CROWDFUNDING PROPERTY NEWS – 2ND APRIL 2015

Crowdfunding Property News Update

Crowdfunded REIT floats on AIM

The first successful exit from a UK crowdfunded company.

Mill Residential REIT listed on the crowdfunding platform Syndicate Room last year, raising over £2 million. Since then it did as promised and listed on the Alternative Investment Market in London. Investors who sold upon flotation would have banked a 11.5% profit in under a year. According to this article most chose not to sell. You can check the share price with the ticker LON:MRR

Amusingly a row has since broke out between Syndicate Room and a rival platform Seedrs about who got the first UK IPO.

“Their (Seedrs) claims are utterly nonsense and I’ve got in touch with them about it”

Read the details of the spat here.

$1 Billion invested in US Property Crowdfunding

By the end of 2015 that number could be $2.5bn. A couple of high profile crowdfunding projects have boosted interest and investment in the U.S.. Namely Hard Rock Hotel in Palm Springs, California, (which added bonuses to investors such as better room rates) and the 3 World Trade Center skyscraper in Manhattan, New York.

The majority, 75%, of the deals are structured as debt. While this may provide a more secure and reliable rate of return, it limits the upside that is possibly achievable using a profit sharing or capital gains sharing structure. The caveat as always to investing is that any investment can go wrong. Figures from the U.S. show that the percentage of investments that run into trouble is approximately 2%. A failure rate that is described as pretty low in this Forbes article.

An example of some property crowdfunding can be seen at this link. A 10,000 sq ft commercial re-development generating 3.5% during the development and 9-13% when finished.

£3,500 per hour being crowdfunded in the UK

An interesting statistic mentioned in an article by The Telegraph recently.

Crowdfunding is fast becoming the fashionable way for the general public to invest their savings. According to data analysis site The Crowdfunding Centre, 6,561 projects have been launched since the start of last year, with an astonishing £3,500 per hour being raised in the UK alone.

This includes for business investments and I’ve no doubt CrowdCube.com helps raise the lions share of that cash.

The rest of the article lists the caveats of investing then morphs into an infomercial for Property Crowd, a property crowdfunding platform based in Kent in the UK.

“Not all crowdfunding opportunities are created equal, but if you take care to invest in the right one, the rewards can beat anything the banks will offer you.”

If that doesn’t sound too boring read the whole article here.

IRISH PROPERTY NEWS – 24TH MARCH 2015

Irish Property News Update

‘Unwarranted delays’ in purchasing property

According to this report by the Institute of Professional Auctioneers & Valuers, over 60% of IPAV members are experiencing delays in conveyancing of up to 4.5 months. Various reasons are proffered by the frustrated buyers. They blame the solicitors for not using email, for not preparing the paperwork before the property goes sale agreed, and generally being inefficient and lacking thought for commercial realities.

Irelands First Online Property Auction

Allsop Ireland recently concluded Ireland first online property auction. A 71% success rate was achieved with 46 out of 65 properties sold. Total sales totalled €6.85m. This is a fantastic development for property sales in Ireland as it raises the bar for transparency in the Irish property market. A bar that needed some lifting. Register with allsopireland.ie to receive updates on future auctions.

Deutsche Bank back in the game

The Irish Independent is reporting that Deutsche Bank are preparing a €175m commercial mortgage backed securitization (CMBS). This is the first Irish CMBS since 2006. Anyone who did invest in 2006 got badly burned of course but it’s presumed that there will be better value to be had this time around. What could possibly go wrong. More details here.

Skills shortage in construction?

Dr Joe Harrington, head of the School of Building and Civil Engineering at the Cork Institute of Technology, thinks so. He’s quoted as saying there is “very likely, a skills shortage, particularly at graduate level”. As reported in The Irish Examiner here.

 

Other Property News

It’s hard to find a buyer for Sean Quinn’s Russian assets as reported in the Irish Times here

Some interesting numbers reported on by the Irish Examiner here. 91 people paid property tax on over 100 properties each. 5 of those paid for over 500 homes each.

 

IRISH PROPERTY NEWS – 21ST FEBRUARY 2015

Irish Property News Update

Property repossessions on the rise

The head of KBC bank expects property repossessions to increase and 2015 and 2016 as reported in the Irish Independent here. He puts it down to the fact that the Central Bank have set targets for Banks to deal with their problem loans.

Growth in rents slows in 4th quarter

Ronan Lyons over at Daft.ie comments on their latest report.

