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

Villa05 · 16-05-2025 09:00AM

https://www.boards.ie/discussion/comment/123452792#Comment_123452792

This will collapse site values which will reduce valuations and tax. Developers will Jo longer accumulate sites until they are ready to develop them

I'm a little confused by this.

A reduction in cost of a significant input to the finished product (land for housing) is normally a huge benefit to a business

Tax in this scenario is not for revenue generation purposes, it's placed on to encourage activity (generating revenue) and discourage inactivity (reducing revenue, shortages of key strategic assets necessary for the economy to run more efficiently)

Lanky_Lad · 16-05-2025 09:30AM

https://www.boards.ie/discussion/comment/123453627#Comment_123453627

The crash itself didn't occur until 2008, some might say that the " St Patrick's Day massacre" of Irish Bank shares was the official start of the crash,2007 wasn't part of the crash though,it was just the clear signal that the boom was over , that could have just as easily happened without preceeding the Lehman's event of September 2008 etc

2008 was multinational in scope and historic in terms of systematic damage

Bass Reeves · 16-05-2025 09:42AM

https://www.boards.ie/discussion/comment/123453783#Comment_123453783

Yes That is the theory it shoukd force activity. However sites need planning and design. From design to breaking ground probably takes 3ish years. The 12 months leeway is not enough for develooers to carry this out. They are reluctant to have sites sitting there and havevthis three year timescale as well.

IIt quite possible you will see double market. One where land is sold without planning and the other where developers will enter into contrcts to purchase shovel ready sites

As this develops it will make it cheaper to sit in development land that has not got planning. It hard to increase activity unless you have the resources to build

timmyntc · 16-05-2025 09:48AM

https://www.boards.ie/discussion/comment/123453783#Comment_123453783

developers realised there is more money in speculation than actual building. demand for land always grows, so as a sector being the biggest holders of zoned development land gives you enormous earning potential.

all you have to do is drip feed sales to market to keep cash flow up, the value of their assets keeps growing enormously.

Ray Palmer · 16-05-2025 09:48AM

https://www.boards.ie/discussion/comment/123453910#Comment_123453910

Context is everything. The point is the job loses didn't cause or start the property crash. It happened before the job loses is the point. People didn't lose their jobs and then prices crashed it happened the other way around. I was there and I remember how it happened. I am not saying the economic crash didn't make it worse but it happened after prices and sales dropped. People also over estimate the amount of people that bought at the peak when in reality sales dropped dramatically as peak was reached.

Villa05 · 16-05-2025 09:59AM

https://www.boards.ie/discussion/comment/123452748#Comment_123452748

the market was flat for the year and the signs were obvious that no one was buying

The mortgage drawdown figures up to and including Q3 2008 were quiet strong, certainly no evidence that people were not buying

Between FTB and movers in excess of 40k for 2008

https://bpfi.ie/wp-content/uploads/2024/04/BPFI-Mortgage-Drawdowns-time-series-Q1-2024.xlsx

Ray Palmer · 16-05-2025 10:25AM

https://www.boards.ie/discussion/comment/123454038#Comment_123454038

That was a dramatic drop in sales from the years prior

Villa05 · 16-05-2025 10:29AM

Context is everything. The point is the job loses didn't cause or start the property crash.........
I am not saying the economic crash didn't make it worse

The original post referenced job losses as the single biggest contributer in the context that Trump wants our jobs back

Blut2 · 16-05-2025 10:46AM

https://www.boards.ie/discussion/comment/123452792#Comment_123452792

A collapse in unused site values in RPZs is exactly the intended purpose of such a tax, any revenue raised from it is just a fringe benefit.

If the unused site is being taxed heavily every year it doesn't matter if developers purchase them quickly or not - the owners will be eager to sell the land, and only growing more-so with time as the tax accumulates. And at a low enough price developers will always buy it.

Unused site taxes really are very close to a magic wand - they costs the state almost nothing, they raise tax revenue, they don't impact existing businesses/employers negatively, they very heavily encourage the use of much needed unused sites, they reduce the cost of construction for builders by reducing the cost of land, and they negatively impact almost no voters.

Villa05 · 16-05-2025 10:54AM

https://www.boards.ie/discussion/comment/123454116#Comment_123454116

Context

In reply to no one buying 2008

Its a fall after 2.5 years of 100% mortgages that soaked up what remaining demand that was out there

Sierra Oscar · 16-05-2025 11:25AM

https://www.boards.ie/discussion/comment/123453721#Comment_123453721

I'm sceptical that the fall off in commencements is primarily down to greedy developers to be honest. I'm aware of two fairly large developments in Tipperary and north Dublin (50 + units each) that have not been able to get underway due to issues with service infrastructure in the area. The Tipperary one is an Irish Water problem, no more connections to the sewer network are allowed until the local wastewater treatment plant has been upgraded. The current one services a population of 3,600. The need for an upgrade to the wastewater treatment plant was flagged as far back as 2006. No new connections have been allowed since 2022 as the network is at capacity.

