Rents to rise to 2500 a month in Dublin

Browney7 · 14-02-2018 12:58pm

....... wrote: »

It is NOT half the profit.

Christ if that was the case it really would be worthwhile being a landlord!

Its half the rental income. Yes, you can make deductions, but the tax is applied on the rental income less deductions, not on the profit.

The piece of the repayment to repay the capital borrowed is not a loss. It's merely repaying cash you didn't have in the first place. You are cashflow negative when you pay the tax on the rental income but you aren't making a loss by paying tax.

Samuel T. Cogley · 14-02-2018 1:02pm

Mickiemcfist wrote: »

Increasing supply is the only method of reducing rents, which should surely be the priority.

Supply is going to take time to come on stream in an environment that is hostile to LL's. Rent's are going one way for a long time yet if the current policy of forcing the smaller LL's out in favour of REITs continues.

Any meaningful supply will be bought by owner occupiers unless it's a specific development for rental which will have a gym membership thrown in and a weekly rental of what I paid a month when I was renting during the last boom.

It's also far from a misuse of funds. At the moment the money is taxed when earned and taxed again when the tenant hands it over to the LL. The exchequer is getting two bites at the apple which is completely unfair to private tenants.

Samuel T. Cogley · 14-02-2018 1:03pm

Browney7 wrote: »

The piece of the repayment to repay the capital borrowed is not a loss. It's merely repaying cash you didn't have in the first place. You are cashflow negative when you pay the tax on the rental income but you aren't making a loss by paying tax.

It's still not a tax on profit and far from a risk free investment either.

Blazer · 14-02-2018 1:05pm

LirW wrote: »

There is no way in hell you do Cashel - Dublin in 90 minutes during the week if you have to leave from within the M50.
Also IT staff needs stable internet, that's a huge problem in a lot of rural and affordable areas.
Ireland doesn't have the infrastructure beyond Dublin to accommodate remote workforce. And I'm not talking about people that live in once-off housing, there are a lot of people in commuter towns that have a bad broadband connection that wouldn't allow remote working.

Also changing profession or shop-work is all nice but a lot of the areas you have in mind have virtually no job vacancies. For everything that comes up, you have 100 people that instantly jump at it.

You’d swear the rest of the country didn’t have internet.
In Limerick there’s plenty of towns with fibre and it’s way to do remote working.
I work in IT in a large company in Limerick and it’s very easy to work from home. In fact they have remote working schemes.
Same goes for cork when I worked down there.
Before there was a big difference in wages between Limerick and Dublin in IT but not anymore.
I’ve a great career in Limerick and have changed jobs on a number of occasions easily.
There isn’t a hope of hell i’d ever move to Dublin. I’d move abroad before that.
Spending 2k on rent. Houses in traffic jams, junkies walking everywhere, shootings in daylight and all for maybe 5k more. No way.

Samuel T. Cogley · 14-02-2018 1:06pm

Blazer wrote: »

Spending 2k on rent. Houses in traffic jams, junkies walking everywhere, shootings in daylight and all for maybe 5k more. No way.

Come on Limerick isn't that bad. :pac:

awec · 14-02-2018 1:09pm

strandsman wrote: »

I can't understand why some IT professionals or other who can work mostly from home don't move out to the midlands and pay rent of 600pm or purchase for 100K . Even if a person had to commute to Dublin for 1-2 days a week how bad? Take Cashel for example, 700pm rent and 90 mins from Dublin/Cork/Limerick/Galway. Why do people go through with the missery of 600K mortgage, 2K rent, Traffic congestion etc etc. When will people cop on to the fact that the reason why living is so expensive in Dublin is because all the Jobs are there. If the jobs were spread around the country then people can return to or near their place of origin instead of moving to Dublin for work. On the other hand I know a few people living in Dublin because they say there is nothing for their profession closer to home and they speak of the misery of living in Dublin but when I suggest that they would be better off financially to locate closer to home and change profession or work in a shop or open a local practice etc they say they couldn't mainly because their profession and career is so important to them! Brain washed I say!

Why on earth would anyone who goes to the effort of getting professional qualifications go and work in a shop to live in the likes of Cashel? That is mental.

Most young IT professionals want careers, they want the hustle and bustle of city life, they want to be around like-minded people. While money in your pocket is important it is not the only factor, I am sure they could go and get some more money in their pocket every month but at the expense of being bored off their head with their job and their life.

Maybe there are some industries that would be suited to being moved to other population centres other than Dublin, but IT will always be heavily concentrated in Dublin.

Blazer · 14-02-2018 1:24pm

awec wrote: »

Maybe there are some industries that would be suited to being moved to other population centres other than Dublin, but IT will always be heavily concentrated in Dublin.

