Future price of Irish properties

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Theo said:
Also, my experience of the UK market is not yours. I own 3 BTLs over in the UK and achieve 13-15% rental yields before tax (cash yields, not gross yields so these are directly comprable to deposit rates) and I have also achieved 25% capital gains (again , received these in cash from the bank tax free when i re-financed) in a priod ranging 6-12 months. There is a significant shortgae of housing supply in the UK over the next 10-15 years.
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Hi,

Slightly OT - but how do you get your cash out tax-free out of the UK properties - you will have to pay CGT on any sale, I would have thought? If you take it out as equity withdrawal, do you bank the eventual CGT charge? I have a house rented out in London and therefore any tax issues are very interesting!
 
Gross rental yields are just below 6% in England at present. Net yields are anyone’s guess.

I’ve seen stuff selling at 4% gross for new build, netting 2% after service charges, management and voids. There are good yielding investments in the UK however these are typically in secondary markets.


Quarterly figures from Landlord Mortgages have revealed rental yields in England have fallen to 5.87per cent - their lowest in three years.

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http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=829&cat=44-0-0



Yes Neffa; I’ve kept you in suspense long enough. Thought my little anecdote of financial euphoria would hardly raise an eyebrow in Ireland anymore. I am reliably advised that a house placed for sale on the market for €315,000 ( modern 3 bed semi about 1,200 sq ft)
was purchased by the first person who viewed, they having made an offer on the spot of €335,000., no competing bids. I’ve checked and the tone now (after this sale) for similar properties in the area is (you guessed it) €335,000. The subject property is sale agreed for about 12 days.
 
Hi Neffa

Yes, ultimately when you sell, there is CGT, but currently Irish residents only subject to Irish CGT on sales of UK property. (and is attractive at 20%)

I use the bank proceeds for further investing - not necessarily property, and always careful to be sure that the interest on these loans is being paid for by someone else.
 
Thanks for that Glenbhoy.
On the trade thing, I deal directly with the Inland Revenue myself and they have not raised this issue with me. I would say it is more likely to be an issue with a person who is flipping high volumes of property as this type of person is clearly not interested in providing accomodation needs to certain areas.
 
Theo said:
I would agree with CCOVICH earlier remark about this honest estate agent. If you're so unwilling to believe one person's hype about the property market, then why are you so quick to believe a person's pessimism wothout doing your own research?

Although it depends on where your 3 bed semi was, I would say its highly likely you have lost substantial sums of money by selling out too early. How much would that 3 bed semi be worth in today's market.

Also, my experience of the UK market is not yours. I own 3 BTLs over in the UK and achieve 13-15% rental yields before tax (cash yields, not gross yields so these are directly comprable to deposit rates) and I have also achieved 25% capital gains (again , received these in cash from the bank tax free when i re-financed) in a priod ranging 6-12 months. There is a significant shortgae of housing supply in the UK over the next 10-15 years.

There is opportunity in prperty for anyone that bothers to look, and ignores all the hype on either side of the argument. true, it is harder to find good deals today than yesterday but they exist.
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can you show me a house anywhere in uk for sale now(on a website we can view) that has a rental tield of 13-15% ?? and you borrow in sterling? mortgage rates around 6% there.
 
No, i can't show you a property on a website. I could show you one if you were prepared to spend a morning over there and view some. I didn't use the web when i purchased my BTLs. I spent 2 weeks in the market looking at dozens of places.

Naturally I borrow in sterling and 3 year fixed rates are available today at 4.85%.
 
And here I was thinking that this thread was about the Future price of Irish properties!
 
bearishbull said:
http://www.rte.ie/business/2006/0328/germany.html
ecb expected to raise rates next month raher than later by .25% and then again in august
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I thought a rise was expected in May? If it comes a month earlier than expected this could be a sign of things to come. Listen to what Bernanke says tonight, if it is on the hawkish side then this only furthers the case for a quicker upward movement by the ECB
 
beattie said:
I thought a rise was expected in May? If it comes a month earlier than expected this could be a sign of things to come. Listen to what Bernanke says tonight, if it is on the hawkish side then this only furthers the case for a quicker upward movement by the ECB
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There's no mention in that article of raising rates in April.

The markets had factored in a rates rise in June, with May being a possibility if the figures dictated. I would imagine that these figures suggest a May rise is 75% certain now.
 
Theo said:
No, i can't show you a property on a website. I could show you one if you were prepared to spend a morning over there and view some. I didn't use the web when i purchased my BTLs. I spent 2 weeks in the market looking at dozens of places.

