Noonan's measure has led to hoarding of land

This article originally appeared in Sunday Independent.

Measures introduced four years ago to encourage property transactions in the depths of the recession has led to land being hoarded.

'The issue was raised by tax lawyer William Fogarty of Maples & Calder at the recent Real Estate Stakeholders Summit, of which the Sunday Independent and Irish Independent are media sponsors.' Photo: PA

In what appears to be an unintended consequence of the seven-year Capital Gains Tax (CGT) holiday introduced by Michael Noonan in Budget 2012, buyers of land must wait until January 1, 2019 before releasing it to the market to avoid incurring a CGT liability.

The issue was raised by tax lawyer William Fogarty of Maples & Calder at the recent Real Estate Stakeholders Summit, of which the Sunday Independent and Irish Independent are media sponsors.

Highlighting the measure's contribution to the current housing crisis, Fogarty said: "It was brought in to incentivise the market. We're now in the bizarre place where people have bought land - and instead of them putting it to good use, they're waiting until January 1, 2019, before they'll release the land on the market.

"The Government could take a very good look at what impact its tax system is having on the property market. There are people hoarding land because that's what the Government told them to do."

Sunday Independent: Noonan's measure has led to hoarding of land

Wilson Moore Estate & Letting Agents

International investors remain crucial to recovery

This article originally appeared in the Sunday Independent.

HWBC’s Jonathan Hillyer says caution is required in relation to changing our tax regime.

Now the pundits have had their say on 2017's Budget, and now that things have calmed down a little, one might surmise that with the political uncertainty that is likely to prevail elsewhere in the world over the next 12 months, this Budget is exactly what Ireland needed.

The foreign investor, who has been instrumental in Ireland's recovery and is now looking to the medium to long term, would likely give an approving nod to Minister Noonan's budget speech. A minority Government has managed to come to a consensus around a budget involving modest fiscal expansion as opposed to big, risky populist gestures.

The positive perception of Ireland's continuing commitment to sensible fiscal management can only help us when existing and potential investors come to compare us to our European competitors. Stability is the watchword that provides the basis for continued inward investment of every kind, including property.

In terms of specifics, there was no clarification in the Budget regarding Section 110 purchase vehicles and other tax efficient structures used for the acquisition of real estate (ICAVs, QIAIFs, QIFs etc). This should be addressed in the upcoming Finance Bill. If there is any retrospective move or radical attack which affects the tax efficiency during the life or at the end of the property hold, this could have a material impact on values especially on larger lot sizes or portfolios where such structures are most common. The Irish commercial real estate market is increasingly dominated by medium to long-term Irish and offshore Institutional investors who do not use Section 110 but do consider ICAVs etc. Deterring these investors is unwise as they are crucial to the future health of the overall market.

In the brief time it has for consultation, the Government must ensure that if it must tinker with the existing tax structures; that it does so in such a way that Ireland remains competitive compared to its European peers. International investors are a crucial source of capital especially since domestic funding is still insufficient to support Ireland's much needed new development in the office and residential sectors.

Unsurprisingly, it was the Budget's residential market measures that attracted the big headlines. My view is the Government missed an opportunity to properly stimulate the supply side of the market in choosing to put the money in the hands of potential first-time buyers. Rising construction costs and local authority fees continue to be the main concern for most developers. If they don't respond by building more starter homes, the tax rebate could end up simply bidding the market higher.

Notwithstanding that reservation, I believe Ireland's recovery is still on track and that the confidence that has underpinned the dramatic turnaround in the property sector looks set to continue.

Sunday Independent: International investors remain crucial to recovery

Wilson Moore Estate & Letting Agents

New policies will help the hard-pressed

This article originally appeared in the Sunday Independent.

We would be waiting a long time for the market to right itself if we didn't intervene, writes Housing Minister Simon Coveney

The Government is not in the business of inflating house prices. We are in the business of supporting the delivery of enough homes for people, whether they be social or private. The current shortage of housing supply needs a significant Government response and it's getting just that. Last week's Budget prioritised housing supply, with a 50pc increase in the housing budget and a series of new policy initiatives to drive supply. Some critics argued for a non-interventionist approach, to wait for the market to correct itself over time; we'd be a long time waiting.

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We'll spend €1.2bn on housing next year, provide over 21,000 housing solutions for social housing tenants, fund multiple new initiatives to bring thousands of vacant properties back into use, streamline the planning system, fund housing infrastructure grants, create public-private partnerships for new projects and a lot more besides. Yet it's the first-time buyer initiative, representing less than 5pc of the housing budget, that has received all the commentary: positive and negative in equal measure.

There are lots of examples of supports for first-time buyers internationally, in the UK, Australia, New Zealand, Canada, Finland, South Africa and many more. Any government intervention in a housing market has risks, and needs to be designed to correct an imbalance. We have a severe imbalance affecting our housing sector where demand far outstrips supply. The results are not good; record local authority waiting lists, unsustainable rental inflation, homelessness at crisis levels, and inertia in the house building and purchase market.

First-time buyers are being squeezed more than anyone, trapped in a pressurised inflationary private rental sector, unable to purchase affordable homes. There are two fundamental reasons for this: lack of supply of starter homes and difficulty in securing a mortgage in line with the Central Bank rules. Ask anybody what it's like to save a deposit of €35,000 while paying the rent and you'll get your answer.

Strict Central Bank lending rules are in place for good reason. However, the new Budget measure was designed, in consultation with the Central Bank and Revenue Commissioners, to assist first-time buyers to put a deposit together to secure a mortgage for a new house. Five percent of the house value will be given back as a tax rebate to help save for a deposit. The restriction of 3.5 times income on mortgage lending remains unchanged.

