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Property Market 2020

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    #482
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    sweetie wrote: »
    what would they be?

    Predominantly labour law issues...….


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    #483
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    fliball123 wrote: »
    I thought these solely dealt in commercial properties which is a whole different market??

    Irish commercial property is what their portfolios mainly consist of, yes; office block sales, acquisitions, developments and lettings. My point is that those with the biggest exposure to the Irish property market (and therefore those who stand to lose the most) are the institutional investors and not Irish mortgage holders. Once Irish pension funds are taking exposure to Irish commercial property I would be looking to pull my money if I was not risk averse. The quotes from the Aviva investment manager are not exactly reassuring to be honest and reminded me of the Irish bank bosses circa 2006/2007.


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    #484
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Assetbacked wrote: »
    Irish commercial property is what their portfolios mainly consist of, yes; office block sales, acquisitions, developments and lettings. My point is that those with the biggest exposure to the Irish property market (and therefore those who stand to lose the most) are the institutional investors and not Irish mortgage holders. Once Irish pension funds are taking exposure to Irish commercial property I would be looking to pull my money if I was not risk averse. The quotes from the Aviva investment manager are not exactly reassuring to be honest and reminded me of the Irish bank bosses circa 2006/2007.

    yes but commercial property is not the same as residential and have followed different trends over the years. But i take the point they are closely connected.


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    #485
    mariaalice
    Registered Users Posts: 12,385 ✭✭✭✭mariaalice


    I do not know if this has any relevance, A new housing estate built 2005/6 which sold for around 450/500k dropped to around 300/350k by 2011 by 2014 they had almost come back to the original price, by 2019 they were at around 500k but have now gone over that.

    Its near the Luas so a very desirable area.

    Evert area is probabley different.


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    #486
    JamesMason
    Registered Users Posts: 152 ✭✭JamesMason


    fliball123 wrote: »
    yes but commercial property is not the same as residential and have followed different trends over the years. But i take the point they are closely connected.
    What happens to any apartment complexes that have been completely bought up by pension funds, some of which are almost vacant waiting on the influx of high paying renters? Do they sit it out or off-load them?


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    #487
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    JamesMason wrote: »
    What happens to any apartment complexes that have been completely bought up by pension funds, some of which are almost vacant waiting on the influx of high paying renters? Do they sit it out or off-load them?

    The golden question that they themselves would wonder but cannot answer; "should we sell or hold out longer?" I think when it comes to the market and the peak of the market, there is no one event which indicates that the game is up, it is generally a culmination of things and even simply a change in mood or outlook rather than a data set which highlights the game is up. Even news articles like the Indo article (which I also note is on the front page of the printed paper) can be one of those events which leads to a turn of mood.


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    #488
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    JamesMason wrote: »
    What happens to any apartment complexes that have been completely bought up by pension funds, some of which are almost vacant waiting on the influx of high paying renters? Do they sit it out or off-load them?

    I would sit on them look at the rental yield you would get regardless of the asset value..historically prices go up and down but over a longer period of time property prices rise


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    #489
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    fliball123 wrote: »
    I would sit on them look at the rental yield you would get regardless of the asset value..historically prices go up and down but over a longer period of time property prices rise

    If you had your pension in a fund which takes exposure to Irish commercial property and you received news that some investors had made redemption requests which increased the risk that the assets would need to be sold, would you start to consider pulling your pension money from that fund?


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    #490
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Assetbacked wrote: »
    If you had your pension in a fund which takes exposure to Irish commercial property and you received news that some investors had made redemption requests which increased the risk that the assets would need to be sold, would you start to consider pulling your pension money from that fund?

    And put it where the uncertainty that is hitting the pensions/property will effect almost anything that can be invested in. I would point to the high rental yields as something that is not coming down anytime soon


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    #491
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    fliball123 wrote: »
    And put it where the uncertainty that is hitting the pensions/property will effect almost anything that can be invested in. I would point to the high rental yields as something that is not coming down anytime soon

    High yields come from high risks. Not something I'd want my pension money invested in. However, it is a personal choice; many acknowledge the high risks and appreciate there is more of a likelihood to lose overall.


