Reactions to New Rental Laws

Homelessness is an issue of uttermost importance in Ireland. Two staggering numbers mentioned below are being directly addressed by members of the Irish government.

10,378 – number of homeless people as of April

3,794 – number of homeless children as of April

Eoghan Murphy, minister for housing, planning, and local government, blames short term renting (letting) as a big contributor. Ireland has seen increasing numbers of people immigrating over plus many British citizens are moving to Ireland due to Brexit concerns. With this influx of people coupled with an increase of short-term renting, many citizens find the lack of few homes for sale too expensive and are resorting to homelessness.

The new legislation will be going into effect on July 1st. The legislation mainly targets the multinational company, Airbnb, who allows people to post their homes for rent on the web. Owners who reside in a rent pressure zone (rpz) will be required to fill out a form at the beginning and ending of each year. Additionally, a ninety-day total limit per year will be enforced and each rental session …

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The Slowing Growth of Property Prices

The cost of property throughout Ireland has skyrocketed over the last 20 years. With the uncertainty in regard to Brexit, prices of homes are said to increase by less than recent years. Slower growth in price of homes may appear to be beneficial for the Irish housing market, but in reality costs of property are still trending to increase in price. Prices rose by 3.9 per cent compared to 4.3 per cent one month earlier. The increase is about four times less than the average percent growth increase of past years in Ireland.

So how will Brexit effect the housing market in Ireland? Some individuals believe that if the deal goes through, Ireland could play a more significant role in Europe. This trend is becoming prominent in Dublin. Massive companies like Facebook, Google, Paypal. eBay and Microsoft have moved their headquarters to Ireland. This change over the last few years means that there will be an increase in jobs and thus an influx of people. The more people means demand for housing will only further increase. If there is …

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Child saving options

When it comes to opening a savings account, earlier is always better. Especially in Ireland, it can be extremely beneficial to start accounts for children at a young age. Personally, I believe that opening a savings account was a very influential step in the shaping of my financial views.

My first savings account was opened after my first communion, and I’m sure that many other irishmen have had this same experience. For me, this was a huge deal. The money I had gotten from such a special time in my life was now being used to finance my future.

As a child, it is easy to get lost in the concept of money, when you have cash or coins in your hand, it is far more valuable than any amount on a written check. Because of this child-like wonder, the actuality of the value of money is highly skewed.

By teaching your children early the power of independent saving and investing, they will be given the tools that enable them to continue down a more financially stable path …

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Problems of the Irish Housing Market

The Irish housing market has faced a drastic increase in price of homes over the last 30 years. Of course inflation has contributed to the increase of the cost of homes, but inflation cannot nearly explain the massive jump in prices of Irish homes. More specifically, costs of housing has jumped more than five times the cost of a home 30 years ago.

So what does explain the massive rise in costs of property prices? Could it be that increase in salaries contribute to the rise of price in homes? I know that the average income today is much higher than it was 30 years ago. However, the rate that average income has increased over the last few decades is nowhere near the amount that housing prices have increased.

The maximum mortgage loan a homebuyer can be granted is his or her average salary multiplied by 3.5. According to the Irish Mirror, the average take weekly income of an irish person is €734 per week. Multiply this by 52 and you have €38168 before taxes. Even income before tax …

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Ireland takes Second Place in Highest Interest Rates of the Euro Zone

Ireland has fallen behind Greece of having the highest interest rates in the euro zone. Irish interest rates are currently standing at 3.04%. The average interest rate of the euro zone is 1.79%. The 2 per cent difference presents many differences and issues in Ireland’s economy and more specifically the housing market.

High interest rates affects spending of both businesses and consumers. The cost of borrowing money increases while interest rates also rise. Often, the higher the interest rates leads to less spending, borrowing and investing by businesses and consumers.

 

Why are Irish interest rates among the highest in the euro zone?

Enforcing security on a mortgage is much prominent and more complex here than in other countries of the euro zone. In other countries, it is common to seize a property when individuals cannot pay off their mortgage debts. Thus, interest rates are so high here to ensure that banks will enough assets to minimize losses if something were to go wrong.

Lending has become less attractive because the uncertainty of returns on loans. Because repossessions …

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Housing market equilibrium missing it’s mark

According to the most recent Real Estate Alliance house price survey, Dublin’s property prices have decreased by €7500 in the last quarter. Additionally, the price of a three-bedroom semi-detached home on average has decreased by 1.7% since the end of December 2018.

Although these numbers seem to be a sign of positive economic advancements, there are a multitude of barriers that keep the people of Dublin from having a choice in regards to their current living situation.

One of the largest obstructions for both home buyers and banks is the ominous outlook of the Irish economy post-Brexit. Without a clear idea about how the UK’s secession from the EU will affect the Irish Market, banks and buyers alike are being cautious of how and when they give out their money.

For the most part, housing purchases below €350,000 have still been steadily occurring due to affordability of loans and sheer price of the home. This combination allows for increased certainty for banks that their consumer will be able to repay their monthly balance across the term of …

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How to design a wealth tax.

Wealth taxes are very popular in general, but not in particular because it usually means that asset ownership gives rise to taxation. One example of this would be property tax.

If ‘wealth’ is going to be taxed it has to be defined, the classical example is to use the accounting equation in which ‘assets minus liabilities equals capital’. The issue after that is where debt is involved because if you owned a home worth €300,000 and had debts on it of €200,000 then your ‘wealth’ is €100,000.

People could potentially try to game the system, it’s not as simple as getting indebted, if you had €300,000 in cash and then bought a property and remortgaged it to the hilt you’d still have to have €300,000 cash somewhere, so the issue becomes one of reporting and valuation.

This puts a weight upon the individual to make declarations and returns which people don’t like doing so a simplified process would be a good thing, where a person can provider a simple number of ‘assets minus liabilities equals wealth’ and file it online.

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RTE Primetime featurs Irish Mortgage Brokers

We were asked to take part in an interview on Primetime about house prices and whether or not they were starting to show signs of falling. Our view is that they will fall in time (probably in a damaging way) but that it won’t be soon because supply is still above demand and price indicators like rents are still rising. This is damaging for first time buyers and those stuck paying high rents.

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RTE Today with Sean O’Rourke has Irish Mortgage Brokers discussing cash buyers

The Today Show with Sean O’Rourke had us on to discuss an article written by Charlie Weston in the Indpendent about the strong level of cash buyers in the Irish property market. Marie Sherlock from Siptu the trade union was also on, what followed was a robust conversation where there was some interesting debate but also a lot of agreement on the problems, symptoms and solutions to the ills of the Irish property market.

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