We took part in a conversation with Matt Cooper on The Last Word about bank taxation with Joan Burton from the Labour Party. We tried to make the point that short term thinking about bank taxation is a mistake, that we are better off getting the maximum amount of money back to the state rather than losing bank value in order to score a short term political win.
We were happy to take part with Maria on WLR FM about the loans that were being sold by Ulsterbank. We wanted to make the point that restructured loans that were making their payments were not going to be transferred and that many of these loans were many years in arrears (on the residential loans it is often 7 years behind). This indicates the loans are not sustainable, and that concluding the loans is probably a better outcome for all parties than the continued situation where the banks and borrowers are both in total denial. After a decade of this crisis it has come to the point where people have to accept that some homes will be lost but that sometimes those homes are empty, other times the person will get debt writedowns and that’s a good outcome too.
We were happy to take part in a conversation on the Last Word with Matt Cooper about the recent Ulsterbank loan sale, Karl Deeter was there for Irish Mortgage Brokers and Mick Barry TD was also part of the interview.
With an attempt to lift the housing market out of the current crisis it’s in, the Irish government is left to answer one very important question. Is the Help to Buy scheme even helping?
Or…is it worsening the gap of the home hunters who are looking for the ability to buy?
As what is already well known, house prices are soaring. Without the supply of housing increasing at any fast rate, this will continue to be the case.
Therefore, home prices are continuing to rise, much faster than incomes are rising, and the gap between available homes and affordable homes is continuing to worsen.
When looking at reports from CSO, the average wage in Ireland is €45,075 for a full-time employee. That number is, however, much lower as a median, where most of the working class clusters. The median is found at €28,500. A drastic difference and even more of a surprise when finding that, that means, nearly half the population is below that number.
This is where the Help to Buy scheme comes into play.
Introduced just earlier this …
As vulture funds have been seen as taking over the market, the next question is, what do we do next? What happens after a vulture fund takes over your mortgage?
These funds first entered the Irish market at the end of the financial crisis and since, have remained a consistent factor in the mortgage game. Though many years have now passed since they were first introduced, there is still much uncertainty that remains with what exactly these funds are.
Vulture funds essentially entail the many forms of private equity firms and pension funds that exist with the goal of investing across many asset classes such as debt. Debt often acting in the form of mortgage arrears.
The question many are wondering is why? Why are these vulture funds deciding to buy the mortgages that are in arrears?
Due to post-financial crisis events, there was an extremely high number of mortgages that were in arrears as a direct effect, and many that will be in long-term arrears as well.
Because banks are generally not willing to write down any debt of …
Problems have been arising with mortgage interest rates in Ireland for quite some time now. As there has been a worsened housing market and much conflict has arisen from it, the uncertainty of many different aspects have come to arise.
Many banks have had to make competitive advances in the market just to stay relative and appealing to their customers. The housing market has simply become a game in Ireland.
Without constant changing rates, their appeal would diminish, in turn, causing a fall in their overall customer base. A rapid decline in business would quickly be seen.
Most recently, Ulster Bank announced more drastic cuts to their interest rates that would, in turn, also affect their fixed rate mortgage offerings. This was done as a way to stay competitive as many other primary banks for lending have been recently seen as doing similar things.
The Irish housing market is offering customers some of the highest variable rates accessible across the eurozone. Ireland’s average variable rate stands at 3.37% while the rest of the eurozone has an average of just 1.8%. …
As we track the Irish mortgage market, the soaring prices are blamed much on the shortage in supply alongside a growing demand.
The law of supply and demand dictate much of what happens in the economy and the many financial phenomena in which are seen.
This, being a large reason as to why the supply and demand law is being blamed for much of what is happening in the Irish housing market today.
To do an analysis on what actually caused the flawed market that there is today, it is important to study the market as it was in 2006. The market boom before the bust.
In 2006, home construction was at peak levels, with nearly 90,000 homes built. With a population of just around four million, that is an impressive number for home production to occur.
This, however, is where the law of supply and demand began to become of question.
As homes were on the rise and an increase in supply was seen, prices continued to rise as well. The opposite of what the supply and demand law …
With the Irish housing market remaining at such a loss, it is important that we recognize what the core foundations are that act as a basis for continuing growth. By recalling these foundations and working to improve them, there is a stronger potential to understanding the true issue with the overall crisis.
Last year, Ireland experienced the highest number of home construction since 2009. With 19,271 homes built to create a growth of 29%. Though an impressive improvement, this number still falls substantially below the goal number of newly constructed homes.
This increase, though not the goal, is, however, a good sign of progress and hope for the housing market to finally return to regular levels.
Some other marginal improvements that can be noted in the market currently are; housing commencements were seen to increase by ⅓, the volume of building activity is at a high, and 13,842 new dwelling units have been approved for construction. All in which represent some of the highest improvements since 2009.
Though there are many positive things happening in the housing market, what we …
Renting in Ireland is an extraordinary and surprisingly busy sector to be involved in. A sector that is shrinking at an exceptional rate. But only by individual growing…not by choice.
Recent surveys actually show that the number of available rental properties are at the lowest they have been in recorded history, while at the same time, less than one-third of people renting their homes are renting by choice.
The majority of individuals in rental properties are in it because they either can not afford the mortgage on available homes or have been denied social housing.
Renting is at best, the third choice.
The burden on individuals and families of paying rent also causes for a demanding financial pressure to be put on these renters as ⅓-½ of their paycheck is often seen taken by rent expenses.
Making it a difficulty for individuals to even get into the renting sector as a large portion of their income will essentially be given up.
However, it’s even increasingly difficult for someone looking to branch out of the renting sector to save the allocated …
Perfect Property has recently found success in finding the common budget of the average house hunter in Dublin.
While in such a crisis, this is information that has been found is essentially vital in understanding a piece to the puzzle of what keeps buyers from buying.
Of course, there are statistics on the shortage of homes compared to the increasing demand, a factor into understanding the crisis that is just as vital.
According to Perfect Property, a relatively new search engine, the average Dublin house hunter has a budget of €315,000 to purchase a home with.
A pretty substantial budget for any home buyer, however, we are still observing a vast amount of first-time buyers applying for the new state mortgage scheme, introduced just a few months prior.
A scheme that was expected to cover nearly 1,000 loans and last for an extended period of time is now lucky if it lasts the full year.
Of course, when looking in the Dublin area it can be expected that the budget for a home will …