awec wrote: » This is still just populism. Ireland needs landlords. The more the small landlords leave the market, the larger the share of the rental market the big funds will obtain. You've been pretty vocal about how terrible this is already. You can't have your cake and eat it.
PropQueries wrote: » We need solvent landlords. Not zombie landlords. And the number of small landlords leaving the market has been grossly over-estimated as many sold due to finally coming out of negative equity etc. etc. Would the percentage of small landlords leaving the market over the past several years still be in the single digits?
Hubertj wrote: » I’m not too knowledgeable on tax allowances for landlords but your suggestion makes sense. I was responding to the posters suggestion policy should drive rents down 40%. That wouldn’t solve anything, in my opinion.
Amadan Dubh wrote: » https://www.irishtimes.com/opinion/reits-are-not-the-enemy-and-emotion-is-not-a-policy-1.4563313?mode=amp It really says a lot that the only supporters of the regime as is are those directly benefitting from it. But it is infuriating how they are somehow legitimised by the media giving them a platform rather than interviewing them and critiquing the points raised. This is just gaslighting of the public to allow the lobbyists spout their side of the story unchallenged; "we're not the bad guys, we're actually the good guys". Note that the author in this piece directly profits from the current state of affairs (ie the housing crisis).
DataDude wrote: » Could you expand on that? I would have thought driving rents down 40% would solve a lot for an awful lot of people. I'd have said it was one of the primary problems that needs to be solved?
Hubertj wrote: » I’d be very surprised if many private landlords are enjoying a 40% premium on rent over mortgage. Intentional policy of make their mortgage unaffordable? Sounds like populist boll*x to punish the evil landlord class. I don’t see how that solves the issue of their being insufficient supply in the market. If there is sufficient supply consumers have more more choice to find a better deal in the market. That will result in rents falling. A better solution is a vacancy tax which kicks in after 2 months (or whatever the average duration of vacancy is). Then we would see if there are the magical hundreds of thousands of vacant units hiding in plane sight around the country (excluding the luxury developments in d2 and d4 everyone knows about).
timmyntc wrote: » The idea that we need to keep rents high to "protect" the small landlord - absurd. All landlords, big or small take a risk when they take on debts to pay for their property. If the rent doesnt cover the mortgage, tough ****. You either pay for it out of your own pocket (you are getting an asset after all) or you sell up. So long as its not bought by an investment fund and kept empty, then there will be no loss of housing/rental stock. People being forced to sell because their investment is no longer profitable is a sign of a functioning market. Not all speculators will make profit, some have to lose out.
derekgine3 wrote: » I see the protest for Palestine rally in Dublin planned for this Saturday has been cancelled, while i do agree with the sentiment that Israel is complete scum and needs to be stopped we could really do with a mass rally against Gov/Cuckoo funds that is the root cause of this housing crisis.
DataDude wrote: » A.) Unless you bought at particularly bad times (e.g. 2004 -2007) and at a very high LTV, I would say it's almost certain that you would have at least that, if not more given that mortgage interest rates are c.2.5% and investment yields are >5%. B.) Taking out debt to invest in an asset is risky. There is no inherent right for that investor to achieve a return that exceeds both the cost of their debt and repays their capital. Rental yields remain remarkably attractive at >5% when compared to other assets, hence the pouring in of international capital. So there are two options, we look to force down rents or apartment prices continue to rocket? I don't think we should be pandering to the poor landlord who is very sad his yield is going to fall from 5% to 3% (still an excellent return in todays terms, even if it doesn't cover his mortgage) in this scenario.
awec wrote: » Who said we had to do this?
Hubertj wrote: » And if such a ridiculous policy was implemented resulting in a large number of private landlords being unable to afford their mortgages? Populism is great but real solutions are required.
timmyntc wrote: » As if landlords unable to afford mortgage on their (extra) rental property is a justification for maintaining the status quo - yeah no. You have to accept that some people will lose out. Any landlords who cant afford the mortgage after a drop in rents should sell. They took a risk, it didnt pay off. Life goes on.
timmyntc wrote: » See below in response to a proposal to decrease rents up to 40%. As if landlords unable to afford mortgage on their (extra) rental property is a justification for maintaining the status quo - yeah no. You have to accept that some people will lose out. Any landlords who cant afford the mortgage after a drop in rents should sell. They took a risk, it didnt pay off. Life goes on. The state should not be trying to keep these people in business.
