Soon to see more regulation among housing

In reference to Greater regulation of our building standards would make it easier to fund social housing by Charles Barry on 26 June 2017 in Independent.

The house building of Ireland is continuing to rise but not without trouble. High demand means there is a chance builders are only looking at their output volume and not the quality. This led to numerous issues that have came up in late 90s and early 2000s – breaking health and safety regulations, pyrite, poor building quality, and contractor bankruptcy.

Regulations have since come up to avoid these issues with Building Control Amendment Regulations and Construction Industry Register Ireland. Even with these regulations in place, it can not completely solve the problem.

There is a similar situation in the UK with about the same building laws. A recent study found that 66 percent of the underlying issues of buildings are caused by poor workmanship.

To help alleviate this issue, the Dáil approved a motion to improve regulation for buildings. It improves the standard and quality as well as support to homeowners …

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The new fast track planning law: will it help boost housing supply?

A new fast-track planning law officially came into effect last Friday. It was passed in December of 2016 as a part of The Planning and Development and Residential Tenancies Act. After months of delays in which officials debated over application fees, the law has now been officially be enacted.

The Planning and Development and Residential Tenancies Act 2016, introduced by former Minister for Housing Simon Coveney, introduced the idea of strategic housing developments. It was intended to provide greater stability for tenants and to help streamline the planning process. An important aspect of the Act is the new fast track planning procedures it introduced. The fast track planning procedure allows developers to bypass their local authority and apply directly to An Bórd Pleanála, an independent authority that previously only made decisions on appeals after plans have been rejected by local authorities. The Board was established by the Local Government Act of 1976, and now its responsibilities will expand to include taking and reviewing applications submitted through the …

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Only one in three approved homes have been started

With reference to Work has yet to start on 23,000 homes in capital which have permission by Paul Melia on June 26 2017 in Independent.

To keep up with the rising demand of the housing market around 30,000 to 35,000 houses need to be completed every year. With 7,975 houses completed and 5,261 under construction, that leaves around 64 percent or 23,700 of the approved homes yet to begin. In Dublin particularly, 5,643 out of the 7,277 or 77 percent approved have yet to start as well.

Speculations on why this could be is developers with not enough funding or they could be hoarding the land expecting the housing prices to further rise, claimed Society of Chartered Surveyors and State bad-bank Nama.

With 36,936 homes approved, it leaves two out of three home plans not being started. Since there is currently a housing shortage, talk of imposing a holding property tax has been circulating. With this shortage of houses there has been a significant increase in housing and rent, especially in Dublin.

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Rents continue to increase over the year by substantial amount

In reference to Irish private sector rents grew by 7.37% from 1st quarter 2016 to 1st quarter 2017 by Robert McHugh on 15 June 2017 in Business World.

Over the course of only a year, the average rent increased by 7.37% from 1st quarter 2016 to 1st quarter 2017. The standardised average national rent being €987, Dublin is one of the highest amongst the other counties as well as Cork and Galway. Looking over the houses and apartments market the trend of rents are continuing to grow.

Outside the Dublin county, the houses and apartment rents at a overall growth rate of 1.3% in private sector rents. Annual growth increased by 7.6% in houses and apartments. The margin is shrinking between the peak of 2007 and the 2017 first quarter however, it is still 8% below.

So far the 19 Rent Pressure Zones (RBZ) are located in parts of the following counties: Dublin, Cork, Galway, Meath. No other parts of the country are currently able to become Rent Pressure Zones, according the to latest Rent Index.

Mr. Simon Coveney, …

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Help-to-buy incentive under scrutiny

This past Sunday, current Housing Minister Eoghan Murphy said on RTE’s The Week in Politics that the Help-to-Buy initiative introduced by his predecessor is currently under review. Since its introduction in January under former Finance Minister Michael Noonan and former Housing Minister Simon Coveney, the Help-to-Buy initiative has already received nearly 7,000 applicants and has successfully helped a great percentage of them with the purchase or building of their first home. However, the initiative has recently come under fire for exacerbating the problems it intended to solve, and there is speculation that it may be dissolved.

 

The purpose of the Help-to-Buy incentive was to encourage first buyers to enter the market by helping applicants with their deposit through the refund of applicants’ income tax and DIRT other the past 4 years. It applies to first time buyers who either purchase or build new residential properties, and allows them to receive 5% of the purchase price of their new home, with an upward limit of €20,000. It is hoped that the incentive would help more people climb the property ladder, …

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ESRI is saying there is no housing bubble

With reference to ESRI says rapid rise in house prices does not signal new bubble by Eoin Burke-Kennedy 22 June 2017 in the Irish Times.

