2021 Irish Property Market chat - mod warnings post 1

mcsean2163 · 25-01-2021 1:10am

PropQueries wrote: »

But what could they invest the proceeds in to get a similar return and also pay less tax?

Also, how many landlords are selling because they bought between 2012 and 2014 and can now sell without paying CGT?

There should be a lot more landlords selling up and leaving the market than there currently are based on those purchases between 2012 and 2014 alone which IMO would mean the returns of being a landlord in Ireland at the moment must be exceptional.

Stock market, capital gains tax is less

PropQueries · 25-01-2021 1:18am

Graham wrote: »

Given the volumes of landlords leaving the markets that doesn't appear to be a significant enough motivator to stay in the market.

I assume it will matter even less to any landlord that's spent the guts of the last year providing private COVID support to tenant/s unable to pay rent.

I’d say it’s more to do with the landlords who purchased between 2012 and 2014 and can now sell without paying CGT.

Even if a tenant hadn’t paid any rent for 10 months in 2020, the landlord would be still better off than if he had sold last January and placed the proceeds in the bank.

He could have risked it in the S&P and got. c. 2% with significant more risk attached.

The rental yields are so high in this country, a tenant would have to get away with not paying rent for at least the next 5 years to make it a problem for any landlord who purchased their RIP for cash IMO.

Timing belt · 25-01-2021 1:24am

PropQueries wrote: »

I’d say it’s more to do with the landlords who purchased between 2012 and 2014 and can now sell without paying CGT.

Even if a tenant hadn’t paid any rent for 10 months in 2020, the landlord would be still better off than if he had sold last January and placed the proceeds in the bank.

He could have risked it in the S&P and got. c. 2% with significant more risk attached.

The rental yields are so high in this country, a tenant would have to get away with not paying rent for at least the next 5 years to make it a problem for any landlord who purchased their RIP for cash IMO.

If rental yields are so high compared to other asset classes then the institutional investors have the ability to develop property that was previously deemed to expensive to invest in or cut rents.... but don't see rents being cut.

Graham · 25-01-2021 1:34am

PropQueries wrote: »

The rental yields are so high in this country, a tenant would have to get away with not paying rent for at least the next 5 years to make it a problem for any landlord who purchased their RIP for cash IMO.

And yet we're losing landlords and tenancies at a rate of knots.

So either your hypothesis isn't reflective of the reality, or the landlords leaving the market have got it all wrong.

PropQueries · 25-01-2021 1:39am

Timing belt wrote: »

If rental yields are so high compared to other asset classes then the institutional investors have the ability to develop property that was previously deemed to expensive to invest in or cut rents.... but don't see rents being cut.

If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO

Rent of €20,000 at 3,5% yield values the property at c. €600k

Rent of €15,000 at 3.5% yield values the property at c. €400k

They could lose c. €200k just by lowering the rent by €5k.

They really are better off keeping them vacant and pretending they’re worth something, in the short-term at least.

Unless there’s a very real upfront cost to keeping them vacant I.e. a vacant property tax

PropQueries · 25-01-2021 1:47am

Graham wrote: »

And yet we're losing landlords and tenancies at a rate of knots.

So either your hypothesis isn't reflective of the reality, or the landlords leaving the market have got it all wrong.

As I already said, IMO, it’s probably primarily either the landlords who bought between 2012 and 2014 selling to avail of their CGT exemption or it’s the banks/funds etc. forcing their Celtic tiger BTL mortgage holders to sell.

It 100% has got nothing to do with the “low” levels of returns in the Irish rental market IMO.

Timing belt · 25-01-2021 1:51am

PropQueries wrote: »

If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO

Rent of €20,000 at 3,5% yield values the property at c. €600k

Rent of €15,000 at 3.5% yield values the property at c. €400k

They could lose c. €200k just by lowering the rent by €5k.

They really are better off keeping them vacant and pretending they’re worth something, in the short-term at least.