The works for the new wastewater treatment plant commenced in 2023 and finished earlier this year - however it still has not been signed off by the relevant authorities so no new commencement orders can be granted at the moment. It's an absurd situation considering the connections won't become active for at least a year if the housing estate construction got underway tomorrow.

The Dublin construction project can't get underway as EirGrid need to upgrade a 110Kv substation. The construction work on the new substation will not begin until 2028 at the earliest, so there is a good chance those houses won't get underway until 2030 of later. There are probably a few hundred homes that will be delayed as a result across a number of developments. These are projects that have planning permission and are shovel ready.

Even if local infrastructure still has capacity it takes months for Irish Water and ESB Networks to make connections once the developer has reached that stage of construction. They haven't even the manpower or resources to keep up with connection demands.

Commencements have been flying ahead in recent years but now we are hitting a wall all over the country where the infrastructure has not kept up with construction activity. It's a combination of planning issues that the utility companies are running into with local objections, their own manpower and resourcing issues and a lack of joint up thinking amongst operators. The Housing Activation Office will be focused on examining the capacity of the utility companies, so the Government know well that there is a serious crisis brewing. If you thought the last few years were bad wait and see what is in store. Water, sewage and electricity infrastructure is really struggling. It is a very, very bleak situation.

If it was any other country the Government would probably declare an actual emergency and introduce legislation to allow utilities to build critical infrastructure without planning. It won't happen here though.

The Government can demand local authorities to set aside land for housing and get as much planning permission for new units as they like, but it’s useless if developers can’t get commencement orders due to poor infrastructure. I'd argue that this is only the beginning of the housing crisis, tbh.

Lanky_Lad · 16-05-2025 07:50PM

https://www.boards.ie/discussion/comment/123453996#Comment_123453996

In order for 2007 to be included as part of the crash ,prices would have needed to drop hard in that year ,they did not, by the end of 2007 prices were only down single digits from the spring 2007 peak ,by the end of 2008 ,prices were 40% off peak ,they fell every year after that too up until 2013 though the bottom in Dublin was spring 2012 ( outside Dublin was later )

I was also there ,2007 is not part of the crash period, it's just when the boom ended ,not the same thing as not every property boom will be followed by a great recession event,most won't

Villa05 · 19-05-2025 08:37AM

Limerick rents up 20% yoy, now the 2nd most expensive city in Ireland. (latest daft report)

LDA sitting on a huge tract of city centre land, brown and greenfield. City on a relatively small land print, which includes 2 golf courses and an unused horse racecourse, is surrounded by farmland

Concerning for the longer serving business in Limerick as recent pharma arrivals are pulling staff from other operations which is proving difficult to replace as there is no place to live.

High rents are pushing migrant labour away, while accommodation is prioritised for migrants that are not allowed to work.

Have we lost our marbles completley

Red Silurian · 19-05-2025 08:48AM

https://www.boards.ie/discussion/comment/123463821#Comment_123463821

Same period

20% increase year on year 2025

21% increase year on year 2024

I'm not saying I saw this coming but I am definitely not surprised by these figures

Don't forget 2% is the legal annual increase limit 🤔🤔🤔

Villa05 · 19-05-2025 09:01AM

https://www.boards.ie/discussion/comment/123463843#Comment_123463843

Imagine a scenario where pharma closes down other sectors in Limerick as they can't compete for wages, rents, housing, labour and later pharma decides to return home due to trump taxes/tariffs etc. How can our leadership be so sh1¥

Mr Coveney said he assumed the 300 staff being sought by US med-tech giant Ely Lilly are already housed and would not need a home.
However, IDA interim chief executive Mary Buckley said that Ireland cannot take Foreign Direct Investment for granted and called on the government to focus on housing and other issues to maintain Ireland’s attractiveness for FDI

https://www.limerickpost.ie/2023/03/28/government-has-no-plans-to-build-homes-for-limerick-biopharma-workers/

Red Silurian · 19-05-2025 10:46AM

https://www.boards.ie/discussion/comment/123463875#Comment_123463875

Reading between the lines I think what Simon Coveney was actually saying there is "it's somebody else's problem because I'll be gone soon" and sure enough….

