What does Ireland truly stand economically compared to other European powers? (pt. 3)

Another form of measurement used when accessing the healthiness and prosperity of a country is the state of its citizens. In this case, a national indicator of household welfare is known as “actual individual consumption” or AIC. This measurement is also a part of the GDP, where it takes into account the consumption of households on services such as healthcare, education, and housing. What AIC does not take into account is the collective government spending such as defence, policing, debt services etc…

Internationally, AIC includes about 2/3 of all GDP. AIC seems to be the best fit measurement of current living standards of households, which can also e adjusted for price differentials across different countries. Ireland currently ranks less high on this measure than compared to others. Ireland’s AIC rank in the European Union has jumped around quite a bit. At 11th place in the 1990’s up to 6th in 20078. But then afterwards it fell to 14th place in 2009 and returned up to 12th place by 2019. Using this measurement, Ireland actually falls behind all six of the …

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Homes sales reaching an all-time high

In the last three months of 2020, the Irish market has experienced the so-called “strongest quarter of home sales in the last decade”. While the official transition figures have not yet been published, many advisors state that this past quarter has been the largest jump in sales for many years. In the number of house sales last year from January until September, there was nearly 29,100 number of house sales. Which was down 25% from the previous year. But there is an estimated amount of 18,000-20,000 number of house sales just in the final quarter.

This sudden jump in the number of sales is largely attributed to the number of prospective buyers that were locked out of the market in the first lockdown, and the market reopening at the final quarter had led to a frenzy of rushed activity as people once again were able to utilize their interests in the market. Since people were also afraid of the potential of having another lockdown occur, they were more rushed to make a decision and in that sense, the entire process …

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Who is buying houses in Ireland for cash? A look at cash buyers in 2021

With fewer homes entering the housing market, and a large amount of demand that is being unmet due to that, the Irish government incentives like “Help to Buy” have only just started to affect rising forecasted housing prices in 2021. But even so, there has been little effect in the market by people that are known as “cash buyers”.

Cash Buyers may not be the people that first come to mind. They’re not exactly the people that pay upfront the entire mortgage, because let’s be realistic, who has ever done that? Cash buyers are investors, and their acquisitions are mostly funded by debt in terms of purchasing power. This is where they get the name “cash buyers” from. Despite the pandemic in 2020, these cash buyers were still highly active in the market. Statistics show that over 1.75 billion euro were invested by investors from European property firms like the LRC. While, it was still down from 2019 when it was pre-pandemic times, where the overall investment was 2.5 billion euro, there was still a significant amount of money being …

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AIB conforms to Industry Standards in drawing a mortgage

The AIB has implemented regulations that have started to severely lower the time that it allows potential home buyers to look from a new home. This time frame went from 12 months to half of that. The reasoning the AIB has given for this is that it increases the approval in principle.

Two weeks ago, on January 15th, AIB made up of around 33% of the mortgage market. The bank announced that it will no longer allow the individuals who received mortgage approval 12 months ago to draw down their loans. These individuals will instead have to do so within 6 months, which is the normal time frame for most other banks within the market. The change is said to only apply to new applicants and that if you were an individual that applied in the 12-month period before January 15th of this year, the 12-month period will still apply to you.

AIB has previously one of the only banks to offer an extended amount of time for consumers to draw down a mortgage, which was one of its largest …

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Red flag Financial words you should know

Your knowledge is the best defence when it comes to your money.  Therefore, you need to learn tactics and these words to best defend your finances from those who want to trick you. You know best about how you spend, save, and invest your money from the moment you laid on your first euro. These are some words that are completely RED FLAGS.

Deferred Interest

This situation pops up everywhere you go on ads like, “Buy this twenty-five thousand euro car at zero per cent interest rates for twenty-four months!”. But you need to know what type of interest they are offering customers during these situations. There are two main types, waived and deferred. Waived means zero per cent interest rates free and clear, meaning you will not need to pay any insurance on that car. While deferred means customers will still need to pay the interest. If customers do not pay off the amount by the end of twenty-four months or miss a payment …

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How one-bed apartments are destroying Dublin’s docklands

With the hit of the pandemic, many couples have begun disapproving of one-bedroom apartments due to the lack of space to work remotely and live. This has led to many of the properties near the Dublin docklands to drop in demand, essentially leading to that market collapsing on itself.

