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cuckoo property

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    #32
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    4ensic15 wrote: »
    The builders are selling to cuckoos because of the funding issues in spec building. That much is obvious and has been commented on by a government minister recently. What is wrong in this country is begrudgery. If begrudgery was outlawed and there wasn't an attitude that it is wrong to make a profit the housing problem could be solved easily.

    The link to the article about the government minister would be highly appreciated as I must have missed that point.

    That point aside, there is still no evidence that without the cuckoos there would have been less units built. My point is that those 3K units or so bought by the cuckoos could have been bought by regular buyers. In addition the cuckoos only came into the equation once those units were almost completed so they didn't have any involvement prior to that point so those units were going to be built regardless.


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    #33
    maestroamado
    Registered Users Posts: 4,426 ✭✭✭maestroamado


    4ensic15 wrote: »
    The builders are selling to cuckoos because of the funding issues in spec building. That much is obvious and has been commented on by a government minister recently. What is wrong in this country is begrudgery. If begrudgery was outlawed and there wasn't an attitude that it is wrong to make a profit the housing problem could be solved easily.


    Can you please clarify who the minister is and what he said?
    Saying somebody said is rubbish....


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    #34
    James Bond Junior
    Registered Users Posts: 5,128 ✭✭✭James Bond Junior


    JimiMac wrote: »
    Fewer landlords controlling more units leads to LESS competition !

    Which would you prefer? Less landlords because of high tax and tenant biased laws or larger companies operating on a defined margin and running things professionally.


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    #35
    TSQ
    Registered Users Posts: 283 ✭✭TSQ


    JimiMac wrote: »
    You're assuming that I am assuming.
    Cuckoo funds are buying up properties to take advantage of an extremely dysfunctional property market. They are doing this to maximise profit at the expense of tenants with no other choice but to pay extortionate rents. They are not buying with the intention of increasing rental supply to bring down rents!

    Jesus wept! Give a dog a bad name - a catchy headline will do just as well. In a subsequent, properly researched, piece, the Indo revealed that the real so-called cuckoos are local government https://www.independent.ie/business/personal-finance/property-mortgages/revealed-one-in-five-newbuild-homes-is-now-being-snapped-up-by-state-38082140.html. Personally, if I made huge personal sacrifices in my lifestyle and life choices (not starting a family for example) in order to save up over several years and put a deposit down for a nice home, and then found out the second half of the estate was sold to house the unemployed and single mothers, I’d be furious. This actually happened to friends of mine in Carlow. They would much prefer the properties had been bought by a vulture fund to rent to young working people.

    As for making a profit.. in what universe does any one or any business invest to make a loss. As someone already pointed out, if builders have a guaranteed upfront purchaser, they are able to complete 100% of units in quick order, rather than building in stages because they need to sell the first lot of units in order to finance subsequent stages. This is how indigenous builders used to develop sites in the past. This kind of stop-go building will not solve the housing crisis. Some developments have been planned, financed, developed and completed incredibly quickly by the likes of Hibernian REIT purely for the rental market. Whatever about rents, for those wanting to buy, the fact that purpose built multi occupancy rental units are being built will take the pressure off the use of traditional housing for rent. Properties in D1, 2, 3, 4, 6, 7 and 8 are already being returned to use as single family homes and this trend can only continue as more high quality rentals come on stream.


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    #36
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    It's interesting to see how easily certain people can be manipulated into taking up an agenda promoted by a newspaper.


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    #37
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    alwald wrote: »
    The link to the article about the government minister would be highly appreciated as I must have missed that point.

    That point aside, there is still no evidence that without the cuckoos there would have been less units built. My point is that those 3K units or so bought by the cuckoos could have been bought by regular buyers. In addition the cuckoos only came into the equation once those units were almost completed so they didn't have any involvement prior to that point so those units were going to be built regardless.

    In order for people to buy them, they have to be built. How many "regular" buyers can pay in advance?


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    #38
    Xterminator
    Registered Users Posts: 4,717 ✭✭✭Xterminator


    Its all a smoke screen to disguise the ideological aversion to council built housing.