So what we've done is help someone put a deposit together, which is the real obstacle, but not encourage over-borrowing that would drive house prices up.

We have also restricted the first-time buyer support to newly built homes, to encourage increased building. Applying the supports to a finite second-hand market would simply increase demand in an already crowded market and push prices up.

The core supply problem is that builders do not see the starter home market as worth building for, because they know the capacity to turn notional demand into a viable mortgage isn't there. If a first-time buyer wants to secure a mortgage of €300,000, the deposit required is €38,000 before even talking to the bank. The State will now provide €15,000 towards that deposit. It will make a significant difference to turning notional demand into real demand to buy homes, without increasing the mortgage ceiling available. Most importantly, it will give a very direct signal to developers that first-time buyers are back in the market to buy homes at the right price.

There's been some criticism of the thresholds set for the new scheme. First-time buyers will get 5pc of the value of a new property up to €400,000. In order to prevent a cliff effect over that figure, it was decided to limit the benefit to the value of €400,000, but allow property up to the value of €600,000 to qualify for the maximum rebate of €20,000. This was to ensure that a buyer of a property for €405,000 would not get nothing while a buyer of a property for €400,000 would get the full rebate. So it's capped at €20,000 but there's some flexibility in the qualifying upper threshold to accommodate the high-priced Dublin market.

In order to qualify for the rebate, the first-time buyer needs also to be borrowing 80pc of the house value, so this scheme will not be supporting buyers who have significant cash available. Instead, it's about supporting the hard-pressed person saving for a mortgage and deposit.

I'm sure of one thing. If we had not assisted first-time buyers in this Budget, I would have been rightly accused of abandoning a generation, locked out of the housing market, struggling to pay rent and unable to buy.

When judging the merits of any policy change, the best place to start is with the facts.

Last year there were 38,000 housing units sold in Ireland, less than 2,500 were new builds. Data on first-time buyers and new builds from 2010 to 2015 makes for stark reading.In 2010, first-time buyers represented 54pc of owner-occupier purchases across new and second-hand homes. By 2015, that figure was just 24pc. But what's most worrying is that only 2pc of the 38,000 homes sold last year were new homes to first-time buyers. That's only 760 across the whole country.

For every 11 existing properties bought by first-time buyers today, only one is a new build. While movers and investors' transactions in the property market have grown by 285pc and 344pc respectively since 2010, first-time buyers are up by only 15pc. We need to be building 7,000 affordable homes for first-time buyers, not 700 per year. That's what the first-time buyers supports are aimed at.

We are beginning to see an increase in supply. Nearly 3,500 new homes were completed in the second quarter of 2016, a 17pc increase on 2015. I hope we will reach 15,000 by the end of the year. We aim to get to 25,000 by 2019.

The Government's action plan for housing and homelessness, Rebuilding Ireland, is a good foundation to build a growing but sustainable housing sector. It takes a coordinated approach to all parts of the housing sector, recognising that each part is interlinked.

At the heart of the plan is a major focus on supply: 47,000 more social houses, a larger, more predictable private rental sector, and a much more balanced home purchase market.

The first-time buyers Help-to-buy scheme needs to be viewed in the context of the range of supply initiatives that the Government is pursuing.

I think we will only be able to judge the effectiveness of the measure when we assess the impact on supply of new affordable homes in a year's time. The initial soundings are encouraging, with a number of developers talking about increasing supply next year to respond to improved viability in the starter home market.

Getting supply of new homes moving in the right direction is good news for all sectors of the housing market. It will ease pressure on the rented sector, in turn helping to moderate social housing need and families presenting as homeless and ultimately helping deliver more homes.

Sunday Independent: New policies will help the hard-pressed

Wilson Moore Estate & Letting Agents

Property prices rise 3.8 per cent in Dublin and 6.7 per cent nationally in year to July

This article originally appeared in The Irish Times.

Property prices rise 3.8 per cent in Dublin and 6.7 per cent nationally in year to July

In the Dublin residential property market, prices increased by 3.8 per cent in the 12 months to July 2016.

Buying a house in Ranelagh, Rathmines, or Rathgar is likely to set purchasers back a hefty sum.

The Central Statistics Office’s new residential property price index, which includes information on cash purchases for the first time, shows huge disparity in prices throughout the capital.

Year-on-year price rise

In the Dublin residential property market, prices increased by 3.8 per cent in the 12 months to July. This compares with an increase of 2.5 per cent in the year to June and an increase of 4.5 per cent in the year to July 2015.

In the year to July, residential prices at a national level increased by 6.7 per cent.

During the month of July, property prices in Dublin increased by 1.6 per cent. This compares with an increase of 0.4 per cent in June and an increase of 0.4 per cent in July of last year.

Residential prices in the capital are now 58.2 per cent higher than their lowest level in April/May 2012, but remain 35.3 per cent below their peak price level in 2006.

Compared with property prices nationally, which fell 54.4 per cent from peak to trough, Dublin prices fell further, falling 59.1 per cent from high point to low point.

However, Dublin prices began to recover sooner and have recovered further than national prices. Currently Dublin prices are just 12.7 per cent less than their base value (January 2005), compared to 14.5 per cent nationally.

Dublin house prices increased 3.9 per cent in the 12 months to July 2016. This compares with an increase of 1.9 per cent in the year to June and an increase of 3.7 per cent in the year to July 2015.

The capital’s house prices are 60.4 per cent higher than their trough in February 2012. However, they are 32.8 per cent lower than their peak in April 2007.