Unless there’s an opportunity cost to keeping them vacant I.e. a vacant property tax

You seem to have a large rounding difference in your calculation as I make it
142.8k by lowering rent by 5k

But yes I agree with your point that they are better leaving them vacant in the short term.

The point I was making was that if a property with a rental income of 2m a year is worth 57m with a 3.5% yield. Then it would be worth 67m with a yield of 3% which means that previous buildings that would have cost to much to develop now become viable to institutional investors if they accept a lower yield.

Graham · 25-01-2021 1:52am

PropQueries wrote: »

It 100% has got nothing to do with the “low” levels of returns in the Irish rental market IMO.

I made no such suggestion.

Graham · 25-01-2021 2:00am

PropQueries wrote: »

If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO

Rent of €20,000 at 3,5% yield values the property at c. €600k

Rent of €15,000 at 3.5% yield values the property at c. €400k

They could lose c. €200k just by lowering the rent by €5k.

Aren't most REITs looking for steady cashflow rather than increased share price / underlying asset value?

Isn't that one of the main reasons pension funds like them so much? Profits are distributed regularly and evenly as dividends.

That's not to say the asset value is irrelevant but it will be largely based on the 'real' yield not some notional yield. Certainly not for long.

Browney7 · 25-01-2021 2:10am

mcsean2163 wrote: »

Stock market, capital gains tax is less

Capital gains tax is the same for property as shares (if you bought between 13 and 15 and held for 7 years - which dropped to 4 - CGT on property was 0%). Income tax on dividends is marginal rate which is the same as property. Investors in IRES REIT pay CGT and income tax if their investment is outside a pension vehicle.

combat14 · 25-01-2021 8:55am

PropQueries wrote: »

If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO

Rent of €20,000 at 3,5% yield values the property at c. €600k

Rent of €15,000 at 3.5% yield values the property at c. €400k

They could lose c. €200k just by lowering the rent by €5k.

They really are better off keeping them vacant and pretending they’re worth something, in the short-term at least.

Unless there’s a very real upfront cost to keeping them vacant I.e. a vacant property tax

always thought historic rental yields were at least 6% has that changed ..?

PropQueries · 25-01-2021 9:39am

combat14 wrote: »

always thought historic rental yields were at least 6% has that changed ..?

No, I think you're right in relation to the small BTL landlords. I think someone here said before that REITS operate under a smaller yield so when discussing the REITS I stuck with the lower figure.

hometruths · 25-01-2021 9:46am

If 5-8k rentals have been leaving the market per annum, that's equivalent of about 10% of annual sales volume. But with supply at historic lows it is clear they have not been entering the sales market.

What's happening to all these properties?

Graham · 25-01-2021 9:51am

PropQueries wrote: »

No, I think you're right in relation to the small BTL landlords. I think someone here said before that REITS operate under a smaller yield so when discussing the REITS I stuck with the lower figure.

The 3.5% figure you've mentioned sounds more like the generally discussed REIT yield of dividends as a percentage of share price.

Graham · 25-01-2021 10:06am

schmittel wrote: »

If 5-8k rentals have been leaving the market per annum, that's equivalent of about 10% of annual sales volume. But with supply at historic lows it is clear they have not been entering the sales market.

What's happening to all these properties?

Some EAs have already reported a very significant proportion of their sales are a result of landlords exiting the market.

hometruths · 25-01-2021 10:11am

Graham wrote: »

Some EAs have already reported a very significant proportion of their sales are a result of landlords exiting the market.

Recently yes, but this has been going on for a few years. Were EAs saying this in 2018/9?

Graham · 25-01-2021 10:16am

schmittel wrote: »

Recently yes, but this has been going on for a few years. Were EAs saying this in 2018/9?

Can't say I've looked but previous landlord-exit figure were at the lower end of the scale and more likely to be mixed with higher volumes of standard residential transactions.