    If councils built houses & apartments for rent and that rent went into the fund for housing maintenance and building future houses then the landlords would stop pocketing government funds set aside to supplement rent rates are current record high prices because less social housing tenants would be funneled into the private rent section.

    More units available at the lower end of the price would do more to tackle rental price inflation than measure such as rent controls/ fast track planning permission and other measures put together.

    Figures show councils can build housing cheaper than the rate at which they purchase turn-key properties form builders. They choose not to build. Its not simply about the budget available, it is a conscious choice in how those funds are spend, and by inference who benefits from the way public funds are allocated.


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    #39
    maestroamado
    Registered Users Posts: 4,426 ✭✭✭maestroamado


    Xterminator wrote: »
    Its all a smoke screen to disguise the ideological aversion to council built housing.

    If councils built houses & apartments for rent and that rent went into the fund for housing maintenance and building future houses then the landlords would stop pocketing government funds set aside to supplement rent rates are current record high prices because less social housing tenants would be funneled into the private rent section.

    More units available at the lower end of the price would do more to tackle rental price inflation than measure such as rent controls/ fast track planning permission and other measures put together.

    Figures show councils can build housing cheaper than the rate at which they purchase turn-key properties form builders. They choose not to build. Its not simply about the budget available, it is a conscious choice in how those funds are spend, and by inference who benefits from the way public funds are allocated.


    This is exactly my position. My view is that us voters should tell our government that we to build more units, i think if it was done properly the Councils could turn a modest profit to spend on whatever.
    This country was brought down by banks, bad government, the developers and the free market just 10 years ago.
    Now just 10 years later we are doing the exact same thing and someone said in an earlier post here that a government minister said it the right thing to do. I think the Galway tent" should return this year?
    What are we like? we are eejits and we vote for eejits.


    On a different note i was chatting a friend the other day who lives in Spain.
    The Spanish had a general election last week, they elected 350 persons to represent almost 50 million.
    We have 166 to represent the amount who would live in a modest city.


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    #40
    Cyrus
    Registered Users Posts: 19,672 ✭✭✭✭Cyrus


    Xterminator wrote: »
    Figures show councils can build housing cheaper than the rate at which they purchase turn-key properties form builders.

    do you have a source for this, id find it hard to believe.


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    #41
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    Cyrus wrote: »
    do you have a source for this, id find it hard to believe.
    "obviously no" but free houses to everybody from the tax the rich lobby group always lurks around here
    oh still blaming de banks and developers get a life council supplied/managed is a bankrupted idea they sold off properties cheaply never replaced and rents at a fraction when paid 100s million owed and many under occupied. :mad:


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    #42
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    TSQ wrote: »
    As someone already pointed out, if builders have a guaranteed upfront purchaser, they are able to complete 100% of units in quick order, rather than building in stages because they need to sell the first lot of units in order to finance subsequent stages. This is how indigenous builders used to develop sites in the past. This kind of stop-go building will not solve the housing crisis.

    They will still go through some form of staged building, especially the bigger it is. It just minimises the financial risk to the builder and developer, since regardless of end price they will get paid by a entity that is not going bankrupt.


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    #43
    Xterminator
    Registered Users Posts: 4,717 ✭✭✭Xterminator


    Cyrus wrote: »
    do you have a source for this, id find it hard to believe.

    https://www.scsi.ie/documents/get_lob?id=885&field=file

    The SCSI research, published in May, was based on a study of live house building projects of at least 30 units in the Greater Dublin Area, and found that:

    The construction cost of a three-bedroom semi-detached house is €150,251
    But when VAT, developer’s profit, land costs and other fees are added, the cost of the house is €330,493
    Construction only constitutes 45% of the total price of a house


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    #44
    Jaster Rogue
    Registered Users Posts: 175 ✭✭Jaster Rogue


    Xterminator wrote: »
    https://www.scsi.ie/documents/get_lob?id=885&field=file

    The SCSI research, published in May, was based on a study of live house building projects of at least 30 units in the Greater Dublin Area, and found that:

    The construction cost of a three-bedroom semi-detached house is €150,251
    But when VAT, developer’s profit, land costs and other fees are added, the cost of the house is €330,493
    Construction only constitutes 45% of the total price of a house


    I haven't read the research yet but wouldn't land prices vary wildly depending on location? Where exactly is the land in that €330,493 estimate? Edit - sorry just read Greater Dublin area in your post. Even still there is a lot of variation depending on where in Dublin. A site in Darndale will be exponentially cheaper than a site in Donnybrook.


