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Dublin - Significant reduction in rents coming?

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    #392
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    Blut2 wrote: »
    They'll go back home. Better to be unemployed and living in the family house in Poland or Brazil or wherever else than unemployed in Dublin, paying 700euro a month rent plus sky high living costs. A lot of them either aren't eligible for welfare here, or are under 25 so only at much reduced rates. And even if they can get full welfare here 200euro a week would barely cover rent, nevermind living.

    The people thinking the rental market is going to recover within a few months are nuts. The current projection for unemployment this year in Ireland is 23% - and thats probably optimistic, its getting worse with every week's new prediction.

    And thats also not accounting for the "temporarily" unemployed people on the special covid payment, if you include them unemployment is currently approaching 45%. Theres no way all of those people are going to go straight back into work in June, a huge chunk of them are retail/hospitality/tourism workers who'll be going onto the normal dole for a long time to come.

    We're going to be in a scenario with 30%+ unemployment, with a huge chunk of that concentrated in hospitality/tourism/retail sectors. ie sectors that predominantly are staffed by the young people who're renters.

    Where are you getting those figures from?


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    #393
    Blut2
    Registered Users Posts: 2,904 ✭✭✭Blut2


    Hubertj wrote: »
    Where are you getting those figures from?

    PASCHAL DONOHOE HAS described the predicted unemployment rate of 22% as “horrific” but said Ireland can and will rebuild its economy. -- https://www.thejournal.ie/paschal-donohoe-unemployment-covid19-5080700-Apr2020/

    591,000 people are now receiving the Covid-19 Pandemic Unemployment Payment, with around 21,000 receiving it for the first time this week.
    That is on top of around 212,000 eligible for standard "non-Covid" Jobseekers benefit of €203 per week, and 337,400 receiving income support through the Temporary Wage Subsidy Scheme. --
    https://www.rte.ie/news/2020/0427/1135061-covid-pandemic-payments-unemployment-benefits/

    For reference there were 2.4 million workers in Ireland at the start of 2020.

    Of those 2.4 million take away the 591k, 212k and 337k from the above - a total of 1.1 million. Thats about 45% of the overall working population currently in receipt of a state payment.

    Of those 1.3 million people still working also bear in mind 350,000 are public servants. So we're actually down to about 1 million adult private sector workers now, whos taxes are now supporting the other 4 million people in Ireland.

    I'm no "taxes are theft" right-winger, but the maths on those figures are going to get really ugly, really fast.


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    #394
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    Blut2 wrote: »
    PASCHAL DONOHOE HAS described the predicted unemployment rate of 22% as “horrific” but said Ireland can and will rebuild its economy. -- https://www.thejournal.ie/paschal-donohoe-unemployment-covid19-5080700-Apr2020/

    591,000 people are now receiving the Covid-19 Pandemic Unemployment Payment, with around 21,000 receiving it for the first time this week.
    That is on top of around 212,000 eligible for standard "non-Covid" Jobseekers benefit of €203 per week, and 337,400 receiving income support through the Temporary Wage Subsidy Scheme. --
    https://www.rte.ie/news/2020/0427/1135061-covid-pandemic-payments-unemployment-benefits/

    For reference there were 2.4 million workers in Ireland at the start of 2020.

    Of those 2.4 million take away the 591k, 212k and 337k from the above - a total of 1.1 million. Thats about 45% of the overall working population currently in receipt of a state payment.

    Of those 1.3 million people still working also bear in mind 350,000 are public servants. So we're actually down to about 1 million adult private sector workers now, whos taxes are now supporting the other 4 million people in Ireland.

    I'm no "taxes are theft" right-winger, but the maths on those figures are going to get really ugly, really fast.

    Thank you, awful reading..... but what % will be back to work by year end? I’m more concerned about H2 2021 looks like. Next 12 months will be a sh*t show.


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    #395
    Muahahaha
    Registered Users Posts: 19,610 ✭✭✭✭Muahahaha


    Sunny Disposition wrote: »
    This is it, if 20% are working from home even three days a week then paying Dublin rents won’t make sense for a large enough amount of people to smash the market.

