Property taxes to include BER

[Leo]

A market price is where supply equals demand.

That's a market at balance, something rarely seen in the housing market. Market price is just a number the market puts on an object. In a market that is not operating effectively or efficiently, you will often see swings in either direction as supply or demand levels diverge significantly.

What proof do you have investor demand is minor. If an investor were to bid on a property then it would increase interested parties and therefore increase price. Recent media attention has shown institutional investors out bidding other purchasers.

Have a read of this report. Recent media attention has covered a few events where institutional investors bought out entire developments, they're not bidding against individuals in these scenarios. They're likely to be paying less than the market might pay in many cases, but the fact that they buy up front makes it a very attractive proposition for developers.

Logic would suggest if you can get a return on investment higher than that in a bank some of the extra €12bn on deposit would find its way to property investment.

Property investment in the form of purchasing one or two properties to rent is a high-risk strategy that brings with it quite a bit of overhead. Most people with a few quid in the bank have no appetite for that.

The rtb has a record of rent charged. This is why landlords are required to update the rtb site with the new rent levels on a property. Which is what I do automatically.

I've never seen any evidence of the RTB instigating an action over this. For a tenant to submit a complaint, they're asked to provide evidence supporting their claim. All a landlord needs to do is change some of the details as they register their first tenancy after purchasing a property and the RTB will likely be none the wiser.

 

[The Horseman]

That's a market at balance, something rarely seen in the housing market. Market price is just a number the market puts on an object. In a market that is not operating effectively or efficiently, you will often see swings in either direction as supply or demand levels diverge significantly.



Have a read of this report. Recent media attention has covered a few events where institutional investors bought out entire developments, they're not bidding against individuals in these scenarios. They're likely to be paying less than the market might pay in many cases, but the fact that they buy up front makes it a very attractive proposition for developers.


Property investment in the form of purchasing one or two properties to rent is a high-risk strategy that brings with it quite a bit of overhead. Most people with a few quid in the bank have no appetite for that.


I've never seen any evidence of the RTB instigating an action over this. For a tenant to submit a complaint, they're asked to provide evidence supporting their claim. All a landlord needs to do is change some of the details as they register their first tenancy after purchasing a property and the RTB will likely be none the wiser.

Market movements are normal in a functioning market. However the rental sector is not a functioning market as it is not been allowed to find its equilibrium. The rental sector is not been allowed to find this point due to state interference. The state is trying to force the sector to meet the states obligations to house those who can't house themselves. The rental sector and the rental market are not the same.

Institutional investors who buy entire developments are competing with individual buyers as they are taking supply away from individual buyers, why do you think the legislation was introduced to increase stamp duty if they purchased more than 10 (I think) houses. If institutional investors did not purchase the property then owner occupiers would.

Property investment should be like any other investment where the higher the risk the greater the returns. Property investment for a small landlord does not reflect this situation. Can you give me an example of any other business who is required to continue providing a service in some cases for up to two years where they are not receiving payment for such service? Maybe more small landlords would enter the market if there were less overheads and paperwork. The recent RTB report has said that the majority of the market is serviced by small landlords with institutional landlords providing only 6% of the market. The report went on to say that 26% of small landlords expect to sell up within the next 5 yrs. The RTB themselves are concerned that the number of landlords leaving the market will result in a lower number of properties for rent and as such will lead to increases in rent.

A new tenant has a right to raise an query with the RTB regarding the level of rent to compare it against the previous rent. Just because you have not seen any evidence of it does not mean it is not happening. The potential fines for a landlord to do so are quiet substantial and the possible return for any increase in rent will be small compared to the increase in rent. Also a tenant can still raise a complaint once they leave a property if they feel this is happening.

 

[Leo]

Market movements are normal in a functioning market. However the rental sector is not a functioning market as it is not been allowed to find its equilibrium. The rental sector is not been allowed to find this point due to state interference. The state is trying to force the sector to meet the states obligations to house those who can't house themselves. The rental sector and the rental market are not the same.

The Irish housing market has not been close to achieved equilibrium in my memory. On what basis did you expect it to do so when you chose to invest?

