Couples earning up to €90,000 may avail of new affordable housing scheme after Budget 21 September 2018
Couples earning up to €90,000 may avail of new affordable housing scheme after Budget
Author: Philip Ryan Date: 20 September 2018
House-hunting couples who earn up to €90,000 a year may be able to avail of a new affordable housing scheme after the Budget.
Fianna Fáil is demanding the introduction of an affordable housing scheme which will see homeowners enter into a shared-ownership arrangement with local authorities.
The scheme, which is central to Budget negotiations, will see local authorities buy houses from developers before offering them at significantly subsidised rates to first-time buyers. Local authorities will retain a stake in the properties until the home is sold or bought out by the property owner.
The scheme will be targeted at people earning between €30,000 and €90,000.
It is envisaged that Dublin local authorities would subsidise houses by as much as 50pc under the scheme which aims to provide houses priced between €160,000 and €200,000. Fianna Fáil is insisting on the scheme being introduced next year to ensure there is no delay in the roll-out of affordable housing.
The party is also proposing a more comprehensive long-term affordable housing scheme that would involve local authorities building new homes. This would see €200m earmarked to build 4,000 affordable houses.
Photo: Darragh O'Brien / Photographer: Tom Burke
The two schemes form the backbone of Fianna Fáil's demands ahead of the final budget of the confidence and supply arrangement.
Fianna Fáil housing spokesman Darragh O'Brien, along with the party's budget negotiator Barry Cowen, yesterday met Finance Minister Paschal Donohoe and Housing Minister Eoghan Murphy to discuss the proposal.
A Fianna Fáil source said it was "making slow progress" on affordable housing but insisted the two new schemes are at the centre of its budget demands.
Fine Gael and Fianna Fáil will meet over the coming weeks to determine how much funding is available for social housing.
Source: Irish Independent
New State agency to free up land for ‘150,000 homes over 20 years’ 13 September 2018
New State agency to free up land for ‘150,000 homes over 20 years’
Land Development Agency will designate 30 zones in Dublin and 10 in Cork for building
Date: 13.09.18 Editor: Fiach Kelly Deputy Political Editor
The agency “will demand” that almost a third of homes built on its sites must be affordable houses. Photograph: Alan Betson About 30 zones in Dublin city centre, and 10 in Cork city, are to be designated as special regeneration areas within which State lands will be released for housing, under a new agency to be announced on Thursday.
The areas to be identified by the Land Development Agency are a mix of previously announced schemes and new zones. The Government says the agency will pave the way for the construction of 150,000 homes over 20 years.
Among the areas in the capital to be designated “regeneration areas” is the Central Mental Hospital in Dundrum, which is earmarked for the construction of 1,500 homes. In Cork, the regeneration of the docks would provide a further 15,000 homes, it is claimed.
It is also understood that areas to the west of Dublin city centre, along the Naas Road, will also be earmarked for development.
The new agency, which will have compulsory purchase powers, will build land banks by both releasing State lands for development and acquiring private land holdings nearby.
A memo brought to Cabinet on the issue yesterday said it would highlight “key privately held, underutilised lands with strategic development potential, such as those subject to the vacant site levy and the holdings of religious orders”.
The agency, to be announced by Minister for Housing Eoghan Murphy, will have €1.25 billion in funding and will seek to further assemble land banks into the future to ensure a consistent flow of house building.
Initially, some 30 zones in Dublin will be identified for “significant regeneration opportunities”. The Cabinet heard a “consolidated approach provides the opportunity to drive the regeneration of urban quarters in the city”.
Among the Dublin city centre zones are Grangegorman; Broadstone; O’Devaney Gardens; St Bricin’s Hospital; Infirmary Road; holdings by CIÉ, such as the rail works in Inchicore; St Teresa’s Gardens; Newmarket Square; Meath Hospital; Dublin Institute of Technology sites; Cathal Brugha Barracks; Harold’s Cross Greyhound Stadium and Portobello GAA pitch; the Irish Glass Bottle site; Bridgefoot Street; Arbour Hill prison; Collins Barracks; Boland’s Mills; the North Dock of Dublin Port; East Wall and St James’s Gate.
The sites in Cork city are the Tivoli Docks; Páirc Uí Chaoimh; the “old Ford site and centre park road”; a site formerly used by the National Oil Reserves Agency; an ESB site at the Cork marina; two holdings around Kent Station; Campfield and Marina Park.
Drive down cost
It is claimed the agency will seek to remove land speculation and drive down the cost of land, which it is hoped will lead to cheaper house prices and increased availability. It will “smooth the peaks and troughs of Ireland’s land and housing market”, the Cabinet was told.
The agency will, however, demand that almost a third of homes built on its sites must be affordable houses.
The price of an affordable home – or the income of those who would qualify to purchase such a property – is yet to be defined by the Government.
Sources pointed to other State housing schemes that roughly allowed a single person on up to €50,000 a year or a couple with a joint income of up to €75,000 a year to qualify for affordable housing.
Cost of building a new family home rose 7.5% in past year 11 September 2018
Cost of building a new family home rose 7.5% in past year
Linesight estimates building 100sq m dwelling costs between €126,000 and €161,000
Author: Barry O'Halloran
A new report estimates that the construction industry will be worth €21 billion to the economy this year. Photograph: Frank Miller
The cost of building a family home has risen 7.5 per cent to as much as €161,000 in the past year, according to new figures from a leading quantity surveyors group.
A report published by Linesight on Tuesday estimates that the construction industry will be worth €21 billion to the economy this year.
The surveyor firm’s figures show the pure construction cost of an average estate home now runs at between €1,260 a sq m to €1,610 a sq m.
Linesight bases its calculation on a 100sq m (1,076sq ft) dwelling, implying a total building cost of €126,000 to €161,000 for the average family home.
Rising wages, fuelled by demand for workers, and more expensive raw materials, have pushed the cost of building a home up by 7.5 per cent over the past year from the €117,000 to €150,000 range.
Linesight – previously known as Bruce Shaw – is publishing its figures in an update to its yearly handbook, which gives a detailed snapshot of the state of the Republic’s construction industry.
The data shows a similar rate of growth in the cost of building apartments, from €2,200 a sq m last year to €2,380 a sq m now.
Listed Irish house builder Glenveagh said, when publishing results for the first six months of this year, that it was seeing costs rise at about 4 per cent a year.
Rival Cairn Homes, meanwhile, calculated that “annualised build cost inflation” was 2.9 per cent when it released its interim numbers recently.
Linesight’s calculations are based on an extensive database and the construction industry regards its handbook as a reliable benchmark for costs.
The surveyors’ figures only give the cost of actually building a home, which is mainly the price of labour, raw materials, heating, plumbing and electrical installation.
The total cost of a family home can be twice that outlined in the company’s report. Other expenses, including buying the land on which the house is built, VAT, finance, professional fees, and local authority charges and taxes, can push the expense past the €330,000-mark.
Figures published by the Central Statistics Office last month showed that the average price of a home – new or second-hand – was €291,579 in May.
However, prices breached the €500,000 mark in Dublin local council areas, such as Dún Laoghaire-Rathdown. On average, people were paying €345,000 for a home in the capital in June.
Linesight indicated that the squeeze on housing is likely to continue as the rate at which builders are completing new homes has yet to catch up with demand.
“The number of dwellings completed for the first half of 2018 was 7,909, which is 30 per cent more than were built in the same period in 2017,” it said.
The Government’s development plan, Project Ireland 2040, estimates that 550,000 homes will needed over the next 20 years.
Meanwhile, Linesight indicates that the recovery in construction is set to continue. Its report notes that while there are indications of demand growing in areas outside the capital, such as Cork, the greater Dublin area remains the focus of the industry’s return. Source: Irish Times
The complete guide to new homes 11 September 2018
The complete guide to new homes
Author: Fran Power Sate: Tuesday 11 September 2018
Latest figures reveal mixed news for house and apartment hunters, writes Fran Power
The autumn new homes season gets well and truly underway this weekend. And at last there is welcome news for house hunters as the number of developments launching is up and the trend looks set to continue.
However, those hoping to secure an apartment to escape the heat of the rental market or to downsize from a larger property, will find little to celebrate.