The national average rent between October and December was just under €950, that’s 9.7% higher than last year. However, this is down from a 10.8% annual increase in the second and third quarters and marks the first time since mid-2009 that rental inflation has eased.

The first time in over 5 years! This may signal the peak rent that the market can bear may be approaching soon. Note that the lowest year on year rise was in Co. Monaghan were rents were up only 0.4%. The full report can be downloaded in pdf format here.

Development of zoned and serviced land

The Department of Finance have opened up a consultation process on what can be done to encourage the development of zoned and serviced land. In particular, how the taxation system can be used to do so. More tax breaks on the way? Michael Noonan argues no.

“I am determined the mistakes of the past will not be repeated, when property-based tax reliefs were allowed to continue for too long with no clear rationale behind their maintenance. Lessons such as these must be applied in designing the Irish tax code for the future. In that regard, I want to emphasize that this consultation is not being launched with a view to introducing new property-based tax reliefs or tax breaks.”

If you want to have your say have a look at the paper here and send your suggestions to zoned&servicedland@finance.gov.ie

Other Property News

Well here’s one way of squeezing an extra bit of yield from your portfolio.  Do you think letting out your driveway as a parking spot might catch on. Then you can invest in JustPark, who say they have signed up 150,000 parking spot owners in the UK. Currently crowdfunding over on CrowdCube. See here.

Larry Goodman Jnr to go house building. See here. 140 units planned for Dundalk. Drogheda expected next.

IRISH PROPERTY NEWS – 10TH FEBRUARY 2015

Irish Property News Update

Crowdfunding Property : The Irish Times

Fiona Reddan in the Irish Times writes about how crowdfunding can be used to get a better deal for consumers and investors this week.

Just like any investment, property crowdfunding can be risky and potential investors should consider carefully before investing. The advantage of the structure is that each property is owned by a limited company, which mitigates against the impact of problems in other properties having a knock-on effect, and there is no debt.

MoneyCrowd.ie gets a mention.

See here for full article.

Strong Pound helps British invest in Irish Property

The Telegraph in the UK is reporting that 48pc more Britons are searching for property in Spain and Ireland than a year ago according to data garnered from Rightmove.co.uk.

This combined with the OECD saying that property in Ireland in undervalued signals a buying opportunity for those with cash.

This is backed up by a report from the newly formed Real Estate Alliance that enquiries to EAs outside of Dublin have risen 13% in the past two months. See here.

Telegraph link here

Commercial Property : Tight supply, Prices rise

Finfacts reports on that the global index company MCSI finds that Irish commercial property returns were among the highest in the world last year. Source here.

The head of the Society of Chartered Surveyors of Ireland (SCSI) might have an explanation for that as she expressed concern about the shortage of office space as reported in the Sunday Independent here.

“The current shortage of prime office space in our major cities poses a threat to our international competitiveness in terms of attracting foreign direct investment.

“We need more access to development finance to ensure adequate supply is brought to the market, especially as it is now viable to build prime offices again,”

Other Property News

Donnacha Fox laments the Irish property obsession with this piece in the Irish Independent.

For a bit of balance, and indeed a reminder of the risks, here’s a rundown on the whole property crowdfunding idea by the American site PSMag.com entitled Your Startup is Stupid

The new Irish Central Bank mortgage rules have been heavily reported and received a mixed welcome. Luckily, property crowdfunding investors here at MoneyCrowd don’t have to worry about a mortgage. Here’s a debate on the issue by Hugh Linehan and Conor Pope in The Irish Times.

Don’t forget to follow MoneyCrowd on twitter for more property news and views.

https://twitter.com/moneycrowd

IRISH PROPERTY NEWS – 18TH JANUARY 2015

Irish Property News Update

Is there still value in Irish Commercial Property?

While the Irish Times reports that Irish property has provided investors with a return of 29 per cent to the end of third quarter, the question arises whether there is any value left?

The rise was led by office space but retail units on Grafton Street have risen by 24 per cent also. Colm Lauder, an associate with MSCI Real Estate, argues that this time it’s different and that these are not the unsustainable rises we witnessed in the celtic tiger boom period.

Yields however have fallen from 9.8% in 2012 to 6.5% in September 2014. Risks he identifies are political instabilty in Ireland (possible early elections) and in Europe (i.e. Greece). Altogether though he surmises the the prospects for the Irish market “remain favourable”

Read the full article here.

CBRE: Commercial property recovery to expand beyond Dublin in 2015

Pretty much a self explanatory headline and what else would you expect CBRE to put in a press release. They say that rents and commercial property values will continue to rise in 2015, as the shortage of suitable office in particular remains acute.