The recovery was initially led by price increases in Dún Laoghaire-Rathdown in 2012 and 2013. However, since late 2014 onwards, Dublin City has led the growth in house prices. In contrast, house prices in the Fingal area have been slowest to recover.

The price of apartments in Dublin increased 6.4 per cent in the year to July 2016. This compares with an increase of 8.7 per cent in the year to June and an increase of 11.9 per cent in the year to July 2015.

Dublin apartment prices are 68.9 per cent higher than their 2012 trough, but are 40.1 per cent lower than their peak in February 2007.

The strongest period of price growth for Dublin apartments (2013-2014) coincided with a period of substantial growth in the volume of sales. From 2015 onwards, volume growth has leveled off and price growth has been more hesitant.

The Irish Times: CSO figures show huge disparities in Dublin property prices

Wilson Moore Estate & Letting Agents

CSO figures show huge disparities in Dublin property prices

This article originally appeared in The Irish Times.

Property prices rise 3.8 per cent in Dublin and 6.7 per cent nationally in year to July

In the Dublin residential property market, prices increased by 3.8 per cent in the 12 months to July 2016.

Buying a house in Ranelagh, Rathmines, or Rathgar is likely to set purchasers back a hefty sum.

The Central Statistics Office’s new residential property price index, which includes information on cash purchases for the first time, shows huge disparity in prices throughout the capital.

Year-on-year price rise

In the Dublin residential property market, prices increased by 3.8 per cent in the 12 months to July. This compares with an increase of 2.5 per cent in the year to June and an increase of 4.5 per cent in the year to July 2015.

In the year to July, residential prices at a national level increased by 6.7 per cent.

During the month of July, property prices in Dublin increased by 1.6 per cent. This compares with an increase of 0.4 per cent in June and an increase of 0.4 per cent in July of last year.

Residential prices in the capital are now 58.2 per cent higher than their lowest level in April/May 2012, but remain 35.3 per cent below their peak price level in 2006.

Compared with property prices nationally, which fell 54.4 per cent from peak to trough, Dublin prices fell further, falling 59.1 per cent from high point to low point.

However, Dublin prices began to recover sooner and have recovered further than national prices. Currently Dublin prices are just 12.7 per cent less than their base value (January 2005), compared to 14.5 per cent nationally.

Dublin house prices increased 3.9 per cent in the 12 months to July 2016. This compares with an increase of 1.9 per cent in the year to June and an increase of 3.7 per cent in the year to July 2015.

The capital’s house prices are 60.4 per cent higher than their trough in February 2012. However, they are 32.8 per cent lower than their peak in April 2007.

The recovery was initially led by price increases in Dún Laoghaire-Rathdown in 2012 and 2013. However, since late 2014 onwards, Dublin City has led the growth in house prices. In contrast, house prices in the Fingal area have been slowest to recover.

The price of apartments in Dublin increased 6.4 per cent in the year to July 2016. This compares with an increase of 8.7 per cent in the year to June and an increase of 11.9 per cent in the year to July 2015.

Dublin apartment prices are 68.9 per cent higher than their 2012 trough, but are 40.1 per cent lower than their peak in February 2007.

The strongest period of price growth for Dublin apartments (2013-2014) coincided with a period of substantial growth in the volume of sales. From 2015 onwards, volume growth has leveled off and price growth has been more hesitant.

The Irish Times: CSO figures show huge disparities in Dublin property prices

Wilson Moore Estate & Letting Agents

How demand for housing is 'a lot stronger than previously thought'

This article originally appeared in the Irish Independent.

Demand for housing is much stronger than previously thought, a new survey indicates.

KBC Bank Ireland’s Chief Economist Austin Hughes and Director of Product, Eddie Dillon launch KBC Bank’s new Home Buyer survey (Photo: Shane O'Neill Photography)

Pent-up demand for property is now so strong after the market’s collapse that up to a third of people are considering buying a new home.

The survey, commissioned by KBC Bank, found that 32pc of adults are contemplating buying a residential property in the next two years.

KBC Bank economist Austin Hughes accepted that the levels of pent-up demand found in the survey were “exceptionally large”.

This was especially the case as a normal level of transactions would see just 4pc of the housing stock changing hands.

But he said strong demand for housing reflected the fact the housing market here had not functioned for eight years.

“A large part of it is catch-up demand. It is not persistent demand. It is not something we will see for the next 20 years.”

Mr Hughes said the level of demand was much stronger than was commonly assumed.

Asked to put a number on it, he said: “You are probably looking at a couple of hundred thousand coming to the market.

A number of factors were driving people to consider buying – this includes new buyers, movers and those looking at investing in a buy-to-let property.

The stronger economic environment and greater confidence among consumers had meant thousands are considering buying. Jobs were more plentiful, and people needed to move because their personal circumstances had changed, such as having more children.

A nationally-representative sample of 2,000 people were interviewed by Ignite Research last month for the survey.

Mr Hughes said it was surprising that the survey found that almost half of those considering buying in the next two years were single and were looking at buying on their own.

This reflects that fact that more and more people live on their own, he said.

Irish Independent : How demand for housing is 'a lot stronger than previously thought'

Wilson Moore Estate & Letting Agents

'Repair and Lease' plan to pay owners €30,000 to put vacant homes in use

This article originally appeared in the Irish Independent.

Owners of vacant properties will be given up-front payments by the State in a scheme designed to bring thousands of homes back into use.

New scheme: Housing Minister Simon Coveney. Photo: Tom Burke

As much as €30,000 will be provided to bring properties up to a standard allowing them to be rented to social housing tenants or families in need of State support, before long-term leases of up to five years are agreed.

Housing Minister Simon Coveney said the Repair and Lease scheme would help alleviate short-term demand until delivery of new homes was ramped up.