Latest figures from the CSO show an increase in new homes completed of 34.1pc year-on-year to June 2018, with a total of 7,909 new homes in the first half of this year. Of these, new homes schemes made up a total of 4,794 - a 54.4pc increase on the previous year.
In contrast, apartments showed an increase in completions of just 6.2pc on the same period last year, a total of 980 in total.
In all, a total of 14,446 new homes were completed in 2017, and Central Bank projections are for numbers to reach 17,500 this year and continue upwards in 2019 to reach 22,000.
Most new homes aimed at FTBs
On the ground, those figures are translating into more homes for first-time buyers, in particular, who have been waiting to get a foot on the property ladder.
The sales for new homes in the first half of the year with selling agent Sherry FitzGerald illustrate the buying power of FTBs. Of 1,100 new homes, says Ivan Gaine, head of new homes, "80pc of transactions were under €500,000; 40pc of these were below €365,000 and 40pc between €365,000 and €500,000."
All would potentially qualify for the Help to Buy scheme and it has spurred developers on to deliver to this end of the market. Gaine believes the figures are an accurate reflection of how the market as a whole is divvied up.
However, while supply is inching upwards, estimates put the actual number of houses needed each year at between 30,000 and 35,000 - to match demand from population growth, immigration and smaller household sizes. "Unfortunately," says Ken MacDonald, managing director of selling agent Hooke & MacDonald, "supply is just not meeting the demand. It's way short."
Activity is up, says Gaine, but from a very low base. Construction may be up by 30pc, but figures fell short of demand by 20,000 houses last year, and will be short by 25,000 next year, and maybe by 15,000 the following year.
"With so many stakeholders, the delivery time from consent - even with the new fast track planning system - to delivery, with the best will in the world, can be anything from 24 to 36 months," he says. And it may be five years before that shortfall is met.
Perhaps the next most important concern for new homes buyers is affordability and whether the price inflation seen since 2013 will continue.
The average asking price of a house in Dublin from March to June this year was €374,885 according to the latest House Price Report by property website Daft.ie. This is a rise of 1.5pc over the previous year. The average price nationwide was €254,000, a rise of 5.6pc. In other words, the rate of increase in Dublin prices is slowing, while prices outside the city are playing catch-up.
MacDonald says: "Prices haven't gone up in the new homes market over the last 18 months like they have in the second-hand market. That is probably what has caused some of the second-hand market prices to come back a little bit. The new homes pricing has been pretty consistent. The only increases have been increases required for complying with new regulations or increases in materials or wages. As a result, we're finding the new homes market very strong, particularly for FTBs."
Another factor in price increases in existing developments, according to David Browne, head of new homes at Savills, is the fact that each phase may release a different type or size of house: "You might come out with three-beds first in phase 1; then Phase 2, the way the site is laid out, you could have more four-beds coming in."
However, he does see some price inflation, "It's modest. It might be €5,000, €10,000 in some cases. And it would very much depend on how many were sold in Phase 1. There's nothing mad, there are no huge jumps."
"Prices depend on development and location really," says MacDonald. "Some developments are still being sold this year at the same price as last year."
By year end, expect to see rises of no more than low single figures, says Ivan Gaine, who points out that in the FTB market, prices are being constrained by the upper limit of €500,000 on the Help to Buy scheme and stringent Central Bank mortgage ceilings.
"The new homes market is very different in that we have very clear caps on affordability," says Browne. We have caps in terms of the land costs so it's much stricter in terms of what we can do and what you can produce."
Demand for apartments sky high
While choice has improved for house purchasers, those seeking an apartment in Dublin are faced with few options.
"What we don't have coming to market is apartments," says Browne. "We've Lansdowne Place [a luxury development in Dublin 4], we've high-end apartments, but other than that a lot of the apartment schemes have been sold off to the private rental sector so there's a gaping hole in the market for people trading down.
"If you look at Clontarf or Blackrock or Monkstown or any of these mature markets that are looking to trade down into stock, there is nothing," he says. "No one is looking at the people with four-bed semi-detached houses and where they are moving down to, they don't want 1,600 sq ft, they want 800sq ft, and they have nowhere to go to."
"A lot of the FTBs would love to buy a small two-bed or even one-bed apartment," says Browne, "but they don't exist new. The viability in apartment construction needs to come back to the market so that, in a site of three- and four-bed semis, you can deliver the more affordable smaller units that just don't exist at the moment."
Commmuter belt grows
Lack of supply, coupled with tighter mortgage lending has seen a shift to the greater Dublin area and outer commuter belt in the last 18 months.
"We're seeing more people in the Dublin rental market buying here because the rent they're paying is more than they would pay in a mortgage, and they get more space and value for money," says Will Coonan of Coonan New Homes, who handles sales for many schemes in Kildare and Meath.
The average house price in Kildare is €263,729, or €259,696 in Meath, according to Daft.ie, still well below the Dublin South City average of €411,959.
Regional city homes
There are signs too that Cork, Galway and Limerick are finally seeing the number of new homes coming to market increase - though many schemes are releasing subsequent phases rather than brand-new developments.
Galway, however, sees two new schemes arrive this autumn, one in commuter hotspot Moycullen and one closer to the city at Monivea Road, which are bound to be snapped up in a city that has seen little development since the crash.
Buyers know their limits
In the meantime, David Browne is seeing a more informed buyer out in the market.
"It's very different now. The buyers know exactly what they want, they have a number in their mind, they have a limit they will pay, they have loan approval and everything ready to go. So it's very solid and a very good indicator of how the market will go."
Source: Irish Independent
A 'soft landing' again predicted: House prices to rise rapidly through 2019 before easing - S&P 04 September 2018
A 'soft landing' again predicted: House prices to rise rapidly through 2019 before easing - S&P
Charlie Weston September 3 2018 12:32 PM Irish Independent
House prices in this country are to keep rising rapidly this year and next, according to the latest report from international ratings Standards and Poor’s.
This is in contrast to a string of other reports that indicate price rises are slowing down as buyers come up against Central Bank lending limits, which are restricting what they can borrow.
Standard and Poor’s (S&P) Global Ratings predicts house prices are set to grow by 9.5pc this year and 8pc in 2019.
It cites housing supply catching up with demand, and the labour market tightening even further as reasons for the property price rises.
The report implies that we are heading for a soft landing.
It says once supply improves however, “excessive pressure on house prices should gradually subside”.
House prices have continued to increase at double-digit rates in 2018 so far. In June, they were up 12pc on a year earlier.
S&P analysts wrote in a report on Europe’s housing market that Ireland is suffering from a chronic lack of properties to buy.
“Ongoing supply shortages will continue to be a factor underpinning house price inflation.”
It adds that increased activity by institutional investors, both domestic and international, has also underpinned house price growth.
In 2017, almost one-fifth of all residential property transactions were by institutional investors, including small-scale buy-to-let buyers, S&P noted.
S&P says the ongoing shortages of properties to buy will underpin house price inflation
The report states that even if house completions were to continue to grow at their “extraordinarily strong current rates” it will still be 2021 before supply meets demand, which is estimated at around 35,000 units needed a year.
House building was up 30pc in the first half of this year, which works out at an annualised figure of 7,950 units, S&P says.
As supply improves, excessive pressure on house prices should gradually subside.
Property price peak in Ireland is in sight 28 August 2018
Property price peak in Ireland is in sight
Author: Charlie Weston Date: August 22 2018 2:30 AM
Buyers are now being restricted in what they can bid due to Central Bank lending limits - while prices have risen so much they are now increasingly beyond reach.
The latest official figures show property prices were up 12pc in the past year.
But most industry experts now expect prices to rise by 5pc over the next few months, according to a survey carried out by the Central Bank and the Society of Chartered Surveyors of Ireland.
Archive: House hunters queuing for five days before new homes go on sale
The survey involved estate agents, economists, academics and surveyors.
Central Bank lending limits are being cited as the reason why price increases are slowing down, with some evidence of greater supply of properties for sale.
The fall in price growth expectations is particularly marked in Dublin, where the one-year expectation fell to just 2pc.