If an EA is getting two-thirds of current listings as a result of landlord-exits, it's going to be a lot more noticeable.

hometruths · 25-01-2021 10:18am

Graham wrote: »

Can't say I've looked but previous landlord-exit figure were at the lower end of the scale and more likely to be mixed with higher volumes of standard residential transactions.

If an EA is getting two-thirds of current listings as a result of landlord-exits, it's going to be a lot more noticeable.

What EA is getting 2/3?

JimmyVik · 25-01-2021 10:24am

fago wrote: »

These properties don't disappear into the ether so surely they help the apt/starter home market.
I read all of the 2021 predictions/shills and don't recall any of the same agents mentioning supply being helped by the increase in rentals for sale.
I've seen one auctioneer in a local paper predict flat for 2021, but then 4% in a national paper.
Even within Ireland there's a good few micro markets, in my opinion you re best off understand where you are buying what sells, what struggles and watch the PPR.

One micro market is the council. Micro might be a bit much, they are significant. And I think a major cause of both rent and purchase price rises.

Rent rising costs the govt a lot less than it costs the average punter.
The govt get half the higher rent in tax for a start. Then when they pay out rent to a private landlord for social welfare, they get half that back in tax anyway.
A nice little con they have going on.

I know one person who sold their rental about 2 years ago.
It was a 2 bed apartment. One of the couples who were renting it we were having a baby so moved out. The other couple moved out about 3 months later. As soon as it was empty he put it on the market. When he put it on the market the council contacted him and offered to buy it. He accepted. There is now one very noisy and annoying woman living in the apartment on her own.
He also owns the apartment beside it and has decided to sell that as soon as the current tenants moves out, which he thinks will be soon, because the one next is making their lives hell. He will offer it to the council first. If not he will put it on the market.

hometruths · 25-01-2021 10:29am

JimmyVik wrote: »

One micro market is the council. Micro might be a bit much, they are significant. And I think a major cause of both rent and purchase price rises.

Rent rising costs the govt a lot less than it costs the average punter.
The govt get half the higher rent in tax for a start. Then when they pay out rent to a private landlord for social welfare, they get half that back in tax anyway.
A nice little con they have going on.

I know one person who sold their rental about 2 years ago.
It was a 2 bed apartment. One of the couples who were renting it we were having a baby so moved out. The other couple moved out about 3 months later. As soon as it was empty he put it on the market. When he put it on the market the council contacted him and offered to buy it. He accepted. There is now one very noisy and annoying woman living in the apartment on her own.
He also owns the apartment beside it and has decided to sell that as soon as the current tenants moves out, which he thinks will be soon, because the one next is making their lives hell. He will offer it to the council first. If not he will put it on the market.

Interesting, thanks. I suspect a lot of the landlords waiting to exit the maket when covid restrictions end might end up selling to the council with tenants in situ. Govt does not have much choice.

Of course properties will be sold to the taxpayer for top whack, and it will cost us a fortune!

JimmyVik · 25-01-2021 10:30am

schmittel wrote: »

I agree. I suspect the volume will be large enough that govt has another problem on their hands here, knowing there is a record number of tenancies about to be terminated in one go. Very difficult for them to handle the fallout.

O'Broin already has a plan to stop those landlords who cant make it work leaving - apparently

JimmyVik · 25-01-2021 10:35am

Graham wrote: »

I've no doubt REITs are taking up some of the slack from departing private landlords and reducing the reliance on private landlords was one of the aims of the tax treatment.

Problem 1 is private landlords are leaving faster than their rental properties are being replaced (by REITs).

Problem 2 is the REITS are obviously concentrating on the most profitable cities.

Problem 3 is the REITs are concentrating on the higher end of the market.

I sont know for certain, but i wouldnt imagine REITs would be too interested in anything but apartments. Maybe the odd small development of houses in high demand areas, but in general i dont see them interested in houses.
Problem is private landlords who own houses are getting out even faster than those who own apartments.

