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

Nit picking

We are behind countries that neighbour Ukraine or where Ukrainians may have relatives living if your figures are accurate

Ireland highest reliance on BnB and hotel accomodation

Many have left Ireland also due to the system dysfunction. Her story stands in my opinion

Reading comprehension is a bit of a struggle on this page

Commercial (office) property has crashed hard in Ireland the last few years. Some government departments took on some leases on newer offices as an indirect bailout but that sort of activity has calmed down. The thing is, price discovery lags the crash so it is taking time for the commercial property valuations to be written down and in fact there is a scam being perpetrated by the accountants and managers of the funds which invest in these office blocks where somehow not having full occupancy isn’t necessary to value the whole property as a sample of rents can be used to approximate the value of the property and then if they aren’t actually selling the building there is no price discovery.

Record high vacancy rate in commercial properties at the end of 2025 which hasn’t fully hit valuations yet. House prices and rents will be next since I don’t see 10% salary increases happening the last couple of years nor do I see extra leverage being introduced for borrowers. It doesn’t seem people are rolling in money and FOMO the last couple of years.

They probably still are going for 4k? we definitely aren't seeing mass layoffs(other than meta which seems to be an outlier) , if anything the likes of Google, Microsoft and Apple haven't reallly cut any staff yet. Even though like all Tech they all over hired during covid. These companies are experiencing record profits now and until that changes I doubt we will see change as the government will use all those profits to juice the housing market too.

The rents are so high even though there is no interest because if they were to rent it to you for say 50% off for 6 months, just to have it rented, then they can charge any more than that plus 2% per year forever more. There is a mechanism to increase to market rate if a tenant leaves voluntarily, but that will only be a rent from the RTBs tool, which doesnt have market rent at all. Or the rules might be changed by the time you left locking them in at the discounted rent forever.

So they will leave it empty even if they have no takers for the higher rent for now.

”Indirect bailout”- do people ever pause on the conspiracy rubbish?

On your valuations point, more rubbish. They can only sample where a property is in the process of being leased up. That won’t be permitted for long.

It's not improving

Whats the point of this reply? Im not making any predictions. My point was that Ireland's housing market is heavily supported by multinational companies, both through high-paying jobs and the corporate tax revenue they generate. That's why people pay attention to what's happening at companies like Google, Microsoft, Apple, Eli lilly and Meta. It's also a fact to they increased headcount during covid, some even admitted to overhiring so they could keep talent of the market.

Met an old friend over the weekend. He retired from the property industry a few years ago but has a keen interest in it and keeps a lot of statistics. His family are also still involved in the business. I was curious to see what he thought about things around the rental market and the change in legislation. He had some interesting observations. Note that these relate only to the Dublin market

1. There are a large number of houses on the market at present - he said there are around 4400 on myhome compared to around 4100 last year. He thinks that's an indicator that landlords are selling up.
2. He noted that sales (as per the PPR) haven't increased - if anything they are slightly down. Prices achieved in the PPR are pretty much in line with last years. His view is that the biggest proportion of buyers in the market at the moment are first time buyers and that most of these are coming from the rental market (or their parents houses!). He reckons again that they have a mortgage ceiling of around 400k and as he says 'a price of 440 plus mum and dad' - and that there is a logjam of properties at 495k (the median asking price at the moment). He says there hasn't been a median PPR price of 495k ever.
3. There are a number of issues with the ex-rental properties that are coming on the market - he says first time buyers are wary of them for a number of reasons:
   a. Size - the 2 beds are far too small to raise a family and that the concept of a 'starter' home is gone now. Most 3 bed apartments are also too small and even if not they are badly designed (no storage, places to park buggies, safety of balconies etc).
   b. Block management and funding - most rental apartments coming up for sale are in blocks that are mainly rentals or AirBnBs. Outside of the potential behavioural issues (often exaggerated in his view) there are issues with the management of the blocks and the payment for this. In many blocks the landlords simply don't pay as they are cash buyers. If the block management is not fully funded then the bank won't lend - the conditions of your mortgage will also force you to keep up management payments so majority owner-coccupier blocks are better funded.
   I had some experience of this When one of my kids was looking to buy a place in Dublin a few years ago they asked me to look at an apartment. It was in a 3 storey block of 12 apartments. I checked the RTB website and found two were rentals so that seemed OK. I met the auctioneer at the gate and he let me in. As we entered the block his face fell and I saw why - 2 girls were wheeling out a cage of laundry (I'd say probably the contents of at least 2 apartments , possibly 3). While having tenants next door might be an issue - AirBnb certainly is. The other problem is that there is no way to find out whether a flat is let on AirBnb. You can still check the number of rentals in the block - in those days you could at least check the rentals in a block in a single lookup - now to use the RTB register you have to know how many apartments there are and check each one individually. There is supposedly a register for AirBnb but I'm not sure if that's either publicly accessible or reliable. Friends rented an AirBnb in a German city that has strict controls - they arrived at the apartment, were met by the host and walked around the corner to another building where their apartment was located - it was the same standard as what they paid for so they didn't complain but their receipt from the host was for the other place and they paid by Revolut. Dublin appears to have no controls.
   c. Expansion - you can't expand your apartment in the way that you might be able to extend even the smallest of houses.
4. He reckoned that the net effect of the new regulations would be quite small - just the differences in occupancy numbers between the number of tenants in a rental property and the number of occupants of an owner-occupied property. Although in theory a 2 bed rental could have 4 tenants in practice it probably doesn't. A couple might buy a place and some will possibly let a room to a friend - which was common when my kids friends bought places - it fades off when they get married or have kids. So the net short term effect (i.e. the length of a rental termination plus the time to sell) might be dramatic but it will work through - an effect enhanced by the fact that the rentals will also terminate over a period.
5. The number of properties to rent have not declined significantly although he points out that most rentals aren't advertised so this figure is always suspect. Equally there is no reliable source of rents paid and the asking rents are an inadequate indicator. Using figures from Daft he said that there have been between 1000 and 1100 rentals available since March this year compared to between 850 and 1000 for this period last year. However median rents asked in the same period last year were 1800 to 1875 (one bed), 2450 to 2500 (2 bed) and this year 1900 to 1955 (one bed) and 2500 (two beds). Looking at the weekly numbers of one beds available there were 300 to 360 last year and 380 to 440 this year. And the 2 beds were 340 to 380 last year and 404 to 450 this year. That hike in one bed rents is obviously not caused by a restriction of supply. Once you see the suspension of the laws of supply and demand you know you're in a dysfunctional market. Since we aren't allowed to know the rents actually paid we have no easy way to find out why this is happening.
6. There is a huge amount of public housing coming on the market in Dublin - this is primarily one and two bedroom to meet the demand of the current homeless demographic - single people with health issues and/or elderly. Low income singles and couples. Single parents. Most of these people are coming from the demographic supported by HAP. I wasn't aware of this strategy and have been a pretty vocal critic of the numbers of small apartments so I need to eat a small slice of humble pie. Places like the IGB development and O'Devaney Gardens are providing 1000s of apartments to meet that demand - which will have an effect on a lot of the poor quality rentals that were being used for HAP.

In terms of the data - I've seen it - the gentleman involved is too nerdy to be making this up.

Anyway - it's food for thought. I'd be interested in peoples responses.

That was what he said - I know O'Devaney Gardens has delivered as I know someone who has a place in there. He mentioned them in the same context. There was certainly a big chunk of IGB sold, and there is a chunk earmarked for social, and there is a lot completed - so whether that has added up to mean delivered I'm not sure.