Where we are in the property cycle and what to expect next

Property cycles have always been a source of fascination for me (KD) and it’s worth briefly mentioning where we are now and where we are likely to go.

In the past I have always said that there are two broadly distinct phases, the first is a post-crash recovery where you see prices come back then rise fairly quickly before stalling.

The ‘stall’ is a mid cycle phenomenon where due to prices having risen you see a lot of buyers back off or take stock of the position, the memory of ‘we saw something like this before’ is still there to haunt them.

After that you get into the second phase where the upward momentum recommences but this time, having seen that the stall was somewhat ‘false’ (in the sense that it is perceived that way, it doesn’t actually have to be that), prices rise up even quicker.

This is unexpected (to some) and evidence that you have to ‘get in’ on the game. It brings us to the second phase which is the classic ‘boom-bust’. This eventuality is inevitable in …

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Irish Mortgage Brokers on Today FM

We were asked to speak with Gavin Reilly on TodayFM’s ‘The Last Word’ where he was sitting in for Matt Cooper, to discuss a new piece of proposed legislation.

While we believe that all people are deserved of compassion and respect when it comes to financial difficulties with their family home, that it would be an error to expect the judiciary to somehow step in and make what are effectively family protection and social protection decisions on something that should be viewed via the contract.

Mortgages arrears are also more of a symptom than the inherent disease, the disease is low employment, job loss, a lack of low income housing, social housing and social supports. It would be an error to misdiagnose this and in short, only an academic or a politician could look at this problem and see the solution in the way that this proposed legislation outlines it.

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The Last Word on Today FM features Irish Mortgage Brokers, 3rd January 2017

Matt Cooper had Karl Deeter from Irish Mortgage Brokers and Ronan Lyons of Trinity & Daft.ie on to discuss the government ‘help to buy’ scheme launch.

The scheme has come under fire prior to the launch and it will likely continue, our view is that the policy implications are of secondary concern to first time buyers who can avail of it. Our advice is that if you can get the grant you should avail of it.

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Pat Kenny Show on Newstalk 106, featuring Irish Mortgage Brokers

Pat Kenny had Lorcan Sirr from DIT and Karl Deeter from our company on to talk about the property market in particular in light of the changes announced by the Central Bank.

The conversation covered many topics in the market and outlined where so many issues in housing are arising.

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Newstalk ‘The Right Hook’, Jonathan Healy speaks to Karl Deeter

We were speaking to Jonathan Healy who was covering for George Hook on ‘The Right Hook’ about the ‘home renovation initiative’ which is set to end at the end of 2016. We covered some of the general terms and conditions of how it worked then went on to analyse whether it was a good idea or not given the various happenings everywhere else in the market.

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Irish Times article by John McCartney, Lorcan Sirr & Karl Deeter

The Irish Times carried an article by John McCartney (Savills), Lorcan Sirr (DIT Bolton St) and Karl Deeter (Irish Mortgage Brokers) about the issues surrounding a shift away from a home ownership model.

Our point isn’t that there is a definitive ‘right or wrong’ way to provide housing, obviously our market has massive issues at present, but the larger question is the long run effects and how a lack of household savings can turn a property crisis into a pension crisis of sorts.

That is why we need to find new solutions for more than just housing.

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Economic factors affecting the Irish property market (part II)

Unemployment

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 …

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Newstalk 106: Pat Kenny talks to Irish Mortgage Brokers

The Pat Kenny show on Newstalk 106FM had Karl Deeter of Irish Mortgage Brokers and Carol Tallon of BuyersBrokers on to discuss the property market in 2016 and to consider some of the things that were happening as well as why certain problems seem to persist.

It was an interesting segment and one that highlighted things such as problems of dereliction.

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