Irish Property Market 2020 Part 2

According to the Irish Independent, Hammerson has cut the value of its Irish assets by almost €100m: https://www.independent.ie/business/commercial-property/hammerson-cuts-value-of-irish-assets-by-almost-100m-39429989.html

PropQueries wrote: »

According to the Irish Independent, Hammerson has cut the value of its Irish assets by almost €100m: https://www.independent.ie/business/commercial-property/hammerson-cuts-value-of-irish-assets-by-almost-100m-39429989.html

Worth noting that this comes at a time when House of Fraiser just closed down (2.4 million in rent per year apparently) and even if BT and Pennys proceed as planned there is likely to be big empty spaces in Dundrum until post recession.

If you suddenly lose your flagship store in the middle of a recession the value of your property decreases... House of Fraiser was in trouble long before COVID19 - but would have been snapped up in January by other stores!

PropQueries wrote: »

Good point re House of Fraiser. Does anyone have any idea how many jobs could be permanently lost in Dublin due to the fallout of Covid-19? The main reason for young people moving to and living in a major city is of course lots of jobs and that if you lose your job, you can/ should easily land another job in another business nearby. Will these workers remain in Dublin or leave permanently as this would also affect the demand for homes going forward.

People working in retail are generally younger people living at home with their folks, or renting with friends. I dont know how many people working in House of Fraser were about to buy a house (which is a failure in of itself, but that's a separate argument).

Pelezico wrote: »

They are deleveraging....good move.

Yes but the fact that they’re contracting now as opposed to aggressively expanding shows their quiet opinion on the direction of the market. Similar to Green REIT’s move

PropQueries wrote: »

That's true, but many were renting rooms in houses. I'd also imagine that a lot of students could only afford to pay the rent on that one bedroom in a house from working part-time in bars, niteclubs, shops, takeaways etc. If they can't afford to rent, they will have to remain at home unless the rent on those bedrooms falls significantly. If they do decide to remain at home or choose a college closer to their home, then that house enters the market as a full family home which would add to the overall supply?

For example, UCD has 1,500 students from the United States. The Irish independent reported today that the USA will be on the Governments red list, so they most likely can't come over to Ireland. So, I would assume that's 1,500 bed spaces in or around UCD that will be available for other purposes this year.

Here's the link form the Irish Independent regarding the red list: https://www.independent.ie/world-news/coronavirus/us-among-covid-19-hotspots-on-travel-red-list-39434368.html

Here's the link from UCD about the number of USA students studying at their campus: https://www.ucd.ie/global/study-at-ucd/studyatucd-unitedstatesofamericausa/#:~:text=We%20have%20over%201%2C500%20students,Bowl%20party%20and%20Thanksgiving%20celebrations.

PropQueries wrote: »

For example, UCD has 1,500 students from the United States. The Irish independent reported today that the USA will be on the Governments red list, so they most likely can't come over to Ireland. So, I would assume that's 1,500 bed spaces in or around UCD that will be available for other purposes this year.

Here's the link form the Irish Independent regarding the red list: https://www.independent.ie/world-news/coronavirus/us-among-covid-19-hotspots-on-travel-red-list-39434368.html

Here's the link from UCD about the number of USA students studying at their campus: https://www.ucd.ie/global/study-at-ucd/studyatucd-unitedstatesofamericausa/#:~:text=We%20have%20over%201%2C500%20students,Bowl%20party%20and%20Thanksgiving%20celebrations.

Can’t come over ? That’s a bit of a leap. As things stand now they can just need to quarantine.

One would also assume completing their studies would end up being classified as essential. So they will be able to come back one way or another .

Cyrus wrote: »

Can’t come over ? That’s a bit of a leap. As things stand now they can just need to quarantine.

One would also assume completing their studies would end up being classified as essential. So they will be able to come back one way or another .