I wouldn’t say IT is heavily concentrated in Dublin.
You have Apple in Cork, Dell in Limerick and HP in Galway. Maybe some of the smaller companies.
I imagine Dublin is more finance ?
In fact IT is one of the few industries that should be pushed to be situated in Dublin, Cork, Galway, Limerick and say Waterford.
Not sure about Waterford but all the rest and their commuter towns have excellent broadband and businesses should be encouraged to set up in one and not try to push everything to Dublin.
Maybe financial incentives ie lower Corp tax to locate in Waterford etc as opposed to Dublin. That way you relieve some of the pressure on Dublin and build up other cities. And if people decide they want to move from Dublin to Waterford then there are opportunities for them there.

McCrack · 14-02-2018 1:26pm

LirW wrote: »

There is no way in hell you do Cashel - Dublin in 90 minutes during the week if you have to leave from within the M50.
Also IT staff needs stable internet, that's a huge problem in a lot of rural and affordable areas.
Ireland doesn't have the infrastructure beyond Dublin to accommodate remote workforce. And I'm not talking about people that live in once-off housing, there are a lot of people in commuter towns that have a bad broadband connection that wouldn't allow remote working.

Also changing profession or shop-work is all nice but a lot of the areas you have in mind have virtually no job vacancies. For everything that comes up, you have 100 people that instantly jump at it.

Cashel to Thurles train station 20 min

Thurles to Heuston Station 1 hr 15 min

....And you can work on the train

It's doable if its one or two days a week

mloc123 · 14-02-2018 1:29pm

Blazer wrote: »

I wouldn’t say IT is heavily concentrated in Dublin.
You have Apple in Cork, Dell in Limerick and HP in Galway. Maybe some of the smaller companies.
I imagine Dublin is more finance ?
In fact IT is one of the few industries that should be pushed to be situated in Dublin, Cork, Galway, Limerick and say Waterford.
Not sure about Waterford but all the rest and their commuter towns have excellent broadband and businesses should be encouraged to set up in one and not try to push everything to Dublin.
Maybe financial incentives ie lower Corp tax to locate in Waterford etc as opposed to Dublin. That way you relieve some of the pressure on Dublin and build up other cities. And if people decide they want to move from Dublin to Waterford then there are opportunities for them there.

A lot of the bigger development based multis are in Dublin... Facebook, Google, Paypal, Amazon, AirBnb etc..

The issue as I see it (I work for a US based IT company in Dublin) is that we are importing a lot of qualified workers from Europe and Asia, that is fine but for the most part they want to be based in Dublin if they move over. Makes it easier to move job after a few years.

McCrack · 14-02-2018 1:31pm

Blazer wrote: »

You’d swear the rest of the country didn’t have internet.
In Limerick there’s plenty of towns with fibre and it’s way to do remote working.
I work in IT in a large company in Limerick and it’s very easy to work from home. In fact they have remote working schemes.
Same goes for cork when I worked down there.
Before there was a big difference in wages between Limerick and Dublin in IT but not anymore.
I’ve a great career in Limerick and have changed jobs on a number of occasions easily.
There isn’t a hope of hell i’d ever move to Dublin. I’d move abroad before that.
Spending 2k on rent. Houses in traffic jams, junkies walking everywhere, shootings in daylight and all for maybe 5k more. No way.

You lost me with "junkies walking everywhere, shootings in daylight"

thierry14 · 14-02-2018 1:33pm

Blazer wrote: »

I wouldn’t say IT is heavily concentrated in Dublin.
You have Apple in Cork, Dell in Limerick and HP in Galway. Maybe some of the smaller companies.
I imagine Dublin is more finance ?
In fact IT is one of the few industries that should be pushed to be situated in Dublin, Cork, Galway, Limerick and say Waterford.
Not sure about Waterford but all the rest and their commuter towns have excellent broadband and businesses should be encouraged to set up in one and not try to push everything to Dublin.
Maybe financial incentives ie lower Corp tax to locate in Waterford etc as opposed to Dublin. That way you relieve some of the pressure on Dublin and build up other cities. And if people decide they want to move from Dublin to Waterford then there are opportunities for them there.

Its pharmaceutical with all the well paying jobs in Limerick/Cork now

Loads of opportunities sadly

Everyone is sick

Mickiemcfist · 14-02-2018 1:40pm

Samuel T. Cogley wrote: »

Supply is going to take time to come on stream in an environment that is hostile to LL's. Rent's are going one way for a long time yet if the current policy of forcing the smaller LL's out in favour of REITs continues.