JimmyVik · 25-01-2021 10:39am

Villa05 wrote: »

The article does mention tax as a factor. Do you think the perceived landlord/tennant imbalance would be cushioned if reits and private landlords had tax equality ie both pay 25%

That would be significant gain for the private landlord

It might make it more attractive to private landlords if the tax burden was reduced significantly. But is it enough to convince private investors wither in or back in. I doubt it. I see the biggest problem beiong they have been whipped up and down for a decade now and have had enough. They have no reason to believe if they get in now that things wont move against them next year. The frog has been boiled and now i think it might be dead.

JimmyVik · 25-01-2021 10:49am

PropQueries wrote: »

I’d say it’s more to do with the landlords who purchased between 2012 and 2014 and can now sell without paying CGT.

Even if a tenant hadn’t paid any rent for 10 months in 2020, the landlord would be still better off than if he had sold last January and placed the proceeds in the bank.

He could have risked it in the S&P and got. c. 2% with significant more risk attached.

The rental yields are so high in this country, a tenant would have to get away with not paying rent for at least the next 5 years to make it a problem for any landlord who purchased their RIP for cash IMO.

There is no investment that is more risky than being a private landlord in Ireland.

I had about €100k ready to invest 3 years ago.
I wanted to invest it in an investment property in Ireland.
While i did my research I left it in ETFs. S&P and world UCITS. I probably could have found a more tax efficient way to invest it, but that was nice and easy.
Anyway I couldnt make the risk/reward on residential property work for me so i left it there. I am glad now that it worked out that way.

PropQueries · 25-01-2021 11:12am

Ok, according to the RTB, the number of registered private landlords in Q3 2020 was 166,615 and in Q3 2017, it was 176,251, so a fall of c. 20,000 over 3 years.

Isn't it a real possibility that the investors who purchased properties between 2012 and 2014 to avail of the CGT tax exemption from 2018 onwards (i.e. they can now sell without paying CGT) are now a significant percentage of these sellers? i.e. it's not the "unfair" tax system, but more due to cashing in their profits from their investments during 2012 and 2014.

MacronvFrugals · 25-01-2021 11:13am

Darragh O'Brien: Ambitious aims and imaginative solutions can solve housing woes

Data from the US and UK show that millennials are financially worse off than their parents were at the same age after housing costs are factored into account.

More diverse, liberal and better educated than any previous generation, they are also faced with the bleakest economic prospects and an increasingly greasy housing ladder. Covid-19 has had a disproportionate impact on them.

The increase in the average age of buying a home from 26 in 1991 to 35 today reflects the much harder path that young people must travel to own their own place.

This is a demographic financial time-bomb when these households retire and need state support for their rent.

The political implications of the age divide can be seen in a more profound crisis of democratic legitimacy.

Darragh O Brien in the Examiner this morning speaking to the 18/35s demo - https://www.irishexaminer.com/opinion/commentanalysis/arid-40212971.html

JimmyVik · 25-01-2021 11:17am

PropQueries wrote: »

Ok, according to the RTB, the number of registered private landlords in Q3 2020 was 166,615 and in Q3 2017, it was 176,251, so a fall of c. 20,000 over 3 years.

Isn't it a real possibility that the investors who purchased properties between 2012 and 2014 to avail of the CGT tax exemption from 2018 onwards (i.e. they can now sell without paying CGT) are now a significant percentage of these sellers? i.e. it's not the "unfair" tax system, but more due to cashing in their profits from their investments during 2012 and 2014.

It is possible. Also councils and REITS might be buying them, therefore keeping them in the rental market.

And yet the supply of properties to rent has dwindled.
Remember also that the RTB arent averse to hiding the real figures on the number of landlords leaving the market. They have form.

Browney7 · 25-01-2021 11:18am

JimmyVik wrote: »

There is no investment that is more risky than being a private landlord in Ireland.