Just over half of the experts expect to see price growth in the capital, down from an overwhelming 98pc at the end of last year. |According to the report: "The availability of bank credit was deemed to be the primary factor behind the anticipated price changes both nationally and in Dublin." Other issues, including level of interest rates and the perception of value, were also cited.
This is a reversal of the findings of previous surveys, where a lack of supply was cited as the main influencer of house price developments.
One of those who contributed to the survey, economist Dermot O'Leary of Goodbody Stockbrokers, said the market is being affected by the Central Bank's mortgage rules.
He said some banks are refusing to accept mortgage applications from borrowers looking for exemptions from the Central Bank mortgage rules on loan-to-value and loan-to-income.
"This is consistent with the slowdown in the growth of mortgage approvals over the past few months," Mr O'Leary said.
The median, or middle, value of a property nationwide has risen by €27,000 in the year to June compared with the same month last year. The median price paid by households for a home this year is €237,000.
A 5pc price rise would add close to €12,000 to the price of a property nationwide. That would take median prices to almost €249,000 nationally.
If Dublin prices rise by 2pc it would mean the median price going from €360,000 to €367,000 by the end of the year.
Meanwhile, new figures show that 4,419 new homes were completed in the April to June period, according to the Central Statistics Office.
This represents annual growth of 34pc.
This takes the year-to-date total to 7,945.
The Greater Dublin Area continues to represent the lion's share of new housing output.
Taoiseach Leo Varadkar said: "I'm pleased to see that in the last three months 4,400 new homes have been completed in Ireland. That's a 34pc increase on the same period last year.
"I think it puts us in a good position to meet our target of building 20,000 new homes in Ireland this year.
"We have a housing crisis in Ireland. The ambition is to build new homes and more homes.
"It is going to take time but we are getting there."
Source: Irish Independent
Dublin homes over-valued by 25pc as report warns global boom is ending 28 August 2018
Dublin homes over-valued by 25pc as report warns global boom is ending
Author: Charlie Weston
Date: August 28 2018 2:30 AM
Property prices in Dublin are over-valued when compared with the incomes of people in the capital city, according to international research.
It has been calculated property in Dublin is 25pc over-valued when set against incomes.
The research conducted by 'The Economist' magazine also found that price growth in Ireland's capital has out-paced growth in 22 other global cities over the past five years.
The publication found property prices in Dublin rose by 62pc following the property crash that started a decade ago.
'The Economist' looked at median household incomes, or middle income levels, and compared them with house prices.
This is in an effort to analyse whether market dynamics are being driven by "fundamentals or froth".
After comparing house prices to long-run median disposable household income, the study found prices in Dublin are 25pc over-valued.
The latest median, or middle, value of a property in Dublin is €360,000, according to the Central Statistics Office.
A 25pc over-valuation would imply the average property in the capital should be €270,000.
In Hong Kong prices were said to be 94pc over-valued, and by 65pc in Vancouver.
London prices were found to be 50pc over-valued when compared with median incomes.
The publication found prices across these cities may now be at a turning point.
Demand, supply and the cost of money could mean the international boom is ending: "As demand weakens, supply strengthens and mortgage rates rise, the bull run in housing may be drawing to an end," it said.
The new research comes as experts have predicted price rises are due to slow down sharply because prices have risen so much they have now hit the limits people can afford.
Buyers are being restricted in what they can bid due to Central Bank lending limits.
Property experts predict a sharp slow-down this year.
Most expect prices to rise by just 5pc over the next few months, according to a survey carried out by the Central Bank and the Society of Chartered Surveyors of Ireland of estate agents, economists, academics and surveyors.
The latest official figures show a 12pc rise.
Central Bank lending limits are being cited as the reason why increases are slowing, while there is some evidence of more properties for sale.
The fall in growth expectations is particularly marked in Dublin, where the one-year expectation fell to just 2pc.
Just over half of the experts expect price growth in the capital - down from 98pc at the end of last year. Source: Irish Independent
Investment in residential property far exceeded commercial in 2017 28 August 2018
Investment in residential property far exceeded commercial in 2017
Falling investment in commercial came as residential spend increased to €14.4bn
Written by Peter Hamilton, Irish Times 27th August 2018
Residential capital spending in Dublin rose 23 per cent to €7.5 billion last year and represented more than 52 per cent of the overall market. Photograph: iStock
Spending on residential property rose by 24 per cent to €14.4 billion last yearwhile investment on commercial property fell, a new report has found.
The analysis of the Republic’s overall property market by commercial real estate agent Cushman & Wakefield also predicts that capital spending on residential property will rise again in 2018.
The breakdown of residential versus commercial investment bucks the trend between 2014 and 2016, where capital spend on residential was around 67 per cent of the total property spend.
The overall spend across both property types only increased 1 per cent to €17.9 billion, the report says. The relatively small percentage increase comes after the volume of capital deployed on commercial transactions dipped almost 43 per cent. The report flagged 2016 as an “exceptional year” and noted that Dublin absorbed 67 per cent of the investment.
But it also said anecdotal evidence is suggesting investors are becoming increasingly comfortable with the regional commercial market on the back of strengthening regional economies. Over €266 million of commercial properties were transacted in Cork in 2017, compared to €111 million the previous year. In Galway, activity rose by 15 per cent, resulting in €107 million worth of deals completing.
The picture in residential showed investment in every county increasing, with double digit growth recorded in all but three counties.
Capital spend in Dublin rose 23 per cent to €7.5 billion and represented over 52 per cent of the overall market. With €1.3 billion transacted, Cork was the second strongest county in terms of activity. Meath, Wicklow and Kildare also recorded strong annual growth rates of 55 per cent, 30 per cent and 28 per cent respectively.
Cushman & Wakefield’s chief economist Marian Finnegan said 2018 looks set to be “another solid year”. Investment
“Commercial investment alone for the first half of the year is significantly higher than the same period last year. Notably, led by a number of larger value transactions and an uplift in overall development land transactions, the commercial property market looks set to exceed 2017’s performance,” she said. Growth in residential is also forecast to continue this year with a 12.5 per cent uplift already recorded in the volume of home purchases annually to the end of the first quarter.
Given the ongoing supply constraints in the Republic’s residential market, the report flagged as a positive the fact that around 50,800 transactions were recorded on the property price register last year, an increase of 14 per cent on 2016.
This year will likely see institutional investors continue snapping up residential properties, the report said, buoyed by a positive economic outlook, a growing population and strong residential rental growth.
The ‘Economist’ says Dublin house prices are 25% overvalued 28 August 2018
The ‘Economist’ says Dublin house prices are 25% overvalued
Dublin still more affordable than Vancouver, Paris and London, according to publication
Written by Irish Times Fiona Reddan, on 27th August 2018
House prices in Dublin are 25 per cent overvalued against income, according to the Economist, which also finds in a new survey that property price growth in the city has outpaced growth in 22 other global cities over the past five years.
The finding from the influential newspaper comes on the back of continued price growth in Dublin and across the country, with prices nationally now up 79.6 per cent from their 2012 lows, with Dublin prices almost doubling, up 92.7 per cent.
Earlier this month the newspaper published its new house price index which covers 22 of the world’s “most vibrant” cities, including Sydney, London and San Francisco. It found buoyant price growth across these cities, noting that the average price of a home has risen 34 per cent in real terms over the past five years, while in seven cities (including Dublin) it rose by more than half.
Now it says that global house prices – which in 14 cities are above their pre-crisis peak by an average of 45 per cent – could be near a turning point. The average rate of house-price inflation across 22 cities has slowed, it found from 6.2 per cent annually 12 months ago to 4.7 per cent now, while in six cities prices have fallen from recent peaks.
Back in 2003 the newspaper made its famous pronouncement that Irish house prices would fall by 20 per cent to the disbelief of almost everyone; in fact they ultimately fell by a multiple of that.
This time around, however, the Economist is not suggesting that house prices in the capital are set to fall. Rather, in an effort to analyse whether market dynamics are being driven by “fundamentals or froth”, the Economist has compared them with median household incomes. If prices rise faster in the long run than the earnings that service mortgages, they may be unsustainable – unless incomes rise also.