    Yeah I think the WFH thing is going to be a significant factor. Not every employer will allow it but you only need 20 or 30% of them to allow it and then it has knock on effects elsewhere- roads will be quieter and rents will drop as some people realise that WFH and living outside the city will save them a fortune. It'll probably be a mixed bag, people in their 20s might still want the city living of pubs and clubs on their doorstep but those in their 30s and 40s have different priorities.
    I got out of Dublin property just before this, very lucky, the peak is passed and the drop could be very hard in the short term, but the long term as in the next 20 years, is far worse.
    .

    Thats really excellent timing Sunny, prices definitely had peaked and we were seeing the beginnings of a correction. The next two or three years at least are going to be a rocky road for property. Did your property investment qualify for the CGT exemption? Happy days if so, theres been great capital appreciation since the last crash and if you can exit without paying any CGT then all the better
    Blut2 wrote: »
    Of those 1.3 million people still working also bear in mind 350,000 are public servants. So we're actually down to about 1 million adult private sector workers now, whos taxes are now supporting the other 4 million people in Ireland.

    I'm no "taxes are theft" right-winger, but the maths on those figures are going to get really ugly, really fast.

    Its really frightening when it is put in those terms but thats the new reality. I dont think it has sunk in for a lot of people yet how bad this will get but its going to be a mess. Plus in the last crash the Govt had the pressure release valve of 250,000 people emigrating, this time out people arent going anywhere as other countries face the same unemployment bloodbath that we do.

    I said it on another thread, property prices correlate to unemployment. You just cant have a scenario where there is 22% unemployment and property does not fall in price, one follows the other. The only silver lining should be that it wont fall like 2008 to the order of 50-80%. I'd estimate about a 20% correction until we can get back to full employment which is some time off.


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    #396
    Blut2
    Registered Users Posts: 2,904 ✭✭✭Blut2


    Muahahaha wrote: »
    I said it on another thread, property prices correlate to unemployment. You just cant have a scenario where there is 22% unemployment and property does not fall in price, one follows the other. The only silver lining should be that it wont fall like 2008 to the order of 50-80%. I'd estimate about a 20% correction until we can get back to full employment which is some time off.

    I'm not sure I'd be that optimistic. In the last crisis the peak unemployment in the absolute worst month was 16%. And that 16% was a lot more evenly spread across all demographics - young apprentice construction workers still living with their parents all the way through to people in their 50s and 60s at the tail end of their careers.

    If this crisis ends up with unemployment of twice that, and heavily concentrated on workers in the key rental demographic in their 20s and 30s in the retail/hospitality/tourism industries, its going to hit rents a lot harder.

    And then on top of that we have the tourism industry being hit much much harder this time around - so all those airbnbs flooding the market, in a way that didn't happen after 2008.

    Its not a good combination for the rental market, at all. The only thing in favour of things being less bad now is how much undersupply of properties there were up to February 2020 - but we'll see how much that counts for in a few months time.


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    #397
    Muahahaha
    Registered Users Posts: 19,610 ✭✭✭✭Muahahaha


    yeah its going to be some hit. It all depends how quickly people can get back to work but even then venues will be operating at 50% capacity so there isnt going to be a sudden light switch moment and suddenly everything is okay again. Getting back to anything near full employment is going to take at least two years IMO and thats all provided there isnt another outbreak and a vaccine arrives.

    900 jobs gone in Aer Lingus today and Ryanair will be doing even more layoffs. That alone is going to make a sizeable dent in rents in Swords, 900 people could add up to 450 2 bed apartments rented in the Swords area. If you're Polish cabin crew and laid off and there are no airlines that are hiring then what are they to do? They certainly cant afford to hang around Dublin unemployed and paying high rents when theres a free bed back at home.


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    #398
    Sunny Disposition
    Registered Users Posts: 2,704 ✭✭✭Sunny Disposition


    Muahahaha wrote: »
    Yeah I think the WFH thing is going to be a significant factor. Not every employer will allow it but you only need 20 or 30% of them to allow it and then it has knock on effects elsewhere- roads will be quieter and rents will drop as some people realise that WFH and living outside the city will save them a fortune. It'll probably be a mixed bag, people in their 20s might still want the city living of pubs and clubs on their doorstep but those in their 30s and 40s have different priorities.