He added that a pilot project was under way in Carlow and Waterford, and that both local authorities and Approved Housing Bodies (AHBs) could enter into arrangements with private landlords.

"It will be extended to AHBs, and they may be a more effective vehicle for delivery," he told the Irish Independent. "Local authorities might advertise in the paper seeking expressions of interest, but an AHB will go out and knock on doors and ask who owns property and see if they will accept three or five years' rent up front.

"That hands-on approach is needed. There's thousands (of vacant units) in urban areas and we need a scheme that brings a portion of those properties back into the market.

"It's much quicker than building a house or going through planning permission. The reason why I think this is important is we need a solution for the next two years while the overall housing stock increases. We need solutions for people today."

Census 2016 says there are some 200,000 vacant properties across the country, and the Department of Housing will begin compiling a register of vacant units when the final census figures are released later this year.

The Repair and Lease scheme is designed to make vacant private properties in need of renovation capable of being rented for social housing or to those in receipt of housing assistance payments (HAP).

In many cases, families may have inherited a property after a parent passed away but were reluctant to sell. These families would be given a portion of the rent up front to make necessary upgrades. The amount was likely to be around €15,000, but could rise to €30,000 if required, the minister said. Once expressions of interest were received, local authorities or AHBs would negotiate rents.

Some €1m is being provided over the coming months, with €2m next year. Based on average rents being demanded this year, at €929 per house, the allocation could fund delivery of more than 2,100 units.

"I'd see this as a really good response to short-term housing need but we need to show that the model works," Mr Coveney added. "It's a much cheaper way of getting housing than building or buying."

The property owner will have no role in managing the property, which will be handled by the local authority or AHB, which will also ensure it is maintained.

AHBs including Focus Ireland, the Peter McVerry Trust and Simon Community will be given resources to fund the works, and it is expected that much of the demand will be in the cities. However, vacant units in any area of need can be utilised.

The scheme is in addition to the Housing Agency's €70m budget to spend on vacant properties. It is negotiating with banks in relation to 1,600 vacant units linked to bad loans. The homes will be sold to councils and AHBs, allowing the fund to be continuously recycled.

Irish Independent: 'Repair and Lease' plan to pay owners €30,000 to put vacant homes in use

Wilson Moore Estate & Letting Agents

First-time buyers to get up to €10k tax back

This article originally appeared in the Irish Examiner.

First-time buyers are to get up to €10,000 in a tax rebate as part of Government plans to reheat the property market.

Housing Minister Simon Coveney said the grant would only be paid to those buying new homes and said the Help to Buy package, to be announced in the budget, would help tackle the housing crisis in Cork and Dublin.

It is unlikely that the State will take equity in homes under the buyer aid scheme, as operates in Britain.

However, property experts have warned the first-time buyers’ grant will simply drive up the price of new houses.

Mr Coveney, speaking at the close of the party’s pre-Dáil conference in Kildare, said the package would help kickstart the stalled property market. The grant will be targetted at purchasers buying homes valued at between €250,000 and €300,000.

However, statistics from estate agents Sherry FitzGerald show the average home price sale value is currently €400,000. Daft’s second quarter report put the national average asking price at €215,000.

“The majority, particulary in Dublin and Cork, are simply locked out of the market,” said Mr Coveney. “There aren’t houses being built for them and there aren’t houses being built at a price that they can afford. So we need to change that.”

Simon Coveney

He said the incentive scheme could see the reduction of house prices and improve the capacity of purchasers to buy homes.

“The mechanism for doing it is still being decided with the Department of Finance,” he said.

“I think it will be something of a first-time buyers grant, effectively through the tax system and through a tax rebate system.”

First-time buyers represented around 55% of the property market, he said.

Mr Coveney said a model in Britain was not favoured by the Government. There were problems there recouping financial aid, he said. Any incentive needed to help drive supply, he added.

Rebates for first-time buyers could be in the region of €10,000. This is similar to the Fianna Fáil manifesto which promised a mortgage deposit top-up scheme worth €10,000 per couple, or €5,000 for an individual.

The finance department o said the rebate could be a refund or tax credit for purchases. It would also be backdated to mid-July, when the housing plan was launched. No exact figure for buyers has yet been decided, a spokesman said.

Revenue and the department will also monitor closely the numbers drawing down the rebate and how it is affecting the housing market.

The grant will form part of taxation measures in the budget, set to come to €330m.

However, economist and Daft report author Ronan Lyons questioned the overall value of the grant for the housing market.

“It may not be viable to build, even after this,” he said. “It’s just free money that will get added to the price [of a house], but taxpayers will pick up the cost.”

The small amount would also not be a “gamechanger” for all buyers, he suggested, but could have an impact in areas such as Cork or Galway.

“The benefit of the overall number of builds has to outweigh the cost of the measure,” said Mr Lyons.

Mr Coveney will next week bring legislation to Cabinet to fast-track planning permission for large housing developments.

The scheme will see developments with 100 plus units going straight to An Bord Pleanála, rather than through local councils. Large developments could be fast-tracked within 16 weeks under the proposals.

Mr Coveney will be quizzed by TDs on his housing action plan at the Oireachtas housing committee today.

Crisis not over

-Eamon Quinn and Geoff Percival

The mortgage crisis has not gone away despite a fall in arrears cases, debt experts have warned.

Central Bank figures show the number of home loan accounts in arrears fell to 82,092 at the end of June, down from 98,155 a year earlier.

Mortgage arrears reached a peak in September 2013, when almost 13% of all accounts in the Republic were in arrears for over 90 days. That has now fallen to 7.8% of all accounts.