In comparing house prices to long-run median disposable household income, it finds that prices in Dublin are 25 per cent overvalued. This is considerably less than its estimates for other cities, which include Hong Kong (+94 per cent); Paris (+70 per cent); Vancouver (+65 per cent); and London (+50 per cent), but higher than Zurich and Madrid (+15 per cent). Just four cities in the survey have prices at or under fair value: Tokyo, Milan, New York and Singapore.
The newspaper says that prices across these cities may now be at a turning point, as the three reasons why cities have experienced a property boom – and why it may now be ending – are demand, supply and the cost of money.
“As demand weakens, supply strengthens and mortgage rates rise, the bull run in global cities’ housing may be drawing to an end,” it says.
The Economist points to potential falling demand, as the growth in globalised cities’ population will soon start to slow – for example, London lost 100,000 people to the rest of Britain in the year to June 2017, while foreign capital – not so much an issue in Ireland – is also on the wane elsewhere. Secondly, supply – in Ireland as elsewhere – is finally ticking upwards, even if it still isn’t sufficient.
Finally, the magazine cites an end to cheap mortgages, and bonds becoming attractive again, as interest rates advance.
Growth factors behind the Irish market may be slightly different, but with everyone describing the latest upturn in prices as a boom driven by lack of supply, it’s still worth noting a point made by the Economist editor who made that famous prophecy back in 2003. Speaking in Dublin in 2005, then economics editor Pam Woodall noted that some economies rely on “common fallacies” to convince themselves that everything was going to be all right.
And one of these fallacies? Believing that a fixed supply of land and rising population mean house prices will always rise.
Commercial Property Market To "Pause For Breath" 04 July 2018
Written by Robert McHugh, on 2nd Jul 2018.
Commercial property specialists CBRE today released their latest bi-monthly report focusing on the latest trends and transactions in all sectors of the Irish commercial property market.
The report shows that particularly strong take-up was recorded in the Dublin office market in the first six months of 2018 with take-up in second quarter significantly boosted by the recent acquisition of 22,146m2 of office accommodation at the Boland’s Quay development in the south Docklands of the city.
In addition to strong volumes of take-up, a number of significant transactions are currently in negotiations and there are several unfulfilled mandates prevailing.
New research from CBRE shows that Dublin currently ranks 27th in a survey of global office occupancy costs, up from 29th place this time last year. With office rents in the suburbs of Dublin remaining at levels that are at least half that prevailing in the heart of the CBD, CBRE believe there is now tangible evidence of occupiers looking to move to more cost-effective locations such as the suburbs.
In addition to a notable increase in lettings to co-working and flexible office providers over the last 12 months, CBRE are increasingly seeing organisations introducing flexible working strategies in an effort to lower costs, improve employee engagement and increase productivity within their existing office buildings.
Following the completion of almost €1 billion of investment transactions in the Irish market in the first quarter of 2018, activity has continued at pace over recent months. Although a somewhat lower investment outturn is anticipated in the second quarter of 2018, there are several sizeable assets being marketed at present which will boost transactional activity further in the third and fourth quarters of 2018. Some further Asian investment is expected to materialise in the second half of the year.
CBRE say investors from a range of jurisdictions continue to be attracted to real estate investment opportunities in the Irish market, attracted by buoyant economic fundamentals and the relative strength of occupier market activity as well as comparatively attractive pricing.
The commercial property specialists envisage a further shift in the sectoral split of investment spend over the coming months with an increasing proportion of investors seeking ‘alternative’ investment opportunities. PRS/Build to Rent continues to evolve as a mainstream sector of the Irish investment market in its own right. Indeed, according to CBRE, the volume of capital chasing residential investment opportunities in Ireland’s main cities continues to escalate with several investors who heretofore focussed primarily on traditional investment sectors such as offices and retail now also willing to consider investment opportunities in the residential sector.
To some degree, this is a diversification play on a sector that is generally less susceptible to cyclical patterns, but investors are also attracted by the attractive yield profile and rental growth prospects in an Irish context. According to CBRE, most of the capital targeting the PRS/Build to Rent sector in the Irish market is looking to invest over a long-time horizon.
Commenting on the bi-monthly report, Executive Director & Head of Research at CBRE Ireland, Marie Hunt said, "Activity in each of the occupier markets remained strong throughout the first half of 2018, buoyed to a large degree by continued job creation in the Irish economy. The months of July and August will now see the pace slow a little with the focus shifting towards closing out many of the transactions that are either in legals or in negotiations at present before the next wave of activity commences in Autumn. Prime rents and yields in all sectors remain relatively stable at this juncture although further rental and capital value growth is anticipated in all sectors of the market in the second half of 2018."
She added, "Considering the strength of both the domestic Irish economy and occupational activity, demand for core real estate investment opportunities in the Irish market remains strong although there has been a notable sectoral shift in investor appetite over recent months with focus on the Build to Rent/PRS sector becoming increasingly evident. Another trend that has become evident over recent months is that an increasing proportion of transactions in the hotel, development and investment sectors are being conducted off-market."
Annual rate of house price inflation slows in Q2 due to Central Bank lending limits
Annual price inflation nationally is up 7.2%, the slowest pace in two years
"Slowdown in house price inflation should be welcomed"
Dublin housing stock has risen by 25% to 5,000 since last year
MyHome.ie asking prices, Dublin and National
% Change quarter-on-quarter
% change year-on-year
National mix adjusted (stock)
Dublin mix-adjusted (stock)
National mix-adjusted (new instructions)
Dublin mix-adjusted (new instructions)
While house prices are continuing to rise the rate of inflation is slowing due in the main to tighter bank lending according to the latest house price report from MyHome.ie.
Asking prices rose 7.2% in the year to Q2 2018 – the slowest pace of inflation in two years – and down from 9.5% in Q1. In Dublin, asking price inflation has slowed to 6.8%, down from 11% at the turn of the year.
The report, which is published in association with Davy, found that the prices of newly listed properties nationally rose by 3% in Q2 while prices in Dublin rose by 2.2%. Newly listed properties are seen as the most reliable indicator of future price movements.
The median asking price for new sales nationally is €270K while in Dublin it’s €384K.
The author of the report, Conall MacCoille, Chief Economist at Davy, said that the slowdown in house price inflation should be welcomed as double-digit price growth could not be sustained over the long term.
"The Celtic Tiger years demonstrated the folly of allowing rising leverage in the mortgage market to drive double-digit house price inflation indefinitely. This time round, the Central Bank's 3.5 X loan-to-income (LTI) threshold is preventing households from chasing prices higher by taking on excessive mortgage debts.”
"We would normally expect the slowdown in asking prices to feed through into transaction prices within the next three to six months. For now, we are seeing stronger price gains in less expensive areas of Dublin and among the less expensive property types. For example, one-bedroom apartments in Dublin are up 11.4% on the year but four bedroom detached houses are only up 2.3%"
"Of course, Ireland still faces an acute housing shortage but unlike the past there is a more sensible debate on how to solve the problem. Short-term ineffectual measures from the early 2000s such as allowing increased leverage on mortgage loans, tax breaks or mortgage interest relief have been left by the wayside. Instead the debate has focused on planning reform, housing density and efficient use of state land and infrastructure funds" MacCoille concluded.
Angela Keegan, Managing Director of MyHome.ie said the improvement in stock levels, particularly in Dublin was most welcome.
"Our data shows that stock levels nationally are up 3.7% on the year to 21,600, the first positive growth since 2015. In Dublin where the housing shortage is most acute, stock has risen by 25% to 5,000 homes which is very positive. With few homes now in negative equity transactions among existing homeowners with mortgage debt are on the rise. There are also now 409 new housing developments listed for sale on MyHome – well up from the 342 in mid-2017”
"While some thought the lending rules would hold back activity, figures from the Property Price Register show transactions in the first five months of 2018 were up 6% and that the increase for the year may well be closer to 10%, bringing the level of transactions for the year to 60,000. While we are still clearly in the midst of a housing crisis, all the key indicators are moving in the right direction as we inch closer to a normally functioning property market" Keegan said.
PRICE DROP Irish house prices could start to fall over next two to three years – but we must be prepared for economy overheating, Central Bank Governor warns 11 May 2018
The regulator told politicians at the Oireachtas Finance Committee there is now a 'material risk' that home valuations will go into reverse by 2020 or 2021
10th May 2018, 1:50 pm Publication: Irish Sun Author: Kieran Dineen, Public Affairs Correspondent
HOUSE prices are likely to begin to fall in price over the next two to three years, according to the Governor of the Central Bank.
