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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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 …

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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 …

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Dart and Luas location spikes home prices

Location has always played a substantial role in the pricing of property, especially in major cities. Comparing prices of rent or total purchasing price of business, commercial and residential properties, it seems that this is a common trend across the world.

In Dublin, this also reigns true. New research from Daft.ie has shown that if you are a renter located near the Dart or Luas, your rent can be up to 12% higher than that of those a bit further from these modes of transportation, with Luas red line stops topping the charts. Rent in Dublin has averaged €2,000 per month in 2019, while more conveniently located renters paid a premium of up to €3,500 per month.

On the coast, there is also an influx in prices due to its prime location from some of Dublin’s quickest modes of transportation. This is not unwarranted though, given that the Luas and Dart decrease travel time significantly. Time is very valuable, especially for commuters into or a bit outside of the city.

As a student at UCD this summer, …

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Cuckoo Funds

Cuckoo Funds has been recently used to describe big investors. 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. These investors pour money into developments that cannot be purchased by the average individual or family. The developments funded by “cuckoo funds” are classified as build-to-rent. Investors are increasingly interested in attempting to tap into the growing demand for Irelands rental market.

These cuckoo funds are named accordingly because they have been seen to push first time buyers out of the market. Cuckoo funds have had significant impacts on investors and buyers in the market.

Benefits to the large investors can be defined by the ability to build apartments that do not have restrictions on maximum number of apartments per floor. Another benefit for a developer willing to invest in build to rent is that they are allowed flexibility in comparison to other developments in regard to amenities and storage. These cuckoo funds are also seen as controversial due to favorable …

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Illegal Irish flats similar to US university housing

During the month of May, a property in the city of Dublin was advertised as a flat, accommodating up to eight people comfortably. This listing, seemed normal to many prospective renters until they looked at the photographs.

This alleged flat seemed to many to be a converted office building. Upon further inspection, it was easy to see that this five bath, eight bed, and shared kitchen space were not exactly up to legal regulations, although this is conveyed as the least important aspect.

What most people seem to be most appalled by is the lack of privacy, and in some aspects, personal space that come from the conversion of an old workplace. The blocks of office areas were broken into two, leaving renters with thin walls between their two rooms.

Additionally, one of the rooms had three single beds pictured in one of the so-called rooms. This also put people in a frenzy, criticizing the renters on their lack of space management. In the end, it was found that this flat did not have the correct paperwork or …

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Reactions to New Rental Laws

Homelessness is an issue of uttermost importance in Ireland. Two staggering numbers mentioned below are being directly addressed by members of the Irish government.

10,378 – number of homeless people as of April

3,794 – number of homeless children as of April

Eoghan Murphy, minister for housing, planning, and local government, blames short term renting (letting) as a big contributor. Ireland has seen increasing numbers of people immigrating over plus many British citizens are moving to Ireland due to Brexit concerns. With this influx of people coupled with an increase of short-term renting, many citizens find the lack of few homes for sale too expensive and are resorting to homelessness.

The new legislation will be going into effect on July 1st. The legislation mainly targets the multinational company, Airbnb, who allows people to post their homes for rent on the web. Owners who reside in a rent pressure zone (rpz) will be required to fill out a form at the beginning and ending of each year. Additionally, a ninety-day total limit per year will be enforced and each rental session …

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Problems of the Irish Housing Market

The Irish housing market has faced a drastic increase in price of homes over the last 30 years. Of course inflation has contributed to the increase of the cost of homes, but inflation cannot nearly explain the massive jump in prices of Irish homes. More specifically, costs of housing has jumped more than five times the cost of a home 30 years ago.

So what does explain the massive rise in costs of property prices? Could it be that increase in salaries contribute to the rise of price in homes? I know that the average income today is much higher than it was 30 years ago. However, the rate that average income has increased over the last few decades is nowhere near the amount that housing prices have increased.

The maximum mortgage loan a homebuyer can be granted is his or her average salary multiplied by 3.5. According to the Irish Mirror, the average take weekly income of an irish person is €734 per week. Multiply this by 52 and you have €38168 before taxes. Even income before tax …

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RTE Primetime featurs Irish Mortgage Brokers

We were asked to take part in an interview on Primetime about house prices and whether or not they were starting to show signs of falling. Our view is that they will fall in time (probably in a damaging way) but that it won’t be soon because supply is still above demand and price indicators like rents are still rising. This is damaging for first time buyers and those stuck paying high rents.

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