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    #492
    19233974
    Registered Users Posts: 120 ✭✭19233974


    reading in the times today berlin have brought in their rent freeze for the next 5 years.


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    #493
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    A further update this afternoon on the IT website, that redemptions in Aviva's fund have been suspended for 6 months.

    https://www.irishtimes.com/business/commercial-property/aviva-stops-investors-from-taking-money-out-of-irish-property-funds-1.4157574

    Gating is a liquidity management tool which can be used by funds to ensure that redemptions are managed in as efficient a manner as possible in order to ensure that investments are not realised prematurely which could result in significant costs. Property funds are typically not very liquid and investors know this when they invest in the funds so there is nothing overly concerning by the mere fact that redemptions are suspended. That being said, the cause of the redemption gate being imposed by Aviva today is likely due to investors seeing the update a few days ago about other investors redeeming and then submitting their own redemption requests, which Aviva now cannot honour in the typical timelines without utilising a liquidity management tool such as the redemption gate.

    As noted in posts above, investors may get spooked and decide to withdraw from Aviva's fund or other property funds, not based on outlook or calculated data, but based on gut feeling (particularly as yields have been incredible for years now). This of course triggers further liquidity problems for a fund which snowball and then suddenly Aviva pulls out of a purchase or sells a performing asset as it needs the cash to pay back investors.

    It is worth remembering that Green REIT was sold off last year having only been established in 2013, its portfolio predominantly consisting of Dublin commercial property. In addition, the WeWork IPO last year which was pulled; with WeWork being one of the largest tenants in the Dublin commercial property sector.


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    #494
    nerrad01
    Registered Users Posts: 237 ✭✭nerrad01


    Listening to the soundbite of eoghan murphy saying a rent caps would strangle supply is utterly laughable.

    Clancy quay phase 2 is opening soon beside me in kilmainham, where a 1 bed apt is €1800 pm ffs. The average double room around here is close to €1000 per month and hes trying to say capping at that level wont attract investors!

    i know there are other more reasonable arguments against rent caps but the man is an absolute idiot and firmly in the interests of big business


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    #495
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    nerrad01- the issue is that over 60% of all units on the rental market are let by people who only own one unit. You can point at Clancy Quay (or any of a number of large recent developments) all of which are entering the market at top dollar- however, they are very much a minority of the market (though a rapidly growing segment of the market). The small property owners are exiting the sector- actively exiting the sector- this has been highlighted by the RTB in its annual report and the Minister is acutely aware of it. That segment of the market charging €1800 pm for a one bed- are gouging and are not representative of the vast bulk of the market- they are however giving the entire sector a bad name.

    If you remove the ability of the small landlord who isn't gouging the market to raise the rent by 4% per annum in a restricted zone- its simply another reason for them to weigh up their options. In all liklihood it wouldn't be a knock-out blow for small landlords or the factor that would encourage them to leave- its just yet another disincentive to stay in the rental market- on a long and growing list.

    The Minister is clearly reshaping the market to drive the small landlords out- and encourage the large scale REITs and other large landlords- which is what tenants have been saying all along (though they had not bargained on rents being as scandalously high as they are on new units).

    Its another of those 'be careful what you wish for, you just might get it' situations.


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    #496
    OwlsZat
    Registered Users Posts: 1,510 ✭✭✭OwlsZat


    The_Conductor wrote: »
    nerrad01- the issue is that over 60% of all units on the rental market are let by people who only own one unit. You can point at Clancy Quay (or any of a number of large recent developments) all of which are entering the market at top dollar- however, they are very much a minority of the market (though a rapidly growing segment of the market). The small property owners are exiting the sector- actively exiting the sector- this has been highlighted by the RTB in its annual report and the Minister is acutely aware of it. That segment of the market charging €1800 pm for a one bed- are gouging and are not representative of the vast bulk of the market- they are however giving the entire sector a bad name.

    If you remove the ability of the small landlord who isn't gouging the market to raise the rent by 4% per annum in a restricted zone- its simply another reason for them to weigh up their options. In all liklihood it wouldn't be a knock-out blow for small landlords or the factor that would encourage them to leave- its just yet another disincentive to stay in the rental market- on a long and growing list.

