Irish Property Market 2020 Part 2

MacronvFrugals · 30-09-2020 3:17pm

PropQueries wrote: »

Yes, that would have been my opinion, covid or no covid.

That's why I'm very interested in seeing what his solutions are in the budget. To work, any policies introduced will have to result in significant and near term losses for the investor class. Otherwise, the housing problem can't be solved quickly enough to save his and FFs skin.

FF panicking and probably have realized someone needs to get hurt here especially in such a short time frame.

Assetbacked · 30-09-2020 3:22pm

Hubertj wrote: »

How many social and affordable houses would expect to be built in 12-18 months. Policy will include short medium and long term objectives with deliverables. Government should be judged in that.

Ideally but a generation in politics is only 4 years so that is the timeline they have to actually fix the problem. To be fair, they've had the last few years to do something so they only have themselves to blame.

SF detonating the investor market could result in investors offloading their supply to individual buyers as they fear the landscape has changed which could lead to SF getting more credit than they deserve for getting more people into home ownership.

The_Fitz · 30-09-2020 3:36pm

Assetbacked wrote: »

Ideally but a generation in politics is only 4 years so that is the timeline they have to actually fix the problem. To be fair, they've had the last few years to do something so they only have themselves to blame.

SF detonating the investor market could result in investors offloading their supply to individual buyers as they fear the landscape has changed which could lead to SF getting more credit than they deserve for getting more people into home ownership.

Would that not be a plan of SFs to do that already?

PropQueries · 30-09-2020 3:40pm

schmittel wrote: »

Whilst maybe not completely fix it I reckon they could achieve enough in 18-24 months to stave off SF.

And don't forget the gorilla in the room that many appear to be pretending isn't there... the foreign funds who bought up €200 billion in property and business loans between 2012 and 2016... What's their short-term plans?

And that doesn't include all the foreign investor cash that invested in property between 2016 and 2019. For example, Colony Capital (the backer of the facebook and salesforce buildings under construction in Dublin) placed both up for sale three months ago.

Irish Times link here: https://www.irishtimes.com/business/commercial-property/ronan-and-colony-selling-majority-stake-in-facebook-and-salesforce-offices-1.4310910

Assetbacked · 30-09-2020 3:40pm

The_Fitz wrote: »

Would that not be a plan of SFs to do that already?

Wouldn't be a bad plan to be fair; selling the BTLs to individuals rather than renting them out.

hometruths · 30-09-2020 3:42pm

PropQueries wrote: »

And don't forget the gorilla in the room that many appear to be pretending isn't there... the foreign funds own bought up €200 billion in property and business loans between 2012 and 2016... What's their short-term plans?

If the government was smart it could leverage that to their advantage.

The_Fitz · 30-09-2020 3:42pm

Assetbacked wrote: »

Wouldn't be a bad plan to be fair; selling the BTLs to individuals rather than renting them out.

Definitely, if it gets more people into singular home ownership then it would be. I'd give them the credit for this if they did it.

Smouse156 · 30-09-2020 4:31pm

The_Fitz wrote: »

Definitely, if it gets more people into singular home ownership then it would be. I'd give them the credit for this if they did it.

It would be good but the rent slaves would get further screwed as rental supply would dwindle! Many argue the rental crisis is worse than the home ownership crisis

Pelezico · 30-09-2020 4:38pm

Smouse156 wrote: »

It would be good but the rent slaves would get further screwed as rental supply would dwindle! Many argue the rental crisis is worse than the home ownership crisis

There is no rental crisis. There are more houses for rent in Dublin than there have been for years.

Airbnb tourists, students and general unemployment have dented the rental market.

The_Fitz · 30-09-2020 4:38pm

Smouse156 wrote: »

It would be good but the rent slaves would get further screwed as rental supply would dwindle! Many argue the rental crisis is worse than the home ownership crisis

I suppose the only answer to both is to build more houses, and quickly. And not allow vulture funds to sweep them up, ensuring that rent coming back is coming back to the state?