However, Paul Joyce, senior policy adviser at the Free Legal Advice Centres said banks are avoiding writing down mortgages.

“It has been presented that the arrears problem has been put to bed by restructuring,” said Mr Joyce. “It has not.”

Eugene McErlean, a banking expert who has advised Independent Alliance TDs on mortgage arrears, also said the number of arrears of over two years showed the scale of the problem.

Separately, the Irish Fiscal Advisory Council told the Oireachtas Committee on Budgetary Oversight that €4.1bn more needs to be put aside in the next five years to account for inflation.

Irish Examiner: First-time buyers to get up to €10k tax back

Wilson Moore Estate & Letting Agents

Revealed: the property hotspots that should be on house hunters’ radars

This article originally appeared in The Irish Independent.

Phibsborough in Dublin 7 has been named as Ireland's property hotspot.

The north city suburb has been judged as the area likely to see the most value added to average homes in the coming year.

That's according to a survey conducted by the Irish Independent in conjunction with a panel of three experts, all with access to a nationwide property network.

The new combined DIT colleges site set to open at Grangegorman and the pending arrival of the Luas are key factors.

The area's central location with a supply of undervalued, affordable homes and the presence of the Mater Hospital all combine to make it the area most likely to surge in the coming 12 months. Three-bedroom period terraces in the area are currently priced at about €395,000.

Coming in second place in the capital is the Ringsend/ South Docks area, thanks to a concentration of multinational employers such as Google, a dynamic architect designed modern landscape at the Canal Basin and a clutch of more affordable smaller homes with a Dublin 4 address. Other locations mentioned in Dublin include Harold's Cross, City West, Ashtown and Dún Laoghaire.

The survey also named Blackrock/Ballinlough as the ultimate property hotspot in Cork city, with affordable homes in high demand in the latter area in particular. Douglas/Rochestown came second on Leeside.

Meanwhile, Limerick's hottest location was judged to be the North Circular/ Ennis Road district where a tight supply of top-end homes are being sought by wealthy locals alongside successful individuals returning from years spent abroad. Renmore has been identified as Galway city's hottest property location.

The results of the survey are published in 'House Hunter 2016' - our definitive home buyers' guide free with today's newspaper.

Irish Independent: Revealed: the property hotspots that should be on house hunters’ radars

Wilson Moore Estate & Letting Agents

Discount of up to 10% expected on bulk-buy social houses

This article originally appeared in The Irish Times.

Housing Agency to spend up to €70m on acquiring private houses and apartments 

The Government’s Housing Agency will target portfolios of distressed properties held by banks. File photograph: Getty Images

The Government’s Housing Agency expects to achieve discounts of up to 10 per cent on the market value of private homes it plans to bulk-buy for social housing.

The agency was last month allocated €70 million under the Rebuilding Ireland housing action plan to buy homes, which will be used by local authorities and voluntary housing bodies for tenants on social housing waiting lists.

It plans to assess about 1,000 houses and apartments for sale over the next two years to determine their suitability to buy for social housing, and expects to buy at least 400 properties a year by 2020.

Agency chief executive John O’Connor said he expected the first tenants to be moving into properties within the next two months and that more than 200 homes would have been bought by the agency by the end of the year.

The agency will target portfolios of distressed properties held by banks and investment companies, primarily private equity funds, to deliver social housing across the State. The homes would generally be former buy-to-let properties, but, Mr O’Connor said, they would not buy any houses which had existing tenants.

Best price

While receivers are under a legal obligation to get the best price for their clients, Mr O’Connor said the agency would be expecting to get a discount on the market value of the houses and apartments.

“We are expected to get the best value for the State and, because we’ll be making bulk purchases, we’d be expecting discounts of 5 to 10 per cent on the properties.”

Average prices are expected to be in the region of €150,000, but could be up to €300,000 in Dublin.

The €70 million would be a rolling fund, he said, which would be replenished as properties were sold on to housing bodies and local authorities. The scheme would primarily be aimed at approved housing bodies who could access “off balance sheet” funding, Mr O’Connor said.

Becoming involved

Simon Brooke, director of policy with the State’s largest housing association, Clúid, said the association was very interested in becoming involved in the scheme.

“We intend to deliver 1,500 homes over the next three years, which will involve us building new housing, but we expect it will also involve acquiring houses through this scheme.”

The involvement of the housing agency would allow tenants to be allocated homes more quickly, Mr Brooke said.

“The advantage of the Housing Agency is that they have a pool of cash, which allows them to acquire properties more quickly that we would be in a position to.”

While Clúid would be interested in acquiring full portfolios of housing, Mr Brooke expected the houses would be spread over an area, rather than in complete estates.

Clúid would be particularly interested in acquiring houses in Dublin, he said.

“There is no doubt that the Dublin area is where the greatest housing shortage is, so this will be one solution to the housing crisis we would be interested in pursuing in Dublin.”

The Irish Times: Discount of up to 10% expected on bulk-buy social houses

Wilson Moore Estate & Letting Agents

Ireland set for ‘devastating crash’ if rules relaxed, says Gerlach

This article originally appeared in The Irish Times.

Former Central Bank deputy warns against loosening property lending regulations 

“A telltale sign of a bubble is that second-rate developers suddenly are able to earn billions,” said former deputy governor of the Central Bank Stafan Gerlach. Photograph: Eric Luke / The Irish Times 

Ireland could face another property crash if market regulations are relaxed, former deputy governor of the Central Bank Stafan Gerlach has warned.

 Mr Gerlach, who left the bank earlier this year to become chief economist at BSI Bank in Zurich, said the construction industry and politicians are putting pressure on the regulator to relax the loan-to-value and loan-to-income ratios on mortgage lending introduced last year.