Philip Lane also believes we need to be prepared for the economy overheating – which could hamper Leo Varadkar’s plans to reduce income taxes further.
Central Bank Governor Philip Lane
At the Oireachtas Finance Committee, the regulator told politicians there is now a “material risk” that home valuations will go into reverse by 2020 or 2021.
And he said anyone thinking of buying a property now needs to bear this in mind.
Mr Lane said this was due to a buildup of housing coming on stream along with other global factors.
Senator Kieran O’Donnell asked him about the “escalation in the price of houses for starter homes” which are now “outside the gambit of the ordinary person”.
Mr Lane said there is now a ‘material risk’ that home valuations will go into reverse by 2020 or 2021
Mr Lane said he fully recognised the “affordability crisis in the housing market” and insisted: “The only answer is to further increase the supply of housing.”
He had earlier pointed out the projections of 23,500 new units in 2018 and 28,500 in 2019 are “below current estimated housing demand of 30,000-35,000 per annum outlined in Project Ireland 2040”.
But the Governor later revealed: “I do think there is a material risk of a reverse of house prices… as supply builds up that will put downward pressure on houses in coming years.
“This is why we have our mortgage rules, in order to stop excessive debt coming on at the wrong time. Only those financially prepared can take on a mortgage at the moment.”
Lane said anyone planning to take out a mortgage now and upgrading in a few years should ‘recognise that risk’
He believes the deposit and income rules for taking out mortgages are “beginning to bite more severely” which will help slow down the house market.
Pressed on a possible decline in house prices, Mr Lane told the committee: “If you are planning on taking out a mortgage now, and trading up in two or three years time, you need to recognise that risk.
“If you are planning to live in that house for a substantial period of time then that should not be a matter of overriding concern.
“The system is a lot more resilient now but I am troubled by the temptation that it is one direction only. Over time there will be a natural increase… it is not a one way bet.”
Residential property prices rise by 12.7% in year to March 11 May 2018
Official figures show property values are increasing by 12.1% in Dublin
Wed, May 9, 2018 Publication: Irish Times Author: Eoin Burke-Kennedy
Figures from the Central Statistics Office show that the most expensive Eircode area to buy a house is Dublin 4, with an average price of €762,913. Photograph: Simon Dawson/Bloomberg
The property market is showing no signs of cooling with prices accelerating by 12.7 per cent in the year to March. This compares to an annual increase of 12.5 per cent in February.
The latest official figures from the Central Statistics Office (CSO) are at odds with recent reports from property websites MyHome.ie and Daft.ie, which both reported a slowdown in headline inflation.
The CSO figures show annual price growth in Dublin, where demand is greatest, is now running at 12.1 per cent, down from 12.7 per cent the previous month.
The highest house price growth in the capital was in Dublin city, at 14.2 per cent while the lowest growth was in south Dublin, where house prices increased 9.6 per cent.
In Dublin, prices have risen by 90.8 per cent since the low point of the crash in February 2012, and are now 23 per cent off their 2007 peak.
The most expensive Eircode area to buy a house was Dublin 4, with an average price of €762,913. The CSO figures show the 10 most expensive Eircode areas by mean or average price were in Dublin.
Property prices in the Republic, excluding Dublin, were 13.4 per cent higher in the year to March.
The west region showed the greatest price growth, with house prices increasing 18 per cent while the Border region showed the least price growth, with house prices increasing 8.8 per cent.
Outside Dublin, the most expensive Eircode area to buy a home over the last 12 months was Greystones, Co Wicklow, with a mean price of €424,534 while the least expensive Eircode area was Ballyhaunis in Co Mayo, with a mean price of €75,415.
Responding to the latest price figures, Brokers Ireland warned that unless supply of properties ramps up more quickly in the near future a whole generation now in their late 20s and 30s, and even beyond, may never be able to recover the financial loss of not being able to acquire a home at an affordable price.
Rental Crises - A Ticking Timebomb 30 April 2018
By Philip Farrell – 1st May 2018
The Irish rental market is a ticking time bomb akin to a Bond film, rolling down to zero however, in this instance there will no ‘007’ to save the day. We now have a situation where an ever increasing 34% of the Irish population are renting, some by choice, most by necessity. There are currently less than 3,000 properties available to rent in Ireland, just 0.15% of the total housing stock. Demand is at least four times that level. Rental values having increased over 65% in some urban areas over the last 4 years. Currently, less than 5% of newly constructed homes are being bought by investors. At the height of the Tiger’s roar, this figure exceeded 45%. So where are these rental properties going to come from? Take a regional town of 5,000 people. A town of this nature would have a demand for least 200 privately rented properties. Who is going to service this market in the future? Due to its’ fragmented nature, it holds no appeal for the large investor. Most one-off investments are now purchased with cash. Servicing a loan at rates north of 4% is simply a non-runner, in addition to paying income tax, USC, LPT and increasing RTB compliance costs. What this means is the only real potential upside for the investor is capital appreciation however, values have increased by up 50% in many urban areas over the last four years which will make investors more cautious when investing.
The government recently announced that they had exceeded their 2017 target by housing 23,000 people. The devil is in the detail. Delve a little deeper, less than 1,000 new social homes were built in 2017 with a further 500 provided through Part V.
Many people understandably have little or no sympathy for landlords, believing they played an integral part in both inflating house prices during the noughties, and the subsequent crash. Herein lies the problem. With property values currently increasing 10% per year, additional homes must be provided for the increasing number who cannot afford or secure a mortgage or the ever increasing number who simply choose to rent.
It is a responsibility of government to provide housing for those who cannot secure a home. Our current rulers, in their wisdom, decided following the crash, that the private sector would deliver the homes needed. This was never going to happen. An industry which had been forced to take a long lunch (6 years) was always going to take some time to reinvent itself. On top of this there is the archaic planning process to contend with. The construction industry has returned to growth, but only in the large urban areas where values are now making it profitable again to build.
‘Rebuilding Ireland’ was launched in mid-2016 by the government to much fanfare. While it can be applauded for success with the ‘Help to Buy Scheme’ and the introduction of fast track planning permissions, it has failed to deliver in a number of areas. At one point, ‘modular housing’ appeared to be the answer to all our prayers! This was short lived. The recent announcement of the home purchase scheme through local County Councils should be cautiously welcomed as it will only assist a small percentage of home buyers. Also, a note of caution, historically, similar type schemes have proven to accrue arrears issues.
Rent controls have had varied success internationally. It is to early to say how they have fared since their introduction here in Dec 2016 however, they do not seem to have stemmed increases in average rents. A downside is they have punished many landlords who had a good relationship with their tenants, and this was reflected in the agreed rent. Many of these landlords are now leaving the market as they cannot legally charge the market rent once they are located in one of the 21 electoral Rent Pressure Zones (RPZ)
Solutions? Two areas of focus - the supply side and the taxation side. As is now happening in the UK, the government must attract back the smaller, buy-to-let investor. Our cities will be well served by professional investors like REITs and pension funds for decades to come with large ‘Built to Rent’ type developments comprising of hundreds of rental properties is desirable areas which offer all day to day amenities, on-site.
What about the regions? Incentives for the small-time investor should include lower income tax from rental income, extra allowances for capex (capital expenditure) and reduced CGT on exit, which currently stands at 33%.
On the planning side, the level of social housing in Ireland currently stands at 10% of the total housing stock, with a further 24% of residential homes privately rented. This figure is higher in cities. In addition to Part V, introduce a requirement that 10% of the total number of units in new developments must be sold to private investors. Currently, investors cannot compete with the FTB for starter homes. For the FTB, this is to be welcomed however, for those requiring somewhere to rent, it is limiting their options. Some would claim that this move would just increase pressure on the FTB. To alleviate this, housing densities could be increased by one unit per acre, for a limited period.
The rental market needs rental properties or else it is just a market! People need to recognise that landlords play a fundamental role in the property food chain and for those who find it hard to accept will need to accept them as a necessary evil.
