We did a piece with Pat Kenny on his Newstalk radio show yesterday. We talked about the reasons for why property prices may face a short term volatility but that when balanced against housing need in general that the pandemic will not make housing more affordable in the long term. For that to happen we need many other things to start to resolve such as land prices, non-construction costs and planning timelines.
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 …
The cost of property throughout Ireland has skyrocketed over the last 20 years. With the uncertainty in regard to Brexit, prices of homes are said to increase by less than recent years. Slower growth in price of homes may appear to be beneficial for the Irish housing market, but in reality costs of property are still trending to increase in price. Prices rose by 3.9 per cent compared to 4.3 per cent one month earlier. The increase is about four times less than the average percent growth increase of past years in Ireland.
So how will Brexit effect the housing market in Ireland? Some individuals believe that if the deal goes through, Ireland could play a more significant role in Europe. This trend is becoming prominent in Dublin. Massive companies like Facebook, Google, Paypal. eBay and Microsoft have moved their headquarters to Ireland. This change over the last few years means that there will be an increase in jobs and thus an influx of people. The more people means demand for housing will only further increase. If there is …
We were pleased to be part of a discussion with Matt Cooper (Today FM) and Kevin Doyle (political editor at The Independent) on the topic of housing on The Last Word.
The analysis we provided was to make the point that help to buy cannot possibly be behind house price increases across the nation. We also made the point that prices would have risen even without it and that you need to look at the secular trend not just the short term ones.
Tara Duggan was presenting the ‘Right Hook’ and spoke to Karl Deeter of Irish Mortgage Brokers and Margaret McCormick of the Irish Property Owners Association about the issues around rents as news came out that they had reached boomtime levels.
The topics covered also reached into areas of taxation and new supply as well as the issues that currently exist due to past failures such as the ineffective rent control measures brought out in late 2015.
The causes of these dramatic price movements in such a short period are numerous as mentioned in the introduction but unemployment is certainly one of the most important.
At the start of the period the annual unemployment rate (April figures) stood 4.5% and remained relatively low until 2008 where it reached 5.4%. However as the financial crisis struck the unemployment rate climbed rapidly to peak at 14.8% in 2012. From then it has fallen to hit 9.8% for year ended April 2015 (CSO, n.d.).
As can be seen from the graph below the unemployment rates rise has mirrored the property index’s fall and vice versa to a very tight degree. I have divided the property indexes by 10 to make the graph easier to read and January 1st 2005 is 10.
So why could the unemployment rate affect the residential property prices to such a degree? Firstly traditionally most properties (more than 70%, though at present this figure is nearer 50%) are purchased with the aid of a mortgage and an unemployed person is not normally successful in getting …
We were asked to speak to TV3 news about the ECB rate cut yesterday which was rather unexpected. We are now at a point where for some tracker mortgages their interest rate is effectively only made up of the fixed margin over ECB base rate.
The Pat Kenny Show broadcast from the Shelbourne Hotel last week and Pat had Karl Deeter on to talk about rising property price and what they mean for different people as well as who the winners and losers of it are.
For some, the crash presents new opportunities such as the couple in Longford that were mentioned, for others it means being trapped in a property they can’t pay for and which rising prices represent an opportunity of freedom, but the main point is that there is no ‘common good’ to higher costs that can’t be avoided.
Something which never ceases to amaze me is how estate agents have such an uncanny ability to capitalise on any opportunity. It’s really something to be admired, the absence of a hard sale makes it particularly difficult to spot, but like sharks who can smell blood at one part per million.
One should clarify, I like estate agents, it doesn’t mean I don’t know when they are making a market. The recent practice of only having three viewings or viewings that can only take place in one week is a recent addition to the toolbox which is designed to have a few effects.
This was something I thought was a bit sharp but rare, then today encountered three times in an afternoon of making calls. The method goes as follows:
1. List a property at a price so keen that it is bound to attract a lot of interest.
2. Field lots of calls as interested buyers ring in, about 7/10 will be tire kickers because the true price sought is way over list but the innocent/uninitiated will show …