A report has shown that the rent has fallen an average of 13% on these properties since March of 2020, and even more so than that at the upper ends of the market. But while much of the short-term rentals for these properties fell, the report showed that the supply of the long-term rental units more than doubled. This, in combination with the reduced demand overall due to the COVID restrictions and limiting travelling, has cased the rent to fall in the second the third quarter of last year. The average rent for the properties was €2,312 per month, 6.97% lower than in 2019.

At the end of 2020, during the fourth quarter, the rent costs were able to stabilize due to rising demands mainly fueled by the returning of technology …

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How will the Government deal with the national debt

According to a recent study done, the Ireland government will be estimated to be able to absorb around 17% of the spike in the State’s level of debt predicted to occur with the pandemic. There is estimated to be a growth of €239 billion within the next two years as the economy continues to battle with COVID’s repercussions. This will not only affect government actions and reach into markets and industries but may mean that there will be uncertainties with regulations regarding COVID restrictions.

Overall, this means that there will be nearly €47,000 being owned by the government to international creditors for every citizen within the state by the end of 2020. This accumulates to billions of debt inherited by the government. This is not just Ireland, but many countries across Europe, driven mostly by the European Central Bank in its bond-buying programs.

Ever since the beginning of the pandemic, the Irish government has responded to its economic and social environment quickly in relation to countries globally and have set aside large series of supports to lessen its impacts on …

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The nasty cycle of high-interest rate loans

Many of us had started from the bottom, working day and nights, and depending on government assistance to pull them through. Many individuals and families are stuck in a vicious cycle unable to break free of their chains. If you are stuck in this situation right now, it is crucial to learn the mistakes other low-income individuals have made and try to avoid them. Not only avoid them but to also improve your money mistakes.

You may be wondering what is causing these people to be stuck in the low-income bracket? The main culprit is your community Payday Loans centres and pawnbrokers. Although there may not be many payday loans in Ireland, they have grown to have a bad reputation in the UK already.

Debt never sounds good, but there are the good and bad. Of course, if an individual is investing in a new restaurant or new company there will start off with debt. With time they can potentially pay it off and earn more from the situation.  But in this case, hearing high interest is one of the …

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Ireland Selling Fewer Homes during COVID

Insight of the COVID pandemic hitting global markets. The sharp effect on the Irish economy and society were evident in the housing industry, where the number of transactions sharply decreased, even though the house prices across the country remained relatively unchanged.

In the most recent GeoView Residential Buildings Report, it shows that in the last 12 months, a total number of 35,542 properties were sold and property transactions took place. This shows nearly a 22% decrease in the number compared to the number of transactions in 2019, the year before the shutdown. This trend was reflected in nearly every county, with Dublin having the largest number of decreases at nearly 4000. Within the number of transactions that were made in the past year, only 20% of the properties were newly built properties, which is slightly above the amount in the previous year. This reflects the trend seen across the country of current homeowners reluctant to keep their properties on the market as the pandemic hit due to the uncertainty of housing prices and whether the properties would be able to …

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Banks in Ireland Expecting to Slow in Recovery

According to a new study done by stockbroking firm Davy, Ireland’s banks can expect to see a slowing in recovery and business activity within the first quarter as the government extends the current lockdown that is Level 5 until foreseeable, March 5th. Even though recently, large banks such as AIB and the Bank of Ireland has reported that in the last quarter of 2020, the lending and other business activities have recovered more than projected from the slump at the start of the quarantine. Still, Davy’s analysts report that they do not expect lenders to book material additional to loan-loss provisions after last year as many of the consumers are looking at these on a case-by-case basis.

The extension of the lockdown and corresponding restrictions are likely to impact the recovery seen in Q3 and Q4 of 20-20, and will likely hit Q1 of 2021, which is seasonally the weakest quarter for new lending in Ireland. House buying will probably require a conservative approach from businesses to limit risk in the new market of loosening restrictions. Individual buyers and businesses …

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