Any meaningful supply will be bought by owner occupiers unless it's a specific development for rental which will have a gym membership thrown in and a weekly rental of what I paid a month when I was renting during the last boom.

It's also far from a misuse of funds. At the moment the money is taxed when earned and taxed again when the tenant hands it over to the LL. The exchequer is getting two bites at the apple which is completely unfair to private tenants.

Yes supply is taking a long time currently, as the govt isn't investing correctly. I work with a construction firm who just got advised by the council to increase the housing density of their proposed site, so it's nice to see positive moves like that. The problem being the 20% interest charged on the site purchase until it's got FPP.

Your second point is correct to a point, I'd imagine mostly owner occupiers will buy the new houses....but those prospective owner occupiers currently live somewhere. Owner occupiers dont go directly from holles st hospital to owning a house, so wherever they are renting will be free to new tenants, in a hopefully less constrained market due to hopefully many houses being sold at the same time.

Re the tax point, that's literally how tax works.

You get your after tax salary, you buy a mars bar, you pay vat on Mars bar, your mars bar shop pays income tax on the profit on the mars bar, the wholesaler pays tax on the profit of the mars bar to the mars bar shop. Mars Ireland pay tax on the profit on sale of the mars bar to the mars bar wholesaler.

Same in pretty much any industry you care to think of, why should LL's be any different?

Anthony123123 · 14-02-2018 1:40pm

Why are high rise buildings not being build? I think it is a case of poor education in the country they don't even look for solutions, just poor bs out of their mouths SAD

...__... · 14-02-2018 1:43pm

McCrack wrote: »

Cashel to Thurles train station 20 min

Thurles to Heuston Station 1 hr 15 min

....And you can work on the train

It's doable if its one or two days a week

And then Hueston to wherever you work which if its down in the docklands will probably take at least 30 mins through traffic.

Another big problem is transport within the city
Say you are a waiter on minimum wage in a city restaurant, without 24 hour public transport they have to rent in the city as they have no income to spend on taxis home its all spent on rent.
If the bus service ran even once an hour at night people could look further out than walking distance.

mloc123 · 14-02-2018 1:44pm

...__... wrote: »

And then Hueston to wherever you work which if its down in the docklands will probably take at least 30 mins through traffic.

Another big problem is transport within the city
Say you are a waiter on minimum wage in a city restaurant, without 24 hour public transport they have to rent in the city as they have no income to spend on taxis home its all spent on rent.
If the bus service ran even once an hour at night people could look further out than walking distance.

My American co-workers laughed when I told them public transport in Dublin shuts down at 11pm and starts again at 6.30am..

Mickiemcfist · 14-02-2018 1:47pm

Anthony123123 wrote: »

Why are high rise buildings not being build? I think it is a case of poor education in the country they don't even look for solutions, just poor bs out of their mouths SAD

Two reasons, 1 is very stupid Dublin city council planning, who ban over 7 stories except for special exemptions given for god knows what reasons.

2nd is that construction materials, labour & professional services in Ireland are significantly more expensive than in many other countries & land prices in Dublin haven't got to the point where the added expense of building upwards adds to the return. There are diminishing returns the further up you go, so it's simpler to build a massive field in Swords & build simple 3 bed semi's & less hassle with planning.

Samuel T. Cogley · 14-02-2018 1:53pm

Mickiemcfist wrote: »

Re the tax point, that's literally how tax works.

You get your after tax salary, you buy a mars bar, you pay vat on Mars bar, your mars bar shop pays income tax on the profit on the mars bar, the wholesaler pays tax on the profit of the mars bar to the mars bar shop. Mars Ireland pay tax on the profit on sale of the mars bar to the mars bar wholesaler.

Same in pretty much any industry you care to think of, why should LL's be any different?

LL's shouldn't, tenants should as there is a true crisis in the rental market at the moment.

dudara · 14-02-2018 1:56pm

bigpink wrote: »

Surely all theae non eu people here are driving rents up
Seems to be tonnes of Brazilians Indians etc here
Just going by Facebook rent groups

Who do think are the tenants in all those horror stories we see? The 14 bunk beds in a room type of thing. The misery of the current rental market is far far worse for those at the bottom.

Samuel T. Cogley · 14-02-2018 1:59pm

Mickiemcfist wrote: »

Two reasons, 1 is very stupid Dublin city council planning, who ban over 7 stories except for special exemptions given for god knows what reasons.

2nd is that construction materials, labour & professional services in Ireland are significantly more expensive than in many other countries & land prices in Dublin haven't got to the point where the added expense of building upwards adds to the return. There are diminishing returns the further up you go, so it's simpler to build a massive field in Swords & build simple 3 bed semi's & less hassle with planning.