Interestingly they say that office yields are currently below 6% and they expect this to drop to 50 basis points in 2015.

Irish Independent source here.

Time for savers to bite the equity bullet?

Ian Quigley in the Irish Independent explains the obvious implications of low interest rates for savers and encourages people to put some cash at risk (to work) here. Main takeaway is that quality wins out.

However, provided you focus on high-quality equity or property assets, you shouldn’t have to worry too much about day-to-day fluctuations.

Northern Ireland Property to rise?

Both TheJournal.ie and the RICS are touting Northern Irish Property at the minute.

Firstly The Journal recommend Belfast as an entry level into property investment mainly due to the low cost relative to Dublin. They quote an estate agent example of buying for €64000 and renting for €510. A healthy 9.5% yield.

Source here.

Secondly PropertyWire.com report that the Royal Institution of Chartered Surveyors expects Northern Ireland house prices to rise by 4%. They put this down to lack of supply and stamp duty changes.

Source here.

Other News

PWC and the Urban Land Institute publish a report saying “Dublin remains in the number two spot for the second year running for real estate investment and development in Europe” Just behind Berlin. News report here

The Irish Independent want a picture of your front door for a bit of PR as they release their “Nationwide property price survey: How Much Is Your House Worth? 2015″ next weekend. Full details here.

Irish Property News – 10th January 2015

Irish Property News Update

Grafton Group – Woodie’s DIY, Chadwicks, Heiton Buckley

Grafton Group are reporting an sharp rise in trade in Ireland as the economy shows some signs of improvement. 13.9% growth in fact. Grafton Group control Woodie’s DIY, Chadwick, and Heiton Buckley. Grafton Group is estimated to serve over 20% of the trade customers in Ireland.

The rate of revenue growth in the Merchanting business in Ireland increased sharply during 2014 as the impact of the market recovery spread and the economy moved on to a stronger growth path.  Revenue growth was initially concentrated on the residential RMI* market but extended into the new housing market where output increased from very depressed levels as the year progressed.

RMI = Repairs, Maintenance and Improvement

See 8th of January trading update on http://www.graftonplc.com/

Northern Ireland Commercial Property prices reach pre-crisis levels

This is not necessarily good news but according to Savills Northern Ireland, commercial property prices have reached pre economic crisis levels. There were approximately £500m of commercial property deals in Northern Ireland which is up 186% on 2013.  This reads like a press release from Savills themselves and it contains the bold claim that they transacted 78% of all investment deals in 2014.

See full report here on PropertyWire.com

West Cork headland sells for €1.35m

A young Irish couple, based in London, has bought the 30 acre, 2 house, private beach, headland only 1.5 hours drive south west from Cork City. God only knows why. Although it is only 8km from Skibbereen, a town with a population of 2500 people.

It’ll be a big change from London unless they only use it as a holiday destination. In either case it’s hardly the investment of the year but it’s been widely reported here, here and here.

Where? Google maps link.

Best of luck to the happy couple.

Other Property News

You might want to check out this weeks Sunday Business Post (11th January 2015) as they have a write-up entitled

Rental squeeze: how to get more income from your investment property

….

Happy New Year folks

Central Bank of Ireland – Macro Financial Review 2014:II

A Macro Financial Review of Ireland

The Central Bank of Ireland has released it’s 2nd Macro Financial Review of 2014.

You can download and read it here : Macro-Financial Review 2014.2

Here are some highlights and quotes from the report.

There have been pick ups in activity in both residential and commercial property markets.
Low levels of housing supply are an important factor in the house price rises.
Clearly the Central Bank is concerned about the rise in house prices as spelled out here.
These developments raise a number of concerns from a financial stability perspective. The first is the rapid pace of house price increases over the past year or so. This could give rise to expectations of further increases and could lead to a misalignment of house prices. Secondly, rising house prices may prompt an increased demand for mortgage loans. It is important that appropriate credit standards apply to new loans. The Central Bank has recently proposed limits on the amount of new mortgage lending that can take place at higher loan-to-value and loan-to-income ratios. Their purpose is to ensure prudent lending standards are maintained throughout the credit cycle.
 irish House Price Growth Year on Year 2006 to 2014
Concern is not just limited to the housing market. The commercial market is also mentioned here.
… activity in the commercial property market appears to reflect, to some extent, the search for yield by international investors. This leaves the market vulnerable to a change in investor sentiment and the availability of investment opportunities elsewhere.
In general the review says Ireland is improving but still on very shaky ground and exposed to external shocks.
In summary, the domestic economic outlook has improved since the last Review, while there have also been some positive
developments in the banking sector. There are, however, issues weighing on the macro-financial environment. These include
high debt burdens in the private and public sectors and a large stock of non-performing bank loans. Beyond Ireland, there are geopolitical issues that could affect world output, deflationary pressures in some economies and the possibility of a reversal of the search for yield. Any of these could have negative consequences for the Irish financial system and macro-financial environment.