    Thats really excellent timing Sunny, prices definitely had peaked and we were seeing the beginnings of a correction. The next two or three years at least are going to be a rocky road for property. Did your property investment qualify for the CGT exemption? Happy days if so, theres been great capital appreciation since the last crash and if you can exit without paying any CGT then all the better



    Its really frightening when it is put in those terms but thats the new reality. I dont think it has sunk in for a lot of people yet how bad this will get but its going to be a mess. Plus in the last crash the Govt had the pressure release valve of 250,000 people emigrating, this time out people arent going anywhere as other countries face the same unemployment bloodbath that we do.

    I said it on another thread, property prices correlate to unemployment. You just cant have a scenario where there is 22% unemployment and property does not fall in price, one follows the other. The only silver lining should be that it wont fall like 2008 to the order of 50-80%. I'd estimate about a 20% correction until we can get back to full employment which is some time off.

    Didn’t qualify for an exemption, but certainly not complaining, was very lucky with the whole thing!
    Yeah, I doubt think this recession will be as bad as the last one, more of a short and very sharp shock, compared to the death by a 1000 cuts we got that time! But the property market on Dublin was out of control, hasn’t been functional for over 20 years. Long term changes coming now which are going to benefit the ordinary people rather than investors, like myself. It is for the best.


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    #399
    James 007
    Registered Users Posts: 962 ✭✭✭James 007


    Muahahaha wrote: »
    ............900 jobs gone in Aer Lingus today and Ryanair will be doing even more layoffs. That alone is going to make a sizeable dent in rents in Swords, 900 people could add up to 450 2 bed apartments rented in the Swords area. If you're Polish cabin crew and laid off and there are no airlines that are hiring then what are they to do? They certainly cant afford to hang around Dublin unemployed and paying high rents when theres a free bed back at home.

    Why would they leave in the first place when there is a free apartment here for them for the next 18 months if they stop paying the rent.:rolleyes:


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    #400
    Zenify
    Registered Users Posts: 861 ✭✭✭Zenify


    James 007 wrote: »
    Why would they leave in the first place when there is a free apartment here for them for the next 18 months if they stop paying the rent.:rolleyes:

    I wonder how many landlords this is happening too? Anyone got any idea of figures or know any stories?


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    #401
    Dav010
    Registered Users Posts: 14,001 ✭✭✭✭Dav010


    Zenify wrote: »
    I wonder how many landlords this is happening too? Anyone got any idea of figures or know any stories?

    The RTB report at the end of the year will tell the story.


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    #402
    Ozark707
    Registered Users Posts: 941 ✭✭✭Ozark707


    James 007 wrote: »
    Why would they leave in the first place when there is a free apartment here for them for the next 18 months if they stop paying the rent.:rolleyes:

    Are you suggesting there is going to be a wave of people who will stop paying their rent?


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    #403
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    Ozark707 wrote: »
    Are you suggesting there is going to be a wave of people who will stop paying their rent?

    Of course there will. If your income drops and its a choice between food and rent which do you think will go unpaid.

    With no real consequences for the tenant this will happen.

    Expect more landlords to leave the market either sell up or leave properties empty especially those that are mortgage free.


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    #404
    PommieBast
    Registered Users Posts: 2,566 ✭✭✭PommieBast


    Ozark707 wrote: »
    Are you suggesting there is going to be a wave of people who will stop paying their rent?
    Among council tenants the non-payment rate was 50% even before the pandemic. Dunno if there any equivalent stats for private tenancies.


    https://www.irishtimes.com/news/social-affairs/first-dublin-city-council-social-housing-tenant-to-be-evicted-for-rent-arrears-1.4085923


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    #405
    Browney7
    Registered Users Posts: 3,098 ✭✭✭Browney7


    PommieBast wrote: »
    Among council tenants the non-payment rate was 50% even before the pandemic. Dunno if there any equivalent stats for private tenancies.


    https://www.irishtimes.com/news/social-affairs/first-dublin-city-council-social-housing-tenant-to-be-evicted-for-rent-arrears-1.4085923

    The RTB report has the dispute data and the number is nowhere near your 50% figure for council tenancies


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    #406
    James 007
    Registered Users Posts: 962 ✭✭✭James 007


    Ozark707 wrote: »
    Are you suggesting there is going to be a wave of people who will stop paying their rent?

    I would think so, reasonable tenants will negotiate, but unfortunately tenants are well glued in on the laws around tenancy so I am sure there will be a good few that will.

