Review of Housing Costs

Increasing costs of rent are hindering workers from benefiting from increases in wages due to the growth of economy and reaching full employment. The number of people who work are reaching record highs because of the booming economy. However, growth in wages cannot keep up with skyrocketing increases in homes.

The average cost of housing is increasing at a rate twice that of average earnings throughout the country. Rent has increased by 8% in 2018. The average wage increased by just over 3%.

According to the Center Statistics Office, the unemployment rate as of the second of July, 2019  is 4.5%. Although this is a relatively low percentage of unemployment other problems exist such as joblessness, skill shortages and low levels of employed women.

Modest official inflation figures are being questioned by various economists to determine if the figures are truly representative of what is actually occurring as increasing demands for greater pay is contributing to more pressure on workers.

In response to heightening housing prices, there have been many actions for the “living wage” to be heightened by an additional …

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More families unable to afford homes in Dublin

The Dublin City Councillors agreed to tightly restrict eligibility to qualify for the affordable housing scheme. Thus, fewer families will be able to buy social housing in Dublin.

The Dublin City Council is seeking developers for 400 new homes on three different sites. These homes will be offered for sale to qualifying low and middle income workers. The starting price will be from $116,000. New apartments and homes amounting to 370 new units in Ballyum and Ballyfermont will be the first of several thousand affordable homes in all of Dublin, Fingal and Dun Laoghaire.  The scheme of priority has been approved by councillors by the four local authorities. The scheme determines how prospective buyers will be chosen.

Priority applicants have been defined as those living in the council area for at least 12 month will be the first to chose the newly available homes. The remaining homes will be offered to applicants with children in education in a set distance of the property. Any remaining homes will then be available to those who have a household member with a job …

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Risks to new social divide due to housing crisis

The burdens of the housing crisis continue to have an effect on everyday life. More homes are being built to slowly reach the immense demand for housing. In the month of March of 2019, more home were built than were sold.

Although more homes are being built, houses are still too expensive for an average couple to buy a first time home. Builders and developers are hoards land, and this keeps prices high. According to economist, Richard Curran, Ireland is headed for another crash. Curran believes there is a bubble in the housing market. Rents are rising too high while cuckoo funds are buying up too many apartments which causes first time buyers to be pushed out of the market. Furthermore, supply of housing is increasing but not enough to keep up with growing demands.

The number of homes are increasing, however these homes are not demanded. The homes built this year are too expensive and in inconvenient locations. Housing prices are likely to severely crash just as they did in the past.  There are fewer homes being sold at …

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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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Office extensions in the docklands

The Dublin City Council has granted planning permissions to a business associated with billionaire Denis O’Brien for additional floors on an office building in the Docklands. In the beginning of 2019, Jepview Ltd had plans to replace the fourth floor penthouse inside the Malt House building. Jepview planned to build an additional four storeys to make a nine storey office building. However, the council determined that the plan may be excessive and Jepview reduced one of the planned floors.

The council revised plans earlier this year after the conservation officer revealed that effective development will consist of five floors of vertical extension over an existing 4 storey victorian warehouse building. The officer also stated that the proposed addition should be reduced by at least two storeys to ensure the glass extension remained appropriated.

The office deemed that getting rid of only one floor was sufficient. The vertical expansion grant of the Malt House building uses the city council planner. Specifically, the proposal”exhibits a distinctive contemporary design which will make a positive contribution to the subject site and Dublin’s urban fabric”. …

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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 …

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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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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 …

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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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