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.
In this discussion the way that council houses are used was discussed, the piece is very topical because there are serious overcrowding issues in many council houses where you have five or more people crammed into a one bed home while other people in council owned houses occupy four bed houses on their own. Our view is that this is a national emergency and for that reason the people in these situations should swop with one another.
Newstalk’s ‘Lunchtime’ with Ciara Kelly did a piece on new wealth statistics issued by the Central Bank which featured Karl Deeter from Irish Mortgage Brokers. It looked at the average wealth per person in Ireland and the point was made that property was a very large component of it. Other things that affect wealth were also discussed as well as some of the problems around using ‘averages’ to describe anything.
With the Irish housing market remaining at such a loss, it is important that we recognize what the core foundations are that act as a basis for continuing growth. By recalling these foundations and working to improve them, there is a stronger potential to understanding the true issue with the overall crisis.
Last year, Ireland experienced the highest number of home construction since 2009. With 19,271 homes built to create a growth of 29%. Though an impressive improvement, this number still falls substantially below the goal number of newly constructed homes.
This increase, though not the goal, is, however, a good sign of progress and hope for the housing market to finally return to regular levels.
Some other marginal improvements that can be noted in the market currently are; housing commencements were seen to increase by ⅓, the volume of building activity is at a high, and 13,842 new dwelling units have been approved for construction. All in which represent some of the highest improvements since 2009.
Though there are many positive things happening in the housing market, what we …
With the Ireland housing crisis still well underway, there are little signs of recovery for a long while, making the current state of the housing market to become the new normal.
The Irish population has begun to accept what it is and proceeding with their life as with an “oh well” attitude. The new normal is here and taking over the Irish community.
With signs of the housing prices to possibly be slowing on their steep upward journey, consumers may begin to come back into the housing market as more active buyers than the market has seen in recent trends.
The second quarter of 2018 brought on some surprising numbers as the overall rates were finally evaluated and ready for assessment.
House prices rose nationally by 2.7pc with an average house price of 254,000 euro, or, 5.6 pc higher than the previous year.
These prices and statistics representing the nation as a whole. However, Dublin alone typically has a large impact on these reports.
In just Dublin, prices rose 1.8pc from March to June….an insignificant rise in just a four-month …
Ireland has seen a hit take place in recent years as property market seems to be downsizing. Families, with two full-time working partners, are finding it difficult to afford houses at their current increasing costs.
It has even been reported by Mark Keenan, a writer for business property and mortgages that working families are struggling to rent as well.
The average working couple in Ireland is earning a combined income of 70,000 euros. This is far below what a couple needs to earn to afford a home today.
It is reported that the average home in Dublin is now priced at mid 400,000 levels. Much more than what the average working couple could afford.
In just the last three months, there has been a multiple week increase to sell a home in Dublin. The housing market is slowing down and it’s slowing down fast.
Why is it that homes are being put on the market for such high prices? It could be that those selling the homes are finding it hard to sell for less …
We spoke to Ciara Kelly about the current property market and where we believe we are in the cycle. She was surprised to hear us say that we believed a crash was virtually an inevitability. There are myriad reason for property cycles and the routes to resolving them are politically unacceptable, for that reason we are confident we won’t avoid experiencing another one.
David McWilliams’s show ‘Ireland’ looked at the issue of property prices here and asked if we are in a ‘bubble’. He spoke to Karl Deeter from Irish Mortgage Brokers about this who made two points. The first was that we are too late to change the outcome of the property cycle, the second was that the biggest land hoarders in the state is the state itself and that Government should release land to flood the land market and drive down the primary costs of construction.
Pat Kenny had Irish Mortgage Brokers on the show to discuss NAMA, their role in building new housing and to consider some of the positives and negatives of this approach.
We were asked for comment on housing recently by the Irish Independent and had this to say on social housing: Karl Deeter, of Irish Mortgage Brokers, suggests that sites be released for social and affordable housing schemes, or private homes, in return for equity. Developers would have little cause for complaint.
“On a vacant site (in Dublin city centre), you could build an eight-storey building with 75pc of the building rented at 20pc below market, and for the rest you have a guaranteed upward-only rent review of 2pc a year,” he says. “If we do it on a build to sell, or build to rent, we share the profits..
“We need to flood the land market. People want to talk about the law of the jungle, but you can’t be a lion, and when a rhino comes along you complain.
The general view in our opinion is that much of the malaise always comes back to the base element of housing which is land.