Landlordism 2.0

Started by seafoid, May 05, 2021, 08:47:32 AM

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thebigfella

Quote from: johnnycool on May 17, 2021, 02:23:41 PM
Quote from: thebigfella on May 17, 2021, 01:54:29 PM
There is more to life than just work, hence why people and especially young people like city living.

Decentalising jobs to mulligar sounds great in theory but in reality young people dont want to live there because there is fcuk all to do. Hence why the big tech companies are based in dublin, because they can attract the best talent not just with the job but the lifestyle.

There's not much point earning big bucks in Dublin when you have to spunk most of it on rent/mortgage and the extra cost of living.

Young families not able to afford to rent let alone buy bigger properties to allow them to have kids.. Move the jobs out of Dublin and make it viable for big business to do so and the housing market in Dublin will cool down a good bit but maybe some people don't want that.

This has always been the way with young people living in cities. When you get middle aged your priorities change but in my mid twenties I wanted to be where all the action regardless of what it cost me.


shark

#91
Quote from: Angelo on May 17, 2021, 03:42:24 PM
Quote from: shark on May 17, 2021, 02:39:46 PM
Quote from: Hound on May 17, 2021, 02:20:28 PM
Quote from: thebigfella on May 17, 2021, 01:54:29 PM
There is more to life than just work, hence why people and especially young people like city living.

Decentalising jobs to mulligar sounds great in theory but in reality young people dont want to live there because there is fcuk all to do. Hence why the big tech companies are based in dublin, because they can attract the best talent not just with the job but the lifestyle.
But if more people were living in Mullingar, there would be more to do!

I spent a long weekend in Athlone last summer, and there was loads to do.

There is a mindset out there though that you need to move to Dublin to be regarded as successful. And the people left behind will be left behind. That won't change overnight.

But I do think working from home over the last 14 months has been a game changer. IDA have been battling for a number of years to persuade new entrants they don't need to be in Dublin.

Although it will be interesting to hear from people who work in Dublin, but who moved back home during the pandemic. Did it make you miss Dublin more? Or did it make you think quality of life could be better if you lived in your home county?

There is certainly truth in that.
But we are probably more taking about those who are slightly older and thinking about starting a family.
I work in a tech company. The age profile is young, and for sure the 24 year old Sales Development Rep wants to live in an apartment in the city centre. But the 32 year old who has just got engaged, and would like a 4 bedroom house in which to raise a family, might be seeking something different. They probably won't have any problem getting approval for a €400k+ property. But €400k won't buy much of a 4 bed house in Dublin.
The pandemic has changed things in my world. There is no way I'll be back in the office full time again. It's just not necessary. At the start of the pandemic I lived walking distance from work, as I wouldn't entertain commuting every day. We have moved outside the M50 now, as I know I'll only face that commute at most 3 times a week. More often 1 day, I suspect. I'm seeing this replicated among others in my company. This should help the overall picture a small bit - but I guess every job doesn't have remote capability.

A 400k property would require a combined salary of 100k per annum and a deposit of at least 40k.

Now say that couple are earning 100k a year together and are currently renting their own place in Dublin at 2k a week.

After tax, they might be seeing 70k a year, would that be a fair estimate?

So 24k of their after tax earnings (35%) of what they earn in a year is dead money on rent. Now they have to save up 40k - on their salaries it will probably take about 4 years if they starting from scratch which they likely would be if they are a young couple based in Dublin.

Running a car is expensive, insurance, tax, fuel, services - could be another 3-4k a year, possibly x2 for them. The alternative of public transport to and from work is likely going to be return a similar enough cost.

Utility bills - heating, electricity, bins, broadband, TV. Probably another 4-5k there in a year, possibly more.

Sot that's another 10-15k gone. You're probably now at 40k.

What would groceries be in a year? Would 5k cover a couple for the year?

Now you're at 45k of your 70k wrapped up and that's just on your basic needs.

How many weddings would a young couple have in a year? Anything from 3-4 to 7-8 I'd say. Between stags, hens and weddings probably the guts of 1k each time.

