House Sales continue to rise

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The Banking and Payments Federation said more than 2,900 mortgages were approved in April.

There was a sharp rise in the numbers of people approved for a mortgage in April, and homebuyers are now generally being approved for close to €200,000 in home loans, the figures also show. The Banking and Payments Federation said more than 2,900 mortgages were approved in April. The value of the mortgages approved in April was worth €573m – a 35pc rise on the same month last year.

The first-time buyer category was particularly strong.

Irish Independant

Future Developement for Maynooth

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Cairn Homes hope to be building in Maynooth in the near future. They have a 6 acre site near to Moyglare and have contracted for an additional site adjoining it. This gives them the potential for a large development in Maynooth described as “a key student and Dublin Commuter belt community as well as a prime location for foreign direct investments into Ireland”  Said Michael Stanley  Cairn Chief Executive.

Dublin third among European cities for real estate investment

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Dublin ranks in the top three European cities for real estate investment for the last three years.

 

A new report by PwC/Urban Land Institute shows that sentiment is very positive for Dublin, with real demand coming from overseas companies.

 

Berlin is named as the top European investment market, followed by Hamburg, Dublin, Madrid and Copenhagen.

 

Those who have already invested in the city or who choose to invest in the very near term are likely to see the highest total returns.

‘Flaws’ in system that denies homes flood insurance

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The Central Bank needs to carry out an investigation into how insurance companies decide homes are at risk of flooding, a new report has recommended.

A committee of TDs and senators has found evidence that insurance firms are using flood prediction maps to avoid providing cover for properties at the remotest risk.

The Oireachtas Committee on Environment found there are flaws in the geo-coding of areas for flood risk that prevent homeowners getting insurance.

Social Democrat TD Catherine Murphy said she knows of situations where houses on hills are refused cover because they are considered to be in a flood-risk area.

“Today there are people in the position that their homes were never flooded but they can’t get insurance,” she said.

“There is a big issue with the insurance company taking advantage of the flood mapping and actually avoiding even the remotest risk,” she added.

The committee’s 156-page report, entitled ‘Flooding and Property Insurance in Ireland’, comes in the wake of the devastation wreaked by Storm Desmond across the country last week.

The report says the flood insurance issue needs a “systematic investigation” by the Central Bank to determine its extent and advise on appropriate measures.Labour TD Michael McCarthy said: “It’s not logical and neither is it fair or moral that people in areas that aren’t affected by flooding can’t get insurance.

“If the evidence proves that insurance companies aren’t stepping up to the plate, then Government will have to resort to measures that will put that right.”

However, he said that the committee did not see fit to endorse a levy on all home insurance to subsidise cover for those in high-risk areas.

The committee heard from organisations representing those who have been excluded from flood cover, or who are at risk of being excluded, that their homes are no longer mortgage-able and the value of their homes plummets.

The report also recommends that the Government give consideration to a ban on future building on flood plains and in low-lying coastal areas.

Campaign wants 20,000 to switch mortgages

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A massive campaign to get 20,000 variable-rate mortgage holders to switch to another provider is to be launched.

The One Big Switch group aims to do a deal with a bank for lower mortgage rates in return for delivering thousands of switchers to it.

The group has already negotiated deals with electricity providers and health insurers for those who sign up with it. It has a database of some 80,000 registered consumers.

There are around 370,000 people on variable rates in this country, with customers paying some of the highest interest rates in the eurozone.

It is estimated that switching to the best-value mortgage could see a family with a €250,000 home-loan saving around €1,500 a year.

“If 20,000 people are prepared to switch together it will unlock the buying power for a group discount,” Lachlan Harris of the One Big Switch campaign said.

Once the group has thousands of mortgage holders who register for the mortgage campaign, One Big Switch will then negotiate with the banks for an exclusive group discount.

Landlords hike rents ahead of new controls

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Landlords have reacted to Government moves to control rents by pushing through increase before the new measures came into effect.

This was confirmed by figures showing rents experienced their strongest rise since the bust in the three months to September.

Economists had warned that introducing a rent freeze would prompt landlords to pre-load rises ahead of the new Government measures due to come into operation.