Allsop Space Auctions – 1st Quarterly Report

Allsop Space have released a report into buyers trends and expectations.

The key word here is ‘buyer’ as most forward looking reports are based on seller expectations based on evidence from estate agents or the property listing sites such as Daft.ie or Myhome.ie.

Allsop Sace Auctions Logo

The results show that even though the majority (56.1%) are investing for rental income rather than capitall growth, 77.5% of residential investors expect prices to rise over the next 12 months.

Although over 65% also expect rents to rise.

56.2% of the 1300 respondents to the survey expect to purchase with cash which may be a sign that buy to let mortgages are hard to come by.

Who reads alt text?

One major caveat to this report, and to be fair Allsop mention it, it that the survey was conducted before the Irish Central Bank flagged that they intend to enforce an 80% LTV on all new mortgages from January onwards.

Loans which exceed 80% of the value of the principal private property will be limited to 15% of total lending; no more than 20% of the value of loans for principal private dwellings will be greater than 3.5 times income; and no more than 10% of the aggregate value of all buy-to-let loans will have a loan to value ratio greater than 70%.

The report also contains lots of commentary on the commercial market and on the results of the Allsop Space auctions so far in which they have achieved almost half a billion in property sales.

Download the report here.

The next Allsop Space Commercial auction is on Tuesday 9th December in RDS, Dublin.
The next Allsop Space Residential auction is on Thursday 11th December in RDS, Dublin.

PRTB Quarterly Report – Rents up 5.2% nationally – Q2 2014

PRTB: Rents rise 5.2% – Q2 2014 vs Q2 2013

According to the PRTB Quarterly Report for Q2 2014, to the end of June, rents have risen 5.2% nationally. Naturally there is a large difference between Dublin and the rest of the country. and also between houses and apartments.

Annually the increases are as follows…

Nationally 5.2% : Houses 3.7% : Apartments 6.9%

Dublin 10.5% : Houses 8.5% : Apartments 12.1%

Outside Dublin 2.6% : Houses 2.4% : Apartments 3.2%

… although rents are still 19% lower than their peak in 2007.

Average rents across the country are now…

Nationally : Houses €793 : Apartments €858

Dublin : Houses €1275 : Apartments €1134

Outside Dublin : Houses €648 : Apartments €640

As calculated by the Sunday Business Post, a person on an average wage of €36000 would now pay 41% of their net income to rent an apartment. It should be noted though that the Irish government supports approximately 30% of the rental market through the rent supplement scheme.

About the PRTB

PRTB

According to the Private Residential Tenancies Board (PRTB), they publish –

the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland. Compiled by the ESRI, and based on the PRTB’s own register of tenancies, this index reveals the actual rents being paid for rented properties.

The PRTB’s register contains details of over 300,425 tenancies as of Q2 of 2014. Each year we register approximately 100,000 new tenancies, with annual peaks in activity in September / October. This extensive database is the largest in the country and is populated with information on actual / agreed rent, location, six categories of dwelling types, accommodation size and number of occupants and tenancy length. The PRTB Index is backdated to the third quarter 2007. It is intended to produce the Index each quarter.

The PRTB offer a useful tool for checking average rent rates in your area sorted by property type and number of beds. Check it out here.

Original PRTB Press Release is here

CIF – Construction Industry Federation – Budget Submission 2015

The Construction Industry Federation has released it’s Budget 2015 Submission. The Construction Industry Federation (CIF) is the representative body for construction companies & contractors working across all sectors in Ireland.

Some of the more interesting points are : –

  • Tax incentivised savings scheme for purchasers of new homes
  • Restoration of 100% interest relief for residential investment for letting purposes
  • Property tax exemption for first 5 years
  • Development levies rebate to new home purchasers
  • Temporary VAT rate of 9% for residential construction for 2 years
  • Extend capital gains tax relief to the end of 2015

The full 16 page submission if available to download here.

Updates: Some press coverage of the submission

Irish Independent: Windfall tax to be reduced under Government plans.

Irish Times: Built-in amnesia in building lobby’s plans. Cantillon: no surprise to see Construction Industry Federation with begging bowl again.

Property Investment Ireland