The Economic and Social Research Institute, ESRI, is stating that even though the housing prices and rents are rising rapidly this does not necessarily mean a new housing bubble. The official house construction may be overestimating the housing activity, according to the ESRI.

ESRI’s latest economic commentary included a section saying that even though new credit is growing in the residential market and small companies, a good credit risk assessment is still in place and seems to provide no risk.

ESRI still believes the housing prices and rent will be rising from the growing imbalance between supply and demand. The predicted the long-run housing demand to increase from 25,000 to 30,000-35,000.

The government supposedly overestimated the level of supply which may have overstated the true level of construction activity. Government estimating the housing supply at 15,000 in 2016 and ESRI at 12,700.

There is a lot of speculations of another housing bubble coming about. …

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Analyzing rental yields – what this means for investors and renters

An article was published by Fiona Reddan on the Irish Times early this morning examining and evaluating property investment options in and around Dublin today. The article uses the measure of rental yields, how much rental income a property generates as a percentage of its market value, to compare the worthiness of investment options.

 

The major finding in the article was a negative correlation between housing prices and rental yields, meaning that, in Ireland, higher priced properties generate lower investment yields on average. The worst places to invest includes areas such as Dublin 6, Dublin 4, and Dublin 14, where average sale prices are well above €500,000. The best places to invest includes Dublin 10 and Dublin 2, where the average market value of property is much lower. In Dublin 6 for example, the average sale price is €706,741, while rental yields are only 3.6%. On the other hand, in Dublin 10, the average sale price is €173,478, but the annual rental yield is 10.4%.

 

These …

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An Upscale Dorm for Adults

With reference to Co-living goes mainstream, but this is not roommate roulette by Diana Olick

A new housing trend called ‘co-living’ is an upgraded version of low cost living geared for young professionals. The concept of co-living works like a college dorm, complete strangers living in an apartment together with shared living spaces. The catch is every roommate has to sign their own lease so there is liability for their roommates.

The idea came from an increase of housing costs in Chicago and there was no place for two guys, Ryan Shear and Noah Gottlieb, to live so they created this new style targeted for the young professional. It gives another option for people moving to a new city who don’t want the liability of sharing a lease with a stranger but wants to meet new people. It comes with a bedroom and bathroom to yourself and a shared-furnished common area. There is also cleaning services that come and clean the common area.

Gottlieb found the demand to be stronger than expected in Chicago with average age of renters …

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Housing Prices are to Remain High in the Future

With reference to Housing Costs likely to remain elevated in Medium Term by Ali Uğur.

The housing costs look to remain elevated with no promise of decreasing throughout the rest of 2017. With increases in the average price of property at 10.7% from 2016 to February 2017 according to the CSO residential property price index.

Concerning rental properties, the rental inflation is 13.4% for the first quarter of 2017. This being the second highest level since 2002. This is in part from the supply and demand issue here in Ireland for rental property. The May 1st, 2017 there was fewer than 3,100 rental properties available to rent. This is the lowest on the record, according to the Daft.ie report.

Looking on the bright side, we are seeing an 18% yearly increase in completed residential properties with 14,932 completed in 2016. This is in response to trying to meet the increase of demand in the housing market. A majority of these, however, are one-time builds and can’t predict any yearly continuous builds. The breaking of grounds for new residential homes has …

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Mortgage Market Update

The Financial Broker gives readers an overview on currently property prices and mortgage market conditions.

The Central Statistics Office published a report showing price inflation on property had increased 10.7% in the past year up to February. A similar report reveal how the number of newly build housing last year was 14,932 units when estimates denote a demand of up to 50,000 units. These numbers illustrate a problem in the current mortgage market, which this article pinpoints the causes of. The author laments about rising property prices, arguing that many potential home buyers have missed out on the prime time to purchase property, and are currently no long capable of affording the housing of their choice at an acceptable price.

The author attributes the current housing price and rent inflation in Ireland as consequences of a lack of supply in urban areas instead of lax macro-prudential regulations. In fact, she argues that current Central Bank regulations are too restrictive, and thus have prevented demanders from being able to locate and buy affordable housing. While the prudential regulations have lowered the …

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