That's true but I guess we'll know for certain in about 6 weeks. Also, the universities must know at this stage if there has been much of a fall. But, I think, as this is just one university and students from just one country, it kinda shows that the effects of Covid-19 could have a bigger (maybe less) impact on the Dublin property market than we can predict at the moment given the many different angles.

schmittel wrote: »

It's understood Ireland's biggest landlord expects to net €50m...

I guess €50m is the asking price. It will be interesting to see whether sale price is higher or lower.

I think what they do with the proceeds will be more telling.

Hubertj wrote: »

I would regard moving to Ireland to study as essential travel. My niece is moving over from Boston to study at trinity. She will quarantine in her apartment. I think colleges will have plans in place - I believe QUB chartered a pane for Chinese students.

But isn't the main reason for students spending a year or so in a university in another country to immerse themselves in that country's culture. With no bars etc. open and social distancing in place that can't really happen. Most the textbooks, labs etc. in universities around the world as basically the same for similar courses, so it takes away, in my opinion, one of the main reasons for studying in another country?

JJJackal wrote: »

Other reasons:
1) to learn English
2) to do a course they dont have easy access to or is more expensive in their own country (eg USA/Canada to Ireland for Medicine)
3) to do a course not on offer in their own country
4) to do a course that is perceived as better in Ireland than in their own country
5) they are Irish and can consequently do the course cheaper in Ireland than in their new home country

Students often do Erasmus type programes for emersion in culture i.e a year or a few months in another country

All good points. But with social distancing, they can't have long conversations with either locals or other students so learning English through interactions with other native speakers will be harder than normal. Also with social distancing and no pubs open etc. they would basically be coming here to sit in a bedroom by themselves for the duration of their studies. Unless, of course, they don't abide by the social distancing requirements.

PropQueries wrote: »

That's true, but many were renting rooms in houses. I'd also imagine that a lot of students could only afford to pay the rent on that one bedroom in a house from working part-time in bars, niteclubs, shops, takeaways etc. If they can't afford to rent, they will have to remain at home unless the rent on those bedrooms falls significantly. If they do decide to remain at home or choose a college closer to their home, then that house enters the market as a full family home which would add to the overall supply?

It all remains to be seen.

It costs 250k to build a house that would sell for approx 350. The remaining 100k is the cost of land and the profit margin.

That 250k isnt going to change much, recession or not. The people hoarding the land aren't going to bother selling it or developing on it until the margins are there to make it worthwhile.

If the economy dips (which it will) the construction of homes will most likely dip to I reckon, as will the availability of credit.

In short, there's vested interests at play that will keep house prices high enough, unfortunately.

Who knows though.

PropQueries wrote: »

Also true. Maybe. But with no social outlet, they may ask to transfer back to their home country fairly fast. No social gatherings and the dark nights coming up to winter would get to anybody eventually.

Be the same wherever they are coming from though won’t it !

tigger123 wrote: »

It all remains to be seen.

It costs 250k to build a house that would sell for approx 350. The remaining 100k is the cost of land and the profit margin.

That 250k isnt going to change much, recession or not. The people hoarding the land aren't going to bother selling it or developing on it until the margins are there to make it worthwhile.

If the economy dips (which it will) the construction of homes will most likely dip to I reckon, as will the availability of credit.

In short, there's vested interests at play that will keep house prices high enough, unfortunately.

Who knows though.

According the latest the real cost of building a home from the SCSI, it costs c. €180,000 to build a 114 sq.m. house in Dublin, including all site development costs: https://www.scsi.ie/documents/get_lob?id=1551&field=file

PropQueries wrote: »

According the latest the real cost of building a home from the SCSI, it costs c. €180,000 to build a 114 sq.m. house in Dublin, including all site development costs: https://www.scsi.ie/documents/get_lob?id=1551&field=file

I believe that does not include VAT? or profesional fees, levies or finance cost

The total house cost quoted in your article include land etc is 371,311 - this does not include profit (not sure re profit- looking at it it may include a margin - apologies)

Note this house is in the greater Dublin Area.

So the builder/developer needs to be making a return on each unit too...