The_Fitz · 30-09-2020 4:39pm

Pelezico wrote: »

There is no rental crisis. There are more houses for rent in Dublin than there have been for years.

Airbnb tourists, students write have dented the rental market.

I would say there is still a rental crisis. The rent that I am paying for my property in Dublin is disgusting. Rent has gone down minimally around me.

PropQueries · 30-09-2020 4:46pm

The_Fitz wrote: »

I suppose the only answer to both is to build more houses, and quickly. And not allow vulture funds to sweep them up, ensuring that rent coming back is coming back to the state?

I don't think vulture funds will be interested in any residential units in Ireland at the moment or for the foreseeable future. Their modus operandi is buy, not just cheap, but really really cheap and sell high.

They bought most of their properties back between 2012 and 2016 at a fraction of even the low advertised prices at that time. If anything, I'd believe they already have their strategies laid out to exit the Irish market in the very near future.

PropQueries · 30-09-2020 4:49pm

The_Fitz wrote: »

I would say there is still a rental crisis. The rent that I am paying for my property in Dublin is disgusting. Rent has gone down minimally around me.

Well you can 100% blame the government for that one. The average HAP payment is €1,800 per month and is probably the only reason rents have risen over the past 4 years.

Smouse156 · 30-09-2020 4:51pm

Pelezico wrote: »

There is no rental crisis. There are more houses for rent in Dublin than there have been for years.

Airbnb tourists, students and general unemployment have dented the rental market.

Not now of course! But if we do get a vaccine and some form of normality returns we could be straight back in a rental crisis in a year or two where half of Dublin goes to work purely to enrich the landlord

The_Fitz · 30-09-2020 4:54pm

PropQueries wrote: »

I don't think vulture funds will be interested in any residential units in Ireland at the moment or for the foreseeable future. Their modus operandi is buy, not just cheap, but really really cheap and sell high.

They bought most of their properties back between 2012 and 2016 at a fraction of even the low advertised prices at that time. If anything, I'd believe they already have their strategies laid out to exit the Irish market in the very near future.

Without pretending to be qualified in knowing what I'm talking about, I'd imagine the exit of the vulture fund would be in their mind prematurely, and therefore they would sell off their residential properties at a lower rate than they had hoped?

PropQueries wrote: »

Well you can 100% blame the government for that one. The average HAP payment is €1,800 per month and is probably the only reason rents have risen over the past 4 years.

Again, don't understand it all, but surely HAP wouldn't have been increased unless there were private rental increases? How much of the HAP payment is the state getting back through state owned properties, therefore why would they willingly increase the payment?

AdamD · 30-09-2020 4:54pm

PropQueries wrote: »

I think the difference now is that we have a proper motorway network and the internet will be in every house in the country within a few years. For example, Limerick to Dublin is now only a 2 hour drive. Older staff will most likely not move but younger staff may be a lot more open to the idea.

Despite what many believe, the young people today spend most of their time online instead of going to the pub/niteclubs several nights a week. The benefits of city living are still there but the draw isn't as big as when I was a young man.

For example, if they want to hook up (or whatever word is used these days) with a partner, today they just use Tinder etc. When I was young, you had to go to the pub/niteclub to potentially engage in such activities.

Ehhhhhh?

None of this is accurate. For example try using Tinder in a rural area, not a whole load of options. And 90% of Tinder dates are going to involve going to a pub or bar anyway. Young professionals absolutely do not spend their weekends 'online', at least not pre-pandemic.

Claw Hammer · 30-09-2020 4:58pm

The_Fitz wrote: »

I would say there is still a rental crisis. The rent that I am paying for my property in Dublin is disgusting. Rent has gone down minimally around me.

The fact is that rents are going down. That is going to be a continuing process.

PropQueries · 30-09-2020 5:01pm

Smouse156 wrote: »

Not now of course! But if we do get a vaccine and some form of normality returns we could be straight back in a rental crisis in a year or two where half of Dublin goes to work purely to enrich the landlord

I don't believe there will be a V shaped recovery. Tourism is on its knees for at least the next 3-5 years. Construction of offices, hotels, student accommodation won't ever get back to 2016-2019 levels, so we will need less construction workers even if residential building does take off.

