Institutional Investors not to Blame

Institutional investors have commonly been credited with causing the rise in property prices. However, stockbroker Davy, claims otherwise and says they are not to blame. The report by Davy credits the inflation in house prices to be caused by the Bank of Ireland’s strict mortgage-lending rules. The pressure on the housing market has caused many people to become interested in the rental market causing pressure there too and a 7% rise in rentals.

Institutional investment has been rising exponentially in Ireland. It has grown in sales to a total of 1.1 billion Euros in 2018 up 200 million Euros from the previous year. These figures may seem high, but only account for 30% of total property investments in 2018 and do not have a big enough impact on the market to make a tremendous impact. Additionally, most of those investment occurred in Dublin where the top 25 transactions account for 2,370 units worth 954 million Euros in 2018.

Davy analyst Conall Mac Coille commented, “People have, however, confused the chicken with the egg,” and “Institutional investors have been attracted here …

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FSA warns banks, but will the Irish Regulator follow suit?

The FSA (Financial Services Authority) has warned specialist lenders that it has extreme reservations over how they are handling some arrears cases which may ultimately end in repossession. They felt that many lenders were overly ready to take court action against borrowers irrespective of their individual circumstances and that they focused purely on regaining the arrears.

From a lenders perspective this is a concern, if the FSA starts to come out in support of people who don’t repay their loans it can spell disaster for the financial institutions who lent out the money in good faith, if there is a prevailing belief that ‘you dont’ have to repay because the government is behind you’ it will send out the wrong message and creating an ‘unwillingness’ to repay debts and that won’t stop with banks, it can permeate into many aspects of the economy, right down to companies not paying eachother. Thankfully, the FSA stopped short of saying that they would get behind people in arrears and instead tried to keep …

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