I was all for the banning of high rises - we don't need them, we're not that bad. Apparently we're the fourth most expensive city on the planet. Time to start acting like it and building UP.

One of the concerns is climate believe it or not but I'll take that one under advisement.

[Deleted User] · 14-02-2018 2:00pm

mloc123 wrote: »

My American co-workers laughed when I told them public transport in Dublin shuts down at 11pm and starts again at 6.30am..

I find that very hard to believe, in general in the US (bar maybe the subway in NY and possibly another exception or two) public transport is very poor and is seen as a thing for those who can't afford a car. If you don't drive in the US you are on a hiding to nothing, I have a friend over there who got laughed at for walking to work even though it was only 10 mins and this is in silicon valley in a big tech company. The only way to get to work is driving in most parts of the US.

LirW · 14-02-2018 2:00pm

McCrack wrote: »

Cashel to Thurles train station 20 min

Thurles to Heuston Station 1 hr 15 min

....And you can work on the train

It's doable if its one or two days a week

The 2 commuter trains from Irish rails take around 1,5hours in the morning plus the time you'll spend on Bus/Luas if you work in IFSC for example.
It's also a mental route to drive.
We're living in the very south of Co. Wicklow and it takes my partner almost 2 hours in the morning to get into the City Centre using Wexford bus. Wexford bus is significantly faster than BE too.
He's lucky enough to have flexi time and can take buses that are less busy and in and out of town faster but if he wouldn't have it, he'd certainly spend a lot of time on the N11 in Bray.

Mickiemcfist · 14-02-2018 2:08pm

Samuel T. Cogley wrote: »

LL's shouldn't, tenants should as there is a true crisis in the rental market at the moment.

I agree but there (shouldn't be, but would) be a significant admin cost to implementing this, then the actual cost of reducing the tax.

Rough calc: There's 500k houses being rented in Ireland, say 12k per year on average, so annual c.3bn tax take.

That cash is so much more valuable long term if it's used to stop the crisis at its root cause, not reduce the impact of the existing crisis on an annual basis. You're suggesting a cost, I'm suggesting investment.

There's a certain ceiling to how high rents can conceivably go, people will run out of cash sometime as annual salary increases are nowhere near housing inflation & people will have to go north, west or south of Dublin. If we just build more houses here none of that would be necessary.

Mickiemcfist · 14-02-2018 2:20pm

Samuel T. Cogley wrote: »

I was all for the banning of high rises - we don't need them, we're not that bad. Apparently we're the fourth most expensive city on the planet. Time to start acting like it and building UP.

One of the concerns is climate believe it or not but I'll take that one under advisement.

I've never seen any data showing us as inside the top 20 for land prices, where did you see that?

I'm all for building up in select areas, from custom house down to the port & all around silicon docks etc. It doesn't make financial sense to do so, but I'm all for anyone who's willing to build up, Johnny Ronan is currently attempting it at Tara st & I actually like the proposed building. Urban sprawl has to be worse for the environment than denser cities *I have nothing specific backing up that opinion, just gut feel

Fian · 14-02-2018 2:35pm

I let an appartment in early 2015, shortly after I bought it in late 2014.

Before the 12 month rent review came up the review period was extended to 24 months by legislation.

By the end of 2016 it was significantly below market rent but at least the rent review date was coming up in early 2017.

Nope more legislation comes along. Now i can increase rent by 2% per annum for the preceding two years + 90 days, with the new rent to come into effect 90 days later. Leaving me well short of market rents.

The rent I receive is still relatively high, but after tax and allowable expenses what remains is far short of what would be required to cover the mortgage. I expected that, did not expect to clear the mortgage after tax, and nor should i have expected my tenants to effectively buy my apartment for me. Even so listening to media commentary I really don't recognise my situation as the one being painted in terms of landlords laughing maniacly as they pocket their rents and turn the screw ever tighter on their poor tenants. I am subsidising a mortgage every month out of my after tax salary, with the rental income being used to pay for part of that but not all - so i clearly have less money in my pocket at the end of the month because I am a landlord than would be the case if I hadn't bought that apartment. And my mortgage was around 55% LTV, so it is not like I didn't also invest a chunk of savings.

So if its so tough why not just sell up? Well tbh that was always part of the plan and I will be able to sell CGT free after holding it for 4 years, down from 7 under the original scheme. Only problem is now my sale price will be negatively affected by the below market rent I am charging, which below market rent will bind future tenancies and any future owner. I would like to see it being permittable for landlords to revert to market rates for new tenancies or at least for new owners not to be bound by the rents previously set by vendors. It is unfortunate for me that the one bed apartment we have is unlikely to attract someone buying a place to live themselves, it is more targeted at investors.

