No Deposit? No Worries!

In an inflated economy, saving up for a deposit can seem like the most difficult part of buying a home especially when most of your net income is going into paying rent and your monthly bills. While having a large deposit gives you the best chance of getting a good mortgage deal with a low interest rate and a bigger house, there are options available for people with lower deposits and government help to get you on the housing ladder.

The average first-time buyer puts down a 10% deposit on their first home, which could mean finding a daunting €30,000 (on a €300,000 property) or more. However, there are also a few government schemes to help first time buyers get on the property ladder. These include the Help to Buy & First home Shared equity scheme.

Although the Help to buy scheme only applies to new build properties, with the purchase price of less than €500,000 and has a maximum amount of €30,000 that you can claim (please see more information about the scheme on the Citizens information website or …

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Four Alternatives for Policy Responses to Increased Mortgage Rates, According to David Willetts:

Introduction:

The recent findings by the Resolution Foundation have shed light on the significant impact of rising mortgage rates in Ireland. With projections indicating further increases in the coming years, it is crucial to explore policy options that can alleviate the burden faced by homeowners. In this article, we will delve into the implications of these findings and examine four potential policy responses to address the challenges presented by higher mortgage rates.

 

Creating a New Spending Program:

One approach is to consider the implementation of a new spending program aimed at assisting individuals facing higher mortgage payments. However, it is essential to evaluate the effectiveness of such a measure, considering the income levels of the affected population. Moreover, it is important to recognize that the increase in mortgage rates is a deliberate policy response to combat inflation, and protecting individuals from the impact of this policy may not fully address the underlying issue.

Exercising Lender Discretion:

Lenders can play a role in alleviating the burden of higher mortgage rates by exercising discretion in their lending practices. One practical measure …

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Property market in Czechia

Recently, around the world, the housing market has become a hotly debated issue in the context of the rapid rise in house prices. From 2000 to 2008, Czechia experienced a huge boom, with the growth of buyer interest far exceeding supply on the market. Between 2009 and 2012, the economic crisis hit the real estate market. As a result, demand weakened significantly, with house prices also falling.

Following this slump in demand and prices, with owners losing up to 40% of the value of their properties in some locations, the market started to grow again in 2013. so you could say that the real estate market has a cyclical period, which is repeated with period of approximately 8 years of growth and 4 years of decline.

Currently, demand is growing greatly due to people’s interest in saving their savings into conservative assets, as well as the overall economic situation in Czechia, where many people have higher incomes and cant hus afford to buy better housing. The quality of housing is a major factor.

Many people are looking for more expensive …

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Negative interest rates are both gone and here at the same time.

Many commentators are talking about the end of negative interest rates in nominal terms and it’s true, interest rates are rising but in real terms they are still negative. Look at mortgage rates (for instance), you can borrow at 3% and below and meanwhile you have property price appreciation at 15% meaning that in real terms you are paying -12%.

If you can ever get something on a continuous basis at -12% that indicates ‘buy’, and that’s what people are doing, but notice that we mentioned ‘continuous’, the reality is that there is no arbitrage most of the time and this will be closed down by either rising costs, falling prices or some other outcome that we can’t forsee. Trees don’t grow to the sky, they never have and never will so the trajectory of house prices must rationalise but it’s hard to see how or where at present because the demand side seems so demonstrably strong.

I bumped into Kieran McQuinn on Pearse Street today and in our brief chat mentioned how the price changes are not sustainable, he …

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What is happening with interest rates, why, and what can you do?

What is happening with interest rates?

Interest rates rise and fall, we have been in a secular-ZIRP (zero interest rate policy) environment for quite some time and as people who subscribe to the monetarist school of thought, this would always lead to inflation which we are seeing now, albeit a fairly delayed response given how long this policy has been in place.

Why?

Not too long ago the yield curve was negative 20 years into the future such was the dismal outlook of markets for any level of inflation, but then you had a pandemic, the ‘great resignation’ and between labor and supply constraints along with monetary policy effects, there is inflation you haven’t seen in 40 years. Now the curve is negative only one year into the future and the price in the money markets has risen.

