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

If this were the case, why do the brand new apartment blocks, that spring up in Dublin with regularity, continue to rent out succesfully to the private market?

As well as pent up demand in family homes and house shares, there are a lot of people moving to Ireland and the vast majority of them move for work.

A lot of people moving here can afford the market rent.

In your example, lets assume that out of 100 HAP tenancies, 60 landlords decide they want the 2.5k a month rent, as it can easily be obtained in Dublin.

What happens to the 60 HAP tenants that are now facing homelessness?

That's their imaginary problem.

The main issue here is that you effectively believe that, were half of the renters in this country suddenly to disappear out of that market, that there would be no effect on the level of rents. That's utter nonsense. There are a lot of renters in this country and it is incontrovertible that over half of them are assessed as not being able to afford their current level of rent.

There is no point bringing in fluff now about kids changing school or other sudden faux concerns. That has nothing to do with the price of rent or your assertion that hypothetically removing subsidies would have no impact. You appear to have implied though that your projection depends on an influx of people sitting in India chomping at the bit to come to Ireland to pay 30k a year rent to live in Athlone. It couldn't get much more bizarre

In the sought after areas of Dublin, the landlords could easily fill their property from the private market, were HAP and other subsidies to be discontinued.

Granted the demand is not so acute in less desirable areas, but those areas are not where the jobs are and its the working person that is capable of paying the market rent.

Whether we agree than 10% or 100% of subsidised tenancies could be replaced by the private market, the fact is that in the employment centres, there is plenty of demand to occupy those homes.

Its an interesting dscussion, but in reality, it (removing subsidies) is not going to happen and we all know that.

The only practical solution is to build more state owned homes so that the private market can carry the private renters only; though we are a long way from that kind of construction output.

The other side of the coin then is house prices - currently all investment-grade housing is priced based on rental yield. If market rents were to drop, then the valuation of these properties drops too.

Below a certain price point schemes may no longer be viable. However if that happened then we would definitely see input costs to construction drop (cheaper land, cheaper labour, cheaper material inputs).

Right now those inputs can charge quite high because the costs can be absorbed by developer. If developers price achievable drops, then input costs will have to drop too or else their entire business will dry up.

Only have to look at cost of construction post GFC to see that in effect.

I forgot about the ESRIs previous predictions in 2022. Let's see how their latest divination works out over the next couple of years.

It was about how leveraged the debt was too. LTI and LTV ratios were off the scale compared to the lending of the last decade.

Yes that is true, but it looks like ordinary people, not banks, were the primary cause of the market peaking back then. If you look at the news reports, the tightening of credit by banks did not come until later.

The Celtic Tiger was a bizarre time. Back in the 2010 or so, there was a thread over on the economic board where posters could relate their wildest tales of Celtic Tiger excesses, and some of them were just mental. People with very ordinary jobs were buying BMW or Mercedes cars completely on credit whilst borrowing 110% mortgages.

Mind you, one salient difference between then and now is that people did seem happier in the early 00s than today….

That isn't what I said at all.

I said if subsidies were stopped overnight, the landlords of subsidised properties would not receive 100% of their rental income, because the tenant could not afford to pay it, which is why they are getting HAP in the first place.

Your 2022 example isnt relevant because the subsidies were not stopped when the eviction ban was brought in.

I believe you were saying that the subsidies should be completley stopped, at the same time as an eviction ban is introduced; thats a very different scenario to 2022 and is the scenario I was addressing.

I agree there would be better value in the councils buying 2nd hand homes instead of new builds, but its difficult to purchase at scale with that M.O., vs buying/renting a single scheme outright.

I dont agree with either approach btw; councils should be building their own homes and leaving the private market alone.

They are not minded, nor resourced, to do that, however.

Have not been looking at this thread in a bit but some really interesting opinions. IMO I think we are in for a decade of pain increases in both prices and rent I feel for anyone under 30 trying to plan for their future. We don't have enough housing to either buy or.and rent and our current immigration policy will mean that we will need more and more housing (60k +) for at least the next decade just to deal with our current population size. So we are in the short to medium term prices for both rent and to buy will remain high.

