Buy to Let in Ireland: The Case for a Contrarian Property Investment

[Greenbook]

If you were to sell your PPR, would you expect to get the current sale value or would you sell it for what it was valued at 10 years ago?

Precisely, and I have often thought that an answer to the current runaway house price inflation is to legislation so that a homeowner can only sell their house at its 2016 price plus 2% pa - that would certainly make second hand houses much more affordable. New houses could be sold at market value, but the competition from cheaply priced second hand homes would drive new house prices down also.

If rent control is the solution for the rental market, I can't see why something similar can't be imposed in the general housing market.

 

[Protocol]

Given the massive capital appreciation of the last ten years, even landlords with rents locked in below market due to RPZ have made huge gains.

 

[DannyBoyD]

have made huge gains

Only if you sell.

 

[Premos]

Given the massive capital appreciation of the last ten years, even landlords with rents locked in below market due to RPZ have made huge gains.

Only if you bought at the good time.

 

[Dr Strangelove]

Only if you bought at the good time.

Hard to see any property in Ireland sitting on a paper loss.

 

[Premos]

Hard to see any property in Ireland sitting on a paper loss

I didn't comment about paper loss but huge gains. Not every landlord bought in 2007 or in 2013.

 

[T McGibney]

Hard to see any property in Ireland sitting on a paper loss.

Before or after inflation?

Anyone who has sold at say a 20% profit on a purchase made during the Celtic Tiger era has in real terms incurred a loss.

 

[Premos]

The property I rent was initially bought in 2002 for 175k, its currently value is about 285k but inflation alone would have brought it to 265k.

 

[The Horseman]

If rent control is the solution for the rental market, I can't see why something similar can't be imposed in the general housing market.

Yes comrade.

 

[KOW]

Bought an Apartment in Palmerstown Dublin 20 2002. Bought 230k. Now worth 300k. Gone up 30% in 23yrs.
Friend bought house same area same year. Paid 280k. Sold few months back 420k. Gone up 45% in 23 yrs.

S&P 2002 roughly 880. Today 6300. Think its time we took shares off folk. You see these horrible investors who have made all this money
need to be sanctioned.

 

[Greenbook]

The property I rent was initially bought in 2002 for 175k, its currently value is about 285k but inflation alone would have brought it to 265k.

Plus, if you sell, the CGT you pay is based on the nominal gain not the one you made taking inflation into account, so your real gain can be wiped out by the tax. In your example, you're paying CGT on the difference between 175k and 285k and not the difference between 265k and 285k.