Inflation Rates Return to Normal

 

The current housing prices in Dublin have been talked about extensively recently. The newest trend shows that housing prices have reached peak affordability and now some of the wealthy classes of people are having trouble affording homes. Current house prices in Dublin are more than nine times the average salary making them unattainable for the majority of people because mortgages can only be 3.5 times your salary. Additionally, these numbers have not been seen since the Celtic Tiger Era, however, the central bank has been more careful this time and increased borrowing rules unlike during the Celtic Tiger Era. Prices are now beginning to slow down because simply nobody is able to afford them.

Inflation has also cooled off recently with a decrease from 12.4% last May to 2.8% a year later. Dublin has seen a significantly smaller inflation rate with an increase of prices from the current year to May of .6%.

The region of Dublin had the highest median price of 366,000 Euros which is just over 9 times more than its average salary of 40,000 Euros. …

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Low Unemployment Rate not Translating to Better Living Standards

Ireland’s unemployment rate has reached all-time lows and people are not able to experience the benefits. Rising house prices are increasing faster than the raise in wages causing bad living standards for many people. The Central Statistics Office posted an unemployment rate at 4.5% last month. Despite this low number, ICTU President Sheila Nunan is still worried about different groups of people that are affected. She mentioned additional problems like youth joblessness, skills shortages, and low employment levels for women as factors that need to be addressed.

Rent has risen approximately 8% in the last year while wage hikes have averaged about 3% over the same period. Many people are calling for wage hikes to be implemented to allow people to afford rising costs in the housing markets. Rent costs contribute to more than half of minimum living costs in Dublin.

The living wage refers to the wage that people need to earn to be able to afford the minimum basket of goods and services. Few employees have used that number as the starting salary for their employees and instead …

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Affordable Rental Properties are Hard to Come by

Rental properties have provided the people of Ireland different options when it comes to living situations. People that cannot secure mortgages for various reasons and therefore are unable to buy a home look into the rental market.

A new Simon Communities Study has found that over 90% of homes available for rent within Ireland are not affordable for people with state housing benefits. The study indicates that the government needs to monitor and strictly enforce rent pressure zones, including the 19 new zones announced today.

The most recent publication of the Locked Out of the Market report found that approximately 8% of properties available on the market to rent were within the housing assistance payment limits. That percentage is drastically smaller compared to the percentage of the population that is using housing assistant payments.

The study found some alarming information that the government needs to take under consideration. Only one property was found available to rent within the Rent Supplement or HAP limits across all of the study areas for a single person. Additionally, only two unites were available within …

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Falling House Prices in Dublin

According to the Irish Independent, housing prices in Dublin on average are decreasing by just over €1,000 per month. However, property prices in the rest of the state are continuing to rise slowly or remain constant.

Property prices have been determined to have decreased on average of €4,500 in the past quarter of the year. Since the beginning of 2019, property prices in Dublin have fallen by 2.2%. The price of an average home in Dublin is now down to €433,000.

Although the average cost of housing in the capital has decreased, Dublin remains one of the most expensive cities to live in Ireland. On average, properties in the capital cost two to four times more than property in the rest of Ireland. This data was reported from the Irish Independent and the Real Estate Alliance (REA) Average House.

South Dublin has seen the steepest decline in overall average home values. In three months, property prices of South Dublin have fallen by  €6,500. Although progress has been shown in the prices of homes in Dublin, prices are still rising in other counties. Prices of …

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Institutional Investors Hurting First-Time Buyers

Big time investors in the housing market are affecting first time buyers and their ability to purchase homes. Large scale investors are buying lots of hundreds of houses at a time and renovating them and re-selling them for profit. Home buyers are feeling the pressure and are unable to find homes in their price range. Fianna Fáil is calling on the current government to investigate the current tax incentives for investors and believes that could be a way to make significant changes.

The Department of Finance has agreed to do a review on how much institutional investors pay in taxes. However, Department of Finance has already begun releasing statements defending their current stance on taxes. They acknowledged that institutional investors only make up a small proportion of the housing market. A small proportion still can affect hundreds to thousands of people. According to Savills Estate Agents, approximately 3,000 properties were purchased in blocks by institutional investors last year. Many homebuyers searching for homes contribute large investment funds to increasing difficulty in getting a house.