Medical expenses? Health insurance?

Gym memberships, playing sports, holidays, social life, getting a few non-essential items through the year?

Every cent you earn is gone if you want to live an anywhere near decent standard of life if you're stuck in the rental bubble in Dublin.

And that's a couple on decent jobs - just forget it for a single person, don't even go there.

All of the above is very true. And I'm aware that plenty of couples don't earn a combined 100k, or anywhere close to it.
It's not easy to save when paying a lot of rent. I know people who moved back with their parents for 2-3 years in some cases, in order to save a deposit. No fun!
I'm also aware that working in tech , one can forget that they are in a bubble that is not representative if wider society. But still has the ability to distort the market. There are many young(-ish) people in Dublin , working in tech, who have made a lot of money in the past few years on stock options. Even after tax it can come to multiples of annual salary. Especially if one accrued these shares prior to IPO. The 30 Coinbase employees in Dublin got a combined $27m (roughly, at IPO price point) which they will be able to sell (after paying 52% tax) in a few months if they wish. This is an extreme example, but plenty out there getting large 5 figure sums, that are no doubt fuelling property purchases and distorting the market.

Angelo

Quote from: shark on May 17, 2021, 03:53:38 PM
Quote from: Angelo on May 17, 2021, 03:42:24 PM
Quote from: shark on May 17, 2021, 02:39:46 PM
Quote from: Hound on May 17, 2021, 02:20:28 PM
Quote from: thebigfella on May 17, 2021, 01:54:29 PM
There is more to life than just work, hence why people and especially young people like city living.

Decentalising jobs to mulligar sounds great in theory but in reality young people dont want to live there because there is fcuk all to do. Hence why the big tech companies are based in dublin, because they can attract the best talent not just with the job but the lifestyle.
But if more people were living in Mullingar, there would be more to do!

I spent a long weekend in Athlone last summer, and there was loads to do.

There is a mindset out there though that you need to move to Dublin to be regarded as successful. And the people left behind will be left behind. That won't change overnight.

But I do think working from home over the last 14 months has been a game changer. IDA have been battling for a number of years to persuade new entrants they don't need to be in Dublin.

Although it will be interesting to hear from people who work in Dublin, but who moved back home during the pandemic. Did it make you miss Dublin more? Or did it make you think quality of life could be better if you lived in your home county?

There is certainly truth in that.
But we are probably more taking about those who are slightly older and thinking about starting a family.
I work in a tech company. The age profile is young, and for sure the 24 year old Sales Development Rep wants to live in an apartment in the city centre. But the 32 year old who has just got engaged, and would like a 4 bedroom house in which to raise a family, might be seeking something different. They probably won't have any problem getting approval for a €400k+ property. But €400k won't buy much of a 4 bed house in Dublin.
The pandemic has changed things in my world. There is no way I'll be back in the office full time again. It's just not necessary. At the start of the pandemic I lived walking distance from work, as I wouldn't entertain commuting every day. We have moved outside the M50 now, as I know I'll only face that commute at most 3 times a week. More often 1 day, I suspect. I'm seeing this replicated among others in my company. This should help the overall picture a small bit - but I guess every job doesn't have remote capability.

A 400k property would require a combined salary of 100k per annum and a deposit of at least 40k.

Now say that couple are earning 100k a year together and are currently renting their own place in Dublin at 2k a week.

After tax, they might be seeing 70k a year, would that be a fair estimate?

So 24k of their after tax earnings (35%) of what they earn in a year is dead money on rent. Now they have to save up 40k - on their salaries it will probably take about 4 years if they starting from scratch which they likely would be if they are a young couple based in Dublin.

Running a car is expensive, insurance, tax, fuel, services - could be another 3-4k a year, possibly x2 for them. The alternative of public transport to and from work is likely going to be return a similar enough cost.

Utility bills - heating, electricity, bins, broadband, TV. Probably another 4-5k there in a year, possibly more.