The goal posts are well and truly moved from where they were when i originally bought. It does irritate me that many less scrupulous landlords are avoiding the rules and causing rents to increase by the amount set out in this report. I would be in favour of a public register of rents. It may not happen in part because that would be very clear evidence of the impact on private property rights caused by the legislation - comparing the unrestricted rents with rents complying with RPZ rules. Bear in mind that any property (first) let after January 2016 is permanently outside the RPZ rules - rent can increase to market rates every time the rent is reviewed and a review can take place every 12 months. That anomaly may be addressed by amending legislation at some point, though presumably it was included to encourage new supply to be brought to the market.

Having said all of that I do sympathise with the rents young people are being asked to pay. I have four teenagers of my own, can't see them being able to move out of our home any time soon. At least they have a home in Dublin they can live in.

Very hard to legislate effectively in this area when supply is so low.

Grayson · 14-02-2018 2:49pm

Harlan Puny Duet wrote: »

I find that very hard to believe in general in the US (bar maybe the subway in NY and possibly another exception or two) public transport is very poor and is seen as a thing for those who can't afford a car. If you don't drive in the US you are on a hiding to nothing, I have a friend over there who got laughed at for walking to work even though it was only 10 mins and this is in silicon valley in a big tech company. The only way to get to work is driving in most parts of the US.

I've been in the valley and it's like that. The guys I work with even drive to lunch.
I had a friend who was in SLC for two weeks for work and walked to the office from the hotel. The cops stopped to ask him if he was ok.

Bob24 · 14-02-2018 2:50pm

mloc123 wrote: »

My American co-workers laughed when I told them public transport in Dublin shuts down at 11pm and starts again at 6.30am..

Last time I went to a similarly sized US city public transport was very limited or nonexistent as soon as you left the small enough downtown area.

Not saying we have great public transport here ... many similarly sized European and Asian cities have much better, but coming from an American :-D

zetalambda · 14-02-2018 4:06pm

mloc123 wrote: »

My American co-workers laughed when I told them public transport in Dublin shuts down at 11pm and starts again at 6.30am..

Apparently in London they refer to Dublin as "the city that always sleeps".

CalRobert · 14-02-2018 4:33pm

Grayson wrote: »

I've been in the valley and it's like that. The guys I work with even drive to lunch.
I had a friend who was in SLC for two weeks for work and walked to the office from the hotel. The cops stopped to ask him if he was ok.

Tbf there's a reason loads of people are bussed from SF to their job in silicon valley (or take caltrain). Not everyone there wants to live in desolate suburban hellscape and not walk anywhere. There's a lot of self sorting - people who hate walking tend to live in sv. People who hate suburbia in SF.

frefrefre · 14-02-2018 4:45pm

Mickiemcfist wrote: »

I've never seen any data showing us as inside the top 20 for land prices, where did you see that?

I'm all for building up in select areas, from custom house down to the port & all around silicon docks etc. It doesn't make financial sense to do so, but I'm all for anyone who's willing to build up, Johnny Ronan is currently attempting it at Tara st & I actually like the proposed building. Urban sprawl has to be worse for the environment than denser cities *I have nothing specific backing up that opinion, just gut feel

You're spot on in your assumption. Urban sprawl puts much more pressure on our transport infrastructure and our greenhouse gas emissions from this sector spiral.
However, in relation to the high rise, there seems to be a suggestion from some quarters that we need to build smarter, denser developments, rather than simply building upwards which can lead to a lot of the space being taken up by extra lift shafts or fire escapes. I'm skeptical of this and it emanates from some of our influential green/left members of society who see high rise anywhere as an affront to Dublin's character.
Simply, we need an area, the north docks would be my choice, where we build very tall buildings. I really couldn't care who's view in Clontarf or Sandymount is blocked.
They can't keep on ignoring this whilst at the same time, marketing ourselves as open for business. People need to live in the city!

mloc123 · 14-02-2018 9:23pm

Harlan Puny Duet wrote: »

I find that very hard to believe, in general in the US (bar maybe the subway in NY and possibly another exception or two) public transport is very poor and is seen as a thing for those who can't afford a car. If you don't drive in the US you are on a hiding to nothing, I have a friend over there who got laughed at for walking to work even though it was only 10 mins and this is in silicon valley in a big tech company. The only way to get to work is driving in most parts of the US.

Well they were from large cities. In general I agree with you, americans drive. When I am in our Palo Alto office I will walk the 10-15 mins from the hotel to the office... while they will drive from the same hotel.

Rents to rise to 2500 a month in Dublin

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