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.
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 …
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 …
With the current housing crisis in the midst of the country, many plans have been developed to get the country out of its current slump. Some merely get laughed at, while others are well on their way to implementation within the housing market. It is likely that before long these effects will take a toll in the market and we will begin to see some upward movement in home buyer confidence.
The government has been quick to release multiple initiatives set out with the goal to turn the crisis around and allow the market to begin looking up. The Home Loan Scheme recently announced by the government is designed with the strategic plan to provide low-cost mortgages to first time home buyers.
With the first announcement of such a plan, many home buyers are thinking; is this too good to be true? As they have been waiting for an extended period of time for some light to be shed on the crisis that allows them to finally move into the homeowner sector.
The Rebuilding Ireland Home Loan …
Good news is underway for those looking to enter the housing market, but find borrowing rates to be making it too expensive.
There’s a mortgage rate war.
Though this term sounds less than appealing, it is a war in favor of getting lower rates to borrowers and moving more first time buyers into the housing market.
As discussed in a previous posting, Ulster bank recently announced dramatic cuts in their variable and fixed mortgage rates.
The question racking everyone’s brain after such an announcement was, will other banks fall in line to stay competitive in the market?
Ulster caused increased competition in the market and even more so, posed a threat to the other banks.
These other banks were beginning to notice that in order to stay competitive they only had one choice…
To get to Ulster Bank levels or face the result that they may lose all new entrants into the market as well as some of the old.
Shortly after the announcement of Ulster Bank to reduce their mortgage rates, followed KBC …
As I have previously written, the Irish housing market is currently experiencing a great crisis. With nearly no answers, the public is scrambling to find a way out, a way to the surface of all this financial distress.
This is where the Irish start-up Moove comes into play.
They’re entering the market with a goal to disrupt the market and give buyers and seller more choices and control during the sale of a home.
Yet to fully enter the Irish market, they are basing and forecasting the success of their business on the hybrid online model, currently based in the UK.
This model is currently offering sellers savings up to 7,200 euro!
Founder of Moove, David Madden started his career at the age of 17 as an estate agent at his parent’s business.
Having worked in the real estate business for many years, he has great potential in the start-up of such an inventive company.
Moove is designed to provide the same services one would find from a regular real estate agent, starting at a base cost of 1,800 euro.
Those looking to buy a home in the States are all currently saying the same thing is holding them back….They can’t seem to afford the down payment.
Down payments on houses can be burdensome and oftentimes weigh on the ability to buy a home. In some cases, it calls for years of disciplined saving. Something that can be difficult for someone who wants a home and wants it now.
That’s where the start-up company Loftium comes in with a solution. This is a business started by 29-year-old Yifan Zhang of Seattle.
As someone who has personally heard her friends talk for years about the down payment dilemma, she finally decided to do something about it.
Zhang started as any other Airbnb business owner. Renting out one room in her townhouse to generate extra cash. Little did she know just how much cash she could actually generate.
Quickly into her business, she was earning enough to completely pay for her mortgage and then have some left over!
That’s when the idea dawned.
Zhang decided to eliminate …
The Construction Industry Federation (CIF) claims that if the Help-to-Buy scheme is in fact removed it will only worsen our housing crisis.
The CIF, an industry lobby group, said it will take time for the scheme to do what it is intended for. The scheme has expanded the first-time buyer market so banks will start lending to builders more to construct starter homes.
The Help-to-Buy scheme can help first-time buyers get a tax rebate of up to €20,000. The public has blamed this scheme for playing a part in the rising house prices this past year.
The Help-to-Buy scheme apparently has made residential building in key locations possible from the first-time buyers being assisted. The CIF director general, Tom Parlon, says that this scheme has significantly helped in the growth of residential construction. Since more first-time buyers can purchase a home, building starter homes becomes a more enticing move for builders.
The Central Statistics Office published on Tuesday a report saying that housing prices grew 2.2 percent last month. This is the largest monthly increase since last July.
In Dublin, …
Abbey, a property developer, has high hopes for the Irish housing market.
They are seeing huge gains as the house prices keep increasing. They are especially reaping the benefits from the Help-to-Buy scheme. That’s why they are against the review of the scheme.
The intention of the Help-to-Buy scheme was to encourage first-time buyers and to speed up new supply of houses. It can give first-time buyers up to €20,000 in tax rebates. The scheme, instead, has apparently increased home values than raise supply of new homes. This has raised concern for the Minister for Housing, Eoghan Murphy, which brought up the review of the scheme.
The Central Statistics Office published on Tuesday that the Irish housing prices went up by 11.9 percent in May from the previous 12 months, driven by a 12.8 percent increase outside of Dublin.
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A mortgage lender offers 100 percent mortgage and a little extra for furnishing the home, why not take it? This before the housing crash seemed like a fool-proof idea. House prices were continuously rising and real estate looked like a safe investment.
Then the housing market crashed. House prices dramatically dropped while unemployment rate was rising. Suddenly Generation X now has negative equity on a home. They’re owing more on a home than it’s actually worth. What do you do?
Generation Xers, classified being born between 1965 through 1984, had a majority out of a job or have had a huge pay cut and having negative equity on a home. Massive tax cuts and the expense of childcare has taken over the disposable income.
Living in a generation of spending culture, during the time of economic growth they did not think to save for retirement. Now …