Nicola McCann and her partner from …

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Skyrocketing Inheritance Taxes due to Increasing Property Prices

The exchequer reported an all time high collection from the inheritance tax which is one component in the capital acquisition tax (CAT). The amount recorded that was collected amounts to €466.3 million. The increase in revenue from the inheritance tax is due to increasing property prices and unchanged tax free thresholds. The revenue figure of inheritance tax collected depicts an increase in revenue by 10% in comparison to the collections in 2017. Inheritance tax collections comparatively increased by 48% in comparison to the Celtic Tiger era in 2007. This dramatic increase across the span of 10 years is due to the rising housing costs.

Over half of the inheritance tax was paid on the behalf of grandchildren, nieces and nephews who inherited upwards of €32,500 from relatives in 2018. The rapid growth in inheritance tax collection is due to another year of increasing property prices. Furthermore, the increase is due to the controversial unchanged tax free thresholds. Many people argue that these thresholds should be immensely increased. The tax free threshold for inheritances left to children was at its highest in …

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Medici Living Group Targeting Dublin for Co-Living Scheme

Eoghan Murphy’s amendment to allow for co-living has drawn a lot of attention from international developers. It has opened the door for cheaper complexes to be built in and around Dublin.

Germany’s Medici Living Group, known as one of the biggest co-living providers internationally, proposed a plan to bring more than 5,000 new beds to Dublin. Luxembourg-based, Corestate Capital, is backing Medici Living Group approximately 1 billion Euros for building co-living accommodations throughout Europe.

A statement regarding why Medici Living Group wants to expand to Ireland, states, “As Ireland is a growing, forward-looking country with a tech hub, we can see our members and future members would be interested in living there.” In addition, they are targeting easy-to-access, high standard affordable accommodation in the city center, which is hard to currently get.

Specific locations that Medici is targeting within Ireland includes; Rathmines, College Green, Ballsbridge, Liberties, North Wall, Portobello, and the Docklands.

A spokesperson for Medici Living Group stated, “As Ireland is a growing, dynamic, forward-looking and innovative country with a tech hub (Dublin) and at the centre of Europe, …

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Residential property prices rise across Ireland

Within the last 7 years there has been an upward trend for residential property pricing. So far, 2019 has continued to follow this trend, showing significant national growth each month; Dublin seems to stay at or above par in comparison to national average prices.  

Although this trend has been upwards, Ireland is still yet to reach the price levels that they had sustained in 2007. The current residential property prices in Dublin still falls at 22.5% lower than the highest period during the early 2000s, while the national values are 18.5% lower.

In 2018, the prices rose a total of 13.3% throughout the year, giving many sellers hope that the trend would continue forward into the following year. From February to March 2019, the prices increased 3.8%. March to April there was a 3.1% increase, which shows a smaller amount of increase, but it is still far from slowing down.

Dublin increased residential prices by 0.5%, leaving house prices and apartment rents increasing by the same 2.2% as the previous month.

It seems that Dublin and …

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Renting vs. Buying

A current issue revolving around Irish news is whether to increase the supply of rental or property ownership. It is well known that there is a shortage in properties available, but just trying to produce as many properties as possible is not the solution. Careful review of the issue needs to take place by the government and necessary legislation would follow. Some factors to consider include; land zoning, shared ownership purchase models, tax breaks for EU nationals arriving for construction work, reduced CGT for empty sites, tax reduction for citizens downsizing, and help-to-buy schemes.

First time home buyers are having trouble purchasing homes due to the increasing purchase prices. It is universally agreed upon that more properties need to be available. According to an independent article, 2500 houses that were built in the first three months have not been sold yet. In addition, this is driving up decisions. That coupled with difficult mortgage banking is challenging middle- and lower-class citizens to find accommodation. These statements emphasize the lack of availability and ease for purchasing affordable housing.

Build-to-rent schemes have the …

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Government denies the warning signs of Cuckoo Funds

Cuckoo Funds has been recently used to describe big investors investments poured into developing build to rent housing. However, on average the developments funded by cuckoo funds are not affordable for the average individual or family. Some of the main investors that comprise of the cuckoo funds are large institutional investors like pension funds, real estate investment trusts (REITs) and special private rental firms. Investors are increasingly interested in attempting to tap into the growing demand for Irelands rental market.

Cuckoo funds are known for buying properties and charging insanely high and unaffordable prices for the properties. However, the Housing Minister Murphy has denied that housing is unaffordable. Murphy continued to argue and defend the government’s record on housing and claimed that the government has protected renters.

However, individuals have accused the government of ignoring the red flags of activities related to cuckoo funds. Multi-national venture funds have been able to sweep up properties and resell them for immense costs. Cuckoo funds have created 3,000 new housing units in 2018.

The government has not yet claimed to see the dangers …

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