Irish Property Market 2020 Part 2

Deleted User wrote: »

Are you selling a house?

No I bought and sold during the earlier part of the year

Few if any new builds have commenced since March. Those that were under construction at that time are the last new builds which will be on the market for quite some time to come. The trading up market is bedevilled by uncertainty. People are saving rather than spending. It is also extremely difficult and inconvenient to market and occupied property due to the restrictions and also messy and inconvenient to view property. All repossession cases in the courts have been halted since March, so again there are fewer properties from that source coming to the market. Demographically, household formations are occurring at a high rate due to the Celtic Tiger baby boom.

fliball123 wrote: »

But people have been spouting on herewith the amount of air bnb and rentals coming on stream (this was 8 or 9 months ago) and the fact that there is no tourism, no students and no immigration inwards, we would have a huge property range to choose from and the opposite has happened.

There is plenty of supply on the rental market.

PropQueries wrote: »

But wouldn't that just result in a zero-sum i.e. if someone sells to buy another home, the two homes just cancel each other out and has no impact on the supply/demand dynamic.

If that reason is true and it does make sense, the reduction in supply is probably not as big a deal as many believe. It basically just leaves the FTB in the market and that should result in them getting better deals as they're the only buyers around (if that reason is true).

I think it's safe to assume there is a growing number of FTBs and a dwindling number of houses for sale.

The longer lockdown goes on, the greater the number of FTBers. If you've decided to buy a house as a FTB it's very unlikely you'll change your mind, it takes years of saving/prep.

If I own a house I want to sell and lock down happens I might pull it back, it's a far easier process.

The pool of FTBers is only getting bigger and I think covid will create more as people realise the importance of their own space.

Demand > Supply

PropQueries wrote: »

But wouldn't that just result in a zero-sum i.e. if someone sells to buy another home, the two homes just cancel each other out and has no impact on the supply/demand dynamic.

If that reason is true and it does make sense, the reduction in supply is probably not as big a deal as many believe. It basically just leaves the FTB in the market and that should result in them getting better deals as they're the only buyers around (if that reason is true).

No not really I showed you that we have quite a high number of people in the 24 to 45 range a good % of these would be first time and second time buyers.

Also a lot marriages and relationships have hit the skids over the pandemic not just here but worldwide, Nothing worse than having to stay at home with your wife and kids 24/7 to put you in bad form but trying to be serious there has been a lot of breakups over the last year.

So now if the family unit is splintered and not even taking the older kids (24+) who would like their own pad this family unit will now need 2 properties one for dad and one for mum so its not a zero sum game anymore. Below are just a few links out of dozens about breakups during corona.

https://boycekelly.ie/divorce-rates-expected-to-spike-during-coronavirus-lockdown/

https://www.irishexaminer.com/news/arid-30993808.html

https://www.bbc.com/news/uk-northern-ireland-53327738

https://www.psychologytoday.com/ie/blog/happy-singlehood/202007/why-many-marriages-may-not-survive-second-wave

https://www.insider.com/what-its-like-to-go-through-breakup-during-coronavirus-pandemic-2020-4

https://www.irishtimes.com/life-and-style/health-family/has-the-lockdown-changed-how-you-view-your-relationship-1.4271562

Billythekid19 wrote: »

We dont have any immigration but we dont have any emigration either.
There are a huge amount of ex air b and b's on daft.ie as it happens, they are just looking for 2 grand for 1 and 2 bed apartments and not getting any tenants in. Paying a mortgage is still significantly cheaper than renting a house so demand for properties remains high.
This might change somewhat when rent prices drop in early 2021

True you may be right with rent drops in 2021 sure only a prophet would know whats going to happen to the property market next year

fliball123 wrote: »

Well they have held out for 9 months already a lot of these landlords would be REITS and other big investment co.s I reckon they could wait it out no bother

You could well be right. We'll see though. The guaranteed returns you used to get for rental properties aren't coming back for a very long time and there are a lot of risks and unknowns about how well that property will hold its value while you play the long game and pay for its upkeep.

