Yep. And getting mentaller by the second. Our place is a 3 bed semi. It was over 450 grand. That’s outrageous. But we thank our lucky stars every day for the last 2 years for it because if it was now, we wouldn’t be given a mortgage near what we were and the price of these ones in the next phase is well over 500g now. The stress and mental anguish of having no home security over your head when you have young kids is something I remember well and wouldn’t wish on anyone. I don’t give a fuck if prices drop cos its our gaff and that’s all we need and we can afford the mortgage. But it obviously affects your disposable income and all the rest of your life and the things you can and do do. To sum up, you could be lucky or unlucky or smart or stupid but if you’re going to buy a gaff then the earlier you do it the better.
They can’t even fit into the first bedroom to film it, it’s so small!
A bedroom is for sleeping in. Those sliderobes are fierce handy, we got them in recently
Lovely house for those looking to downsize.
Very handy if you worked in the bus depot.
How much was the extension?
nice pub nearby, close to town & the coast but that whole area is very tight, houses on top of each other, cars parked everywhere
Handy alright for the Sheds and the Pebble Beach and you wouldn’t need a washing machine or a dryer because there is a very good laundry around the corner.
Our national broadcaster showing high profile property porn shows during a housing crisis is utterly shameful too
Was talking to a friend of mine yesterday and he told me that there’s currently 12 lads in the country doing plastering apprenticeships. I find it hard to believe but we’re in serious trouble if it’s true.
Why did they waste so much money on encyclopedias and fancy plates?
You’d borrow the encyclopaedia from the library.
That’s one of the funniest things I’ve seen for a long time. RTE should pick her up for her own comedy show.
The build-to-rent debate: What the data says about price, supply and occupancy rates
Build-to-rent homes are politically controversial, with opponents arguing that high rents mean too many remain vacant. However, an analysis of 63 fully completed rental developments show this is not the case.
One of the bones of contention in the debate around the Irish housing sector currently is whether things are getting better or getting worse. Last autumn, I outlined a few reasons to be cheerful about Irish housing – as well as a couple of reasons to be fearful. In my list of factors pushing the Irish housing system towards greater health was the large number of new rental homes due to be built in the first half of the 2020s.
Much ink has been spilled over the last 12 months in particular on whether build-to-rent homes make things better or worse. Aside from self-interested arguments – such as those who worry the value of their property will fall or those who dislike the idea of ‘transient’ renters moving down the street from them – there are perhaps four main arguments against purpose-built rental housing that come up time and again.
The first relates to the use of the for-profit sector to provide not-for-profit housing. I have a long history arguing in favour of healthier non-profit housing, in particular the idea of moving away from a reliance on the market through mechanisms such as HAP and Part V. Under HAP, tenants in receipt of subsidies are directly competing against those without using taxpayer euros. Under Part V, where developers set aside 10 per cent of their newly built homes for social housing, the cost of social housing is taken from society in general and lumped onto the 90 per cent who take up residents in the rest of the development.
Both systems suffer from being effectively procyclical. Supported housing should be driven by need, not the market. So, in that, I agree. The government, however, would argue that it does not have time on its hands and that some of the systems in place now were designed to maximise the immediate delivery of housing for those on lower incomes.
My estimate is that Ireland needs to be building at least 15,000 homes – and possible as much as 20,000 – every year until the middle of the century in what might be termed the supported housing sector. To the best of my knowledge, I don’t know of any commentator who has come up with an estimate of social housing need that is higher than mine. I also believe that local authorities are not best placed to do this and that, together with something like the Land Development Agency, non-profit housing bodies of scale – which are common on continental Europe – will be key to meeting this housing need.
A second argument against build-to-rent housing also relates to tenure: that funds displace would-be homeowners – and indeed in the worst-case scenario outbidding them for the homes they wanted to buy and renting it back to them. Indeed, one of our leading national dailies led with a provocative headline that investors were actively outbidding homebuyers by a quarter – only for the detail in the piece to tell a very different story, one of funds facilitating the construction of new homes that would otherwise not get built.
Some – although not all – of the political heat on this issue relates to houses, rather than apartments. The issue of build-to-rent houses is largely moot at this point, though, as the government’s additional tax on the bulk buying of houses further tilts the market in favour of homeowners at the expense of renters.
It is worth dwelling on this point a little further. Compared to landlord-renter combinations, and perhaps not appreciated by many of those commenting, homeowners already enjoy a very privileged status when it comes to taxation – not being liable for any income tax or capital gains tax – and when it comes to finance, with those borrowing for a home they wish to live in able to borrow up to 90 per cent of the property’s value at rates of less than two per cent. These are terms that landlord-renter combinations simply cannot compete with. The only margin on which renters are competitive with homeowners for estate houses is when it comes to bulk: if looking to sell all homes quickly, a developer may turn to a fund. But very few developments are built with this in mind and thus it is a very small fraction of transactions. (The specifics of the Maynooth case that emerged last Spring confirm this.)
The last tenure-related argument against build-to-rent housing is one that was recently taken up by Dublin City Council in its draft Development Plan: that single-tenure housing is sub-optimal. Strictly speaking, under a Part V system, almost all developments will have some fraction of social housing as well as market renters. But really this is an argument about more ownership, rather than more social housing. The problem is that this is entirely logically inconsistent with restrictions on funds buying houses: if single-tenure developments are bad, then surely that applies to developments aimed solely at owner-occupiers as well as those aimed at renters?