Naturally I borrow in sterling and 3 year fixed rates are available today at 4.85%.
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Still a bit OT - why borrow in sterling when euro rates are lower :confused: ? The currency hedge is not that great. Our loan in the UK is in sterling at a very low fixed rate (with heavy cancellation costs, hence why I am sticking with it) but I could save £200+ pcm at a stroke by putting it into euro.
 
soma said:
Did anyone see the programme..?
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Yes, I did. It was very damning on a number of agents, especially Foxtons who already had a less-than-glowing reputation in the London market. I once posted a complaint about them on a UK message board and head their lawyers call me about it straight away. Their practices included dodgy paperwork, phantom "other bidders", inflated valuations etc. etc.

None of the stuff was that surprising to me. Not sure how much of it is relevant to Ireland, mind you. Not bought here yet, so others can judge more easily than me.

Scariest bit was a mortgage broker who created an entire fraudulent credit history and a fake passport for an unemployed applicant to make it look like they were in a £50,000+ p.a. job. I suspect he will go to jail for what he did. I did find that bit to be really shocking.
 
Theo said:
Hi Neffa

Yes, ultimately when you sell, there is CGT, but currently Irish residents only subject to Irish CGT on sales of UK property. (and is attractive at 20%)

I use the bank proceeds for further investing - not necessarily property, and always careful to be sure that the interest on these loans is being paid for by someone else.
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It remains to be seen what your portfolio will realise if/when they sell at less than you purchased them for. Incidentally interest on loans is never being 'paid for by someone else'! Whether deferred as interest-only the borrower pays and it is disingenuous to suggest otherwise.

Regarding your remarks about shortage of housing stocks.......the financial institutions, estate agents and local councils getting 'backhanders' from developers operate as enthusiastically this side of The Pond as the other!
 
Neffa said:
Still a bit OT - why borrow in sterling when euro rates are lower :confused: ? The currency hedge is not that great. Our loan in the UK is in sterling at a very low fixed rate (with heavy cancellation costs, hence why I am sticking with it) but I could save £200+ pcm at a stroke by putting it into euro.
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Very simply, I'm not prepared to accept the risk that is inherent in borrowing in a currency different from the asset base. For me, property is a long term game and over the long haul, things like currency tend to even themselves out. My opinion is that I would be effectively speculating/gambling/betting by borrowing in euros to buy sterling assets.
 
Marie said:
It remains to be seen what your portfolio will realise if/when they sell at less than you purchased them for. Incidentally interest on loans is never being 'paid for by someone else'! Whether deferred as interest-only the borrower pays and it is disingenuous to suggest otherwise.
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Well, actually, no, it doesn't remain to be seen what my portfolio will realise.
In addition to the 13-15% cash yield I currently receive, I have also realised 25% of the purchase price on all 3 BTLs through re-financing the properties.
As you may know, selling is not the only way to exit a property - refinancing is also an extremely attractive way to get your money back (and it has the added benefit of being tax free).

Its an old adage but you make your money the day you buy, and not the day you sell.

I disagree with your belief that interest is never being paid by someone else. I would never borrow on any other basis (that includes car loans, credit cards, any other loans). The fact is that on each of my borrowings, I have not paid a penny in interest since the day I drew them down. This is more than handsomely covered by the rents I receive( in the case of property borrowings). I'm not being disingenous, I'm not emotional at all about it, I'm simply stating a fact.

You, it seems , are the one introducing emotion into your thread. I don't know why you are worked up about it but maybe you could let me know?

Marie said:
Regarding your remarks about shortage of housing stocks.......the financial institutions, estate agents and local councils getting 'backhanders' from developers operate as enthusiastically this side of The Pond as the other!
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Yes, I'm sure there are cowboys and people with agendas everywhere. My earlier question to you was, why are you so unwilling to believe one side of the argument and so quick to believe another without checking the facts for yourself. I can respect both points of view, as long as they are based on fact, and not on what you would seem to want to believe.

Again, if I may ask, why are you so worked up over it? If I were you, I'd check the facts for myself and not just believe what I want to believe or what I hear or what the crowd is saying - everybody's different, for some property doesn't suit at all and a crash may very well be round the corner. For others, it may be the perfect vehicle, as they willl know how to manage the risks involved.

As to the orignal question in this thread, what about the future price of Irish property prices? I really don't know and I don't think anyone does. I happen to believe that prices in Dublin (I can only speak for Dublin as I do not know the market outside of Dublin) are overvalued and I base this on the rents currently achievable. It indicates that there is a lot of waht I would call speculation and gambling going on.

Please do not introduce emotion into your responses, this should be a civil debate about the issue at hand, don't you think?

best

t
 
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