    The Minister is clearly reshaping the market to drive the small landlords out- and encourage the large scale REITs and other large landlords- which is what tenants have been saying all along (though they had not bargained on rents being as scandalously high as they are on new units).

    Its another of those 'be careful what you wish for, you just might get it' situations.

    The should increase the tax big landlords pay and reduce the tax this smaller ones pay. Problem solved.


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    #497
    JamesMason
    Registered Users Posts: 152 ✭✭JamesMason


    OwlsZat wrote: »
    The should increase the tax big landlords pay and reduce the tax this smaller ones pay. Problem solved.
    That would require a change of government...


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    #498
    Yurt2
    Registered Users Posts: 9,381 ✭✭✭Yurt2


    Giblet wrote: »
    Earn enough and save enough to afford it.

    Quick, someone call the London School of Economics, there's a savant economist on the loose on an Irish bulletin board that they're going to want to hire.


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    #499
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    The IT now releasing an opinion piece about the Aviva fund suspension and what it might signal for the commercial property sector in Ireland;

    https://www.irishtimes.com/business/commercial-property/should-dublin-city-office-sales-and-property-fund-withdrawals-wave-red-flags-1.4158023?mode=amp

    Nothing alarming highlighted in the article, which is of course true as the economy is still booming and predicted to continue to motor on. But the herd can get spooked by such events and even articles discussing the events.

    On a separate note, the IT also have an article on European bank stress test results which predict residential property prices to flatline and decline 1% next year. Of course, this is good news for property owners as it backs up the view that residential property prices are more stable and simply undergoing a correction from the hyper growth the last few years.

    https://www.irishtimes.com/business/commercial-property/irish-property-prices-forecast-to-fall-in-bank-stress-tests-1.4157946?mode=amp


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    #500
    nerrad01
    Registered Users Posts: 237 ✭✭nerrad01


    OwlsZat wrote: »
    The should increase the tax big landlords pay and reduce the tax this smaller ones pay. Problem solved.

    they should also have a percentage of these major build to let developments designated for sale. I`ve been looking to buy for over a year and cant remember ever seeing a single new build apartment for sale in the last 1-2 years, despite thousands of them being built in the last few years. There is zero balance.

    How anyone could support the FG policy on housing is beyond me


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    #501
    Taylor365
    Registered Users Posts: 2,994 ✭✭✭Taylor365


    A quick scan of daft returns rental figures for Dublin:

    1 bed - min 1.3k
    2 bed - min 1.6k
    3 bed - min 2k

    Excluding kitchen-cum-bedrooms.


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    #502
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Taylor365 wrote: »
    A quick scan of daft returns rental figures for Dublin:

    1 bed - min 1.3k
    2 bed - min 1.6k
    3 bed - min 2k

    Excluding kitchen-cum-bedrooms.

    Anything under 1.6k per month is guaranteed to be of terrible quality, even for one beds, from my own regular browsing. It's bizarre how landlords don't take care of their apartments or carry out any modernisation. Notwithstanding that €1.3k is the minimum price for one beds, it's not pocket change for someone renting, 42% of a 50k salary. It just shows how desperately those 30,000+ new dwellings per year are needed to try to fix that mess.


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    #503
    pearcider
    Registered Users Posts: 1,033 ✭✭✭pearcider


    Assetbacked wrote: »
    The IT now releasing an opinion piece about the Aviva fund suspension and what it might signal for the commercial property sector in Ireland;

    https://www.irishtimes.com/business/commercial-property/should-dublin-city-office-sales-and-property-fund-withdrawals-wave-red-flags-1.4158023?mode=amp

    Nothing alarming highlighted in the article, which is of course true as the economy is still booming and predicted to continue to motor on. But the herd can get spooked by such events and even articles discussing the events.

    On a separate note, the IT also have an article on European bank stress test results which predict residential property prices to flatline and decline 1% next year. Of course, this is good news for property owners as it backs up the view that residential property prices are more stable and simply undergoing a correction from the hyper growth the last few years.

    https://www.irishtimes.com/business/commercial-property/irish-property-prices-forecast-to-fall-in-bank-stress-tests-1.4157946?mode=amp

    Take note. The big boys are selling up. The US stock market is about to roll over after the longest expansion in history. It’s so overvalued it’s laughable. The recession is here already if we look at forward looking indicators like manufacturing, freight and the Baltic dry index. You only need to go to any city in the west and see the absurd construction boom that is just topping out thanks to central banks leaving interest rates near zero for a decade. This time it will be a global cyclical downturn like we have never seen before.