Sot that's another 10-15k gone. You're probably now at 40k.

What would groceries be in a year? Would 5k cover a couple for the year?

Now you're at 45k of your 70k wrapped up and that's just on your basic needs.

How many weddings would a young couple have in a year? Anything from 3-4 to 7-8 I'd say. Between stags, hens and weddings probably the guts of 1k each time.

Medical expenses? Health insurance?

Gym memberships, playing sports, holidays, social life, getting a few non-essential items through the year?

Every cent you earn is gone if you want to live an anywhere near decent standard of life if you're stuck in the rental bubble in Dublin.

And that's a couple on decent jobs - just forget it for a single person, don't even go there.

All of the above is very true. And I'm aware that plenty of couples don't earn a combined 100k, or anywhere close to it.
It's not easy to save when paying a lot of rent. I know people who moved back with their parents for 2-3 years in some cases, in order to save a deposit. No fun!
I'm also aware that working in tech , one can forget that they are in a bubble that is not representative if wider society. But still has the ability to distort the market. There are many young(-ish) people in Dublin , working in tech, who have made a lot of money in the past few years on stock options. Even after tax it can come to multiples of annual salary. Especially if one accrued these shares prior to IPO. The 30 Coinbase employees in Dublin got a combined $27m (roughly, at IPO price point) which they will be able to sell (after paying 52% tax) in a few months if they wish. This is an extreme example, but plenty out there getting large 5 figure sums, that are no doubt fuelling property purchases and distorting the market.

And that's the problem isn't it?

People with money are going to invest in property as there is no safer investment at the minute.

The issues is why is govt policy fueling this rather than tackling it? It can't be that hard to draft legislation or increase taxation whereby private investors will not stand to make an absolute fortune through investment in residential property.

I put it up earlier that the mortgage for a 450k home is probably around 1600 pm.
The rental price of a similar property is likely well in excess of 2k.

And that's the issue there - I'd say 70% of couples in Dublin who are currently renting up in Dublin cannot afford to save the deposit up to get a mortgage.
So these investors are coming in and buying property and are then fleecing those people even further with the rental market and gov policy not only enables it but actively encourages it.

Look at the HAP and RAS schemes - look at the annual cost of that to the taxpayer and who benefits - private landlords. FFG policies that consistently damage first time buyers chances but consistently benefit private landlords and vulture funds.



GAA FUNDING CHEATS CHEAT US ALL

seafoid

Affordability is a function of income and deposit.

Average earnings last year  were EUR 40,283
6 out of 10 earned less than 36,000

By definition a large chunk of the population do not have the means to buy a house.
This is a political issue.
"f**k it, just score"- Donaghy   https://www.youtube.com/watch?v=IbxG2WwVRjU

RedHand88

Quote from: Hound on May 17, 2021, 02:20:28 PM
Quote from: thebigfella on May 17, 2021, 01:54:29 PM
There is more to life than just work, hence why people and especially young people like city living.

Decentalising jobs to mulligar sounds great in theory but in reality young people dont want to live there because there is fcuk all to do. Hence why the big tech companies are based in dublin, because they can attract the best talent not just with the job but the lifestyle.
But if more people were living in Mullingar, there would be more to do!

I spent a long weekend in Athlone last summer, and there was loads to do.

There is a mindset out there though that you need to move to Dublin to be regarded as successful. And the people left behind will be left behind. That won't change overnight.

But I do think working from home over the last 14 months has been a game changer. IDA have been battling for a number of years to persuade new entrants they don't need to be in Dublin.

Although it will be interesting to hear from people who work in Dublin, but who moved back home during the pandemic. Did it make you miss Dublin more? Or did it make you think quality of life could be better if you lived in your home county?

Lived between Belfast and Dublin from 2006 to the present day. Moving back to Tyrone next month and it can't come quick enough! The last 15 months in Belfast, with no garden, have been miserable. The pandemic has really taught me the important things about where you live. That's no disrespect to anyone who has spent their whole lives in an urban environment, but I've just really missed green space and when there are no shops, bars or restaurants, what's the point in living in a city?