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    #45
    Cyrus
    Registered Users Posts: 19,672 ✭✭✭✭Cyrus


    Xterminator wrote: »
    https://www.scsi.ie/documents/get_lob?id=885&field=file

    The SCSI research, published in May, was based on a study of live house building projects of at least 30 units in the Greater Dublin Area, and found that:

    The construction cost of a three-bedroom semi-detached house is €150,251
    But when VAT, developer’s profit, land costs and other fees are added, the cost of the house is €330,493
    Construction only constitutes 45% of the total price of a house

    are you inferring that the council doesnt have to pay for land (or forego the opportunity cost of selling it), isnt levied with vat and other fees?


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    #46
    Cyrus
    Registered Users Posts: 19,672 ✭✭✭✭Cyrus


    have a read of this

    https://www.irishtimes.com/news/ireland/irish-news/dublin-city-council-says-average-housing-unit-costs-330-000-1.3523127


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    #47
    TSQ
    Registered Users Posts: 283 ✭✭TSQ


    Xterminator wrote: »
    Its all a smoke screen to disguise the ideological aversion to council built housing.

    If councils built houses & apartments for rent and that rent went into the fund for housing maintenance and building future houses then the landlords would stop pocketing government funds set aside to supplement rent rates are current record high prices because less social housing tenants would be funneled into the private rent section.

    More units available at the lower end of the price would do more to tackle rental price inflation than measure such as rent controls/ fast track planning permission and other measures put together.

    Figures show councils can build housing cheaper than the rate at which they purchase turn-key properties form builders. They choose not to build. Its not simply about the budget available, it is a conscious choice in how those funds are spend, and by inference who benefits from the way public funds are allocated.
    Yes, but you forget the ridiculously low rents council tenants pay - I think it is 15% of household income, so a pensioner living alone in a 3 Bed house could be paying under €50 a week in Dublin 6, plus there is an upper cap, not sure but think under €500 pm ( rant alert!! so you can have a People Before Profit TD on €87,000 holding on to his €450 a month council house and expecting us mugs to believe it is some kind of class solidarity thing) Out of this pittance the council has to pay maintenance, insurance, management including of antisocial tenants, interest on the loan to finance the build, etc. Rents don’t pay a fraction of the true cost of the day to day running, never mind providing a fund to pay for future builds. So that’s why councils would prefer to farm out the responsibility to the private sector, where rent allowance and HAP is capped at a fixed amount and the council has no additional outgoings. Simples.


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    #48
    maestroamado
    Registered Users Posts: 4,426 ✭✭✭maestroamado


    overkill602 wrote: »
    "obviously no" but free houses to everybody from the tax the rich lobby group always lurks around here
    oh still blaming de banks and developers get a life council supplied/managed is a bankrupted idea they sold off properties cheaply never replaced and rents at a fraction when paid 100s million owed and many under occupied. :mad:


    The problem in the article i read a few weeks ago is these Cuckoo funds buying properties are paying no tax at all according to a few articles i read which prompted this thread.


    www.thejournal.ie/cuckoo-funds-review-fianna-fail-4583259-Apr2019
    There are loads of articles on this topic.



    I have being involved in renting properties and paid tax on income after expenses, my own opinion is if these funds are having an unfair advantage over people working people paying taxes and trying to raise families it is morally wrong.
    The first duty of our Government is to try to make life as good as possible for our citizens and i am surprised this topic has not got more attention from the socialist politicians.

    Who cares about these Corporations who are owned by shareholders. Unfortunately i do not this is what is being promoted by the current leaders of this country.


