Volatile Housing Prices in the Irish Market

Ireland housing price inflation has come to be of large concern to the public as a wider gap of the housing market will likely develop. Currently, central bank lending rules have been established and are beginning to be implemented as a way to slow the rate at which it is increasing.

Housing prices are still on the rise, as they have been in many recent reportings throughout the nation in current times. With tighter bank lending now being enforced more and more at a national level, the rate of inflation throughout Ireland has been seen to finally begin to slow down.

The second quarter of 2018 reported by MyHome.ie showed a steep increase in home prices alongside the slowest pace of inflation to be recorded in over two years.

The steep prices of homes have for a while now, been on the watch by the nation as a housing shortage has been of strong concern, affecting the living standard of many citizens throughout the nation.

As asking price inflation has slowed dramatically, Dublin has been feeling some of the effects.

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Mortgage interest relief set to end, but is it worth it?

Mortgage interest relief ‘tax relief at source’ or just ‘trs’ is a credit available to first time buyers who purchase their first home prior to the end of 2012. Currently it is due to be discontinued from 2013.

At the moment it is applied as follows:  up to a maximum of €10,000 interest per buyer can be applied so you take your total interest paid for the year and add it up.

Say you buy for 200,000 with a 10% deposit and an interest rate of 4.5% the cost per year is €1000pm over 25yrs. The interest portion is as follows:

(200,000 * .9 [90% mortgage) * 4.5% = 180,000 * 4.5% = approximately €8,100 a year will be treated for TRS reasons which is 25% for the first two years reducing to 22.5% for the next three years and 20% after that.

The 8,100 gets 25% relief = €2,025 or about €169 a month. In the example above when you get this credit it will mean that your ‘cost’ is €1,000 – €169 or €831 per month.

Because the …

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Mortgage providers to restrict rural lending

We were mentioned in the Irish Independent today in a story about lenders restricting mortgage credit in rural areas. They are doing this by lowering LTV’s or coming up with requirements on population size for LTV’s (Loan to Values).

Mortgage broker Karl Deeter of Irish Mortgage Brokers said lenders were now discriminating against those seeking loans to buy property in rural areas. “If you are not buying in Dublin, Cork, Limerick or Galway cities they do not want to know. This is all part of a growing trend to discriminate against properties outside of the cities,” Mr Deeter said.

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Mortgage Interest Relief (TRS) changes for May 2009

The changes mentioned in the recent budget will be kicking in soon and it will mean that people are likely to be affected in their mortgage interest relief for the month of May. TRS (tax relief at source) is going to be temporarily suspended for most of qualifying borrowers so that revenue can work through the claimants and determine who should be obtaining the benefit and at what level.

The rules regarding TRS can be found on the Revenue Commissioners website, some of the national commentary on it appeared in the Times (here).

According to banking sources we spoke to the borrowers who will be affected are any who changed their mortgage in the first seven years, so if you switched to get a better deal, topped up or made any changes you will probably be affected in the short term. As well as that, any first time buyers who moved during this time will be affected, if you bought a house (for instance) in 2004 then moved …

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The Vultures are here….

When the government raised the bar for stamp duty to €317,500 house prices took a jump and suddenly every house was valued at €317,500. This meant that a huge amount of stamp never entered government coffers and many people blamed estate agents. Rightly so, it was a disgrace but it happened and now we can’t reverse time.

Once bitten, twice shy. Fool me once shame on you, fool me twice….. (in the words of GW Bush) well…. you’re not gonna fool me twice. Alas, yes, we have been fooled twice, for no sooner had the government introduced extensive increases in mortgage interest relief than they were swooped upon and devoured.

How? By the likes of Ulsterbank who increased their rates (especially the ones available to first time buyers) only the day before. So all of the money that the tax payer spends to suppliment the mortgage interest relief and all of the governments best efforts are once again halted by greed.

Estate agents took a beating over the house price increases when stamp duty was reformed, and developers too as …

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