At some point that investment money would work harder in something else. Whether we'll get to that point, we'll find out soon I think.

jill_valentine wrote: »

You could well be right. We'll see though. The guaranteed returns you used to get for rental properties aren't coming back for a very long time and there are a lot of risks and unknowns about how well that property will hold its value while you play the long game and pay for its upkeep.

At some point that investment money would work harder in something else. Whether we'll get to that point, we'll find out soon I think.

Well the only thing I will say about your comment is that yes we will see anything can happen. But someone with a rental and having difficulty renting it out currently has the final option of giving their property to the government and getting 80/85% of the rental value for 20 years + , not sure where you would get that with other investments these days a state guarantee ROI and your property back to you the way you gave it to them. So while that is still an option and judging by the constant moaning from the left about the need for housing this option is going nowhere fast.

PropQueries wrote: »

If that's true, that doesn't bode well for the 145,500 construction workers in Ireland. Construction workers are generally highly skilled and can move to the UK and start work pretty much immediately. Before anyone says it they're still building in the UK, many Irish construction workers have relatives where they can stay for the quarantine period and be working within two weeks from leaving Ireland.

More emigration, less demand for housing and so forth and so forth. If that is true that 'Few if any new builds have commenced since March' though.

You really are clutching here PropQueries.

KennisWhale wrote: »

It's terrifying how heavily involved in the property market the State is, like some glue holding it together. The question is whether it is held together by the State with super glue or pritt stick? There is no endless money supply for the State to carry out current practices such as help the brickie, giving huge money to private landlords for an ever growing group of people that need rental support. I'm sure there will come a time when the growing cost of these subsidies to the market are weighed against a dwindling tax take and higher costs for international market borrowing with such housing market flotation devices needing to be eased.

I would agree with you at the end of the day its our tax euros that is being used to pay for it all, but there seems to be an awful lot of people leaning towards the left point of view the last election would be a good indicator with SF getting their highest return ever on a platform of more housing for the poor. How would you see this situation being reversed

KennisWhale wrote: »

It's terrifying how heavily involved in the property market the State is, like some glue holding it together. The question is whether it is held together by the State with super glue or pritt stick? There is no endless money supply for the State to carry out current practices such as help the brickie, giving huge money to private landlords for an ever growing group of people that need rental support. I'm sure there will come a time when the growing cost of these subsidies to the market are weighed against a dwindling tax take and higher costs for international market borrowing with such housing market flotation devices needing to be eased.

good point, it would be interesting to understand how many FTBers the government is cutting out of market. Then factor is what would happen if they start to build more social housing themselves - this would be contracted out so what would this do in relation to capacity of private sector.
There is clearly a requirement for accommodation - private, social, etc - so what is the demand / supply impact if government is not so heavily invested.

Graham wrote: »

Mod Note

folks, there's a dedicated forum for the discussion of Coronavirus (COVID-19) if you'd like to continue that discussion.

Thats not a place anyone with any interest in maintaining their sanity wants to visit

fliball123 wrote: »

No not really I showed you that we have quite a high number of people in the 24 to 45 range a good % of these would be first time and second time buyers.

Also a lot marriages and relationships have hit the skids over the pandemic not just here but worldwide, Nothing worse than having to stay at home with your wife and kids 24/7 to put you in bad form but trying to be serious there has been a lot of breakups over the last year.

