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

Comical indeed, worth a listen.

First up is a professor of Economic policy at TCD saying the idea LLs leaving the market in droves has always been nonsense, it wasn’t true when first raised, and it isn’t true now, finally we have irrefutable data to show it.

Then a FG spokesman has his say, gamely trying to claim exodus was true, citing Joe Duffy callers et al.

Finally Chairperson of Irish Property Owners Association getting quite irate saying the same thing, clutching at straws, ignore the data, private landlords are leaving the market in their droves.

Interviewer does a good job of exposing policy being influenced by lobbying of vested interests rather than hard data. FG spokesman and IPOA chairperson had nowhere to go really.

Well if we don't have comparable data between now and then, lets assume that when the anecdotal alarm bells rang that small private landlords were leaving the market in their droves was true back when it started, the good news is it appears to be no longer true.

Even it is still true, it is no longer the disaster story it was billed as originally.

The reason it was a noteworthy narrative is obviously it was deemed evidence that rental supply was falling.

The new data from the RTB is comparable from RTB data at end of Q2 2024 and it shows rental supply rising across the board -

For instance, despite the large number of eviction notices, the total number of private tenancies has increased from 213,177 at the end of June 2023 to 230,006 at the end of March 2024.The total number of landlords linked with private tenancies has also increased from 96,702 to 103,035.Dublin recorded the largest number of private tenancies in the first quarter of 2024 at 99,630, up from 91,860 in the second quarter of 2023.In Cork, private tenancies rose from 23,548 to 25,041, while rental housing supply in Galway and Limerick also increased in the period -

https://www.businesspost.ie/news/analysis-are-landlords-leaving-the-market-potentially-is-rental-supply-in-free-fall-definitely-n/ .

Something odd about housing in Ireland is that across the board it is a race to the bottom to interpret anything in an apocalyptic fashion as possible, even when the data doesn't support it.

Any data that counters the doom and gloom is dismissed as the data is wrong, look at the anecdotal evidence. The FG guy in the radio interview was a prime example - he was citing jOe Duffy callers!

It slightly calls to mind 2006, just a role reversal. Back then the narrative was unbridled optimism, and when anybody cited data that questioned this optimism the reaction was similiar - ignore the data, look at the anecdotal evidence!

In other related news, according to an article in the UK times, institutional LLs are about to leave the market in a big way.

https://www.thetimes.com/world/ireland-world/article/10000-apartments-to-hit-dublin-market-as-funds-sell-up-5m9xz5khk

There is no doubt there is anecdotal evidence that small LLs are exiting the market and selling up. Principally the spike in notices to quit because of an intention to sell.

But where is the data that backs up the anecdotal evidence?

We have not seen a corresponding spike in second hand sales transactions in the same period.

We have not seen a corresponding spike in second hand supply advertised on the market. Quite the opposite. Second hand supply has been on a downward spiral.

So if there is no data that shows these properties that were intended to be sold, were not sold, or even advertised, where is the data that confirms this.

And if there is no data to back up the anecdotal evidence, why should we be so in thrall to anecdotal evidence. In most other fields anecdotal evidence is dismissed out of hand if there is nothing concrete to back it up.

And now we're seeing data that is showing rental supply is increasing. This is good news

If we are only talking about a few % of LLs this is not as a big deal as it is made out. It's part of normal functioning market.

If an LL sells his 2 bed apartment and it is bought by another LL, no big deal. Rental supply stays the same.

If it is bought by an FTBer, then it is one less FTBer to worry about, and they have moved from another property, freeing up at the very least a bedroom in a house share, or potentially a similiar rental property, or moved out of their parents house. These are all problems we're trying to improve.

The claim that RTB themselves say their data cannot be used for comparison does require a little context:

The new data, according to the RTB, is not comparable to that formerly released and the drop in the number of registered private landlords when the first quarter of this year is compared to the equivalent figure for 2023, should “not be attributed to landlords leaving the sector”.

“The reduction should primarily be attributed to the improved verification processes and the introduction of the requirement for landlords to register tenancies annually, which has removed inactive tenancies and duplicates from the register,” said the RTB in a statement accompanying the release of data.

So in a nutshell, the RTB say "We've improved our data and it shows that rental supply is increasing and small LLs are not exiting the market en masse"

And rather than people recognising this for the good news that it is, the reaction is "That's bull, look at the anecdotal evidence"

The point I am making is to place such a high value on the anecdotal evidence that it continually overrides the hard data seems a bit silly to me. This is just one example of many.

At some stage we have to accept at least the possibility that the data on housing is correct, even if it contradicts the anecdotal evidence.

If there is an uptick in supply in the price range you're looking for, which is presumably same as most FTBers, surely at least that's pretty good news from your point of view?

Sure it's bad news for individual tenants if they're evicted to facilitate a sale, but it is not necessarily bad news for the rental supply as a whole.

Buyers and renters don't exist in entirely different ecosystems. Most of the ex-rentals will be bought by FTBers who are vacating a rental, or by landlords who retain the property as a rental. Rental supply will stay broadly similiar.

Irrespective of any uptick in the number of ex-rentals on the market now, it is a tiny % of tenancies, and it is normal to expect that at any given time LLs will turnover stock.

There is simply no data to suggest a catastrophic decline in rental supply due to a mass exodus of LLs leaving the market.