MyHome.ie Q1 2018 Property Report in association with Davy 30 April 2018
Annual rate of house price inflation cools in Q1, as prices slow in Dublin
Asking prices nationally rise by 4.8% - in Dublin the figure is 3.3%
"Affordability is beginning to bite in Dublin, but outside the capital house price inflation is continuing to rise and now stands at 10% year on year"
Number of €1m plus house sales rose 25% in 2017
MyHome.ie asking prices, Dublin and National
% Change quarter-on-quarter
% change year-on-year
National mix adjusted (stock)
Dublin mix-adjusted (stock)
National mix-adjusted (new instructions)
Dublin mix-adjusted (new instructions)
House prices are continuing to rise but the rate of increase is moderating due to tighter bank lending and stretched affordability in Dublin, according to the latest house price report from MyHome.ie.
The report, which is published in association with Davy, found that the prices of newly listed properties nationally rose by 4.8% in Q1 while prices in Dublin rose by 3.3%. Newly listed properties are seen as the most reliable indicator of future price movements.
The median asking price for new sales nationally is €260K while in Dublin it’s €345K. The figure for outside Dublin is €210K.
Nationally, asking prices are up 9.5% on the year, while in Dublin price inflation is 8.2%.
For the entire stock of properties listed for sale on the website prices rose by 1.9% nationally and by 1.8% in Q1.
The author of the report, Conall MacCoille, Chief Economist at Davy, said that while house price inflation would remain close to 10% outside Dublin for 2018, stretched affordability in the capital and a pick up in housing supply suggested the rate of inflation would continue to moderate.
"The tightening of the Central Bank mortgage lending rules coupled with stretched affordability was always likely to be first felt in Dublin. The house price -to-income ratio for first-time buyers in Dublin was 4:1 at the end of 2017 and this compares with 3.5:1 recorded in Cork, Galway, Limerick and Waterford."
"Inflation in Dublin is now 8.2%, down from just over 11% in Q4 2017. The cooling off is already evident in more expensive areas and property types. The median asking price in Dublin South City was flat year on year at €275K but was up 12.8% in Dublin North City to €225K. The median one-bedroom apartment price in Dublin increased by 13% over the past 12 months to €190K; in contrast four-bedroom detached house prices have been flat at €650K."
"The other key trend we are seeing is that house supply is finally picking up. Although the number of properties listed nationally on MyHome.ie is largely unchanged at 18,800 the number of properties in Dublin is 3,900, up 20% on last year"
"Furthermore, the number of new developments on MyHome has increased to 423, up 24% on the 342 recorded in mid-2017. While two thirds of these developments are in the greater Dublin area there has also been a sharp increase in some other areas – in Cork for example the number is 64, up 68% on mid-2017. Although moving in the right direction the current level of homebuilding – circa 12,000 per annum – remains well short of the natural demographic demand of at least 35,000 each year MacCoille concluded.
The Managing Director of MyHome.ie Angela Keegan said that while first time buyers would continue to be concerned at the rate of inflation, there were some positive trends in the new figures.
"Transactions levels are up 10% in the first two months of the year and at this stage we would be predicting an 11% increase on last year’s figure of 54,000. Given that the level of transactions was 18,400 in 2011 it is encouraging to see that we should be in or around the 60,000 mark this year."
"Meanwhile activity at the very top end of the market shows little sign of slowing down. Our analysis of the Property Price Register shows that the number of house sales above €1m rose to 826 in 2017, up 25% on the previous year. There are currently 506 properties with an asking price exceeding €1m listed for sale on MyHome.ie" Keegan said.
BREAKING...Mortgage approvals fall 8pc in March 30 April 2018
Journalist : Ellie Donnelly
Publication: Irish Independent
The number of mortgages approved fell by 8pc year-on-year in March, according to data from the Banking and Payments Federation.
Mortgages approved in March 2018 were valued at €763m – of which first time buyers accounted for €390m (51.1pc) and €234m (30.7pc) by mover purchasers.
Overall, the value of mortgage approvals fell by 2.9pc year-on-year, but rose by 10.4pc when comparing month-on-month.
The decline in approvals was impacted by bad weather, reduced supply and and new lending rules.
In addition, according to Dermot O’Leary, chief economist with Goodbody, March 2018 figures came off a very tough comparison in the first three months of 2017 when mortgage approvals increased by 77pc year-on-year.
"Annual comparisons will become easier as the year progresses," Mr O'Leary said.
Despite the cooling, the trend in drawdowns remained strong in the first quarter of 2018.
The value of loans drawn down in the first three months of 2018 was up 22pc year-on-year, almost matching the fourth quarter 2017 growth rate of 23pc year-on-year.
This is made up of a 14pc year-on-year increase in mortgage volumes and an 8pc increase in the average loan. Remortgaging, up 59pc year-on-year, was the fastest growing component by far, reflecting increased competition and rising levels of equity in the system.
Overall remortgaging accounted for 13pc of new lending, the highest level since 2009. While first-time buyer drawdowns increased by 29pc year-on-year.
Restrictions for first time buyers
While a quarter of first time buyers received exemptions from the Loan-to-Income ratio threshold of 3.5 times income in 2017, under new lending rules, this is now restricted to one in five first time buyers.
"Lack of available housing stock remains the major issue holding back faster growth in mover-purchaser mortgages," Mr O'Leary said.
"This is reflected the widening gap between mortgage approvals and drawdowns over the past twelve months."
Buying a new home in 2018? Here's what's coming 30 April 2018
Our new homes listing of schemes in Dublin and its environs indicates improved supply, but rising prices will drive first time buyers into commuter counties
With the dire shortage of housing in the capital an almost daily staple of news reports, and the economic recovery a reality, surely 2018 will be the year when it all falls into place and supply finally begins to meet unprecedented demand.
Our regional breakdown of more than 140 new homes schemes launching, or rolling out new phases, in Dublin and its environs in the next 12 months would certainly suggest a marked increase in output. But closer inspection indicates that the numbers are still not adding up.
ESB connections have increased by around 26 per cent and commencement notices are up almost 50 per cent, but this is still only adding up to a potential delivery of about 21,000 new homes in 2018.
It is generally accepted that this figure amounts to less than half of what is actually required to meet demand and population growth expectations.
The drip feed of new homes to the market will improve slightly this year but the flow that’s needed to service a normal, functioning property market is still not there. While last year saw new homes sales across 100 sites, the volume of units being released to the market remains low.
In mid-2017 the approval process for large-scale planning permission applications was taken out of the hands of local councils and given directly to An Bord Pleanála in a move to fast track new builds. Towards the end of the year Minister for Housing Eoghan Murphy declared the move a success when he noted that developers had sought planning for more than 11,000 units under the new fast-track system. However last week’s refusal by An Bord Pleanála of planning for the next phase of one of south county Dublin’s biggest residential schemes, Clay Farm in Leopardstown, is a salutary reminder that the process may have been accelerated but there is still no guarantee that plans will convert to actual homes.
A glance at our New Homes listing shows relatively small numbers of homes being launched per scheme. The cynical analysis suggests that developers are happy to ride the upward wave of property prices, and adopt a “phased approach” to new homes production. After all why sell 100 homes now, when prices are rising by 11-12 per cent annually?
The asking prices for most new homes and apartments coming on stream are substantially higher than the €320,000 limit being offered to eligible candidates
The construction industry would argue that prohibitive building costs (to comply with stringent building regulations) and limited access to funding are the stumbling blocks to large-scale production.
The upshot of it all is that even with the assistance of the help-to-buy scheme and the Government’s newly announced mortgage assistance scheme for first-time buyers within certain earning brackets, the prospect of being able to buy a new home in Dublin remains slim.
The asking prices for most new homes and apartments coming on stream are substantially higher than the €320,000 limit being offered to eligible candidates. The leafier locations within the city and south city environs are already seeing plenty of demand from well-heeled downsizers and buyers assisted with cash from the bank of mum and dad. Big developers such as Cairn continue to service this market and expect plenty more high-end apartment schemes to come on stream from the substantial RTÉ site in Donnybrook, to the Blakes and Esmonde Motors site in Stillorgan village where Cairn has just applied to build nearly 300 units in blocks rising to nine storeys.