Just to clarify this, many mortgage providers get their money by buying it (you buy at X + interest rate and then ‘sell’ it to borrowers at X+margin [which is ideally above the price you bought it at]). In an oversimplified manner, …

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European property and mortgages: Frankfurt

Residential real estate is as popular as ever. Many people fulfill their dream of owning their own home with a one- or two-family house or a condominium. High demand is driving real estate prices to infinity. The problem of housing shortages is on the rise. Forecasting future prices is not that easy. Rents could rise even further due to excess demand. Many are therefore looking for alternatives. These include buying condominiums or single-family homes.

The average asking price for a condominium in Germany was €3,748 per square meter in the first half of 2021. This represents an increase of 15.1 percent compared with the first half of 2020. In previous years, the annual increase had still been around ten percent. One- and two-family houses and terraced houses were offered for an average of 350,000 euros, representing an increase of 12.9 percent.

However, this does not apply equally to all of Germany. There are significant regional differences. The best example here is eastern Germany, which is still considerably cheaper than western Germany. It doesn’t matter whether we’re talking about condominiums and …

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European mortgages explained: Czech Republic

About Czech Republic

The Czech Republic ia a state in Central Europe. It is a landlocked state of 78,870 km2. It is bordered by Germany, Austria, Poland and Slovakia. The capital city is Prague. The Czech Republic is a market economy country that belongs to the highly developed countries of the world, according to economic, social and political indicators. Economically it belongs to the world’s 31 riches nations with the highest financial incomes, according to the World Bank. The unemployment rate has been low for a long time and below the average for developed countries.

History of the Czech Republic

Czech Republic was first populated by Celts 4th century. In 863, the Byzantine missionaries Constantin and Methodius come to the part of the present-day Czech Republic and introduced Slavic liturgy there. The defeat of Austria-Hungary in World war 1 cleared the way for the foundation of an independent state of Czechoslovakia, which was founded on October 28, 1918. The first president of Czechoslovakia was Tomáš Garrigue Masaryk. On January 1, 1993, Czechoslovakia was divided into two independent states: Czech Republic …

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Irish Mortgage Brokers featured in the Irish Times

We were mentioned in the Irish Times in a piece by Cliff Taylor about the increase in the number of people seeking to refinance their home.

Rather than a fear of higher interest rates, Karl Deeter, of Irish Mortgage Brokers, believes it is primarily driven by people facing tightening (link to article here)

The crux of the point being made is that as inflation is affecting people and rates look set to rise that it is naturally driving people to consider ways to get better prices on one of their biggest outgoings and to get some assurance on what the price levels of their outgoings will be.

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History of the Landesbank (Bavaria)

In Germany, Landesbanken are credit institutions that carry out banking transactions for individual federal states and support the state in promoting the economy.

The history of the legal predecessors of today’s Landesbanken often dates back to the 18th century. In their now familiar form, the banks emerged in the years after World War II, when the German states issued their first state bonds with the help of the Landesbanken. In the respective federal state for which they carry out banking transactions and act in an advisory capacity, they perform a kind of house bank function. In addition, the Landesbanken are authorized to conduct all banking transactions permitted under their statutes. In this respect, they have been operating on the market for years as general commercial or universal banks.

The business model of the Landesbanken has faced a dilemma since the abolition of institutional burden and guarantor liability in 2005; on the one hand, they conduct banking business for their federal state, but on the other hand, they are on a par with private banks and have to hold their own …

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The economy of Nuremberg

Nuremberg is the second-largest city in Bavaria after Munich. According to the population register in December 2021 530,222 people had a registered main residence in Nuremberg. Within the last two Corona years, Nuremberg’s population has thus declined by 1.1%. The main reason for this is the Corona pandemic. Since October 2021, the number of inhabitants has been increasing significantly again. According to the Nuremberg and Fürth Statistical Information System, about 32.000 people moved away from Nuremberg in the year 2021.

Nuremberg was ranked among the top 25 cities with the best quality of life worldwide in a study (Worldwide Quality of Living Survey) conducted by the consulting firm Mercer, and was ranked sixth among German cities in 2010.

The overall quality of living and satisfaction of the population is continually determined every three years in most German cities. The last survey took place in 2019 with over 1,000 participants. More than 80% of all attendees from Nuremberg were satisfied with the public areas such as markets, squares, and pedestrian zones in their city. The condition of roads and buildings as …

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