    Yesterday would have been a real kick in the teeth for some of them, having lost their jobs and the collection of their monthly rent on the 1st May, I'm sure a lot of landlords are looking at no transfers this morning:rolleyes:


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    #407
    Ozark707
    Registered Users Posts: 941 ✭✭✭Ozark707


    James 007 wrote: »
    I would think so, reasonable tenants will negotiate, but unfortunately tenants are well glued in on the laws around tenancy so I am sure there will be a good few that will.

    Yesterday would have been a real kick in the teeth for some of them, having lost their jobs and the collection of their monthly rent on the 1st May, I'm sure a lot of landlords are looking at no transfers this morning:rolleyes:

    Well I think many LL's will have to accept the new reality and negiotiate with their tenants anyway. Be that a 10 or 20% reduction. I don't however see a mass movement of tenants refusing to stump up anything, of course there will be a number who will but I hope it is in the minority. As a tenant myself I value having a good landlord but he has to now accept the new reality that I could probably secure similar accommodation for 10/20% less than what he is charging.


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    #408
    Muahahaha
    Registered Users Posts: 19,610 ✭✭✭✭Muahahaha


    Just as a signal as to how long this current crisis might last- Ryanair have come out and said that they do not expect to get back to their full performance until the summer of 2022 at the earliest. I presume they are not pulling that out of their arse and some proper analysis has gone into it.

    Its also a noticable U turn from their position just a few weeks ago when they were saying they would be back to normal by August/September this year. They've rolled back on that completely now and they've had a reality check and are now laying off 3,500 staff, reducing wages on the remaining by up to 20% and closing some hubs across Europe.

    Definitely some very rocky times ahead which has to feed into rents. By how much is yet to be determined but just consider the Ryanair situation alone, they have over a thousand cabin crew all renting in the Swords area and hundreds of them are losing their job and the others are getting a 20% paycut. Some will have no choice but to vacate their apartments and those that do still have a job are going to need a reduction in rent or they'll be forced to move somewhere else that they can afford on their reduced wages.


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    #409
    hometruths
    Registered Users, Subscribers Posts: 5,797 ✭✭✭hometruths


    Ozark707 wrote: »
    Well I think many LL's will have to accept the new reality and negiotiate with their tenants anyway. Be that a 10 or 20% reduction. I don't however see a mass movement of tenants refusing to stump up anything, of course there will be a number who will but I hope it is in the minority. As a tenant myself I value having a good landlord but he has to now accept the new reality that I could probably secure similar accommodation for 10/20% less than what he is charging.

    Emboldened by eviction freezes, there is an organised mass movement of tenants refusing to pay rent in Toronto. If something similiar started in Dublin it could spread very quickly.

    From Toronto site:
    We should keep our rent. Our landlords will be fine. We may not be. No tenant should feel forced to hand over so much money when faced with so much uncertainty. You should keep your rent. Whatever you have, hang on to it. Once you give it to your landlord, it’s gone. You won’t have it for food or for medicine. You won’t have it for you, your family, your friends, your neighbours, or your co-workers – no-one. Your landlord will have it. It will go in their bank account and it will secure their investments. While you and everyone you care about stares down the barrel of insecurity.

    Sure, it’s against the rules. The rules say that when the calendar says the 1st, the landlord gets paid. Not this time. We’re keeping our rent. We will not be forced to go without because those with so much say we should. We know what we should do. We should support each other, we should defend each other, and we should provide for each other.


    https://keepyourrent.com/


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    #410
    hometruths
    Registered Users, Subscribers Posts: 5,797 ✭✭✭hometruths


    Muahahaha wrote: »
    Just as a signal as to how long this current crisis might last- Ryanair have come out and said that they do not expect to get back to their full performance until the summer of 2022 at the earliest. I presume they are not pulling that out of their arse and some proper analysis has gone into it.

    Its also a noticable U turn from their position just a few weeks ago when they were saying they would be back to normal by August/September this year. They've rolled back on that completely now and they've had a reality check and are now laying off 3,500 staff, reducing wages on the remaining by up to 20% and closing some hubs across Europe.