The government should be buying 2nd hand housing as its cheaper than new houses and putting people who are on HAP into these, I think its crazy that there is social housing being built out in the likes of Howth worth 900k and upwards that people who are sitting on their asses will be getting access to before those of us who work. Its time some priority was given to those who contribute to the taxes here. If the government offered say an amnesty on CGT on people selling 2nd hand rental homes to the the state for a fair price (no bidding against the public). they would get them at a reasonable price the landlord gets away with CGT and the state can house someone who needs housing at a cheaper price point and the state has an asset that can be used going into the future.. Win/Win/Win

All new homes should be put up for sale / rent in the private market and existing dwelling should be used for those who are on HAP over the next 10 years the government should look at all options including starting a public sector building company to build, offering large incentives to other builders from other countries to come in and build a blitz of housing over the next 4/5 years and of course getting larger and larger amounts of modular homes built on scale to house those who needs housing.

After we have caught up or over the next decade our country should be weened off HAP and Help to buy and other drains on the tax payers. Also the question has to be asked why are the lefties dictating housing policy with regards to who has first choice? Our housing policy is actively dissuading people from working as they lose to much when they start working. Also the government need to keep its housing stock in their own hands and not let people get them on the cheap or for free which has happened before when someone is gone from a house that was given to them by the state then that house should be used for the next person needing it and not given to the kids of the person gone before. This will all take time but it would see rents and prices drop it would also mean people working their asses off get priority.

Lets be clear there is no easy answers out there

I think we are in agreement. I am making the point that they should not be buying new dwellings which are always more expensive then 2nd hand homes. I agree with them pumping the money in but if housing was in itself in isolation they could do this but what do you think would happen to any government who over night stopped HAP, help to buy and the all the rest - they would go the way of the greens so any self serving politician (so basically all of them) wont do this there is a higher likelihood of us all winning the lotto at the same time. Once again I agree with those working they should be prioritized - this is the real shame of what's happening you get up and work and you struggle to move out of your parents then if you sit on your a$$ chuck out a few kids there you go there's a gaff for free beside mumsy in Howth for almost a million - talk about moral hazard.

The only real way out is to build and I have advocated that the state should be ramping up modular homes - cheaper and faster to build and doing things like letting builders/plasterers/laborers/sparks/plumbers (basically the people needed to build) from other countries give them a 5 year deal where they pay zero tax but they have to leave when they are finished or they start paying tax after this - I know for people working and paying tax here may think this seems unfair but housing is gone beyond a crisis in Ireland and we need to find some levers to make it more palpable for our younger cohort to live and stay in the country and if those on the housing/HAP have an issue with modular then stay on the street the day of getting a gaff beside mumsy should be gone. People are entitled to a roof over their head but not one that costs the tax payer a million or so and not one that the vast majority of tax payers can not afford to get themselves. The tail is wagging the dog here.

Jesus. If the average list price in Dublin increases by an average of 6.5% over the next 2 years it'll be more than half a million quid.

https://www.rte.ie/news/business/2025/0102/1488224-house-prices-up-9-in-2024/

If an employer in Blackrock paid the same as an employer in Mullingar, then nobody would work in Blackrock and travel from Mullingar.

The wages must reflect either the cost of travel or the cost of housing in order to retain employees. When govt subsidises housing costs in those areas they are indirectly subsidising employers themselves as they can pay less and still get employees.

There isnt a stipulation that says if you live in subsidised housing in Blackrock, you must work in Blackrock.

Some of those in subsidised housing dont work at all, so the impact of wages on a business from social housing in the area really isnt a major factor.

The wages a company will pay will be primarily based on market rates for the job and the cost of commercial rents in the area.

Google wont be adjusting their pay scales based on social housing costs in Ringsend, for example.