"average Dublin house prices should fall to ‘the €300,000 mark" according to Many Lou McD.

But if the price drops to 300K it doesnt matter if I want to sell now or in 5 years right...unless SF are only dropping the prices for less than 5 years?

Using your own assumptions of a 350k property with an 80k deposit, and 270k mortgage of 30 years, with a starting point of 1400pm rent, and the landlord already being in the top income bracket. The attached is what we get using the current standard mortgage assumptions if you approach a bank for a buy to let mortgage.

This is for the first 5 years of the mortgage, and the last 5 years, for brevity.

Thats including mortgage interest obviously. And annual costs for things like repairs, which you haven't accounted for. And only a 90% occupancy rate.

This means for an initial 80k investment, and 28k negative cash flow over the decades, you're left with an €825k asset after 30 years. Circa €715k of appreciation on your investment, or €24k per year. Thats more than a lot of workers in full time, 40hour a week, jobs earn.

CGT applies to any gains on stocks, PAYE taxes on dividend income, and DIRT on savings, so what exact tax free alternative are you suggesting that gives better returns, for a similar or less effort? Turning €110k into €825k over 30 years, from something that requires an hour two a week of effort at most, is very very good business.

This is all also despite some of your assumptions being rather questionable - what property would you buy in Dublin for 350k and only rent out for 1400e pm today? 350k woud get an apartment with closer to 2k a month rent these days. And 25% of landlords in Ireland currently pay no income tax whatsoever, with plenty more in the lower tax bracket. Only some are in the top bracket. Adjusting for both of those makes things wildly more profitable for the landlord.

I really hope you aren't a landlord, because your maths are utterly incorrect in every way.

I just thought it a ridiculous point.

Why would anyone want construction costs to stay high, to keep their house value inflated, so they can borrow more to pay for high construction costs???

So in your example the rent goes up but the repayments remain static? Considering you have the rental income is positive in growth, repayments are static and your predicted end value is €124k more the figures are going to be skewed in your favour. You have also decided to rent at the mortgage cost, not sub cost as previously suggested by yourself.

Throw up your totals, as per my post, purchase price, total cost of finance etc, show me the NRV of the asset after 30 years

I used €350k (look at the title, 300k....) if I used €750k with whatever rent you wanted its all the same really seeing as we are talking a relative increase over a period, it could be a house anywhere for the sake of it.

Not a landlord, presume you are not a homeowner, which is bewildering seeing as its the only way going buy your logic.

For the savings, https://personalbanking.bankofireland.com/investments-regular-saver-calculator/ knock yourself out

FYI note the exit tax of 41%

Assumptions

• Minimum investment term of 5 years
• Maximum investment term of 50 years
• Monthly premiums are flat and do not increase over time
• Investment Growth of 3.25% pa for medium-high risk is assumed
• Fund Management Charge of 1.5% is assumed
• Exit tax of 41% is assumed.
• Fund Levy of 1% is assumed.

For additional reference, to put things in even more context, the current average rental yield in Dublin on a 2bed apartment, with an average value of €355k, in 2024 is 8.6%. Which gives a yearly income of €30.5k, or over €2,540 a month. Rather more than the figures used in the above of €1,400 a month. And thats not not even inclunding the substantial capital appreciation that will also be occurring.

Again, thats how insanely profitable it is right now to be a landlord in Ireland. Even one charging just over half the market rate like in the €1400pm example, who owns just one completely average not high end apartment, with a full mortgage, will make more money per year in net income over the duration of the investment than large numbers of people working full time, 40hour a week jobs. For about an hour a week of time/effort.

You said that a landlord should rent below mortgage cost.

"I'm not suggesting anything, I'm pointing out the financial realities of being a landlord in Ireland in the year 2024. Which is that its not required to have your rental income cover your mortgage to make a large, long term, financial profit. Anyone telling you otherwise is either lying, or very bad at maths."

Taking your scenario above and there us probably a lot of 2 beds making sub2K/ month.

Of the 30K apartment management fees will be the bones of 2k/ year maybe a tad with as well as the risk of a cash call by the OMC.

Property tax approx 400 not tax deductible so it take double the money if you are at the high rate.

If you use an agent to manage you tenancy the fee is usually about a months rent. Then there is risk on average over a five or ten year span you will only average 11 rental months per year. So yout 30k is now below 23k before you even start into maintenance costs

You will probably replace statutory appliances every five year, washing machine ( dryer as well if an apartment) microwave, fridge freeze, hob and oven as well as electric shower probably 500+/ year,

A repaint will cost 2-3k every five years, electrical certificate every three years 5-600 euro.

To clean and remove rubbish between tenancies, 1-1.5K every 2-3 years.

The real killer us a tenant over holding and not paying rent or seriously damaging the property anything from 5-20k in losses. Once is enough to really sicken you.

HAP tenant goes in arrears with the LA you get nothing and they pay you in arrears and you know nothing about it until 7-10 days before they stop it. Have a friend that has to deal with this 3+ times every year.

Then you are quoting upper end Dublin rates. A two bed apartment in Limerick city rents for 800-1500/ month at the top end. Costs will be 2/3 of Dublin costs.