New figures show that renters are having to pay out €82 more per month than a year ago.

The latest Daft.ie survey shows rents nationwide jumped an average of 3.2% in the July to September period. This was the largest three-month increase since early 2007, according to the property website. The national average rent between July and September was €964, compared to €882 the previous year. While the average rent in Dublin is now €1409.

Mortgage market is ‘dysfunctional’,say experts

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The mortgage market is the most dysfunctional it has been in the last 25 years, a leading financial expert claims.

Irish Brokers Association mortgage committee chairman Michael Dowling said lenders had their hands tied by new Central Bank rules.

His comments came as ratings agency Moody’s said population growth and economic recovery would continue to drive housing demand and property prices for some time.

Mr Dowling said good candidates for a first mortgage, or those who wanted to move, were unable to get loan approval.

“In my 25 years in the mortgage market, I have never experienced such a dysfunctional mortgage market,” he said.

“We have five banks lending but their hands are tied by the new Central Bank rules on lending.”

Ireland has the fastest-growing economy in Europe, unemployment is falling, exports are growing and our national debt is under better control, but we are not providing enough homes for those who would like to buy and at the extreme end, homelessness is growing, said Mr Dowling.

He said no other market had introduced two significant changes the way this country did in February – a reduction in loan to value (LTV) along with loan-to-income limits on how much can be borrowed.

In the UK, which is facing similar problems to ours, they introduced a LTV reduction but left loan-to-income limits at 4.5 times. It is now 3.5 times in this country.

The new rules are on top of ‘stress tests’, which examine if borrowers could still pay the mortgage if interest rates were two percentage points higher than current interest rates.

This meant that borrowers and movers were being hit with three separate rules, he said.Ratings agency Moody’s said demand for housing would remain elevated, due to stronger-than-expected economic recovery and improved employment/income prospects.

Moody’s said the strength of economic recovery was likely to draw recent expatriates back, resulting in a continuing increase in population.

This higher population growth will support housing demand, which is facing tight housing supply in urban locations, it added.

Property prices still rising despite Central Bank’s lending curbs

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Property prices continue to rise at more than 1pc per month, despite the lending measures introduced by the Central Bank to cool the market.

Figures released by the Central Statistics Office (CSO) show national price hikes of 8.9pc year on year – and 1.3pc in September.

Meanwhile, in Dublin, residential prices rose by almost 1pc (0.9pc) – up 6.5pc on September last year.

The latest month’s data is comparable to the 1pc-plus increases during the boom years.

More worryingly, Dublin house prices (not including apartments), which the Central Bank measures were designed to cool, rose 1.1pc in September.

However, national residential prices are still now 34.6pc lower than at their peak level in 2007, while Dublin prices remain 33.7pc lower.

It has been noted that the increases, particularly in Dublin, were a sign that bank lending restrictions in the absence of supply increases were not working.

Mortgage rules force builders to down tools

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Rigid mortgage lending rules imposed by the Central Bank are forcing property prices to stagnate and discouraging builders from constructing homes.

A new survey by Davy Stockbrokers has also concluded that the property market is “clearly characterised by stagnating prices and an under-supply of land”. It found the market is weaker than developers may have expected at the beginning of the year – particularly in Dublin.

After conducting a survey of home builders, it said the housing sector was locked in a state of stubborn under-supply coupled with high demand.

This has been primarily driven by headwinds to lending created by the Central Bank’s macro-prudential rules, limiting bank lending in relation to loan-to-value and loan-to-income ratios.

Savings overhaul for first time buyers.

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The Government wants to overhaul a tax relief scheme for first-time buyers which has been labelled a “flop” by Fianna Fáil.

First-time buyers can apply for a refund on the Deposit Interest Retention Tax (DIRT) levied on savings to build up a deposit to buy a home. The scheme was due to run until the end of 2017, but its take-up has been poor.

Figures released in July showed that fewer than 50 refunds were issued since the scheme was introduced.

Finance officials are examining ways to make the scheme more attractive, as concern grows about a lack of initiatives for first-time buyers.

“We need to make the scheme more appealing,” said a Government source.

Fianna Fáil finance spokesperson Michael McGrath said the low take-up shows the scheme does not work.