I imagine property developers are scared shitless after what happened in 2008 so have no motivation for house building at the moment. It's not even a cost issue, it can take up to 3 years to build a house… Who will they sell the houses to if 2008 happens again in 2018?

Ray Palmer · 19-05-2025 11:32AM

https://www.boards.ie/discussion/comment/123463843#Comment_123463843

2% is on existing rentals. So when a landlord sells and the property is bough a 2% on the rent means nothing because it is now a private home. A new build or a property never was rented starts at open market rate which means rents can go up above a 2% limit. It is an artificial restriction to keep the rent figures good for the government paid for by landlords that didn't increase on their tenants for years. They are going to do away with the restriction meaning a new tenant no longer gets the old rate. The rent increase figure will go much higher and needs to in order to keep rentals on the market

Red Silurian · 19-05-2025 11:53AM

https://www.boards.ie/discussion/comment/123464369#Comment_123464369

It is an artificial restriction to keep the rent figures good for the government

2 things on this though

The rent figures don't look good
If they remove what little protections they currently have for tennants the figures will look worse

It's a catch 22, if they remove the rent controls they will get more rental properties in the mix because landlords will be able to profit more, but then tennants might not be able to afford the rent. If tennants can't afford the rent, at best they will emigrate and at worse they will wind up homeless and become a drain on the state funds

Bass Reeves · 19-05-2025 11:54AM

https://www.boards.ie/discussion/comment/123464369#Comment_123464369

Low rents are also causing LL to either sell up at the end or during a tenancy or when they get it vacant again to leave empty for two years. It's the law of unintended conquences.

Ray Palmer · 19-05-2025 03:24PM

https://www.boards.ie/discussion/comment/123464445#Comment_123464445

The rent figures have been kept down since RPZ was introduced. It only can have a limited effect over time. While rental numbers have increased smaller private landlords have left the market with it now over 90% institutions renting property. Those figures are bad.

Tenants have tons of protection and RPZ will still protect tenants just not be transferable to a new tenant. They are under pressure by all the big players to remove the restriction on RPZ being carried or they will not build anymore. The reality is the government gave away pension plans for it's own citizens to big companies. The public were happy about this and still many think it is better and want small landlords all gone.

If an emigrant can come over to Ireland and get a well paying job and buy a property you have wonder how so many Irish natives have to leave. Eitherway it doesn't matter costs have gone up and you can't expect the private individual or company to make rent cheaper they aren't charities nor government. Lots of people can afford rents and mortgages.

The government does need to provide housing but may have to reform certain things. I know a couple that have a child together but broke up. Both long term unemployed, they each have a 2 bed place provided by the state. She has another child with a different guy. The other guy has a job and rents but has to stay at his mothers to have visitation as his own rental is shared. He also pays child support.

Another house I know has one resident yet a 3 bed house . He has 2 carers all day with a team of 4 rotating to cover his care. That is really expensive but covered by the government.

You can't expect private companies to provide such things but who are you going to take away benefits from?

Red Silurian · 19-05-2025 04:01PM

https://www.boards.ie/discussion/comment/123465100#Comment_123465100

Tennants won't have any protection against price increases. Without the RPZ's a landlord could decide to up the rent by 50% tomorrow and if the tennant can't pay then that's just tough…

Regards affordability, our minimum wage is €13.50/hr. Let's say 2 people work 40 hours each a week, they make €1080/week or 4152/month. Nearly half of that is gone if you pay what is now the average rent

Your examples of the emigrant who comes over here and walks into a well paid job is an excellent example of what we need. Where do you propose these well paying jobs come from though? Are you going to provide them

I accept that landlords aren't charities, they are investors. But the people paying their return on investment are human beings, often ones that don't have the means to pay much more in rent than they already are

But if the govt make a decision to allow 40% or 50% increases in rent they're gonna have a lot more homeless on the streets, and they already have a lot!

Rocket_GD · 19-05-2025 04:15PM

https://www.boards.ie/discussion/comment/123465215#Comment_123465215

I accept that landlords aren't charities, they are investors. But the people paying their return on investment are human beings, often ones that don't have the means to pay much more in rent than they already are

What is seldom mentioned by small landlords is that investments have the potential to not return also.

Property is often seen as guaranteed profit as stated above by the other poster "The reality is the government gave away pension plans for it's own citizens". Investments carry a risk profile, they shouldn't be seen as a guaranteed pension plan.

Red Silurian · 19-05-2025 04:42PM

https://www.boards.ie/discussion/comment/123465262#Comment_123465262

For sure, all investments have the potential to not return, or even to return negatively. I also fully accept that investment as a landlord is probably at the higher end of the risk scale and there are less risky places to put your money

But the government has to weigh this risk up against the risk of allowing the rental market to go completely nuts and make a lot of people (a lot more people) homeless. The only thing the govt can do is get houses built en masse

Villa05 · 19-05-2025 07:36PM

https://www.boards.ie/discussion/comment/123464221#Comment_123464221

If this is an isuue, there is a very simple solution.

