Newstalk Lunchtime, Wealth per capita now higher than back in the boom, 11th September 2018

Newstalk’s ‘Lunchtime’ with Ciara Kelly did a piece on new wealth statistics issued by the Central Bank which featured Karl Deeter from Irish Mortgage Brokers. It looked at the average wealth per person in Ireland and the point was made that property was a very large component of it. Other things that affect wealth were also discussed as well as some of the problems around using ‘averages’ to describe anything.

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Is the Housing Gap Increasing?

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 …

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When Vulture Funds Buy Mortgages

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 …

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Irish Housing Market Full of Problems

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%. …

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Intriguing Statistics of First-Time Buyers

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 …

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Borrowers Looking to Lower Existing Mortgages

Now, more than ever, it’s time that homeowners do whatever they can to lower their mortgages.

With the rise in European interest rates, it is expected that higher mortgages bills will be quick to follow.

Homeowners are beginning to get more and more comfortable as economic recovery since the recession has been tracked as going in such a positive way.

By overpaying on a mortgage the borrower will knock tens of thousands off of their mortgage easily. And they would dramatically cut back on the time it takes to finally become mortgage free.

According to Dowling financial, by an increase of 100 euro per monthly payment, the average mortgage would be paid off three years earlier and save nearly 12,826 euro in interest.

A small increase in payments leads to quite a substantial savings. Probably an effort worth it to most borrowers.

Those that should keep their guard up and remain mindful are those with a fixed rate mortgage.

Overpaying on fixed-rate mortgages could cause borrowers to be hit with an early redemption fee. A charge that could potentially be …

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Affordable Home Schemes

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 …

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What the Numbers Mean for those Looking to Buy

Ireland as a whole is eagerly waiting for each month to come, and new statistics to be published. Statistics in regards to the housing market and what can be expected by the next months’ forecasts.

It is with eager thoughts that positive reports mean future gains and future gains mean economic development and of course, citizens of Ireland to get into their homes.

A country with many living in a distressed state as they give up their dreams of home ownership or settle for someplace they simply don’t want, these reports sit a little heavy.

With every new reported couple/persons in the home buyer cluster there comes a story as to why they aren’t following their initial plans.

Maybe they can’t afford their dream home, the supply of homes isn’t available in their price range, or they gave up after years of looking to move into a one bedroom apartment, costing the same amount as a small home. The overlapping theme, unfulfilled.

Most individuals are hoping for the stats to tell them that the country is …

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How the Mortgage Market can Return to Normal Levels

Last week the Institute of Banking held a forum on behalf of the Irish Mortgage market in which Deputy Governor Ed Sibley delivered a speech addressing much of what is prevalent in the country today.

It began by briefing the current housing situation in Ireland. Simply put, it’s dreadful. As many are on the pursuit of suitable housing the “toxic legacies of the financial crisis” are proceeding to cause mayhem throughout the nation.

The forum started by discussing the role of the central bank. The central bank plays a much greater part in the overall mortgage market than one may think.

It is up to the central bank to ensure that “the economic and social good of mortgage provision is prudent, sustainable, and that the best interests of consumers are protected. “

The central bank has had to take extensive interventionist movements in the Irish mortgage market since the financial crisis as Ireland typically experiences extreme economic and human hardships when these certain risks arise.

In order for the mortgage market to function properly, consumers …

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U.S Housing Market since ’08

It’s been ten years since the U.S. housing market crashed and caused many banks to close their doors and many people to lose their homes.

The question today is, has the market recovered? It depends on where you look….it is predicted that the market will have fully recovered by 2025, says Ralph McLaughlin, chief economist.

When predicting the recovery of the housing market, it is vital that you keep in mind the key factor of location.

Housing development varies greatly from state to state and it is places like California where we see a complete recovery in some areas and little to no recovery in others.

Such a large range between close by spaces is due to factors such as the city’s overall well-being. By this, I mean population growth and job outlook.

When a community is expanding and working within its own limits it is inevitable that different areas in the community will also look up, such as the housing market.

When developing the statistics in assessing the recovery of the housing market we compare current data to pre-recession …

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