Central Bank warns of a financial stability threat due to cuckoo funds

Cuckoo funds or offshore venture funds in Ireland’s commercial property is causing apartments to be bought up by the big businesses that make up the cuckoo funds. The increasing dominance of offshore investment in Irish commercial property is causing risks that they will also import a boom bust cycle. According to research from the Central Bank, the threat is also that house prices will fall and the banks will be weakened.

Warnings have been definably seen as two of the biggest property investors in recent years look to sell a large portion of their office blocks. The Central Bank continues to explain that foreign financed funds are more vulnerable to negative shocks outside of Ireland. In other words, foreign investors are not as concerned with the Irish economy as they are concerned with the general economy and their investments. Foreign investors are not concerned with the health of the Irish economy and could potentially get rid of all Irish assets to pursue easy profits elsewhere.

Although there is high risk associated with cuckoo funds and foreign investors, these investments are …

Read More

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 …

Read More

OPW’s failures in property management – overpaying for properties

A former employee of the Office of Public Works (OPW) will discuss in a private session of the Public Accounts Committee (PAC) that they have shown to have immense failures in the property management unit.

The main purpose of the OPW is to support the implementation of policy. The Office of Public Works also advises the Minister and the Minister of State in property. This property includes heritage properties and flood risk management.

The former employee worked in the property management unit. The previous employee revealed that the Office of Public Works wrote numerous reports that showed the shortcomings and failures in the way that the OPW deals with property.

The OPW has been under recent pressures due to the move of the Department of Health headquarters onto Baggot Street. According to the PAC, the move led to an overpayment of €21 million. The former employee will assess on the value of money in the OPW’s total property and report to the PAC related to the overspending of OPW. According to the employees report the overspending of a single session exemplifies …

Read More

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 …

Read More

Is Long-Term Renting Sustainable?

Lifelong renting is becoming increasingly popular within Ireland’s largest cities. Influential Cork developer, Michael O’Flynn, talked about instances when he heard of people suggesting that up to 50% of houses should be rented. O’Flynn heavily disagrees with this statement and suggests that ideas such as economic and pension polices should be reviewed.

O’Flynn most recently addressed this issue during his discussion at the Institute of Professional Auctioneers and Valuers (IPAV). He set out to prove that retirees could not sustain a long period of renting properties and instead should have a house paid off to retire in. He asked the audience, “There are currently five workers for every pensioner, but the projection is for this to drop to two workers for every retiree by 2050. Have we considered how that will impact on pension income?” The renting model is not affordable for many classes of people and can cause severe economic troubles down the road when savings begin to dry up. Renting can be a great alternative for people moving to new areas or students and young adults in the …

Read More

Finance Minister Announces €1.25 Billion allocated to Social Housing

According to Finance Minister Donohoe, the Land Developmental Agency has identified sites where a potential  3,000 homes could be built. State bodies are working with the government to locate land that can deliver an additional 7,000 units.

Donohoe also pledged an increase allocation of €121 million to the Housing Assistance Payment. This additional €121 million serves as a emergency accommodation. Donohoe reveled a €60 million increase in funding will also go towards emergency accommodations.

Also, landlords will have 100% mortgage relief on loans used to pay for rental properties. This new relief for landlords will be in effect in the next year. This action will help reduce the risk of becoming a landlord.

Homelessness services were also planned to receive an increase of funding of  €30 million. This funding is to help alleviate the burdens of the housing crisis. The total spending on homelessness in 2019 is now boosted to €146 million. Donohoe’s report revealed that housing needs for 25,000 people will be met in 2019 due to the increase in supply of housing stock. The increasing trend in supply of housing has …

Read More

Single Parents and Migrants at Greatest Risk for Homelessness According to New Report

If you identify as either a lone parent, migrant, or a member of a traveling community then you are at greater risk of homelessness according to Focus Ireland. Focus Ireland conducted a report examining the drivers of family homelessness in Dublin. The overarching idea was many families are being evicted from private rental properties and unable to find another place to live causing homelessness. Many of these families have a long history with residing in the same apartment and should not be threatened with homelessness due to the rising property prices and shortage of availability.

Mike Allen, Director of Advocacy at Focus Ireland, appeared on RTÉ’s Morning Ireland to discuss his companies recent report. He was quoted saying, “the vast majority of the families surveyed had been living in the private rental sector without any problem until the crisis came along.”  Mike Allen has witnessed an increase in many property owners exiting the rental market especially those that are offering more affordable properties to rent. This is one of the many reasons contributing to the growing numbers of homelessness in …

Read More

First time buyer steps explained

Being able to take out a mortgage has become a major hassle for all types of home buyers, but especially first time buyers. Recently, a 2018 study by the Central Bank reported that the best position to be in so that your request for a loan can be approved by one of the 7 largest lending banks is in a couple with a substantial down payment already available.

This is most likely the case because a couple can bring in two salaries, making a steady stream of income more reliable even if one person were to lose their job. Additionally, having a large down payment reduces risk for the lender. If you were to foreclose on a property, meaning you couldn’t afford to pay your mortgage anymore, there would be significantly less consequences on the lender side.

Although this is an ideal situation for approval, it is not the only solution. Plenty of first time buyers are individuals without extremely high credit scores and salaries, but there are a few key parts that must be fulfilled in order …

Read More

Dublin’s Housing Prices are Growing Faster than Income

A new report released by credit analysts from Moody’s states that Dublin house prices have grown approximately nine times the rate that employees’ wages have grown in the last six years. This is adding to the housing market difficulties causing many native Dubliners to either move or live on the streets. Many factors can be credited to the rising house prices including; the rise of multinational cooperation’s settling in Dublin coupled with the rapidly growing population. The Moody’s report concluded that Dublin’s population has grown by 21% since 2000 which, makes it the fasted growing city of all European capitals.

It ultimately comes down to the shortages of properties available in Dublin that are driving up the demand for housing, while the supplies stay consistent. Moody’s Investor service released a ranking for the European cities that its inhabitants can least afford to buy a home. Dublin was among the group of cities distinguished for being a hard and expensive city to find housing among many European countries. Additionally, the price to pay ratio for Dublin that determines how much money …

Read More

IHREC Upset Over Eoghan Murphy

Homelessness is increasing drastically throughout Ireland due to the rising property prices and shortage of available properties for sale or rent. Homelessness numbers reached 10,378 people at the end of April with almost 40 percent being children. In response the government has initiated some new programs and taken action into building social housing. Housing Minister, Eoghan Murphy, has claimed that his new Rebuilding Ireland Program has been working well since he implemented it.

Has Eoghan Murphy spent enough time and effort solving homelessness?

Emily Logan, Head of the Human Rights Body for the Irish Human Rights and Equality Commission (IHREC), would say otherwise. The IHREC accused the government of blaming this crisis as, “the by-product of market dynamics, or the price our society pays for progress.” Part of the housing shortage and rise in homelessness can be contributed to market problems, but the government needs to step up and take more action into drafting policies that would make a significant difference. The IHREC is very blunt when it comes to pointing the finger, they stated that the rising level of …

Read More