RadioGAAGAA

Quote from: thewobbler on May 17, 2021, 08:48:51 AM
Quote from: RadioGAAGAA on May 17, 2021, 07:24:43 AM
Quote from: seafoid on May 05, 2021, 08:47:32 AM
Minister for Housing Darragh O'Brien said on Tuesday that he did not approve of investment funds purchasing almost entire new estates.

"Do investors have a role here, in housing in Ireland? Yes, they do as they do in most western European countries."

No they f**king don't.

When the price of rent is equivalent to a mortgage, if not more - then they absolutely have no business near domestic property.

If I were in charge, the simple rules would be:
- a house must be owned by an individual.
- no individual can own more than 2 houses (with a 5 exemption year period for inheritance matters).

Simple and to the point.

I'm sure folks will point toward student housing etc - to which I'd respond - so what? There will be enough people willing to invest their "second" house as a student house and rent it to sort that out - without requiring investment companies etc.

I want to agree with you, but the logistics involved in a housing chain (if sale A falls through, then sale B falls too, so sale C can't happen, and sale D has to come off the market) would make your proposal one of extraordinary stress, luck,  and legal intervention.

If you refer to my earlier post about increasing capital gains tax to the point that only rental companies would aspire to own multiple properties, I think it achieves the same goals, but more efficiently

Eh?

I don't see what difference a chain makes to the whole thing.

Chains exist now. They existed in the past and they'll exist in the future.

Having investment vultures snap up houses may make chains shorter - but that is an exceptionally poor reason for supporting their continued existence.
i usse an speelchekor

thewobbler

The problem is that from the midway point of a chain up, there is a high likelihood that the person involved would have a second investment property. Anyone in that situation, regardless of available capital, is stuck from purchasing until they've sold up.

Currently chains break because buyers get cold feet, and because buyers can't raise the capital. But they don't break because a person who really wants a house and can afford it all ends up, is landlocked.

Rossfan

I see a certain TD has no problem getting "on the housing ladder". And near the top of it too.
Davy's given us a dream to cling to
We're going to bring home the SAM

seafoid

Houses are like shares.
Ni uasal agus iseal ach thuas seal agus thios seal.
"f**k it, just score"- Donaghy   https://www.youtube.com/watch?v=IbxG2WwVRjU

seafoid

The real economy is weaker than people think . House prices can fall as well as rise

https://www.irishtimes.com/life-and-style/as-yet-another-shop-closes-can-grafton-street-survive-1.4566666

On Dublin's Grafton Street, a host of shops, formerly occupied by the likes of Tommy Hilfiger, Fitzpatricks, Ecco, Urban Decay, Pamela Scott, Topman, Monsoon and Cath Kidston, will remain closed. In fact, almost one in five shops on the street won't be reopening today.

And they may not be the only ones.

"I wouldn't be surprised if a couple of [other] shops don't reopen," says Eoin Feeney, deputy managing director and head of retail at BNP Paribas Real Estate Ireland.
Hugo Boss agreed a 24 per cent reduction on its rent when it agreed a new 10-year lease at 67/68 Grafton Street in January of this year, equating to €1,177 per square metre, while Tommy Hilfiger recently agreed to pay a year's rent just to exercise its 15-year break option early. If and when a replacement is found for the unit, it's unlikely to be at previous levels.
"f**k it, just score"- Donaghy   https://www.youtube.com/watch?v=IbxG2WwVRjU

bennydorano

#100
The housing market always seems to he on the precipice of an exploding bubble (UK) & permanently in one in the ROI. It's a house of cards that always seems to just about remain upright. The inflationary explosion that is coming post lock isn't going to help.

trailer

Quote from: seafoid on May 18, 2021, 12:31:23 PM
The real economy is weaker than people think . House prices can fall as well as rise

https://www.irishtimes.com/life-and-style/as-yet-another-shop-closes-can-grafton-street-survive-1.4566666

On Dublin's Grafton Street, a host of shops, formerly occupied by the likes of Tommy Hilfiger, Fitzpatricks, Ecco, Urban Decay, Pamela Scott, Topman, Monsoon and Cath Kidston, will remain closed. In fact, almost one in five shops on the street won't be reopening today.