    Definitely some very rocky times ahead which has to feed into rents. By how much is yet to be determined but just consider the Ryanair situation alone, they have over a thousand cabin crew all renting in the Swords area and hundreds of them are losing their job and the others are getting a 20% paycut. Some will have no choice but to vacate their apartments and those that do still have a job are going to need a reduction in rent or they'll be forced to move somewhere else that they can afford on their reduced wages.

    I imagine incoming Ryanair flights feed much of the airbnb demand, which suggests that wont get back to anything like it was until summer 2022.

    If that is the case I doubt there are many airbnb landlords that can hold out that long, and presumably will put the properties on long term rental market (or up for sale).


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    #411
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    schmittel wrote: »
    Emboldened by eviction freezes, there is an organised mass movement of tenants refusing to pay rent in Toronto. If something similiar started in Dublin it could spread very quickly.

    From Toronto site:


    https://keepyourrent.com/

    I hope that crap doesn’t happen in Dublin. Poxy socialists on another crusade.


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    #412
    Claw Hammer
    Registered Users Posts: 6,160 ✭✭✭Claw Hammer


    Hubertj wrote: »
    I hope that crap doesn’t happen in Dublin. Poxy socialists on another crusade.

    It is bound to start in Dublin. The Free Lunch Brigade live in eternal hope.


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    #413
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    schmittel wrote: »
    I imagine incoming Ryanair flights feed much of the airbnb demand, which suggests that wont get back to anything like it was until summer 2022.

    If that is the case I doubt there are many airbnb landlords that can hold out that long, and presumably will put the properties on long term rental market (or up for sale).

    I doubt they will go on the longterm market. Individual landlords are leaving the market for a number of reasons one of which is the lack of protection afforded to landlords with rogue tenants.


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    #414
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    Claw Hammer wrote: »


    It is bound to start in Dublin. The Free Lunch Brigade live in eternal hope.

    Unlikely the state needs tax revenue to fund covid support payments.


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    #415
    PommieBast
    Registered Users Posts: 2,566 ✭✭✭PommieBast


    Muahahaha wrote: »
    Just as a signal as to how long this current crisis might last- Ryanair have come out and said that they do not expect to get back to their full performance until the summer of 2022 at the earliest.
    Been following the Covid-19 thread over in the Aviation forum. I think that is as much to do with the time-frames involved in airline planning as expectation of how long the pandemic will last.


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    #416
    Claw Hammer
    Registered Users Posts: 6,160 ✭✭✭Claw Hammer


    The Student wrote: »
    Unlikely the state needs tax revenue to fund covid support payments.

    For one thing what has that got to do with tenants? For another, the landlord has to pay tax on the rent once they become contractually entitled to it, whether they actually receive it or not.


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    #417
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    Claw Hammer wrote: »
    For one thing what has that got to do with tenants? For another, the landlord has to pay tax on the rent once they become contractually entitled to it, whether they actually receive it or not.

    How can you pay tax on rent you have not received?


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    #418
    Claw Hammer
    Registered Users Posts: 6,160 ✭✭✭Claw Hammer


    The Student wrote: »
    How can you pay tax on rent you have not received?

    In the world of the taxman if you are due to receive it, you are considered to have received it and must pay. VAT in may cases has to be paid after an invoice has issued and before the money comes in, if ever. Capital Acquisitions tax has to be paid in may cases before the inheritance is received.
    It is the same with rent.
    Time to live in the adult world.


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    #419
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    Claw Hammer wrote: »
    In the world of the taxman if you are due to receive it, you are considered to have received it and must pay. VAT in may cases has to be paid after an invoice has issued and before the money comes in, if ever. Capital Acquisitions tax has to be paid in may cases before the inheritance is received.
    It is the same with rent.
    Time to live in the adult world.

    Are you sure of your view on rental income. Can you provide the source of your assertion


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    #420
    Claw Hammer
    Registered Users Posts: 6,160 ✭✭✭Claw Hammer


    The Student wrote: »
    Are you sure of your view on rental income. Can you provide the source of your assertion

    I am sure. From the IPAV
    Members should be aware rental income is taxable on a receivable basis i.e what you are entitled to receive as per the lease rather than what was actually received


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    #421
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    Claw Hammer wrote: »
    I am sure. From the IPAV
    Members should be aware rental income is taxable on a receivable basis i.e what you are entitled to receive as per the lease rather than what was actually received

    Could you provide the specific link please as I have tried to find it on their site but can't.


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