Institutional investors who buy entire developments are competing with individual buyers as they are taking supply away from individual buyers, why do you think the legislation was introduced to increase stamp duty if they purchased more than 10 (I think) houses. If institutional investors did not purchase the property then owner occupiers would.

No, they are not competing. They are not out-bidding individual buyers when purchasing entire developments off-plans or prior to completion. They are of course limiting the overall supply of new properties to the market, but again, supply has long been an issue here so nothing new there.

Property investment should be like any other investment where the higher the risk the greater the returns. Property investment for a small landlord does not reflect this situation. Can you give me an example of any other business who is required to continue providing a service in some cases for up to two years where they are not receiving payment for such service?

You understand that higher risk investments carry a greater chance of incurring a loss? I can't argue with the rest of your points there, it really highlights how small time property investment is a poor choice for many and should not be undertaken without serious consideration.

A new tenant has a right to raise an query with the RTB regarding the level of rent to compare it against the previous rent.

Look at the process more closely. There is no route to just query the previous rent paid, tenants are advised to verify the details with their landlord and if they feel the landlord has miscalculated the allowable rent, they must submit a formal dispute including evidence of being overcharged to support your submission.

 

[The Horseman]

The Irish housing market has not been close to achieved equilibrium in my memory. On what basis did you expect it to do so when you chose to invest?


No, they are not competing. They are not out-bidding individual buyers when purchasing entire developments off-plans or prior to completion. They are of course limiting the overall supply of new properties to the market, but again, supply has long been an issue here so nothing new there.


You understand that higher risk investments carry a greater chance of incurring a loss? I can't argue with the rest of your points there, it really highlights how small time property investment is a poor choice for many and should not be undertaken without serious consideration.


Look at the process more closely. There is no route to just query the previous rent paid, tenants are advised to verify the details with their landlord and if they feel the landlord has miscalculated the allowable rent, they must submit a formal dispute including evidence of being overcharged to support your submission.

We surpassed equilibrium with the "ghost estates". I expected the market to find equilibrium like any other market, when supernormal profits are earned new entrants enter the market until "normal profits" are made. In any market participants compete on service offering and the market will dictate the price. We don't have a market as the market is not being allowed to find its price due to the rpz.

The institutional investors are competing, they are offering something the developer wants, either a higher price, less hassle what ever the developer wants. That is exactly what business is, do you expect the developer to accept something he is not happy with? This is a business trans to the developer nothing more nothing less. Obviously whatever the institutional investor was offering was more appealing than that which the developer felt he could get selling individually.

I am well aware higher returns have higher risk, but you did not address my point of providing a service and not getting paid and not having the ability to mitigate your losses.

There is no reason why a tenant either existing or previous tenant can't ask a question of the RTB regarding the previous rent if the tenant has a suspicion the rent is not in line with the previous rent level. if the tenant feels there is a difference then they can lodge a formal dispute either while they are there or when they leave. When you register a tenancy with the RTB they issue out correspondence to both the landlord and tenant advising them that the tenancy is registered. I suspect the rent is registered on the letter to the tenant which the RTB will be aware of the previous rent charged and will notice any increase over and above the legal limit.

 

[Leo]

We surpassed equilibrium with the "ghost estates". I expected the market to find equilibrium like any other market, when supernormal profits are earned new entrants enter the market until "normal profits" are made. In any market participants compete on service offering and the market will dictate the price. We don't have a market as the market is not being allowed to find its price due to the rpz.

Housing isn't like any other market. Not sure if you're avoiding the question deliberately or not, but what rationale did you have that the market here would reach an equilibrium?

What evidence do you have that suggests the RPZ regime is affecting house prices to any significant level? RPZs were introduced in 2016 and property prices have continued the trajectory they were on with little or no noticeable affect.

There is no reason why a tenant either existing or previous tenant can't ask a question of the RTB regarding the previous rent if the tenant has a suspicion the rent is not in line with the previous rent level. if the tenant feels there is a difference then they can lodge a formal dispute either while they are there or when they leave. When you register a tenancy with the RTB they issue out correspondence to both the landlord and tenant advising them that the tenancy is registered. I suspect the rent is registered on the letter to the tenant which the RTB will be aware of the previous rent charged and will notice any increase over and above the legal limit.

You're doing a lot of speculation there for someone invested in this market.