The biggest increase in activity this year is likely to be in the market for two-, three- and four-bed homes at the north and south city limits and into commuter counties such as Meath, Kildare, Wicklow and Louth. Expect many of the applicants under the new mortgage assistance scheme to target their money towards these areas.
It is inevitable that the Government’s housing policy failures will eventually come home to roost
The net effect is that prices will be driven upwards on foot of added demand, and new pressures will be placed on these areas to deliver adequate infrastructure supports to meet population growth. Despite its almost entire reliance on the private sector to deliver us out of the property crisis, it is inevitable that the Government’s housing policy failures will eventually come home to roost.
With apartments accounting for just 12 per cent of all our housing stock, progress to increase housing density in line with our EU neighbours (the EU average is 50 per cent) is slow. Availability of land for development is an inhibiting factor, and it was envisaged the vacant site levy might address this. However the failure by two Dublin local authorities to list any properties on the register of vacant sites set up a year ago is indicative of a lack of will to enforce the levy on property owners who fail to develop prime housing land.
Meanwhile some of the most ambitious developments in prime locations around the city are by real estate funds operating managed rental blocks. Kennedy Wilson, Hines and IRES Reit are just three of the major investment funds mopping up much of the exciting large-scale development in the city currently. Much of the development is for offices rather than apartments, and the residential units will be primarily only available to rent.
Stamp duty increase fails to slow commercial property growth 30 April 2018
JLL index finds overall returns of nearly 11% in the past year, as market stabilises
Wed, Apr 18, 2018, 06:15
Ireland’s commercial property market continues to report stable growth as the JLL Property Index, to be released on Wednesday, shows that overall returns increased by 2.7 per cent in the last three months and by 10.7 per cent over the last year.
The good results are all the more surprising as the market has had to absorb the effects of a stamp duty increase in December.
Capital values grew by 1.5 per cent in the last quarter and by 5.5 per cent over the past 12 months. The growth was predominantly led by the industrial sector. The capital value index has increased by 90.4 per cent since the trough in 2013 but remains 37.5 per cent below the peak in 2007.
Overall income increased by 2.1 per cent in the last three months. The index portfolio showed an income yield of 4.6 per cent across all sectors.
Rental values across the index portfolio increased by 1.7 per cent in the last three months and by 7.5 per cent in the last 12 months. Offices have had the greatest increases over the last 12 months (up 9.6 per cent) followed by retail (up 5.6 per cent) and industrial (up 3.7 per cent).
John Moran, JLL’s head of investment, said the index had shown steady performance in the first months of 2018. It had reverted to normal growth following the stamp duty increase in the last months of 2017, which virtually cancelled out capital growth in the previous quarter.
Investors had achieved strong overall returns, increasing by 10.7 per cent in the year to March 2018, and the yield remained steady at 4.6 per cent. Of particular note was the strong growth in industrial capital values, which was primarily a result of strong occupier market fundamentals.
Irish House Price Report Q1 2018 | Daft.ie 30 April 2018
The figures in this latest Daft.ie Sales Report are unlikely to surprise many who have an interest in the housing market. Comparing prices in the first three months of 2018 with those in the final three months of 2017, they rose in 53 of the 54 markets covered in the report, with only Monaghan recording a slight fall. Compared with prices a year ago, only Donegal has seen a fall.
It is, in other words, a market that continues to see almost across-the-board strong increases in prices. Looking at the national average, the annual rate of inflation was 7.3% in the first quarter of the year. The optimist will point out that this is the slowest rate of inflation in almost two years.
However, in a healthy housing system, housing prices increase at the same rate as prices in the rest of the economy, no faster. According to the official measure of the price level, general prices in the Irish economy are no higher now, in early 2018, than they were five years ago. This is a remarkable achievement in recovering the lost cost competitiveness of the Celtic Tiger years. It is all the more remarkable considering that one of the single largest components of the CPI is private rents - so in truth, leaving the housing market aside, consumer prices in Ireland have fallen over the past five years.
In the same time, though, the purchase price of housing has risen by one half, on average. In Dublin the increase is slightly above 60%, outside urban areas, the increase is closer to 40%. But overall, this is a collection of geographical markets more defined by their similarities than their differences.
The reason that prices are rising is not complicated: the growth in demand far exceeds the growth in supply. The fundamental barometer of a healthy housing system is that, where new demand occurs, new supply follows quickly. This should be true for the housing system as a whole - i.e. both market and social housing segments. But a closer look at the figures reveals just how dysfunctional Ireland's housing system is.
Turning to demand, first, Ireland's population is rising by over 50,000 people a year. About two-thirds of that increase - between 30,000 and 35,000 - is down to a natural increase in the population. The remainder - a far more volatile number in Ireland but 20,000 in 2017 and on average that amount over the last two decades - is net migration.
Of course, it's a little more complicated than births exceeding deaths. A population increase of 50,000 does not mean the country needs 50,000 new homes a year. At a very basic level, not every individual - and certainly not new-borns - has a household by themselves.
So, in order to understand housing demand, we need to look at household formation. But the picture here reinforces the stats above. There are about 330,000 women in Ireland aged between 25 and 34, compared to about 110,000 aged 75-84. This gap of between 20,000 and 25,000 per year gives a good measure of the underlying demand for new housing in Ireland each year.
But in addition to the increasing population, there are two further elements that need to be factored in. The first is obsolescence: even in countries with a declining population, new homes need to be built to replace stock that falls out of use. Even if every home lasts on average 200 years, that's still 0.5% of the housing stock - or in Ireland's case, 10,000 homes.
And lastly, there is household size. While at first glance, this appears to have been static in recent years, or indeed even increasing between the 2011 and 2016 Censuses, this is merely because household formation is what economists call endogenous. Simply put, if you can't find a dwelling, you cannot form a household. Looking at the bigger picture, including long-run trends in Ireland and elsewhere, it is clear that the bulk of new households formed will be 1 or 2 persons.
This has implications for both how many new dwellings are needed and what type. If Ireland adds 2 million people in the coming decades, but they are in households of 4 persons on average, this is an additional 500,000 dwellings. But if - as is overwhelmingly likely - they are closer to 2 persons on average, Ireland needs twice as many new homes to cover the same increase in population.
And not only that, Ireland is urbanising. Dublin and the other major cities are likely to account for 80% of the country's population by mid-century. This is not some anomaly, with Dublin far too big - indeed, if anything, Ireland is anomalous in not having this process happen already.
Ireland is in the middle of a century-long process of moving from rural households of roughly 4 persons to an urban society of 2 persons per household. This has huge implications for what we build and how. Supply will be needed in and around the cities - and predominantly in apartment form.
What is clear is that this is not happening. Planning permission was granted for a little over 5,000 apartments, nationwide, in 2017, and for 20,000 dwellings in total - less than half the likely demand. It is often said that the mantra in the housing market is "location, location, location". For housing policy in Ireland, it needs to be "supply, supply, supply".
Do you own a property in Ireland that you’re renting out but you don’t live in the country? There’s a few tax obligations that you need to be aware of, but also, there’s some tax deductions you need to be taking advantage of!
So, what exactly is a non-resident landlord?
You are classed as a non-resident landlord if you rent a property in Ireland but you reside in Northern Ireland or another country. Any money you make from the renting of your Irish property, comes under Irish taxation law and must be taxed the same as if you were a resident.
How exactly do you pay your tax to the Revenue Commissioners?
It works slightly differently than if you were a resident of Ireland. One method is when the tenants of your property actually withhold the income tax and pay it to the nearest tax office in their location on your behalf.
At the end of the tax year, the tenant then fills out a Form R185 and gives this to the landlord as a record of the tax paid. This may seem a quite roundabout way of organising your tax affairs but it is a lot cleaner than trying to pay money to the Revenue Commissioners from overseas.
But, what if you don’t want to put the responsibility of paying your tax on your tenants? Your tenants may not be willing to do this for you, or you may not trust your tenants to pay the correct amount. There could be a number of reasons why you wouldn’t want to go down that route, but luckily there is an alternative
Using a Collection Agency
A tax collection agent is an Irish resident who collects and files income tax on your behalf. The handiness with this option is that they are provided with a second PPS number to be used exclusively when dealing with your income tax. They can be a company, individual or even a family member, trusted friend or tax advisor.