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    #49
    TSQ
    Registered Users Posts: 283 ✭✭TSQ


    maestroamado wrote: »
    The problem in the article i read a few weeks ago is these Cuckoo funds buying properties are paying no tax at all according to a few articles i read which prompted this thread.


    www.thejournal.ie/cuckoo-funds-review-fianna-fail-4583259-Apr2019
    There are loads of articles on this topic.



    I have being involved in renting properties and paid tax on income after expenses, my own opinion is if these funds are having an unfair advantage over people working people paying taxes and trying to raise families it is morally wrong.
    The first duty of our Government is to try to make life as good as possible for our citizens and i am surprised this topic has not got more attention from the socialist politicians.

    Who cares about these Corporations who are owned by shareholders. Unfortunately i do not this is what is being promoted by the current leaders of this country.
    Agree there should be a level playing field though also believe there is nothing wrong with international funds being involved in the private rental sector. Section 110 has been shut down in fact. Stephen Donnelly has made vague claims that the property investments have been switched to other tax avoidance schemes but hasn’t offered any examples, and I wouldn’t count him among the most financially literate of commentators. As a landlord you will know that if you become tax resident abroad you still have to pay tax in Ireland on any IRISH rental income. Also, as a private landlord you can’t write off the acquisition or additional build costs against rental income (apart from some mortgage interest). Obvious and fairest solution would be to apply the same rules on rental income to corporations as to to private landlords.


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    #50
    Marcusm
    Registered Users Posts: 10,184 ✭✭✭✭Marcusm


    alwald wrote: »
    Taking your chance in a market that is undersupplied and that requires a lot of appartments to meet the current demand.

    The issue here isn't about those funds buying full blocks, the real issue is that the timing is very bad as people are looking to buy a property that they can afford - in this case appartments.

    The government should intervene to stop this practice for few years, they can at least make sure that 50% goes to these funds while the other 50% can be sold to individuals/families.

    That would result in a significant reduction in overall supply of housing.


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    #51
    Marcusm
    Registered Users Posts: 10,184 ✭✭✭✭Marcusm


    JimiMac wrote: »
    You're assuming that I am assuming.
    Cuckoo funds are buying up properties to take advantage of an extremely dysfunctional property market. They are doing this to maximise profit at the expense of tenants with no other choice but to pay extortionate rents. They are not buying with the intention of increasing rental supply to bring down rents!

    The fatuous part of this argument is inherent in the assumption that this is a new phenomenon. Actually, Irish Estates Management, a subsidiary of Irish Lufe when it was still state owned, developed a number of apartment developments around Dublin. The most significant was the Mespil Estate. These were developed over a 20 year period from 1952 and were ultimately resold in the commercial market, very controversially, in the 1990s. The fact is that large scale investment requires committed investors. If Urush insurance companies and pension funds had continued to develop and/or invest us Urush residential property we would have a much better position today. Why, you might ask? Because institutional investors generally have more power and focus to ensure issues like Priory Halk, Beacon South Quarter, Longboat Quay and other similar deficient blocks would have been properly completed.

    The daft us that most Irush people fon’t Want to live in apartments long term. iPso facto, they are better left to institutional investors.


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    #52
    overkill602
    Registered Users Posts: 267 ✭✭overkill602


    https://www.independent.ie/irish-news/rush-for-buildtorent-as-plans-for-more-than-6000-properties-are-tabled-in-just-five-days-38100933.html
    Cuckoo funds have been tax enticed to our country and given unfair advantage of natives because any incentive to them would be rejected by so call socialists in our parliament.
    Same group wants highly taxed and over regulated small LLs out of the market
    Its not just down FG we have this mess and they are the ones charging top rents, reap what you sow.


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    #53
    maestroamado
    Registered Users Posts: 4,426 ✭✭✭maestroamado


    overkill602 wrote: »
    https://www.independent.ie/irish-news/rush-for-buildtorent-as-plans-for-more-than-6000-properties-are-tabled-in-just-five-days-38100933.html
    Cuckoo funds have been tax enticed to our country and given unfair advantage of natives because any incentive to them would be rejected by so call socialists in our parliament.
    Same group wants highly taxed and over regulated small LLs out of the market
    Its not just down FG we have this mess and they are the ones charging top rents, reap what you sow.