Edit

My son was renting a two bed apartment in Dublin with another lad two years ago. Cost was 880/month each or 1760/ year. Landlord sold up after 12 months and he moved to a house share @800 month for him for the master ensuite.

The apartment was in Ballsbridge it sold for above 450++k I think. If the LL had risen it by statutory amounts it would be 915 each or 21960/ year at present. A yield of 5%. I say he was an accidental LL

25% of landlords in Ireland pay no tax on their income whatsoever. A significant amount more are in the lower tax bracket.

The only realistic investment alternative, stocks, have the same tax rate for dividend income.

What exact investment are you suggesting is better?

Can you give me a link to prove that. I seldom ask anyone to link anything but that is pure BS.

All of those figures are averaged for and accounted for in long term buy to let calculations like the above.

Again, this thread is literally titled "Dublin house prices". Why would I quote figures for anywhere else?

And for reference I didn't quote remotely upper end. €355k is the average price for a 2bed apartment in Dublin in late 2023. High end would be something closer to double that.

Either your figures are made up, or your son was being insanely under charged, or the apartment was a kip. 1760e pm in 2022 for an average 2bed apartment in Ballsbridge was wildly below the normal market rate.

If the apartment sold for "above 450++k" and the yearly rental was 21k per your figures thats closer to 4% yield. When the average for similar in Dublin is 8.6%. So less than half the going market rate. Thats not remotely normal/common.

"OFFICIALS WITHIN THE Department of Finance warned against the tax break for landlords that was introduced in Budget 2024. Department officials also estimated that more than one in four landlords will pay no income tax on the rents they charge as a result of the tax break."

https://www.thejournal.ie/department-warned-finance-minister-against-tax-break-for-landlords-6267280-Jan2024/

I didn't make any business case based on not paying tax, I included an assumption of the landlord being fully in the top tax bracket for all rental income in the figures I posted.

Despite the fact that in real life large numbers of landlords do not pay tax at this rate.

And, again I'll ask since you'e ignored it: what specific investment are you suggesting offers better returns over the long term than property in Ireland in 2024, if being a landlord is so awful according to you?

And, again I'll ask since you've deliberately ignored it, again: what specific investment are you suggesting offers better returns over the long term than property in Ireland in 2024, if being a landlord is so awful according to you?

What is happening is C & D, not on your list above.

C) Local councils are not funding devlopments at all. They are taking their part 5 allocation with no effort or expense on their part.

D) Local councils are renting (not buying) additional homes in private developments for social, which does indeed steal homes away from private renters and buyers.

These homes are still owned by the developer and social tenants can be kicked out once the rental term ends.

Point A in your post is fine, in my opinion. Council funding private developers to build social homes that the council owns.

It houses people and its efficient use of council money, as the council owns the property.

This does not happen often though. How many developments under construction are there in Dublin at the moment that are entirely funded and owned by local councils? Hardly any.

Private developments should have part 5 only allocated to social and the rest left to the private market.

So that the private market gets a ready and consistent supply of housing, which helps reduce rent and sale prices.

The issue at the moment is that any private development that is intended for the open market can by 100% reallocated to social housing.

Which means the prices in the private market stay high (or grow even higher) because there is no new supply hitting the market.

Indeed. But the practice of moving new builds to soical housing at scale is a major part of the problem in relation to keeping private prices high.

The housing crisis will never be solved by social housing. Because most people dont qualify for social housing.

We need more social and private housing and there is some scope to deliver more homes in both areas if the councils were tasked with managing a targetted amount of new social homes, directly via their own funding.

In other words, councils are given a target of x amount of homes to be delivered directly (which means built and owned by the council. from the planning stage)

If this happened, we would see slightly more homes delivered overall, because both the private market and the social market would be planning and delivering autonomously and leveraging almost all labour and resources available to them.

At the monent, councils are not planning and have little in their pipeline, but then swoop for the new builds at the last minute.

This means we arent firing on all cylinders in terms of pipeline development for both private and social housing.

The capacity of housing output is greater, if both social and private homes are planned from the outset.

I understand your points, but I dont agree its a zero sum game in that the number of units completed each year is the max it can possibly be, as all available resources are not being leveraged.

If two teams plan and resource from the outset, we will deliver more units overall than if one team plans and resources from the outset, whilst the other team sits on the sidelines.

Sure, we may run into capacity issues at certian junctures, because the pipeline is much stronger than it was, since 2 teams have now planned for success.

But we will sweat all the assets overall and deliver more units to the market as a result, as well as helping develop the construction labour market through producing a stronger and consistent pipeline.

Private market will also have a precitable supply hitting the market.

i.e. if 10,000 private completions occur in 2024 in Dublin, we know 2,000 will be allocated to social, but no more than that.

So we will land at 8,000 new homes on the market, which will help control prices.

Currently, that 8,000 is being consumed by social and nobody really knows to what extent this is happening.

So its impossible to predict how many units will actually hit the private market. it could be 5,000, it could be 4,000. It could be less.

Net result is private house prices stay high and social home delivery remains sub-optimised.

I do agree with you that the politicians arent too distressed with the way things are working out, since they know the strangulated delivery of homes to the private market props up the prices of their would-be voters.

Which is still 70% (homeowners) of adults in Ireland.