Quoting from an article he wrote for the think-tank Project Syndicate, Newstalk reported several concerns raised by Mr Gerlach.

 Among them is that while housing bubbles are easy to spot, there are a number of conflicts of interest that make it hard to take action as the market spins out of control.

“The obvious question is why nobody stepped in before it was too late,” he wrote of the previous crash.

“The answer is simple: while the bubbles are inflating, many people benefit. With the construction sector thriving, unemployment falling, and banks lending freely, people are happy – and politicians like it that way.”

Today, he said, Ireland has been experiencing a recovery in prices, rising in Dublin by about 50 per cent from the trough of 2010.

“Is Ireland setting itself up for another devastating crash? The process is simple. Rising prices trigger a surge in building activity, which creates job opportunities for young, low-skill workers, whose employment options are otherwise limited, and generates large profits for property developers and builders.

“In fact, a telltale sign of a bubble is that second-rate developers suddenly are able to earn billions.”

The Irish Times:  Ireland set for ‘devastating crash’ if rules relaxed, says Gerlach

Wilson Moore Estate & Letting Agents

Residents oppose construction of Dublin 4 apartment blocks

This article originally appeared in The Irish Times.

Property firm backed by businessman Denis O’Brien aims to build €50m luxury scheme

Denis O’Brien: businessman is linked to property firm Purleigh Holdings which wants to build 71 apartments in five white pavilion blocks in Donnybrook. File photograph: Dara Mac Dónaill/The Irish Times

A group of Dublin 4 residents are trying to block plans by a property firm backed by businessman Denis O’Brien from constructing a new €50 million luxury apartment block development in Donnybrook. Last month, Dublin City Council gave the go-ahead to Gibraltar-registered Purleigh Holdings Ltd to construct 71 apartments in five white pavilion blocks at Greenfield, Donnybrook.

The development consists of five four-storey apartment blocks with wrap-around balconies made up of 56 two-bedroom, 14 three-bedroom and one four-bedroom apartments.The council granted permission despite 18 separate objections, including three from local residents groups.

Amenities

It granted permission after its planner concluded the development would not unduly materially detract from the amenities of adjoining properties or the character of the area. However, the 30 residents of the adjoining Nutley Square have appealed against the decision to An Bord Pleanála through management firm Nutley Square Management Company.

In a submission to the council, consultants for Purleigh Holdings said apartments at the site would contribute to the alleviation of the housing shortage within Dublin while also providing accommodation on serviced land, within close proximity to shops and facilities and with good public transport connections.

In its appeal, the management company claims the proposal “seriously contravenes” the Dublin City Council development plan “in relation to character, height and density and is totally incompatible with the existing developments in the area”.

The size will have “an unacceptable adverse impact on the houses in Nutley Square”. It also says house owners will “find they are overlooked” by the development.A decision is due on the appeal in December.

The Irish Times: Residents oppose construction of Dublin 4 apartment blocks

Wilson Moore Estate & Letting Agents

Construction industry activity rises sharply in July

This article originally appeared in the Irish Times.

Commercial and housing most buoyant, says Ulster Bank construction PMI report

Employment is continuing to grow in the construction sector, the Ulster Bank construction purchasing managers’ index indicates. Photograph Nick Bradshaw

There was a sharp rise in business activity in the construction industry in July, according to the Ulster Bank construction purchasing managers’ index (PMI). The key index designed to track overall activity rose to 61.0, from 59.7 in June, signalling strong growth. Total activity has now risen in each of the last 35 months.

The PMI survey shows confidence remains strong, with 58 per cent expecting expansion to continue over the next year and just 9 per cent expecting a fall.

While this was slightly lower than the previous month, it suggests the domestically focused construction sector sees little immediate danger from the Brexit vote. Other survey indications – in manufacturing and consumer sentiment – have indicated a more significant impact from the Brexit referendum.

Extra staff

Employment continues to grow in the construction sector, the survey suggests, with rising workloads encouraged companies to take on extra staff and increase their purchasing activity.

The results showed “the pace of expansion accelerating to a four-month high in July”, said Simon Barry, Ulster Bank’s chief economist in the Republic.

“Underpinning the further uplift in activity last month was a further significant increase in new business, with the new-orders index also rising to its highest level since March.”

Commercial construction

The strongest performing sector, according to the survey, was commercial construction, which grew at its fastest since February. Housing activity also continued to rise at a sharp pace.

Housebuilding collapsed during the bust and a key concern has been building enough houses to meet demand. Civil engineering activity continues to expand, but some way slower than the other two main subsectors.

“The July survey results offer the first glimpse into Irish construction trends following the UK referendum,” said Mr Barry, and offers some reassurance that the sector’s recovery is maintaining a solid momentum. 

Brexit-related risks

However, he said uncertainty remained high about the extent of the possible adverse impact on the Irish economy from Brexit, even if the primarily domestic-focused construction sector is not in the line of fire to the same extent as the more export-oriented manufacturing sector “where recent trends have clearly deteriorated as Brexit effects have begun to take hold”.

According to the PMI survey, the increase in total activity was mainly due to higher new orders. New business expanded at a sharp and accelerated rate during the month, extending the sequence of growth which began in July 2013.

Although the use of subcontractors continued to rise in July, the rate of expansion slowed sharply and was only marginal. Subcontractor availability continued to decline markedly, leading to a further rise in the rates they charged despite perceptions in the survey of a decline in their quality of work.

The Irish Times: Construction industry activity rises sharply in July

Wilson Moore Estate & Letting Agents

Dublin housing plan requires over €80m in infrastructure

This article originally appeared in The Irish Times.