I had about €100k ready to invest 3 years ago.
I wanted to invest it in an investment property in Ireland.
While i did my research I left it in ETFs. S&P and world UCITS. I probably could have found a more tax efficient way to invest it, but that was nice and easy.
Anyway I couldnt make the risk/reward on residential property work for me so i left it there. I am glad now that it worked out that way.

Were you adding leverage to your initial 100k and didn't you assess the risk of borrowing a similar level of cash with your 100k to add to the equity market investment for your comparison?

As a rough Proxy, IRES REIT is roughly flat from this time three years ago with a 4% gross div p.a. yield or so over that time. Eurostoxx 50 is also flat with a lower dividend yield whilst S&P 500 is up about 35% (adjusted for currency) before dividends. A lot of that S&P growth driven by FAANG and tech stocks over the past nine months.

Nice gain on your S&P 500

hometruths · 25-01-2021 11:20am

PropQueries wrote: »

Ok, according to the RTB, the number of registered private landlords in Q3 2020 was 166,615 and in Q3 2017, it was 176,251, so a fall of c. 20,000 over 3 years.

Isn't it a real possibility that the investors who purchased properties between 2012 and 2014 to avail of the CGT tax exemption from 2018 onwards (i.e. they can now sell without paying CGT) are now a significant percentage of these sellers? i.e. it's not the "unfair" tax system, but more due to cashing in their profits from their investments during 2012 and 2014.

Undoubtedly the CGT exemption played a part but not the only thing. Eoin Ó Broin:

He said: "For about 20 years, every single year, the total number of rental tenancies registered with the Rental Tenancies Board [RTB] increased right up until 2016 — partly because there were tax breaks during the Celtic Tiger era.

"What happened literally from quarter one of 2017, every single quarter since then — 2017, 2018, 2019, and 2020 — has seen a loss of tenancies."

Literally from Q1 2017? What happened in Q4 2016 so?

RPZs were introduced in Q4 2016.

JimmyVik · 25-01-2021 11:21am

MacronvFrugals wrote: »

Darragh O'Brien: Ambitious aims and imaginative solutions can solve housing woes

Darragh O Brien in the Examiner this morning speaking to the 18/35s demo - https://www.irishexaminer.com/opinion/commentanalysis/arid-40212971.html

The increase in the average age of buying a home from 26 in 1991 to 35 today reflects the much harder path that young people must travel to own their own place.

This is a demographic financial time-bomb when these households retire and need state support for their rent.

The political implications of the age divide can be seen in a more profound crisis of democratic legitimacy.

Wasnt it on FFs watch that the push to make it the norm for two people to be working to afford a house was made. What did they think was going to happen to prices? Oh of course , they knew.

The blame is totally with FF if you ask me.

JimmyVik · 25-01-2021 11:23am

Browney7 wrote: »

Were you adding leverage to your initial 100k and didn't you assess the risk of borrowing a similar level of cash with your 100k to add to the equity market investment for your comparison?

As a rough Proxy, IRES REIT is roughly flat from this time three years ago with a 4% gross div p.a. yield or so over that time. Eurostoxx 50 is also flat with a lower dividend yield whilst S&P 500 is up about 35% (adjusted for currency) before dividends. A lot of that S&P growth driven by FAANG and tech stocks over the past nine months.

Nice gain on your S&P 500

Leverage? And you want to talk about risk?

You go do that. Make yourself rich if you think its so easy.

Browney7 · 25-01-2021 11:25am

JimmyVik wrote: »

Wasnt it on FFs watch that the push to make it the norm for two people to be working to afford a house was made. What did they think was going to happen to prices? Oh of course , they knew.

The blame is totally with FF if you ask me.

One man's blame is another man's credit.

I thought from the talk on this forum is it's Sinn Féin's fault for the high prices and high rents and housing shortage. Plenty blame to go round these days!

Browney7 · 25-01-2021 11:27am

JimmyVik wrote: »

Leverage? And you want to talk about risk?
You go do that. Make yourself rich if you think its so easy.