So now if the family unit is splintered and not even taking the older kids (24+) who would like their own pad this family unit will now need 2 properties one for dad and one for mum so its not a zero sum game anymore. Below are just a few links out of dozens about breakups during corona.

https://boycekelly.ie/divorce-rates-expected-to-spike-during-coronavirus-lockdown/

https://www.irishexaminer.com/news/arid-30993808.html

https://www.bbc.com/news/uk-northern-ireland-53327738

https://www.psychologytoday.com/ie/blog/happy-singlehood/202007/why-many-marriages-may-not-survive-second-wave

https://www.insider.com/what-its-like-to-go-through-breakup-during-coronavirus-pandemic-2020-4

https://www.irishtimes.com/life-and-style/health-family/has-the-lockdown-changed-how-you-view-your-relationship-1.4271562

The chances of a divorced couple both buying houses are slim

brisan wrote: »

The chances of a divorced couple both buying houses are slim

True but if one has to rent it will start showing on the rental market

fliball123 wrote: »

True but if one has to rent it will start showing on the rental market

Not if its rent a room
Divorce is an expensive business
I know one chap who got divorced and his legal bill was 14k
That included solicitor ,Barrister, Actuary for a report on the value of his pension and other costs
His wife's bill was 11k
She could not afford to buy him out and either could he
She stayed in the house and she has to pay him a fixed sum in the next few years ,plus she has to service the mortgage
Rent a room is all he can afford after paying child maintenance

Hubertj wrote: »

As I understand it there were/are a lot of cash buyers for investment properties? If they sell what other assets are a viable investment? I also read that mortgage payments are significantly less than rent? Therefore, many landlords can absorb reduced rent?
And if the rental market is going to become a bad investment very soon who will buy? I presume there aren’t enough potential owner occupiers?

They still have to pay 50% tax on the reduced rent plus other costs

thefridge2006 wrote: »

Correct me if I'm wrong, but I think you get 80/85% of market value at the time....as in you will be forfeiting 15/20% of the full market value ( on an already much lower market... )so an investor who is struggling to make money from the investment already is hardly going to take an extra 15/20% reduction on their investment...

If they pay an agent 10% and revenue 50%, then 15 - 20% below market rate seems ideal to me. They might be losing out by a few % but id go for it if i was in that position.

Ulster bank update as per Q3 results

‘Our strategy to grow our Ulster Bank business in the Republic of Ireland organically and safely remains unchanged. We continue to evaluate the impact of Covid-19 and the challenges to the economy and we are reviewing our strategy appropriately and responsibly in light of these events.
In the event of any changes being made to our strategy, these would be undertaken with full consideration of any impact on customers, colleagues and shareholders in the first instance. Our priority now is to continue to remain focused on supporting our colleagues in serving our customers in these difficult times.
As at Q3 2020, Ulster Bank RoI had approved over 17,000 payment breaks and, of those who have rolled off their initial payment break, approximately 46% have opted for a second payment break, representing around 8% of the lending book by value.’

Aib Q3 note on payment breaks

Payment breaks
We continue to engage with our customers and monitor the credit quality of those loans currently on payment breaks or subject to modification. We remain vigilant to the risk of downward stage migration on the expiry of the payment break periods.
In total we granted c. 66,000 payment breaks in Retail Banking and they have evolved (as at 16 Oct) as follows:
 3% remain on payment break 1
 60% rolled off payment break 1 without availing of payment break 2 – over 90% have returned to
normalised payment schedules
 37% rolled on to payment break 2 of which:
o 23%remainonpaymentbreak2 o 14%rolledoffpaymentbreak2.
3

Overall this level of roll-off has proved better than originally anticipated and c. 96% of payment break 2 are due to reach their expiry period by the end of 2020. AIB is in continual contact with customers to understand if any further support measures may be required beyond this point.
The return to contracted payment terms by those customers who availed of payment breaks in our Corporate, Institutional & Business Banking (CIB) has similarly been better than expected. In the UK, over 90% of payment breaks granted have returned to normalised payment schedules.

thefridge2006 wrote: »

An agent might only be paid after they find you a tenant(once off payment) and the 50% will still need to be paid on the money received from the Council.....

Just because the money is coming from the Council, doesn't mean its tax exempt.

emm no thats not true at least from my experience the EA looks after the property for you. The landlord doesnt interact with the tenant so if they sign a year rent then they renew through the EA so they get their one month out of every year for managing the property for you. Or at least that is how it was when I was renting many years ago, it may have changed