International students aren't coming back next year either as they would need to decide by this January and we will still be in lockdown. Once a vaccine is discovered and rolled out, taxation will go through the roof to repay the debt, which will place a further drag on the economy over the next 5-10 years.

But we're still probably going to build c.18,000 residential units this year and probably the same or more next year so supply is continuing to increase while demand will continue to decrease.

hometruths · 30-09-2020 5:02pm

PropQueries wrote: »

For example, if they want to hook up (or whatever word is used these days) with a partner, today they just use Tinder etc. When I was young, you had to go to the pub/niteclub to potentially engage in such activities.

I can never decide whether I’m jealous of the young because of the ease and volume of opportunity Tinder affords them, or sympathetic because they’re missing out on the thrill of the challenges that Tinder denies them.

On balance I think I save my sympathy for the fact they have it much harder buying a house (just to keep the mods happy!)

MacronvFrugals · 30-09-2020 5:04pm

schmittel wrote: »

I can never decide whether I’m jealous of the young because of the ease and volume of opportunity Tinder affords them, or sympathetic because they’re missing out on the thrill of the challenges that Tinder denies them.

On balance I think I save my sympathy for the fact they have it much harder buying a house (just to keep the mods happy!)

Thats one way of looking at it, another is you're also in competition with the best looking people in the country.

I'm waiting for the avocado toast brigade to attack you for saying this :P

PropQueries · 30-09-2020 5:13pm

AdamD wrote: »

Ehhhhhh?

None of this is accurate. For example try using Tinder in a rural area, not a whole load of options. And 90% of Tinder dates are going to involve going to a pub or bar anyway. Young professionals absolutely do not spend their weekends 'online', at least not pre-pandemic.

I suppose I meant that the extreme loneliness/isolation shouldn't be as big a factor as it used to be in rural areas. Plus, no matter where a person would decide to live along the Dublin-Limerick motorway, they're probably less than an hours drive from their nearest big city i.e. Limerick or Dublin.

I remember 25 years ago, if you were driving from Dublin to Kerry, you would have considered booking a hotel half way down to break up the journey (I'm not messing). Now, you can be there in no time at all. The motorway network and internet have really opened up living options that simply didn't exist 20 years ago.

But I'll admit it still doesn't make up nearly enough for the lack of regular human contact. I suppose it's a good option for people who were brought up along this route and it gives them the option. If they choose the option, it then creates less demand and lower prices for a person who truly wants to live in Dublin.

MacronvFrugals · 30-09-2020 5:20pm

Looking IRES's portfolio they own lots of apartments in Ballymun, since the beginning of March a really high volume of these apartments have went up for sale, i wonder are they looking to quietly build up some cash reserves.

PropQueries · 30-09-2020 5:28pm

MacronvFrugals wrote: »

Looking IRES's portfolio they own lots of apartments in Ballymun, since the beginning of March a really high volume of these apartments have went up for sale, i wonder are they looking to quietly build up some cash reserves.

Thanks. Good to know the areas they're selling in.

Here you go about IRES REIT selling 150 apartments: https://www.independent.ie/business/commercial-property/ires-reit-to-sell-off-50m-in-assets-after-buoyant-first-half-39432452.html

MacronvFrugals · 30-09-2020 5:33pm

PropQueries wrote: »

Thanks. Good to know the areas they're selling in.

Here you go about IRES REIT selling 150 apartments: https://www.independent.ie/business/commercial-property/ires-reit-to-sell-off-50m-in-assets-after-buoyant-first-half-39432452.html

Thanks Prop, evidently not so quiet after all.

PropQueries · 30-09-2020 5:57pm

Here's an interesting one in the Irish Times today. 25 rental apartments in Stillorgan for sale. 8 vacant: https://www.irishtimes.com/business/commercial-property/stillorgan-apartment-portfolio-at-9-7m-offers-5-5-yield-1.4366634

Potatoeman · 30-09-2020 6:47pm

I don’t see SF doing as well in the next election. It was a protest vote for many that didn’t expect them to do well. Many more didn’t realise how socialist leaning they are and that’s what FF and FG need to highlight.