Dublin City Council says the provision of 10,000 new homes depends on investment 

The Irish Glass Bottle site at Ringsend, Dublin, which is marked for large-scale housing development. File photograph: Cyril Byrne/The Irish Times

More than €80 million in essential infrastructure is needed to make key privately owned sites in Dublin city ready for large-scale housing development, Dublin City Council has said.

Six areas in the city – the largest of which is the planned new strategic development zone on the Poolbeg peninsula – have been identified as having the potential to provide a combined total of almost 10,000 homes.

However, the development of these lands has been held back because of inadequate water, sewerage and transport infrastructure.

Activation fund

The cost of the work needed to open up these lands, as well as the infrastructure required to make council-owned lands ready for housing, could swallow up most of the Government’s €200 million local infrastructure activation fund, the council’s executive housing manager Tony Flynn said.

 

The six housing development areas require levels of funding ranging from €4 million to €25 million per site to make the construction of housing a realistic option for private developers, many of whom are now National Asset Management Agency (Nama) debtors.

Two areas need €25 million each to make their lands housing-ready – the Poolbeg peninsula at Dublin city’s southeast end and, slightly closer to the city, the docklands area.

The Government earlier this year approved plans for 3,000 homes on the former Irish Glass Bottle site and surrounding lands on the peninsula, using fast-track planning.

However, as a former industrial site, the area lacks most of the infrastructure necessary to support housing.

A new road network would be essential, and while the factories would have had electricity and sewerage connections, significant investment would be needed to carry these utilities to housing estates.

A sum of €25 million would not cover the extent of infrastructure needed, but would get the ball rolling, with the resulting developments generating levies to add to the infrastructure development pot.

Roads and bridges

Similarly, while the council has identified €25 million for “roads and bridges” in the docklands area, to facilitate the construction of 2,400 more apartments there, a planned new bridge to link the docklands with Poolbeg has a price tag of €25-€30 million.

 

Two other bridges across the Liffey are also planned.

At a site at the north fringe of the city, in the Clongriffin area, €10 million is needed for roads to service land which would accommodate 1,000 homes in mostly Nama-funded developments.

The council also intends to draft a local area plan to kickstart the development of large plots of vacant lands at Cherry Orchard, which is to the west of Ballyfermot and just inside the M50.

Some of these lands are council-owned, but others are private.

The council estimates spending €9 million on installing water infrastructure on these lands would allow 2,000 homes to be built.

Cigarette factory

The former Player Wills cigarette factory site on the South Circular Road in Dublin 8 came under the control of Nama earlier this year.

 

It could, the council said, accommodate 500 homes, if a range of utility services costing about €8 million were installed.

This site, the most central and arguably the best-located of the six, backs on to St Teresa’s Gardens, the council flat complex which is currently undergoing redevelopment.

The smallest infrastructural costs would be incurred in the Pelletstown site, between Ashtown and Cabra in Dublin, where €4 million for a new rail station would allow the development of almost 700 homes.

Pelletstown is one of the few areas in the city where large-scale residential construction is ongoing and also one of the few where new apartments are on sale for under €300,000.

However, residents have objected to any more development without new infrastructure, such as the station.

The Irish Times: Dublin housing plan requires over €80m in infrastructure

Wilson Moore Estate & Letting Agents

New housing plan fails to address the elephant in room

This article originally appeared in the Sunday Independent.

The Government's new housing plan has received a cautious welcome at best. There are good reasons for caution. 

Master plan: Minister Simon Coveney’s blueprint to solve the housing crisis has received a cautious welcome, but he has a mammoth task on his hands to make it actually work. Photo: Colin O'Riordan

Policies and zoning are behind high cost of homes in the capital but fixing the issue is a political quagmire, writes Colm McCarthy

The dysfunctional housing market was at the heart of the 2008 banking crash which brought down the broader economy and destroyed the solvency of the Government. It took several decades of policy mistakes to create the disaster and there will be no quick transit back to a rational and well-functioning system.

The key problem with Irish housing, whether owned or rented, is affordability, as the Housing Agency has pointed out time and again. If prices were affordable there would be no sense of crisis.
In most parts of Ireland this is happily the case - there is no housing crisis.

In Dublin and a few other urban areas housing is becoming unaffordable even for people with decent jobs. Lending more money than banks can prudently lend, or than purchasers can prudently borrow, is an evasion, a choice to finance the problem rather than solve it. It has been tried in the years up to 2007 and the Central Bank has wisely flagged that there will be no repetition.

Policy mistakes in many areas can simply be acknowledged and the failed policies reversed without great cost.

Things are not so easy when it comes to housing. An enormous edifice of long-term debt for some and an illusion of household wealth for others has been built on the foundations of house prices divorced from economic common sense.

A house in the outer suburbs of Dublin is currently priced at double, or more than double, the price of an identical dwelling in most provincial areas. There is no economic rationale for this disparity and it is entirely a creature of policy.

It is moreover a creature of two damaging popular myths. The first is that Dublin is a very large city, the second that there is an absolute shortage of land around Dublin suitable for residential use.

Dublin is not a large city. The population is a little over one million and there are numerous larger cities around the world where housing is affordable for most people.

There are some with equally dysfunctional housing policies and identical problems. Dublin city is surrounded by rolling prairies of empty land zoned for low-value agriculture, interspersed with small pockets zoned for housing.

These pockets have become vehicles for a destructive speculation industry which corrupted local government, has infected national politics and produced a banking system dangerously focused on long-term housing finance.

When it released the results from the April 2016 census last week, the Central Statistics Office prepared a map which shows the geographical distribution of vacant homes.