You stated "there is no investment riskier than being a private landlord". Was that a 100k apartment on a standalone property with no loan or a 100k deposit with a 200k loan. It's unfair to compare a leveraged investment with an unleveraged one.

JimmyVik · 25-01-2021 11:28am

Browney7 wrote: »

One man's blame is another man's credit.

I thought from the talk on this forum is it's Sinn Féin's fault for the high prices and high rents and housing shortage. Plenty blame to go round these days!

Well you can only blame the ones who had the power to enact it.
SF, while they talk a lot, can only do damage if they are in government.
FF however, are the masters of the destruction of the property market in Ireland. FG destroyed the rental market.

PropQueries · 25-01-2021 12:11pm

How do people believe this may impact the manufacturing FDI jobs in Ireland going forward and hence the demand for future housing in the areas where these facilities are currently operating from? For example, would it also apply to pharma supplies which would impact future housing demand in rural areas more so than Dublin?

According to the FT today:

"Biden set for ‘buy American’ push to boost domestic manufacturing.

US president Joe Biden is set to tighten “buy American” provisions as part of a push to boost domestic manufacturing, in a move that risks straining relations with key US allies.

Mr Biden is on Monday expected to order an increase in domestic content requirements for federal procurement contracts, following a campaign pledge to boost the US manufacturing industry as he aimed to outflank Donald Trump in key swing states.

Administration officials said Mr Biden would also reiterate his support for the Jones Act, which requires goods shipped within the US to be transported on American vessels."

You can read the article in the FT here: https://www.ft.com/content/5cb92834-ddba-4d34-ab8d-cbf11305a888

JimmyVik · 25-01-2021 12:24pm

PropQueries wrote: »

How do people believe this may impact the manufacturing FDI jobs in Ireland going forward and hence the demand for future housing in the areas where these facilities are currently operating from? For example, would it also apply to pharma supplies which would impact future housing demand in rural areas more so than Dublin?

According to the FT today:

"Biden set for ‘buy American’ push to boost domestic manufacturing.

US president Joe Biden is set to tighten “buy American” provisions as part of a push to boost domestic manufacturing, in a move that risks straining relations with key US allies.

Mr Biden is on Monday expected to order an increase in domestic content requirements for federal procurement contracts, following a campaign pledge to boost the US manufacturing industry as he aimed to outflank Donald Trump in key swing states.

Administration officials said Mr Biden would also reiterate his support for the Jones Act, which requires goods shipped within the US to be transported on American vessels."

You can read the article in the FT here: https://www.ft.com/content/5cb92834-ddba-4d34-ab8d-cbf11305a888

This kind of think happens with every election in the US. At the end of the day, nothing changes in Ireland that isnt related to the government interfering with the property market.
They are the single biggest force acting on it. Anything else doesnt really change. Even Brexit I think will have little impact on the property market.
And I think COVID-19 has a big impact on it now, I think that ompact will go away , with the virus.
Then its steady as she goes, until the next hair brained domestic rocket up the hole of the irish market.

JimmyVik · 25-01-2021 12:43pm

Browney7 wrote: »

You stated "there is no investment riskier than being a private landlord". Was that a 100k apartment on a standalone property with no loan or a 100k deposit with a 200k loan. It's unfair to compare a leveraged investment with an unleveraged one.

Just for a thought experiment.
Say I was to take out €100k of it now and invest that in property.
How do you think I should invest it in property? What would the risks and what do you believe I could expect to make from it?

Villa05 · 25-01-2021 12:51pm

Graham wrote:

Given the volumes of landlords leaving the markets that doesn't appear to be a significant enough motivator to stay in the market.

Maybe with the tax rate on private LL, they may choose to have a close family member use the house and resume renting whem they are retired

Graham wrote:

Aren't most REITs looking for steady cashflow rather than increased share price / underlying asset value?

