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

This is just word salad of classic Boards/Irish Reddit fear-mongering talking points, you haven't said anything actually informative at all. People taking 300k mortgages will lose their jobs to outsourcing and AI a lot sooner than those taking bigger ones.

And how will they be doing this with 100k NET immigration each year, increasing inflation and possible supply chain issues if (and probably when) further conflict is triggered overseas?

Paddy is too busy celebrating and out of control ruling class' selling Ireland to the wolves to fatten up their investments. Imagine if the men who fought for this country could see it today :(

Are they building much in Galway?

We see the house completion numbers each year and we were around 34k last year. I dont think it is as clear where the homes are being built. Would be good to see a county overview.

There are residential construction sites all over Dublin, but is Dublin getting most of the new stock?

Excellent question. Historically speaking, a middle class is something of an anomaly. Most of history saw the majority of property owned by a small ruling class, with most people working on but not owning land, at least not as we would understand it today. It could just be a temporary phase that is rapidly eroding.

Not a whole lot in the city. Oranmore seems to be getting nearly all of the developments now (~20 min drive).

There was 1 or 2 new developments on the far West side outside the city, but with majority of employment on the East side and the massive traffic problems crossing the river, it's a stretch to pay that premium to add extra commute to your every day life. Those new developments are on the outskirts of current civilization up a bohereen with no foothpaths or PT routes already set up. One of these developments was originally assigned to be 100% social housing but out of nowhere announced that they would be going for public purchase. They sold out after 1 day of being on sale. From memory these were mostly 4 beds, which rules out a few FTBs.

On the new developments in the west side since 2020, there has been a few developments, 2 or 3 depending on what you would class as a mass-development. 100% of all of these developments were assigned to social housing. Not one unit was available for public purchase. This rules out all FTBs, and all up-sizers too!

Yes absolutely, the metrics are based on median price to income ratios. You would expect the two factors to scale together in a vacuum

The point is howeve, that capital cities have higher incomes, but also are generally less affordable (I.e. house price increases are relatively more than income differences) because their is huge amount of forced demand. That is seen in the affordability list.

A huge huge percentage of the Irish population have to live in or near Dublin for economics reasons. It’s incredible its price to income ratios are in around those like Hull, where almost nobody is forced to live.

Dublin is one of the ‘most affordable’ capital cities in the world.

It’s a very interesting question as to why rental yields are so high in Ireland (I think rents are moderately high but broadly in line with other capitals, it’s just house prices being lower which makes the yield higher).

I’d propose a few possible reasons but don’t know for sure:

• Pretty tight lending rules make it hard for people to buy a home which supresses house prices (increases rental yield) relative to other countries. Most renters would be far better off with a mortgage…but can’t get one for ‘affordability’ reasons.
• Individual BTL mortgages are crazy expensive…but then I don’t think average Joe landlords are that prevalent globally.
• We have a systemic lack of apartments in major cities which is where rentals are mostly focused.
• We have fairly involved government policy in rentals with RPZs and the main opposition party manifesto talking about outright bans on rent increases for several years…institutional investors will always require a premium to cover this government intervention risk.

On your tax point. I’d be surprised if many countries taxed rental yields for individuals more favourably than earned income as this would be very hard to justify.

The ‘tax breaks’ for REITS are poorly understood. They don’t pay tax within the fund because those who own the funds are subject to tax upon sale.

If the REIT itself paid income tax…and the individual who owned the REIT had to pay tax again when they sold the REIT, they would immediately cease to exist which would be disastrous for are already low supply of apartments.

That's irrelevant. LTV is what matters, the more money you pledge (low LTV - loan-to-value) the safer it makes it for the bank to lend…

Are there people who clearly know about economics, and who is the clearer, is it yourself by chance? 😀

I am just saying facts based on the rates I see from BOI, AIB and PTSB and pass expriences

What you see is also true, a ~50% LTV has a better rate than a higher LTV

There should be a scheme for people who rent out one property like the rent a room scheme. I know a number of people who own a second property and just leave it idle as they are in the higher tax bracket and would be paying 52% on additional rental income. A scheme like this would suddenly bring loads of rental properties to the market.

This may sound sensible, but you’re just going to encourage more Joe Public money to buy up property. Do we really need more demand for existing houses? (individual demand don’t create new developments like institutional investors do)
There are apartments in our surrounding areas which sell for €300,000ish. Rent for maybe €2,100-€2,300. If your idea was implemented I would go buy one. Immediately. You’ve just doubled my yield. I wouldn’t really care if it went to €320, €330, €340. My net yield is so insanely high id take money out of equities where dividends are taxed at 52%
I’d almost certainly outbid some first time buyer. Who knows, maybe they’d rent it off me.

Is that a good outcome?

Then you’re just giving a big tax benefit to a cohort of people who have vacant houses.

Tax policy is very important for influencing behaviour. I’d much rather see that particular problem tackled through aggressive taxation on unused properties. Stick makes much more economic sense than carrot here.

We shouldn’t reward 10 years of dereliction!