/ month but he has 75k in equity and costs remain the same giving total costs over 30 years of 1525/month. Because it's an apartment appreciation is not guaranteed and if it was a house you have added costs.

tom1ie · 09-05-2021 08:18PM

Sierra Oscar wrote: »

I think you're forgetting why HAP was introduced in 2014 in the first place - i.e. a greater number of people couldn't afford to make ends meet and were becoming homeless due to being unable to afford basic accommodation costs. This was brought about as a result of a critical shortage in the rental market.

The problem is HAP was always meant to be a short term solution to a supply crisis. It was envisaged that the rental market would reach a stable equilibrium with rents falling back once supply began to outpace demand. This was to be coupled with an increase in housing stock held by Local Authorities for further alleviate the pressure on the market. I think it's clear for all to see that not nearly enough progress has been made on this. In fact I would argue we are in a much, much worse position now than in 2014.

If you remove HAP, what do you propose to do with the people who become homeless as a result of that decision? I'd argue we still don't have near the level of rental supply needed to drive down rental costs to an affordable level in a post-HAP world. Sure, the costs would fall but probably not by nearly enough.

Rental supply is increasing due to vulture funds coming in buying housing stock.
The reason rent is so high is because of HAP.
I didn't say remove HAP just lower it so the baseline for rent overall drops.
There is now more supply in the market.

Sierra Oscar · 09-05-2021 08:22PM

tom1ie wrote: »

Rental supply is increasing due to vulture funds coming in buying housing stock.
The reason rent is so high is because of HAP.

Is it?

Admittedly supply has increased modestly in Dublin since the onset of Covid-19, but the rest of the country has seen a sharp fall in supply.

It would be a brave Minister who takes the decision to abolish HAP with the thinking that we have enough supply to no longer warrant State intervention in the rental market. People becoming homeless isn't a good look for a Government. Fine Gael post-2016 General Election will tell you that.

hometruths · 09-05-2021 08:24PM

tom1ie wrote: »

Rental supply is increasing due to vulture funds coming in buying housing stock.
The reason rent is so high is because of HAP.

Exactly it is a vicious circle.

As rents rise further more and more people need housing assistance.
|
V
As more people need housing assistance, govt enters into more leases, pays out more HAP, buys more units on private market etc.
|
V
As govt enters into more leases, pays out more HAP, buys more units on private market etc rents rise further
|
V
As rents rise further more and more people need housing assistance.

And so on and so on....

tom1ie · 09-05-2021 08:25PM

Sierra Oscar wrote: »

Is it?

Admittedly supply has increased modestly in Dublin since the onset of Covid-19, but the rest of the country has seen a sharp fall in supply.

It would be a brave Minister who takes the decision to abolish HAP with the thinking that we have enough supply to no longer warrant State intervention in the rental market. People becoming homeless isn't a good look for a Government. Fine Gael post-2016 General Election will tell you that.

Agreed. I said that in my first post.
Vulture funds are buying up housing so rental supply must be increasing.
There is no point supply increasing but the price of rent being kept arificially high by HAP.

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

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2021 Irish Property Market chat - mod warnings post 1