    Your first comment makes no sense to me. If these socialists you mention can reject what is happening, where are they?
    We are a CAPITALIST country and the socialist are not listened simply because we have one party government FF+FG.
    I agree with "reap what you sow"


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    #54
    listermint
    Registered Users Posts: 33,619 ✭✭✭✭listermint


    Interested Observer wrote: »
    The way this discussion gets framed is just amazing. The Indo ran an extremely negative front page article last week on this. The substance was that 2300 apartments were to be built (not bought, built) for rent. This is quite obviously a good thing imo, it would represent a massive proportional increase in the number of available units for rent. The way it gets framed though - "buyers locked out".

    There is just no way to win with some people.

    I have to disagree



    These companies are not buying to add supply to that market. Rents are not suddenly going to go down or stall.

    The are buying solely because of the excessive profits continuing to be made even ten years later.

    What we need is people being taken out of the rental market so there is more rental units available.

    This is a bad thing , the market is disfunctional. It's over priced. And won't change with more funds coming into it and spiriting profits off elsewhere.


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    #55
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    listermint wrote: »
    These companies are not buying to add supply to that market. Rents are not suddenly going to go down or stall.

    Regardless of their intent/motives, they will be adding supply to the market.

    In a supply constrained market, additional supply is one of the ways to rebalance prices.


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    #56
    Topgear on Dave
    Registered Users Posts: 4,522 ✭✭✭Topgear on Dave


    In the roughly sixteen years that I rented I never once had a landlord that did not do it for profit.


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    #57
    Cyrus
    Registered Users Posts: 19,672 ✭✭✭✭Cyrus


    listermint wrote: »
    I have to disagree



    These companies are not buying to add supply to that market. Rents are not suddenly going to go down or stall.

    But they are adding supply regardless of their motives and as another poster said every landlord is in it for profit at least with their scale there are better quality products instead of 10 bedsits in a period house


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    #58
    McGiver
    Registered Users Posts: 4,366 ✭✭✭McGiver


    How about cooperative ownership, council built and run housing stock (for reasonable profit!)? Very common in Central and Northern Europe. Why it can't be done in Ireland?

    Also the talks about supply and demand and competition bringing prices down are laughable - this is a simplistic economic theory for an ideal scenario of a market in a perfect competition state (which is a hypothetical scenario not existing in reality apart from some very specific niche markets). Economic reality is much more complex and looking only at supply and demand is too simplistic. Regulatory framework as well as government policies and degree of deviation from perfect competition state are quite important factors to consider. As far as I can see I would predict establishment of an oligopoly which obviously will lead to higher prices whatever the supply-demand situation is. This is aided by incorrect legislation and government incentives for these corporations (tax breaks, plus aiding tax evasion etc.)


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    #59
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    While there are undoubtedly other factors at play here, basic economics still applies.

    Supply < Demand = Price Rises
    Supply > Demand = Price Drops

    There are some significant providers of housing in the market currently but none of them with anything like a large enough market share to be able to control prices in a monopolistic manner.


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    #60
    McGiver
    Registered Users Posts: 4,366 ✭✭✭McGiver


    Graham wrote:
    There are some significant providers of housing in the market currently but none of them with anything like a large enough market share to be able to control prices in a monopolistic manner.

    Cartel?


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    #61
    McGiver
    Registered Users Posts: 4,366 ✭✭✭McGiver


    Graham wrote:
    There are some significant providers of housing in the market currently but none of them with anything like a large enough market share to be able to control prices in a monopolistic manner.

    You need to be looking at localised markets. Are there/are there going to be large players in the Dublin market to be able to control or at least push the price?

    Also you completely disregard price electricity which is not very elastic from both supply and especially demand side - you need housing and it's hard to substitute - options being move away, buy, live with grandma, live on friend's couch, go homeless.


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