How do tenants get a feel of what a previous owner might have charged in rent???

 

[The Horseman]

Housing isn't like any other market. Not sure if you're avoiding the question deliberately or not, but what rationale did you have that the market here would reach an equilibrium?

What evidence do you have that suggests the RPZ regime is affecting house prices to any significant level? RPZs were introduced in 2016 and property prices have continued the trajectory they were on with little or no noticeable affect.



You're doing a lot of speculation there for someone invested in this market.

How do tenants get a feel of what a previous owner might have charged in rent???

Housing would be like any other market if there was no interference in it. Housing like any other functioning market is where willing sellers and buyers come together to agree a price.

This was exactly what happened between 2009 and 2014 when rent prices fell. Or is it only a functioning market when prices are falling.

The rpz is affecting the property market as it is restricting the number of buyers (investors) which impacts on price. As you previously highlighted institutional investors were outbidding owner occupiers. Why could that not be happening in the small landlord and the price he would pay based on possible returns if the rpz did not exist.

When the tenancy is registered with the rtb the tenant receives notification that the tenancy is registered. So I assume there is a check mechanism in the rtb to ensure any changes in rent are within the legislation.

I note you have still not answered my question on continuing to provide a service and not receiving payment for possibly two years. I have posed that same question twice and to give you the benefit of the doubt I will pose it again.

 

[Leo]

Housing would be like any other market if there was no interference in it. Housing like any other functioning market is where willing sellers and buyers come together to agree a price.

No housing will always be a little different, people don't live their lives and raise families in equities or bonds.

The rpz is affecting the property market as it is restricting the number of buyers (investors) which impacts on price.

The fact that property prices have consistently risen since the RPZ régime was introduced proves that is false.

When the tenancy is registered with the rtb the tenant receives notification that the tenancy is registered. So I assume there is a check mechanism in the rtb to ensure any changes in rent are within the legislation.

You assume incorrectly.

I note you have still not answered my question on continuing to provide a service and not receiving payment for possibly two years. I have posed that same question twice and to give you the benefit of the doubt I will pose it again.

I have touched on that a number of times. Issues like that is exactly why property investment carries a higher risk. I don't disagree that it's a huge problem for a small number of landlords, but I presume you were aware of this risk and accepted it when you chose to invest in property.

 

[The Horseman]

No housing will always be a little different, people don't live their lives and raise families in equities or bonds.


The fact that property prices have consistently risen since the RPZ régime was introduced proves that is false.


You assume incorrectly.


I have touched on that a number of times. Issues like that is exactly why property investment carries a higher risk. I don't disagree that it's a huge problem for a small number of landlords, but I presume you were aware of this risk and accepted it when you chose to invest in property.

Housing is like any other market of supply and demand. People all over the world rent (some for their whole lives). People are free to choose to rent or not. I never mentioned anything about equities or bonds. I have repeatedly referred market forces nothing more nothing less.

Property prices may indeed have increased but that does not in itself prove the RPZ is false. How can you definitively say this fact is false. The RPZ has taken some buyers out of the market (ie investors) so this fact would have impacted on prices achieved whether you accept that fact or not.

How are you so confident that there is not a check mechanism when a tenancy is registered?

The market has changed since I invested in property. The RPZ did not exist when I first invested so I could not factor that into the risk associated with investment.

 

[Leo]

Housing is like any other market of supply and demand. People all over the world rent (some for their whole lives). People are free to choose to rent or not. I never mentioned anything about equities or bonds.

But housing clearly isn't like other markets, you have argued in this thread about how government interference is manipulating the property market. So it can't be both.

There are a wide range of emotional, regulatory, and supply/ demand issues that affect property in a way that doesn't apply to other markets. You didn't mention equities or bonds, but they are just examples of other markets. Perhaps ones you should have looked at more closely as a pension investment if you didn't like government interference in the property market.

Property prices may indeed have increased but that does not in itself prove the RPZ is false.

Show me any evidence the RPZ has resulted in lower sales prices? With non-investment demand levels for property, in an investor is limiting their offer based on previous rent, they'll be outbid by a non-investor.

How are you so confident that there is not a check mechanism when a tenancy is registered?

The procedures for interacting with the PRA are documented, they do not offer such a rent check service.