Are vulture funds more prevelant than reits, contrasting business models. Also Irish Reits may deviate from traditional business models

Anyone got data on the number of ll/tennant disputes instigated by LL to get a rough measure of the problem

Hubertj · 25-01-2021 1:38pm

JimmyVik wrote: »

This kind of think happens with every election in the US. At the end of the day, nothing changes in Ireland that isnt related to the government interfering with the property market.
They are the single biggest force acting on it. Anything else doesnt really change. Even Brexit I think will have little impact on the property market.
And I think COVID-19 has a big impact on it now, I think that ompact will go away , with the virus.
Then its steady as she goes, until the next hair brained domestic rocket up the hole of the irish market.

Medtronic CEO commmented on this last year when trumped started on about it. Essentially they said for complex manufacturing processes only a simpleton would suggest all production could be moved back to the US. They are generally part of a global supply chain. Depending on the industry there could be risks in Ireland but I don’t know what they might be. There were discussions in the past as to why Nissan produces cars in Mexico etc...

Graham · 25-01-2021 1:52pm

schmittel wrote: »

What EA is getting 2/3?

I vaguely recall it was Sherry Fitz who said two thirds of their listings are landlords selling up but can't find the article. It was discussed earlier in the thread.

Similar commentary from another agent but with an even higher proportion:

Not surprisingly then that landlords selling up accounted for 78pc of the sales of estate agent Owen Reilly through the last 12 months.

Does go on to suggest some investors are coming back slowly.

Mic 1972 · 25-01-2021 2:04pm

Bruno Millions Geisha wrote: »

"With the supply of properties for sale at a record low and robust demand, we now expect prices to grow this year by 4pc, a significant change from our previous estimate of -2pc"

https://www.independent.ie/business/irish/recovery-in-consumer-spending-will-be-swift-40005813.html

it doesn't come as a surprise to me.
prices were already increasing before, but now they are crazy

Reins · 25-01-2021 2:33pm

Graham wrote: »

I vaguely recall it was Sherry Fitz who said two thirds of their listings are landlords selling up but can't find the article. It was discussed earlier in the thread.

Similar commentary from another agent but with an even higher proportion:

Does go on to suggest some investors are coming back slowly.

https://www.businesspost.ie/houses/rents-set-to-rise-again-as-increasing-numbers-of-landlords-sell-up-a9def7e0

It says a third of its sales

Balluba · 25-01-2021 2:37pm

Mic 1972 wrote: »

it doesn't come as a surprise to me.
prices were already increasing before, but now they are crazy

Mic what goes up eventually comes down so I will just bide my time and not bid on houses recklessly

Graham · 25-01-2021 2:38pm

Reins wrote: »

https://www.businesspost.ie/houses/rents-set-to-rise-again-as-increasing-numbers-of-landlords-sell-up-a9def7e0

It says a third of its sales

Thanks, Reins. I stand corrected.

So we have one EA saying a third and and another over three-quarters.

It doesn't take much to work out it's not good for renters and it demonstrates that ex-rentals are returning to the market.

Reins · 25-01-2021 2:43pm

Graham wrote: »

Thanks, Reins. I stand corrected.

So we have one EA saying a third and and another over three-quarters.

It doesn't take much to work out it's not good for renters and it demonstrates that ex-rentals are returning to the market.

Doesn't Owen Reilly mainly deal with city centre properties? So not surprised to hear it's over three - quarters

Graham · 25-01-2021 2:46pm

Makes sense, highest density of rentals and STL properties, both of which an EA is likely to classify as ex-rental.

PropQueries · 25-01-2021 3:15pm

Mic 1972 wrote: »

it doesn't come as a surprise to me.
prices were already increasing before, but now they are crazy

My understanding was that prices (in Dublin anyway) had flat-lined or were falling since c. 2018 up to year end 2019?

random_banter · 25-01-2021 6:06pm

Balluba wrote: »

Mic what goes up eventually comes down so I will just bide my time and not bid on houses recklessly

My understanding was that prices (in Dublin anyway) had flat-lined or were falling since c. 2018 up to year end 2019?