L1011 · 30-09-2020 6:53pm

Potatoeman wrote: »

I don’t see SF doing as well in the next election. It was a protest vote for many that didn’t expect them to do well. Many more didn’t realise how socialist leaning they are and that’s what FF and FG need to highlight.

They are still polling the same or slightly higher than the result in February, and as they are not in Government, its not like there are any actions for people to see.

Assetbacked · 30-09-2020 6:56pm

PropQueries wrote: »

Here's an interesting one in the Irish Times today. 25 rental apartments in Stillorgan for sale. 8 vacant: https://www.irishtimes.com/business/commercial-property/stillorgan-apartment-portfolio-at-9-7m-offers-5-5-yield-1.4366634

You'd know IT have a vested interest in the market with the way the article is written.

It talks about "stabilised net rental income" as a selling point, whatever that term is supposed to mean.

Edit: described here https://study.com/academy/lesson/calculating-stabilized-net-operating-income-in-real-estate.html#

Potatoeman · 30-09-2020 7:01pm

L1011 wrote: »

They are still polling the same or slightly higher than the result in February, and as they are not in Government, its not like there are any actions for people to see.

My sister and husband voted for them. She seemed to think taxing the rich is not her and her husband on a combined income of 100k. There are an awful lot of people under this delusion.

Pelezico · 30-09-2020 7:09pm

Assetbacked wrote: »

You'd know IT have a vested interest in the market with the way the article is written.

It talks about "stabilised net rental income" as a selling point, whatever that term is supposed to mean.

Edit: described here https://study.com/academy/lesson/calculating-stabilized-net-operating-income-in-real-estate.html#

Average rent projected at 1853pm with full occupancy. Why are so many vacant?

Assetbacked · 30-09-2020 7:14pm

Pelezico wrote: »

Average rent projected at 1853pm with full occupancy. Why are so many vacant?

Controlling supply to keep rents artificially high?

Taylor365 · 30-09-2020 7:19pm

Potatoeman wrote: »

My sister and husband voted for them. She seemed to think taxing the rich is not her and her husband on a combined income of 100k. There are an awful lot of people under this delusion.

Who else will you vote for?

I'd rather chaos than the same ole boys club!

Darc19 · 30-09-2020 7:36pm

PropQueries wrote: »

Here's an interesting one in the Irish Times today. 25 rental apartments in Stillorgan for sale. 8 vacant: https://www.irishtimes.com/business/commercial-property/stillorgan-apartment-portfolio-at-9-7m-offers-5-5-yield-1.4366634

Vacant possession gets a better price, so the chances are that any that became vacant over the past 12 months were not let out.

Usually these funds plan sales many months in advance.

Darc19 · 30-09-2020 7:38pm

Interesting to see most lots sell in today's bidx1 auction.

Prices of anything decent got 10%-20% above the amv.

A dozen or so properties that did not sell in the June 30th auction sold above the June reserve.

Smouse156 · 30-09-2020 7:43pm

Assetbacked wrote: »

You'd know IT have a vested interest in the market with the way the article is written.

It talks about "stabilised net rental income" as a selling point, whatever that term is supposed to mean.

Edit: described here https://study.com/academy/lesson/calculating-stabilized-net-operating-income-in-real-estate.html#

Stabilised Net rental incomes assumes 100% occupancy at pre-COVID rates and applying increases of 4% whenever they’re due....dream on

Darc19 · 30-09-2020 8:24pm

Smouse156 wrote: »

Stabilised Net rental incomes assumes 100% occupancy at pre-COVID rates and applying increases of 4% whenever they’re due....dream on

Most investors will look at the actual figures.

The suggested rent is €2,000 per two bed unit.

Considering the location, this is probably what the market will pay.

But any good buyer will also look at a worse case scenario. Let's say €1500.

