Irish Property Market chat II - *read mod note post #1 before posting*

No tax reporting needs to be done. It is taking care for you.

I worked with a bank thats been mentioned in relation to this Revolut savings account for well in excess of 20 years and their mantra is and always has been that very few people will go to the bother of switching and moving.

Slowdown in wage growth. Averaging 4.5% increases for preceding 4 years (2018- 2022) but down at 2.1% for 2023.

Bit surprising given inflation and public sector pay deals. Perhaps reflecting some of the cooling off in tech.

Might provide some reprieve to rate of house price growth in 2024 if it continues.

The fund sold its 29% stake in Manhattan’s 360 Park Avenue South for $1 to one of its partners, Boston Properties Inc., which also agreed to assume CPPIB’s share of the ‘Project’s Debt’

So sold it for the equivalent of 65m when you take the debt also into the equation

The lack of apartments in Ireland is really quite unique in modern Europe, its a disaster of planning.

There are so many suburban rented houses full of 20 and 30 somethings in our cities which should instead be housing families, while those 20/30somethings should be living in apartment blocks close to the city center.

Fair enough but the point being that the fund most likely had significant equity vaporised in a deal struck in 2021.

Does seem to have very poor risk management at a time when WFH wàs and remains prevalent.

The cultural aversion to apartments is compounded by the fact that such a large proportion of current stock is of very poor quality - fire safety issues, noise issues, leaks etc. Then there’s the inevitable management company issues which arise from owners not paying their fees/voting to reduce fees by cutting services/underfunding the sinking fund.

There’s exceptions of course, but generally the average experience of owning or living in an apartment in Ireland is inferior to a house.

“Having consulted widely and at length with stakeholders and interested parties, the Working Group estimates that of apartments and duplexes (or associated common areas) constructed between 1991 and 2013, the number that may be affected by one or more defects (i.e. fire safety-, structural safety- and water ingress defects) is likely to range between 50% and 80%. This equates to between 62,500 and 100,000 apartments/duplexes.”

Ultimately, only opening up works in all apartment blocks across the country could provide more reliable information than that report.

Re the time period involved, I don’t have any exact numbers, but it’s fair to say a very large proportion of our overall apartment stock was built during that period - certainly enough that if at least 50% per cent of them have structural issues, makes my initial post asserting that a large proportion of our current stock have fire safety issues or leaks, a valid assertion. The report doesn’t go into noise issues, which I also mentioned, as those issues aren’t seen as critical.

I owned an apartment built during the period, built by a developer with a good reputation, and indeed in a desirable overall development relative to the area it was built in. While if you asked the managing agent or OMC or the majority of owners (most of whom never lived there) if there were issues, you would be told absolutely not, due to a leak I had reason have some very minor opening up works done in my own unit. There was no fire stopping material between mine and the adjoining upstairs unit.

There is a huge, huge element of managing agents/OMCs and indeed owners burying their heads in the sand about these issues, and the “nothing to see here” attitude maintains the prices of these developments so that current owners pass the problems onto future owners and round and round it goes.

I would argue that that report, rather than apartment owners/managing agents/omcs being asked “how much money would you like” was rather a chance for them to anonymously tell the truth about the situations within their developments, without it impacting on the value of their units.

Irish people don't have a unique inability/cultural aversion to living in apartment complexes, though. The reason our apartment % is so low compared to the rest of Europe is simply because we don't build enough apartments, not because 92% of Irish people would refuse to live in them if they existed.

Again, as the go to example just look at the huge numbers of students, 20something, and 30something professionals living in suburban house shares in any city in Ireland. These people would all far rather be in centrally located apartments, but can't, because apartments don't exist in large enough numbers.

In a Dublin context any development between the canals over the past 30 years, and for at least the next 30, should be apartments with a mandatory minimum height of 6 stories to help address this.

For so many reasons (the quality of life for the renters, the families that would be able to move into suburban houses, the lower infrastructure pressure with lots of people having walkable commutes, the more vibrant city center etc etc) the inner city should be medium to high density apartment living. But our governments have made no attempt to encourage this historically, and even in 2024 this isn't showing much sign of change, either. Somewhat horrifyingly.

The report supports my claim. It doesn’t prove it, but it does support it.

Most buyers are not buying new builds, and so get no incentives whatsoever to buy.

A short article on the market today in the IT, it paints a different picture from the government press releases:

"House prices and rents will remain on an upward curve for the foreseeable future, the Economic and Social Research Institute (ESRI) will tell the Oireachtas Committee on Budgetary Oversight on Wednesday evening.

In its opening statement the institute notes that investment in residential construction here slowed noticeably in 2022. “Ireland was among the countries with the lowest investment in housing in the EU in 2022, only exceeding Greece, Poland, and Bosnia and Herzegovina,” it says. “As a result the rise in house prices and rents is likely to continue, albeit at a slower pace in the case of house prices.”

The institute warns that demand for housing would continue to exceed the supply over the medium-term."

https://www.irishtimes.com/business/economy/2024/03/06/house-prices-and-rents-to-remain-on-upward-curve-says-esri/