On these two things. My understanding also is that the peak was c. 2018 and were plateaued/falling in 2019.

As a buyer in South Dublin, I can see reckless bidding happening now on very little stock and stock that's inferior to what could be got for similar prices at the peak in 2018. As an example, a property for sale in Dundrum at the moment which is just a minute's walk from one that sold in 2018 for a certain price, but is smaller, in much worse condition and has a north facing vs. south facing garden is now at bids higher than the final selling price of the one I mentioned in 2018 (which was a supposed peak).

The difference, as I see it, is the Pandemic - causing hesitation from sellers, who aren't putting properties on the market in the same numbers, and hence causing a lack of supply, which is again making them hesitant. Why decide to trade up and put your property on sale when there aren't many decent quality properties on the market for you to buy? And then you have those who feel they need to buy now, are putting in desperate bids on ever decreasing stock (mostly executor sales coming up at the moment). It's a pandemic-premium.

We have been trying for a year and now have accepted that until the situation is more stable, and there are more people selling, we've no interest in bidding over the odds for properties which were going for 50-70k less in 2018/19. But we have the luxury of waiting a while longer which not everybody does.

My experience comes from trying to buy in South Dublin, which I acknowledge can experience different conditions than other parts of the country.

Caveat: Obviously this is all anecdotal but the PPR will tell us the tale in time.

combat14 · 25-01-2021 7:12pm

PropQueries wrote: »

If they cut rents (real or perceived), the value of all their property investments falls so it wouldn’t benefit them either way IMO

Rent of €20,000 at 3,5% yield values the property at c. €600k

Rent of €15,000 at 3.5% yield values the property at c. €400k

They could lose c. €200k just by lowering the rent by €5k.

They really are better off keeping them vacant and pretending they’re worth something, in the short-term at least.

Unless there’s a very real upfront cost to keeping them vacant I.e. a vacant property tax

the trouble is if rental yield is 6.64% which apparently is average rental yield here -

According to the Business Insider, Ireland is the eighth best country to invest in rental property, with an average rental yield of 6.64%

https://www.4property.com/top-rental-yields-in-dublin/#:~:text=According%20to%20the%20Business%20Insider,average%20rental%20yield%20of%206.64%25.

aforementionned properties are worth a lot less at same rents:

Rent of €20,000 at 6,64% yield values the property at c. €300k

Rent of €15,000 at 6.64% yield values the property at c. €225k

but maybe everyone is happier with lower yields in current risk free environment

PropQueries · 25-01-2021 7:41pm

combat14 wrote: »

the trouble is if rental yield is 6.64% which apparently is average rental yield here -

According to the Business Insider, Ireland is the eighth best country to invest in rental property, with an average rental yield of 6.64%

https://www.4property.com/top-rental-yields-in-dublin/#:~:text=According%20to%20the%20Business%20Insider,average%20rental%20yield%20of%206.64%25.

aforementionned properties are worth a lot less at same rents:

Rent of €20,000 at 6,64% yield values the property at c. €300k

Rent of €15,000 at 6.64% yield values the property at c. €225k

but maybe everyone is happier with lower yields in current risk free environment

Thanks for that.

It's just a few posters were stating that the yield accepted by these large funds was much lower than the yield acceptable to the small BTL landlord. Made sense given the amount of money flowing their way.

But, apparently the funds are achieving near enough the same yield as the small BTL landlord which means there's no incentive for either to be leaving the market at the moment unless they believe both rents and property values will collapse in the near future.

Ires Reit's Gross Yield in 2020 was 5.7%.

Link here: https://investorrelations.iresreit.ie/sites/ires-ir/files/reports-presentation/presentations/interim-results-2020.pdf

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2021 Irish Property Market chat - mod warnings post 1