And they may not be the only ones.

"I wouldn't be surprised if a couple of [other] shops don't reopen," says Eoin Feeney, deputy managing director and head of retail at BNP Paribas Real Estate Ireland.
Hugo Boss agreed a 24 per cent reduction on its rent when it agreed a new 10-year lease at 67/68 Grafton Street in January of this year, equating to €1,177 per square metre, while Tommy Hilfiger recently agreed to pay a year's rent just to exercise its 15-year break option early. If and when a replacement is found for the unit, it's unlikely to be at previous levels.

Using shop closers as a measurement for the economy is useless. Retail is closing as ppl are changing their habits. People should thank Covid for fast forwarding its demise. Retail was dead 5 years ago, people just refused to believe it.
There are also lots of opportunities in the hospitality sector that these employees can transfer into. So I can't see much of an issue. Locally all hospitality businesses are hiring, and in one case they said if they can't get staff they won't be able to open. If you don't have a job at the minute you simply don't want one.



seafoid

Quote from: trailer on May 18, 2021, 04:42:28 PM
Quote from: seafoid on May 18, 2021, 12:31:23 PM
The real economy is weaker than people think . House prices can fall as well as rise

https://www.irishtimes.com/life-and-style/as-yet-another-shop-closes-can-grafton-street-survive-1.4566666

On Dublin's Grafton Street, a host of shops, formerly occupied by the likes of Tommy Hilfiger, Fitzpatricks, Ecco, Urban Decay, Pamela Scott, Topman, Monsoon and Cath Kidston, will remain closed. In fact, almost one in five shops on the street won't be reopening today.

And they may not be the only ones.

"I wouldn't be surprised if a couple of [other] shops don't reopen," says Eoin Feeney, deputy managing director and head of retail at BNP Paribas Real Estate Ireland.
Hugo Boss agreed a 24 per cent reduction on its rent when it agreed a new 10-year lease at 67/68 Grafton Street in January of this year, equating to €1,177 per square metre, while Tommy Hilfiger recently agreed to pay a year's rent just to exercise its 15-year break option early. If and when a replacement is found for the unit, it's unlikely to be at previous levels.

Using shop closers as a measurement for the economy is useless. Retail is closing as ppl are changing their habits. People should thank Covid for fast forwarding its demise. Retail was dead 5 years ago, people just refused to believe it.
There are also lots of opportunities in the hospitality sector that these employees can transfer into. So I can't see much of an issue. Locally all hospitality businesses are hiring, and in one case they said if they can't get staff they won't be able to open. If you don't have a job at the minute you simply don't want one.
I disagree. Retail is an important barometer of overall demand.
In the UK, Debenhams collapsed. Boohoo which is internet only bought the brand and website only. 10,000 jobs were lost.
What counts is demand. If 100 retail jobs are replaced by 20 online jobs at lower pay, demand falls. If this is repeated across the economy, house prices are not sustainable .
Too many indicators are saying the same thing.
"f**k it, just score"- Donaghy   https://www.youtube.com/watch?v=IbxG2WwVRjU

trailer

Quote from: seafoid on May 18, 2021, 08:10:13 PM
Quote from: trailer on May 18, 2021, 04:42:28 PM
Quote from: seafoid on May 18, 2021, 12:31:23 PM
The real economy is weaker than people think . House prices can fall as well as rise

https://www.irishtimes.com/life-and-style/as-yet-another-shop-closes-can-grafton-street-survive-1.4566666

On Dublin's Grafton Street, a host of shops, formerly occupied by the likes of Tommy Hilfiger, Fitzpatricks, Ecco, Urban Decay, Pamela Scott, Topman, Monsoon and Cath Kidston, will remain closed. In fact, almost one in five shops on the street won't be reopening today.