Graham wrote: » Haven't there only been something like 65 BTL mortgages per year drawn down over the last few years? Assuming that figure is correct, what's the impact of say 10% of them leaving the market?
Amadan Dubh wrote: » I presume you have not been reading the news for the last five years as there is a housing crisis, predominantly due to the hyper growth of rents. It is not just a supply issue, but also a cost issue. If you think it is just the one then you do not accept it is a "crisis" or an "emergency" but something a lot less severe. Sure what good would a doubling or tripling of supply be if it was of 2 bedroom apartments starting at €2k per month?! Just about affordable for two well paid finance or tech workers sharing but how would that help people trying to raise their families? And I use 40% for rents to decrease as, from looking at the average salaries and average rents, that would be a much more equitable level to pay for your rent and it would ensure people are not as financially stretched, unable to save, plan etc. For house prices, I think they aren't actually that unaffordable , maybe something like 15-20% reductions on new builds and an increase in supply would go a long way to alleviating the crisis. You also have to think of the bigger picture post-covid; it is not sustainable for the cash in the economy to get sucked into rents instead of being circulated constantly into more productive sectors. Ensuring that workers have more cash in their pockets after they pay their rent and bills is far better for the economy.
Hubertj wrote: » I’m not denying there isn’t an issue. There clearly is. But tell me how policies designed to make investment unattractive will encourage investment? Who will take on that risk? I don’t think private investors will. That leave “funds” or REITs but everyone seems to want them out of the industry too. Is it then Just the state? What is the capital cost of this? What are the operational costs going forward? Many many extra public servants are required to manage this? Additional public sector salaries and pension obligations?
Hubertj wrote: » You make some good points and I’m not in a position to disagree on the numbers as I don’t have any myself. However, look at it from an investment perspective. Landlords are needed, only an idiot would think otherwise. If policies are intentionally introduced to make an investment unattractive why would another investor take that risk? What happens further down the line when another wave of populism leads policy makers to make more bad decisions?
DataDude wrote: » Just to echo comments made by a few others. If rents were somehow forced down (not saying this is easy to do, although I do think when you look at the level of government subsidy in the private rental sector - it's somewhat artificial at current levels).In order for investors to continue to achieve the same yield, apartment prices would fall. Given building costs are relatively inflexible (and high), this theoretically would mean land values would have to fall also for more development to occur. So we'd end up in a new era with lower rents, lower land values, lower apartment prices and investors still getting their yields. Sure the ones who bought in 2018-2021 would get stung, but that's investing for you and life would go on. Given that most of the BTL going on in 2018-2021 was done by large institutional investors, there's arguably no better time to pursue something like this as there's fewer than ever Joe Public Landlords to get stung by it.
Marius34 wrote: » They would not achieve same yields, and if property price fall significantly, supplies would go down as well. Shortage of properties problem would grow.
schmittel wrote: » With the greatest of respect, this is nonsense. So what if private landlords cannot afford their mortgages? They'll simply be replaced with landlords/owners that can afford the property. If the problem we're trying to solve is the unaffordable cost of housing then obviously rents falling by 40% will solve this problem. Rubbishing such ideas as populism is just populism for landlord/property owning classes!
Hubertj wrote: » The point I am making is that if you introduce policies to make investment unattractive and drive investors out of the market you cause uncertainty in that market (whatever that market is property or otherwise). If there is uncertainty in a market it will deter investors as they may not want to take the additional risk. Are you really suggesting that introducing uncertainty in a market will not deter investment? That’s just nonsense, total nonsense. Rents obviously need to fall but to suggest regulating the sh*t out of the market will have the desired effect without unintended consequences is nonsense
