"In 6 months rents in here will be 700 Euros per 2 bed&

An interesting quote from BertieBasher and I’m sure there’ll be fivers swapping hands after the 6 months is up but something bothers me. I clicked on the links to the actual properties in the OP and the following jumps out at me from the first few alone.

1 beds

2 beds

3 beds

Even if we assume that BB is being silly :stuck_out_tongue: and that a 2 bed can’t possibly rent for less than €1500, that is still a considerable way short of the mortgage payment. The landlord would be subsidising their tenants to an incredible degree. Wouldn’t foreclosures have to happen before the real drops in rent happen because surely no LL is insane enough to let a property for so much less than the mortgage payment?

The market sets rents, although they can be a bit sticky.
Empty flats will force rents down. IF the LL has to pay up the extra to service the mortgage…then so be it.

None of this is news. The Central Bank report around the middle of last year pointed out that LL’s were subsidising their tenants to the tune of 36-43%.

Yes but my question is “what happens when it becomes clear that this won’t be a short term situation and if their subsidy has to increase even more?”

Are there precedents elsewhere that we could look at? It may be that rental prices will not change dramatically until repossessions start.

Yes there will be massive repos/firesales among the BTL crowd and this will produce wealth destruction on an unprecedented scale in Ireland. Thats when it gets scarey.

I have waited and waited but finally number of properties for rent in Blackrock hit century mark. And the prices slowly but surely appear to budge under the supply pressure. You could even find 3 bed semi for 1500 p/m. Unheard of couple of months ago.
tinyurl.com/29wxn5

Real landlords won’t mind subsidising their tenants even for ten years or more, because they were never in it for the short term anyway, so it’s only the get rich quick merchants (the GRQs) that stand to get burnt in the coming meltdown - real landlords won’t mind a bit of pain now because they KNOW it’ll all be worth it in thirty or forty years when their properties will finally have achieved real investment growth.
This is why we can expect plenty of whingeing from the GRQs in the coming years, but the real landlords will still be smiling quietly and just getting on with things - they always had the long-term big picture in mind anyway, they are not about to let some once-in-a-lifetime property bubble explosion interfere with their carefully charted plans.

:laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing: :laughing:

This is a joke right?

Hi,

In regard to the comment on real landlords that are in it for the long haul - most of them an afford to bring their rental property rents down as they are quite usually older houses with lower mortgages. The supply in some towns is now at a scary high… I rented the house i currently live in last july - at the time on daft there were approx. 43 - 47 houses/units for rent then its is now up to approx 105. All with very high asking prices in a market so flooded with houses. crazy.

My sarcasm detector went off.

Ah come on. Any landlord who bought in the last few years is going to be looking at losing hundreds of thousands of euros worth of equity, increasing interest costs, and decreasing rental returns as a result of increased housing supply. This is a business-ending proposition, not a temporary blip.

In thirty or forty years they’ll have spent years subsidising their properties and may well have sod all to show for it - a lot of newer built apartments are going end up effectively worthless, with their poor location and build quality. We may be looking at demolishing a lot of these new builds within the lifetime of the mortgages on them. Now THAT’s scary.

why would loss of equity worry a RLL (real LL ) - hes not in it to release equity - hes in it for the long term. anyway , would a RLL have bought where the return is < 3% ?

a RLL would have factored an increase in interest costs.

yes this could happen no doubt. are rents way too high tho? i used to pay rent back in the day . it usually worked out 1 weeks pay = a month rent.
is that reasonable?

it is - if you havent taken those factors into accout.

a RLL would not have bought a PLLQG in the first place. thats for GRQs to do.