And they may not be the only ones.

"I wouldn't be surprised if a couple of [other] shops don't reopen," says Eoin Feeney, deputy managing director and head of retail at BNP Paribas Real Estate Ireland.
Hugo Boss agreed a 24 per cent reduction on its rent when it agreed a new 10-year lease at 67/68 Grafton Street in January of this year, equating to €1,177 per square metre, while Tommy Hilfiger recently agreed to pay a year's rent just to exercise its 15-year break option early. If and when a replacement is found for the unit, it's unlikely to be at previous levels.

Using shop closers as a measurement for the economy is useless. Retail is closing as ppl are changing their habits. People should thank Covid for fast forwarding its demise. Retail was dead 5 years ago, people just refused to believe it.
There are also lots of opportunities in the hospitality sector that these employees can transfer into. So I can't see much of an issue. Locally all hospitality businesses are hiring, and in one case they said if they can't get staff they won't be able to open. If you don't have a job at the minute you simply don't want one.
I disagree. Retail is an important barometer of overall demand.
In the UK, Debenhams collapsed. Boohoo which is internet only bought the brand and website only. 10,000 jobs were lost.
What counts is demand. If 100 retail jobs are replaced by 20 online jobs at lower pay, demand falls. If this is repeated across the economy, house prices are not sustainable .
Too many indicators are saying the same thing.

High street retail was already dead Covid or no Covid. It'll have minimal effect on house prices.

seafoid

Quote from: trailer on May 18, 2021, 09:11:02 PM
Quote from: seafoid on May 18, 2021, 08:10:13 PM
Quote from: trailer on May 18, 2021, 04:42:28 PM
Quote from: seafoid on May 18, 2021, 12:31:23 PM
The real economy is weaker than people think . House prices can fall as well as rise

https://www.irishtimes.com/life-and-style/as-yet-another-shop-closes-can-grafton-street-survive-1.4566666

On Dublin's Grafton Street, a host of shops, formerly occupied by the likes of Tommy Hilfiger, Fitzpatricks, Ecco, Urban Decay, Pamela Scott, Topman, Monsoon and Cath Kidston, will remain closed. In fact, almost one in five shops on the street won't be reopening today.

And they may not be the only ones.

"I wouldn't be surprised if a couple of [other] shops don't reopen," says Eoin Feeney, deputy managing director and head of retail at BNP Paribas Real Estate Ireland.
Hugo Boss agreed a 24 per cent reduction on its rent when it agreed a new 10-year lease at 67/68 Grafton Street in January of this year, equating to €1,177 per square metre, while Tommy Hilfiger recently agreed to pay a year's rent just to exercise its 15-year break option early. If and when a replacement is found for the unit, it's unlikely to be at previous levels.

Using shop closers as a measurement for the economy is useless. Retail is closing as ppl are changing their habits. People should thank Covid for fast forwarding its demise. Retail was dead 5 years ago, people just refused to believe it.
There are also lots of opportunities in the hospitality sector that these employees can transfer into. So I can't see much of an issue. Locally all hospitality businesses are hiring, and in one case they said if they can't get staff they won't be able to open. If you don't have a job at the minute you simply don't want one.
I disagree. Retail is an important barometer of overall demand.
In the UK, Debenhams collapsed. Boohoo which is internet only bought the brand and website only. 10,000 jobs were lost.
What counts is demand. If 100 retail jobs are replaced by 20 online jobs at lower pay, demand falls. If this is repeated across the economy, house prices are not sustainable .
Too many indicators are saying the same thing.

High street retail was already dead Covid or no Covid. It'll have minimal effect on house prices.
On its own it won't. But all the jobs lost over a year, the fact that Central Banks can't restore equilibrum, Brexit, the fact that the credit transmission mechanism is broken- it's all pointing in one direction. There is going to be another housing crash. Most models are backward looking. That doesn't help.   
"f**k it, just score"- Donaghy   https://www.youtube.com/watch?v=IbxG2WwVRjU