State is desperate for housing and can act as guarantor for unsold complete properties at a discount of 5 to 10% of the average selling price achieved for similar properties.

I belive risk is priced at 10 to 15% of selling price. With a significant risk eliminated, asking prices can fall pro rata

Red Silurian · 19-05-2025 07:48PM

https://www.boards.ie/discussion/comment/123465864#Comment_123465864

Not sure if that's the issue, I'm speculating but nonetheless I don't think there's a fast way out of this issue for the govt

They're being pressured to subsidise landlords while at the same time making it look like they're trying to protect tenants. They can't win this one

Blut2 · 19-05-2025 07:53PM

https://www.boards.ie/discussion/comment/123465864#Comment_123465864

This.

But also for years the argument against the state building more social housing was "but there are no construction workers available, they're all already employed".

So surely if private sector construction does slow down then it will be the perfect opportunity for the state to employ the construction workers building social housing?

It would save the tax payer a fortune, far better than using tax payer's own euros bidding on already built houses against them. Or leasing properties at exorbitant rates for 30 years.

But it also wouldn't further inflate the housing market, so our government will presumably avoid doing so if at all possible.

Villa05 · 20-05-2025 12:35AM

https://www.boards.ie/discussion/comment/123465924#Comment_123465924

If the risk is priced at 10%, the developers margin is close to 20%

10% + 2% (margin) = 12%. This saving to the ftb is greater than the ftb grant. That grant can be abolished and the savings used to help alleviate the bottlenecks in supply, like water connections, thus increasing supply

Not a silver bullet, but perhaps, a bronze one

Ray Palmer · 20-05-2025 08:34AM

https://www.boards.ie/discussion/comment/123465215#Comment_123465215

Well you missed the details spectacularly. They aren't doing away with RPZ they are doing away with the passing on the current tenants rent rate to a new tenant. Landlords can't up the rent to anything they like outside of the RPZ either and that isn't changing.

A person on minimum wage renting is also going to be rent sharing so their rent is not 2k as you are suggesting. If they are then they are bad with their money and living outside their means.

The good jobs are already here and the emigrants are coming here because locals don't fill the jobs. The education is available here. Natives have the same chance to get these jobs if they train in the right areas.

Reality for landlords currently is if they lose a tenant there are 10 more waiting. During covid a lot of tenants broke leases and tenants didn't care if the landlord lost money yet you want landlords to care more than the tenants do. Just keep it professional for all concerned.

So overall you exaggerated or misunderstood either way you are wrong. You can argue about how we got here but none of it is the fault of landlords.They didn't cease building social housing and they didn't ask for HAP (actually forced to accept it). You are being played by the government to blame the wrong people when it is the governments cause and responsibility. Some even want the landlords profit taken or their assets because they blame landlords.

Red Silurian · 20-05-2025 08:47AM

https://www.boards.ie/discussion/comment/123465924#Comment_123465924

You're idea is a good one don't get me wrong, but the last time private sector construction slowed down the country also ran out of money so there was no opportunity to setup a state run construction firm. I'd also say a state run firm should also build housing for sale to private buyers, not just social housing.

https://www.boards.ie/discussion/comment/123466860#Comment_123466860

They aren't doing away with RPZ they are doing away with the passing on the current tenants rent rate to a new tenant.

So in theory a landlord could evict a tennant and get a new one in on a higher rate?

Landlords can't up the rent to anything they like outside of the RPZ either and that isn't changing.

Are they keeping the 2% annual rule then? That's not too bad if they are

Reality for landlords currently is if they lose a tenant there are 10 more waiting. During covid a lot of tenants broke leases and tenants didn't care if the landlord lost money yet you want landlords to care more than the tenants do. Just keep it professional for all concerned.

During covid a lot of tennants were put on short time, pandemic unemployment payments or their workplace were given bailouts which made a lot of them unable to pay rent… You can hardly suggest that tennants were being malicious in the intent there

timmyntc · 20-05-2025 08:53AM

having rent caps stick to tenant means immigrants will get priority letting over those already in the country in account of no rent caps associated with those persons. Also the skilled migrants can afford high rents anyways.

WWhich is good news for MNCs as it should alleviate recruitment issues seeing as high paid hires can jump the queue on renting a place to stay.

Bad news for existing tenants though as you will be evicted and replaced by a tech bro from Europe or India

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

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