Expanding Housing & Development: New Sites

Three new building sites have become available for development. As of early this week, Savills brought three properties to the market that will allow for development. The properties are located near Citywest Business Campus in Dublin, Kilkenny, and north Dublin.

The Citywest property is listed on the market for the price of €5.6 million. The site has been defined as 9.7 acres amounting to a little more than €1.7 million per acre. The property is also available at €3.25 million for one 5 acre plot or 4.7 acre plot. The objective of this property was defined as to “to provide for enterprise and employment-related uses”. This new property listing can be greatly beneficial for Dublin. Introducing a 10 acre plot can be developed and create new jobs and housing.

The second property in North Dublin that has been listed at a starting price of about of €2 million. This lot amount to about three acres. The price per acre is about €1.5 million. The property has planning permission to develop 35 residential units, and may have potential for an additional five homes …

Read More

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 …

Read More

Is the Housing Gap Increasing?

With an attempt to lift the housing market out of the current crisis it’s in, the Irish government is left to answer one very important question. Is the Help to Buy scheme even helping?

Or…is it worsening the gap of the home hunters who are looking for the ability to buy?

As what is already well known, house prices are soaring. Without the supply of housing increasing at any fast rate, this will continue to be the case.

Therefore, home prices are continuing to rise, much faster than incomes are rising, and the gap between available homes and affordable homes is continuing to worsen.

When looking at reports from CSO, the average wage in Ireland is €45,075 for a full-time employee. That number is, however, much lower as a median, where most of the working class clusters. The median is found at €28,500. A drastic difference and even more of a surprise when finding that, that means, nearly half the population is below that number.

This is where the Help to Buy scheme comes into play.

Introduced just earlier this …

Read More

When Vulture Funds Buy Mortgages

As vulture funds have been seen as taking over the market, the next question is, what do we do next? What happens after a vulture fund takes over your mortgage?

These funds first entered the Irish market at the end of the financial crisis and since, have remained a consistent factor in the mortgage game. Though many years have now passed since they were first introduced, there is still much uncertainty that remains with what exactly these funds are.

Vulture funds essentially entail the many forms of private equity firms and pension funds that exist with the goal of investing across many asset classes such as debt. Debt often acting in the form of mortgage arrears.

The question many are wondering is why? Why are these vulture funds deciding to buy the mortgages that are in arrears?

Due to post-financial crisis events, there was an extremely high number of mortgages that were in arrears as a direct effect, and many that will be in long-term arrears as well.

Because banks are generally not willing to write down any debt of …

Read More

Irish Housing Market Full of Problems

Problems have been arising with mortgage interest rates in Ireland for quite some time now.  As there has been a worsened housing market and much conflict has arisen from it, the uncertainty of many different aspects have come to arise.

Many banks have had to make competitive advances in the market just to stay relative and appealing to their customers. The housing market has simply become a game in Ireland.

Without constant changing rates, their appeal would diminish, in turn, causing a fall in their overall customer base. A rapid decline in business would quickly be seen.

Most recently, Ulster Bank announced more drastic cuts to their interest rates that would, in turn, also affect their fixed rate mortgage offerings. This was done as a way to stay competitive as many other primary banks for lending have been recently seen as doing similar things.

The Irish housing market is offering customers some of the highest variable rates accessible across the eurozone. Ireland’s average variable rate stands at 3.37% while the rest of the eurozone has an average of just 1.8%. …

Read More

Foundations of a Strong Housing Market

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 …

Read More

Intriguing Statistics of First-Time Buyers

Perfect Property has recently found success in finding the common budget of the average house hunter in Dublin.

While in such a crisis, this is information that has been found is essentially vital in understanding a piece to the puzzle of what keeps buyers from buying.

Of course, there are statistics on the shortage of homes compared to the increasing demand, a factor into understanding the crisis that is just as vital.

According to Perfect Property, a relatively new search engine, the average Dublin house hunter has a budget of €315,000 to purchase a home with.

A pretty substantial budget for any home buyer, however, we are still observing a vast amount of first-time buyers applying for the new state mortgage scheme, introduced just a few months prior.

A scheme that was expected to cover nearly 1,000 loans and last for an extended period of time is now lucky if it lasts the full year.

Of course, when looking in the Dublin area it can be expected that the budget for a home will …

Read More

The Slow Fall of Housing Prices

With the rising prices in the Ireland housing market continuing on their steep journey up, buyers in the market are slowly being priced out.

That is, they simply cannot afford to purchase homes anymore and are becoming less and less driven to continue their search.

With unrealistic prices seen all around the board and most steeply in the Dublin area, where housing demand is the highest, buyers are beginning to call off their hunt for homes.

What about the future?

How long will these buyers that choose to wait, be waiting, until they can comfortably afford their dream home?

With housing prices being upwards of 11.4 times more than the typical buyer’s disposable income in 2017, with an expected increase to be reported in 2018, it is likely it will be years before homebuyers are able to comfortably afford homes in the Dublin market.

It is likely that they will begin to look in the neighboring areas where prices are less competitive and there is less demand.

If, and when, housing price inflation regulates, it is possible there will be …

Read More

Is the Housing Market Really Recovering?

The Irish property and housing market have been working to recover since 2012, solely funded byways of international capital.

That’s nearly 6 years of borrowing to achieve a market that remains in the midst of a crisis.

Foreign investors have for long been a very prominent component in the market as they have achieved multiple ways of investing in properties and homes in which provided for a strong return.

International investors have been tracked as using a strategy in which all of their funds went to purchasing the most inexpensive properties in the cities of Ireland and reselling them at extremely high prices to buyers.

This is a smart way for investors to get the highest return possible and make the most out of their investment contributions.

Some investors have begun in the flipping business in which they would sometimes reconstruct entire office blocks for re-selling. By doing this they as said above, are able to buy for extremely low prices and make a large profit margin when reselling.

The latest development in the …

Read More

Buy-To-Let Homes in Arrears

Why have recent reports been showing an increase in the number of mortgages being in arrears? More specifically the interest-only mortgages? And furthermore specifically, those on buy-to-let homes?

Interest only mortgages are typically mortgages that are seen to be taken by investors searching for a more affordable option to the standard mortgage scheme.

So, why has it been found that those who hold interest-only mortgages are more likely to be in arrears today?

In a recent study by the Central Bank, it was found that this is the case for investors on an interest-only mortgage deal for buy-to-let homes.

The surplus in interest-only mortgages that we are seeing today was initiated by buyers of high end and expensive properties during the last housing boom.

It is predicted now, that we will see a strong increase in the amount of homeowner to go into arrears as nearly a third of the interest-only mortgages have plans to make the switch to paying a traditional capital and interest mortgage from present 2018 to 2022.

It is not of a …

Read More