Build-to-rent developments involves shared amenities and perhaps more importantly are based on certainly kinds of owner types. A system of meddling with the financing of individual projects, in order to achieve some kind of ideal tenure mix block by block across the country, is a system destined to fail as it will discourage the kind of investment that the country so badly needs. It is worth remembering that Ireland is about fifteen years into a chronic undersupply of new rental homes. It is instead far healthier for the country to think instead about mixing tenure by area, not by building.
Standards and costs
There are perhaps three final arguments against the construction of new rental homes. The first is that they are built to a lower standard than build-to-sell apartments. As my piece two weeks ago discussed, however, it is not at all clear that Irish build-to-sell standards for apartments are the correct target for Irish build-to-rent homes. The higher a city sets its minimum standards, the higher it is pushing the break-even point for rents – and thus the greater a share of the income distribution that are priced out.
Indeed, arguably the very lack of construction of build-to-sell apartments over the last few years – at a time when the building of lots of other types of housing has resumed – is a testament to the lack of viability of these standards.
The final arguments against build-to-rent housing relate to their cost. One of Dublin’s newest rental developments is Griffith Wood. According to the listing on daft.ie, a two-bedroom home at Griffith Wood, designed for four people, comes with a rent of €2,350. This is not cheap. The Daft.ie Rental Report for 2021Q4 gives the market average rent for a two-bedroom home in Dublin 9 as just under €1,700 per month.
To some, they see these figures and can see no other conclusion than that those building the new rental homes are enjoying extraordinary profit levels. However, for publicly listed companies such as the REITs, we can see their profit levels and it’s clear that these are hardly goldmines. (Ironically, in a city with growing rental demand, attempts to limit BTR construction could, however, mean that existing BTR stock becomes increasingly profitable.)
Rather, we must remember that equity is a soft cost – one thought of in percentage terms – and not a hard one. Suppose an investor has a required return of 12 per cent. This would mean where the breakeven costs of a two-bedroom rental home are €2,100 in monthly terms, the rent charged is €2,350. If you don’t like the idea of €250 profit on a home per month, your best strategy is to lower costs, not increase them. If the same home had a break-even monthly cost of €1,600, the same investor would need a return of just €200 per month. But if standards or other costs were to increase further, such that the breakeven cost hit €2,500 per month, the developer would stand to make a profit of €300 per month per unit.
Occupancy rates
This brings us to whether these homes are, ultimately, any use at all for Dublin, Cork or anywhere else they get built. The final fear for build-to-rent homes is that they are priced so out of reach with respect to ordinary incomes that they end up as dark and empty cubes, looming over the city.
Thankfully, we can combine various sources of information – including planning permissions and registered leases as well as media coverage and industry reports – to look at whether Ireland’s new rental homes are being taken up.
This is a labour-intensive exercise: there are up to 150 potential “multi-unit rental” developments in the country and they are in various stages of development. Not only that, many are subject to unusual features, including investors such as REITs owning many but not all of a development and developments being subject to various forms of agreements, such as a recent cost-rental agreement with an AHB.
A first trawl through each of these buildings, and the associated data sources for each, reveals approximately 75 that are in operation and with clear ownership structures – with twelve of these effectively brand new. Of those fully in operation, there is no ambiguity about take-up. For example, Vantage, in Leopardstown, is a development with 442 units in its planning permission. RTB data suggest that there are active leases on 434 distinct dwellings across its three blocks – an occupancy rate of 98 per cent. Closeby is Elmfield, where there are leases recorded in all but one of its 185 dwellings.
While this is best thought of as a first pass to set the lower bound, the estimate of occupancy across all 63 fully operational rental developments – which contain almost 7,800 homes – is 90 per cent. Some might say that a ten-per cent vacancy is not trivial.
I suspect that a closer investigation of some specific developments will reveal higher occupancy rates – as above, in the absence of good public information systems, this is labour-intensive stuff. But even if it turned out to be true that 800 or so homes were empty in these developments, they could be added to the total rental stock available in Dublin currently and the aggregate availability in the city would still be at an all-time low, in a series stretching back to 2002.
In other words, the shortage of rental homes is not manufactured – it is very real. Thankfully, tens of thousands of new rental homes are due to be completed in the coming quarters.
Unfortunately, almost all are concentrated in Dublin – another clear sign of the viability challenge, as rents are lower elsewhere but build costs are not – but then again, Dublin’s high rents reflect that the scarcity of rental homes is worse there than anywhere else in Ireland.
Developments such as Griffith Wood offer us an important window into the city’s likely immediate future. In early January, there was not a single lease registered at Griffith Wood on the RTB register, as the development of 342 homes took on its first residents. By early February, there were 29 leases registered.
Even as each comes on to the market a price point that is high relative to the market average, as more and more of these new homes do come on stream, they reduce the pressure on the existing stock of rental homes. In a city so badly in need of new rental homes, adding 50,000 over the course of the 2020s will undoubtedly ease the pressure on the existing 150,000 homes.
We have sliderobes in our house, very handy, Mrs is delighted with them.
The kitchen counter didn’t come up to her waist. It must be a house for leprechauns.
Who is the author?
Looks standard to me.
Ronan Lyons. It was in the currency