    Anybody buying property this year needs their head examined.


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    #504
    lastusername
    Registered Users Posts: 338 ✭✭lastusername


    pearcider wrote: »
    Take note. The big boys are selling up. The US stock market is about to roll over after the longest expansion in history. It’s so overvalued it’s laughable. The recession is here already if we look at forward looking indicators like manufacturing, freight and the Baltic dry index. You only need to go to any city in the west and see the absurd construction boom that is just topping out thanks to central banks leaving interest rates near zero for a decade. This time it will be a global cyclical downturn like we have never seen before.

    Anybody buying property this year needs their head examined.


    What's happening in terms of the forward-looking indicators like manufacturing and freight? Looking to buy this year!


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    #505
    pearcider
    Registered Users Posts: 1,033 ✭✭✭pearcider


    lastusername wrote: »
    What's happening in terms of the forward-looking indicators like manufacturing and freight? Looking to buy this year!

    US PMI at lowest level since 2009.
    Baltic dry lowest since 2016.
    Capesize index at all time low.
    Cass freight index all time low.


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    #506
    JamesMason
    Registered Users Posts: 152 ✭✭JamesMason


    pearcider wrote: »
    Take note. The big boys are selling up. The US stock market is about to roll over after the longest expansion in history. It’s so overvalued it’s laughable. The recession is here already if we look at forward looking indicators like manufacturing, freight and the Baltic dry index. You only need to go to any city in the west and see the absurd construction boom that is just topping out thanks to central banks leaving interest rates near zero for a decade. This time it will be a global cyclical downturn like we have never seen before.

    Anybody buying property this year needs their head examined.
    Totally agree pearcider. The global economy is already on a cliff edge. The Chinese healthcare might just be the final push. If things do go bellyup, Ireland is very exposed. The big players know this. Investor nerves are already starting to shake as the headlines have shown this week.


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    #507
    JamesMason
    Registered Users Posts: 152 ✭✭JamesMason


    JamesMason wrote: »
    Totally agree pearcider. The global economy is already on a cliff edge. The Chinese healthcare might just be the final push. If things do go bellyup, Ireland is very exposed. The big players know this. Investor nerves are already starting to shake as the headlines have shown this week.
    *health scare


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    #508
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    I the next 6 months we will see how brexit effects the irish economy,
    the service sector is worth about 45 billion a year,
    it depends on some future trade deal between the uk and ireland.
    services includes, things like insurance, legal service,s, online service,s etc
    if there is no trade deal in 2020 it will be more costly and complex to provide service,s
    to uk customers from ireland.
    this could effect house prices .
    The effects of the corana virus could effect trade between china and the eu.
    one example apple is closing down all its stores and offices in china for a few weeks.
    https://www.peakprosperity.com/coronavirus/
    many companys depend on china to make basic items like cpu,s , ram,
    phone,s ,camera,s etc


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    #509
    lastusername
    Registered Users Posts: 338 ✭✭lastusername


    pearcider wrote: »
    US PMI at lowest level since 2009.
    Baltic dry lowest since 2016.
    Capesize index at all time low.
    Cass freight index all time low.


    I have no idea what any of those mean, but I can google and assume it's a sign of poor investor confidence. Were these and similar indices low prior to recent global recessions?


    I'll do some research but maybe at the end of the day the right time to buy is the right time for you...albeit having done some research on market trends.


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    #510
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    US PMI at lowest level since 2009.
    Baltic dry lowest since 2016.
    Capesize index at all time low.
    Cass freight index all time low.

    I think the above are index,s which reflect the value of share,stock,s bonds traded in america and europe.
    the stock market in america is down due to fears about the corana virus.


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    #511
    ebayissues
    Registered Users Posts: 446 ✭✭ebayissues


    Global eonomy has up and downs. If you re buying property to live in the longterm, flunctuations in the value of your house/psrtment shouldnt matter.


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