This is normally the preferred method of dealing with income tax, as it takes the burden away from the tenants. Then, you, the landlord is able to receive your full monthly rent and can sort out your own taxes and know that you are completely compliant with local taxation laws. Even if you use a collection agent it would be advisable to use the help of a tax consultant to ensure you are fully tax compliant and have claimed all the deductions you are entitled to so that your tax bill is kept to a minimum. They can also advise you on your PRSI and USC position and their fees for completing the rental computations are tax deductible.
But it’s not all doom and gloom!
Did you know that, even though, you may be a non-resident of Ireland, you are still entitled to the same deductions as resident landlords!
PRTB – Private Residential Tenancies Board
You will have to register with the PRTB at €90 per tenancy. You are entitled to claim this as a deductible expense for tax relief though!
Mortgage Interest Relief
If your tenants are registered with the PRTB you are entitled to claim tax relief of 80% on the mortgage interest of your rental property from 1 January 2017. For certain tenancies the interest deduction is 100% where the property is let out for 3 years for social housing use.
Repairs and Maintenance
If you need to carry out repairs or maintenance to your rental property you can claim these back as expenses in your tax return. Included in the repairs or maintenance is the cost of hiring a third party for labour, which is extremely helpful in the case of non-resident landlords who cannot do the repairs or maintenance themselves.
Are you paying a management company to collect rent and overall manage your property? Did you know you that these fees as tax deductible? If you didn’t, you need to get that sorted! Hiring an agent or company to manage your property is something a lot of non-resident landlords opt for, due to peace of mind, but so many of them don’t know that these fees are completely tax deductible!
Have you purchased insurance to cover and protect your rental property? You guessed it, your insurance premium on the rental property is deductible in your tax returns!
10 Reasons to live in Longford 30 April 2018
Longford often describes itself as a hidden gem, meaning most people don’t know about it. However if you are seeking a high quality of Life, Longford has a lot to offer.
Property is cheap
Your money goes a long way in Longford. Whether it’s buying or renting, prices are still recovering from the economic crash and Longford is one of the most affordable locations in the country. A large country house can be purchased for the price of a ‘shoe box’ townhouse elsewhere in the country. Prices are rising quickly but there are still amazing opportunities. Your dream home is possible in Longford.
Longford Town & Rural living
The county is principally a rural area with Longford town being the main urban centre with a population of over 10,000. There are a lot of vibrant villages throughout the county including three former tidy towns’ winners, all within a maximum of 20 mins drive from Longford Town. A lack of traffic congestion means a morning commute is short & stress free.
Jobs … yes really
The recession hit provincial Ireland hard. Construction came to a halt and in Longford unemployment soared. However, Longford is fortunately home to a number of very prominent businesses such as Abbot Laboratories, Green Isle foods, Finesse Medical, Tool & Plastic all competing for third level graduates. The Irish prison service is headquartered in Longford and the department of social welfare has substantial offices here. Centre Parcs are starting construction of a holiday resort just outside Ballymahon in spring 2017, which will employ 1000 when fully operational. A lot of speculatively built commercial property built in the boom year’s means setting up a business is much cheaper in Longford with modern office space and industrial units and low retail rents giving easy opportunities to expand.
It’s an education
When raising a family one of the greatest concerns is getting children into good schools. While third level courses are more restricted in the county with most students travelling to nearby Athlone IT. Longford is blessed with a number of great national schools including a Gaelscoil, where waiting lists are not a massive issue. There are 10 secondary schools in the county all with excellent academic reputations.
Despite the downturn and a number of vacant retail shops in the town, Longford has somehow remained a great shopping destination with a number of unique local award winning shops & boutiques. The quality of coffee shops has improved dramatically in recent years and the car parking is amongst the cheapest in the region. All the major supermarkets are represented and the current trend is for more multiple retailers opening in the town.
Eating, Drinking, Culture & Dancing
During the economic boom Longford did not have the variety of restaurants it does now. The Aubergine bistro, Indian Spice, Mekong & Rising Sun Chinese restaurants in the town have all thrived in recent years. Viewmount house with celebrity chef Gary O’ Hanlon has brought some high acclaimed fine dining to the town. In Ballymahon, Nine Arches is a new welcome addition. Crossing the Shannon into Tarmonbarry Keenan’s Pub & the Purple Onion add to the variety and are just 5-10 mins drive from Longford town. Afterwards you might want to hit the Pubs, which creates a dilemma, the village local or into the town. Catch a film in the Omniplex or up to the Backstage for a play, I hear the St. Mel’s Musical Society’s latest one is hilarious. Either way, you will probably still end up in the Spiral Tree Night club or Luigi’s for the chips at the end of the night.
Living in Longford you will probably not be celebrating Leinster GAA titles a lot… but what is seldom is beautiful and our Club sides often punch well above their weight in the Leinster championship. Twice holders of the FAI cup Longford town got relegated from the premier division last year but intend making a swift return. Longford’s Rugby club is the envy of all provincial towns with top class facilities and the popular Sin bin bar & restaurant. These three most popular sports have a huge youth aspect with high quality coaching. The mall sports complex hosts five a side on Astro & indoor and has a 25 meter six lane swimming pool & Gym. Longford Cycling & Tri clubs are very active and growing fast. Longford Golf club is a parkland golf course close to the town centre and within 30 mile radius there are championship courses such as Mullingar, Glasson and Sliabh Russell. The Tennis club features fine savannah courts and has a popular mixed doubles night on a Friday. Due to the Shannon and lakes around Longford water skiing, wakeboarding & Canoeing / kayaking are common pursuits.
While we are on the subject, the River Shannon runs all along the western border of the county where Leinster, Ulster and Connaught all converge. This is intersected by the Royal Canal at Clondra which now features a cycle & walkway path all the way into Longford Town. The River Inny also flows into the Shannon and this is particularly renowned for the short rapids just North of Ballymahon that make it an ideal white water canoeing spot. Longford’s St. Mels Cathedral is a modern day phoenix rising from the ashes, dominating the town skyline it was almost completely destroyed by fire Christmas morning 2009 rebuilt & restored within 5 years the modern interpretation and craftsmanship is fascinating. The north of the county is dominated by Cairn Hill (a torture spot for the enthusiastic cyclist) and the beautiful countryside around the Lough Gowna system of lakes. This is a popular area for fishing and Derrycassin Woods hosts one of Ireland’s finest old estate walkways. The south of the county is dominated by Lough Ree and the Bogs, in which the Corlea trackway visitor centre shows off the Iron Age trackway dating back to 148 bc. Also coming out of the Bog are the amazingly beautiful bog oak sculptures created by Michael & Kevin Casey which operate out of a studio in picturesque Barley Harbour in Newtowncashel. But then again there are ‘Hidden gems, throughout the county. The Granard Motte with commanding views of the surrounding countryside, the ‘hot water stretch’ in Lanesboro is renowned amongst fisherman throughout Europe. The heritage & tidy town winners of Ardagh Village, Newtowncashel & Abbeyshrule (also known for its airfield). All a bit boring for you? Time to go to Edgeworthstown for Go-Karting on a championship track or paintballing. This section is getting too long…. too many to mention!
In the heart of Ireland
Situated along the N4 Dublin – Sligo Road & N5 Dublin Castlebar Road, Longford is just c. 90 km from the Dublin M50, or an hours’ drive. My friends often joke with me ‘Longford, convenient to other places’, but it is true. Commuters and businesses are finding that getting to Dublin is pretty easy Monday to Friday there are 10 rail services with commuter and intercity trains to Dublin along the Dublin-Sligo line and 9 return services starting as early as 5:40am. Sligo on the Wild Atlantic way is just an hour’s drive. Did I put Surfing in the sporting section? From this north Midlands location whether it’s getting to Cavan and across the border, west to Mayo or Galway, south to Athlone. These areas are all within easy reach.
You will be welcomed
Longford is a very welcoming place, being a smaller county it easy to get to know people and make friends. In selling houses its notable the number of people not originally from the county, but spent time here due to work or relationships, that end up returning settling in a place they felt at home.
You won’t be made feel like a ‘blow in’ in Longford, we’re just happy you decided to live here.