That's still 4.5% gross and long term investors would accept that easily.

Pelezico · 30-09-2020 9:14pm

Banks must engage with mortgages in arrears warns CBI. I reckon that is code for continued non payment and maybe even a moratorium on interest payments.

Little wonder that Irish mortgage rates are so high and Ulster Bank is running for the hills.

https://www.rte.ie/news/business/2020/0930/1168452-lenders-must-engage-constructively-on-breaks-warns-cbi/

Potatoeman · 30-09-2020 9:18pm

Taylor365 wrote: »

Who else will you vote for?

I'd rather chaos than the same ole boys club!

It won’t be chaos, it will be a saddle on you to pay for those that won’t work as foreign investment runs to avoid the socialists looking to steal their assets.

snotboogie · 30-09-2020 9:21pm

AdamD wrote: »

Ehhhhhh?

None of this is accurate. For example try using Tinder in a rural area, not a whole load of options. And 90% of Tinder dates are going to involve going to a pub or bar anyway. Young professionals absolutely do not spend their weekends 'online', at least not pre-pandemic.

Agreed but at the same time Ireland has quite a lot in between the "big schmoke" vs "dancing at the crossroads outside your McMansion" false dichotomy plugged by some on here.

manniot2 · 30-09-2020 9:22pm

Brother was at a viewing in Dublin city Centre this evening. About 20 parties queuing when he arrived. Some life left yet in the city hopefully.

Bass Reeves · 30-09-2020 9:43pm

neutral guy wrote: »

Heard many similar stories in 2007.

But in 2007 the people quing up would be buying there 3rd or 4th house, this time they are queing for there first house

neutral guy · 30-09-2020 9:45pm

Bass Reeves wrote: »

But in 2007 the people quing up would be buying there 3rd or 4th house, this time they are queing for there first house

Today Reit and similar buy 100-250 houses.Even more than ordinary people before !

Ozark707 · 30-09-2020 9:46pm

manniot2 wrote: »

Brother was at a viewing in Dublin city Centre this evening. About 20 parties queuing when he arrived. Some life left yet in the city hopefully.

Rent or buy?

Graham · 30-09-2020 9:58pm

Mod Note

Neutral guy, if you continue to steer every thread into a "What Neutral Guy and his friends did in 2007" thread, you will be thread banned. There will be no further warnings.

Do not reply to this post.

Assetbacked · 30-09-2020 10:12pm

Potatoeman wrote: »

It won’t be chaos, it will be a saddle on you to pay for those that won’t work as foreign investment runs to avoid the socialists looking to steal their assets.

That's not true. The cost of sustaining the handout class becomes a lot cheaper when housing is inexpensive.

Pelezico · 30-09-2020 10:34pm

Darc19 wrote: »

Vacant possession gets a better price, so the chances are that any that became vacant over the past 12 months were not let out.

Usually these funds plan sales many months in advance.

You reckon? I bet these show up in the next census as vacant possession to add to all the other houses in Dublin which are vacant.

How can an asset which is supposed to be an income stream be worth more by not producing money?

awec · 30-09-2020 10:38pm

Pelezico wrote: »

You reckon? I bet these show up in the next census as vacant possession to add to all the other houses in Dublin which are vacant.

How can an asset which is supposed to be an income stream be worth more by not producing money?

Vacant opens you to a wider pool of buyers.

Pelezico · 30-09-2020 10:40pm

awec wrote: »

Vacant opens you to a wider pool of buyers.

They are selling these as a block of apartments. One buyer for the lot.

I reckon they cant achieve full occupancy and hence they are very vacant.

awec · 30-09-2020 10:42pm

Pelezico wrote: »

They are selling these as a block of apartments. One buyer for the lot.

I reckon they cant achieve full occupancy and hence they are very vacant.

Oh I missed that. You are probably right.

Taylor365 · 30-09-2020 10:48pm

Darc19 wrote: »

That's still 4.5% gross and long term investors would accept that easily.

That's a liability for anyone but big business.

Irish Property Market 2020 Part 2

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