Housing crisis only expected to get worse until 2023

According to Focus Ireland, the most optimistic statement on housing released by the government reveals that the housing crisis will continue get worse until 2022 or later. This statement is considered very optimistic as housing issues will likely progress into 2023.

The Department of Housing targets 48,000 new home completions by 2023. If this target is achieved, 2023 could be the first time that housing supply could potentially exceed housing demand. Figures provided by the Department of Housing have shown the first time that an admission denoted housing and homelessness will only continue to get worse in the next few years.

Although the Department of Housing has set a target of 48,000 new homes to be built by 2023, this target could be missed. If the target is completed or surpassed then burdens associated with the housing crisis could be significantly reduced. The problems that could be reduced would include reduced homelessness and new homes would create more supply for social and affordable housing. However, if homes were to be sold at current market values then the impact on …

Read More

Heightening Taxes to Boost Spending

According to the Nevin Economic Research Institute (NERI), the government needs to look at generating extra funding for housing. How do you generate additional government funding? Taxes.

The need for increased spending on housing can be gained from heightening employer-related PRSI, property, gift and inheritance, and carbon taxes. Irelands government spending and tax revenue amounts to much lower than the average EU spending and revenue.

According to the Department of Finance, in 2018 just over €55.5 billion was received by the Exchequer. Tax on income and wealth amounted to 10.5% of the Irish GDP in 2017, while tax on individual or household income amounted to 7.3%.

Countries in the EU that have progressively developed more stable housing and social housing taxes and tax revenues are comparatively much higher than Irelands. For example, Denmark has established housing that over 22% of dwellings are social rented. Denmark’s tax on income and wealth amounts to 29.7% of their GDP and tax on individual or household income equates to 25.4% of Danish GDP.  Denmark exemplifies a similar country in the EU where the housing market …

Read More

Changing Population and Effects on the Housing Crisis

According to the Central Statistics Office, Ireland’s population is expected to grow from 4.78 million in 2019 to 5.9 million by 2046. The growth is occurring due to economic growth and recovery since the 2008 recession. The population of Ireland has increased by just over a million people since 1999. The rapid population growth suggest an even greater demand for housing in the future. The housing crisis will only continue to progress, because demand for homes and apartments will only continue to grow as the population increases.

An additional 1.12 million people will need to be housed by 2046 as population continues to grow. At least 12,500 homes need to be built each year until 2021. This is a massive task, considering that Ireland built just over 8,500 homes in 2012.

Demographic changes in population also present challenges in supplying more housing. Ireland’s population is aging. The 2016 National Census has confirmed that there has been a 19.1% increase in people aged over 65. By 2046, people over the age of 65 are expected to account for 1.4 million of …

Read More

Dart and Luas location spikes home prices

Location has always played a substantial role in the pricing of property, especially in major cities. Comparing prices of rent or total purchasing price of business, commercial and residential properties, it seems that this is a common trend across the world.

In Dublin, this also reigns true. New research from Daft.ie has shown that if you are a renter located near the Dart or Luas, your rent can be up to 12% higher than that of those a bit further from these modes of transportation, with Luas red line stops topping the charts. Rent in Dublin has averaged €2,000 per month in 2019, while more conveniently located renters paid a premium of up to €3,500 per month.

On the coast, there is also an influx in prices due to its prime location from some of Dublin’s quickest modes of transportation. This is not unwarranted though, given that the Luas and Dart decrease travel time significantly. Time is very valuable, especially for commuters into or a bit outside of the city.

As a student at UCD this summer, …

Read More

Pension top-ups failing seniors, women

The most recent governmental review of pension top-ups has left many retired people with far less than they had anticipated. Only 15% of around 11,500 cases reviewed within the last period will be receiving top-ups, leaving 10,000 people who applied for a top-up without any other option than to survive off of their same plan, despite rising prices.

This denial of pension top-ups extends beyond this small percentage of retirees. Tens of thousands of people were affected by this bad review, causing the public to go into a frenzy. Understandably so, given that everyone who has a pension is retired and between the ages of 60 and 70. Most of these people have already worked for over 40 years and have planned and saved so that they no longer have to work in the elderly stage of their lives.

Usually, people begin saving for pensions at the age of 25, paying small amounts to their retirement fund that are sometimes matched to a degree by either their current employer or the government. These plans also usually have higher …

Read More

BPFI Housing Market Monitor Report Explained

The Banking & Payments Federation Ireland released their latest Housing Market Monitor report today. It consisted of many different numbers and statistics that will be explained in this blog.

Ireland has consistently seen a large influx of newcomers recently. In the first quarter of 2019, it was reported that the number of housing commencements increased by 31.6% compared to the first quarter of 2018. Additionally, 5,800 housing commencements were registered during that same time period. These numbers are good signs for the Irish people. An increase of new construction will help out with the shortage of houses available and allow for a continually growing economy.

In response to the increase in number of housing projects, one would also expect the number of mortgages given out to increase as well. Mortgage approvals grew 9.2% in the first quarter, while mortgage drawdowns increased by 8.9%. Increase in the number of mortgage approvals can raise some red flags. Mortgage defaults can be deadly for both parties involved, however, with Ireland’s growing economy, defaults should not be an added worry.

The major increases in …

Read More

Donhoe’s Investigation in Interest Cap on Loans

The Minister for Finance and Personal Expenditure and Reform, Paschal Donohoe, has begun investigating the idea of capping interest rates moneylenders can charge. The discussion of capping maximum interest rates has been brought up by the fact that moneylenders can charge insanely high percent annually on small loans. In other words, any licensed moneylender is able to set their own interest rate. There has been a recent push onto the Minister for Finance to create a interest cap on loans.

Why is the ability for licensed moneylenders to set their own interest rates an issue ? Interest rates determine the price at which individuals can borrow money. The higher the interest rate the more expensive it becomes to borrow money. The higher the cost of money the more difficult it becomes to borrow money and thus discourages investment. Ultimately, ability to set extremely high interest rates means borrowers will be paying a high price for money. The higher the interest rate set by a moneylender the higher the lenders profit will be.

In comparison most countries in the European Union …

Read More

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 …

Read More

RTE 1: Claire Byrne Live features Irish Mortgage Brokers, 17th September 2018

We took part in a panel discussion about the ‘take back the city’ campaign. While we are in favour of solutions to housing shortages, taxing dereliction and land, we are not in favour of taking people’s property. This has to be balanced against why property rights were established in this country and we also questioned why they went after private property rather than the abundant and abandoned state owned property which includes council owned homes that are not being used.

Read More