Excluding holiday homes, just under 10pc of the national stock was vacant on census night. But the vacancy rate varied hugely across the country, with vacancies over 25pc in many parts of the West and the North Midlands.

In Leinster and most of Munster vacancy rates are much lower, testament to the failure, during the housing bubble, to build in the areas of strongest demand. Not merely did Ireland build too many houses, they were built in the wrong places. An inevitable result is that houses are for sale in many areas at less than the cost of construction.

The Central Bank rules permit 90pc mortgages up to a house price of €220,000. There are parts of Ireland where it would be difficult to find a house that costs that much. In the Dublin area it is difficult to find very many that cost any less.

Salary levels do not vary greatly across the country, so the problem of affordability, whether for rent or purchase, is largely a Dublin problem.

An annual income of around €50,000 puts an individual into the upper reaches of the Irish income distribution. But this will not be enough to command a mortgage adequate to buy a starter home in the outer suburbs.

The housing plan fails to address this central issue of affordability in the Dublin area. Sky-high prices for properties in the fashionable inner suburbs are not the crux of the issue.

The excess price of modest homes in the outer suburbs and the surge in rental costs across the city are what matters. Reducing those prices back towards construction costs requires a steady increase in the availability of residential zoning on the city's outskirts and the allocation of all available land in the central areas to apartment construction.

Achieving this outcome will depress prices, inflame homeowners and damage the collateral value of mortgage loans, the principal component of Irish bank assets.

Indeed the long-term profitability of the banking system benefits from the survival of a dysfunctional housing policy in the Dublin region.

If prices bore a more realistic relationship to construction costs, negative equity for mortgage holders would be even more prevalent and the collateral value of bank lending undermined. It is not hard to see why the politics of fixing affordability is so difficult.

The plan contains some measures which will make matters worse. The planned reintroduction of the first-time buyer grant in October's budget, even if confined to purchases of new homes, will tend to stimulate demand and circumvent the Central Bank's lending restraints.

Despite the reservations of many housing experts, the local authority tenant purchase option has been reintroduced with even bigger discounts than were available in the suspended scheme.

This has the potential to deplete the available stock of social housing even as local authorities scramble to get construction under way again.

It provides a further incentive to get on the waiting list for local authority accommodation - with average rents around €50 to €55 per week the deal is already a bargain and a free option to buy out the property at up to a 50pc discount is quite a sweetener.

This scheme is likely to be particularly popular in the urban areas where the discount is most valuable, precisely where pressure on the social housing stock is greatest.

One method of financing social housing in Ireland is the so-called Part V requirement on builders to provide up to 20pc social units in each development, with the costs recovered through loading the price of the remaining 80pc.

In effect there is an earmarked tax on the purchasers of these homes, the proceeds going to pay for social housing provision off the Government's books. It would be fairer, and would help affordability, if this cost was levied on the generality of taxpayers.

There is also a host of charges and compliance costs dating from the days when local authorities could not levy any local tax on residential property. With property taxes reintroduced all homeowners, not just the purchasers of new ones, could reasonably be expected to share these burdens.

The largest elephant in the room remains the exorbitant, and policy-induced, price of building land in Dublin and a few of the other urban centres.

This problem will not be resolved until the planning and zoning restrictions which have contributed so much to the current crisis are addressed.

Sunday Independent:  New housing plan fails to address the elephant in room

Wilson Moore Estate & Letting Agents

When is the time to buy and how much do you want to spend ?

When is the time to buy and how much do you want to spend ?  

You’re currently renting and paying a high rent.  You would like to own your own home and an investment for the future.  It’s a big step and you’re keen to get the timing right.  The truth is everyone’s situation is different and no one can predict the future.  Sometimes people think it’s best to enter the market and buy a home when consumer sentiment is low as there can be good value available.  Once the economy improves and confidence returns this usually means that prices will start to increase. 

The next thing is to decide how much you want to spend on your home.  Setting a budget for your property purchase is always a difficult and very important decision.  You need to know how much you can afford each month and translate that into the amount you can afford to take out on your new mortgage.  When you start house hunting with that budget in mind, you may find to your dismay that you are not seeing many homes in the price range you have set that match your needs.

There are three choices you have to make in this situation.  The first is to wait , keep looking, and hope the house you want comes up on the market in your price range.  The second is to compromise and buy a house that is affordable but not really what you want.  The final choice is to look at raising your budget. The best advice is not to rush into making a hasty decision.  Figure out what your current financial situation is and put a cushion in place when calculating your figures in case your circumstances change in the future.  If you are considering raising your maximum purchase price then calculate what difference it will make in your actual monthly payment.  In some cases the difference may not be as difficult to handle as you might think.  Using a mortgage calculator you can easily figure out what it would cost you per month to increase your budget figure by say €20,0000.  Sometimes even a small raise in your maximum price can put you into a whole new class of available homes.

Therefore the decision you have to make is if you are you willing to consider making some personal budget cutbacks such as on entertainment to enable you to have the house of your dreams ?  How important is it to you to get everything on your wish list or are you willing to compromise on something ?  If having the right house is the most  important thing to you then you may be prepared to stretch your finances to achieve your goal.  A little flexibility is always a good idea when you start searching for the right house as sometimes spending a little more will save you later in terms of property value.  It can also save you from having to move again when you decide the compromise to save money was not worth it and you need to move to a larger property or a different area.

To learn more click here

How to remodel your home to Increase Your Selling Price

How to remodel your home to Increase Your Selling Price

So you are ready to sell but you know that there are a few things in your property that require some updating in order to increase your selling price.  Your budget may be limited and you are wondering where and how to spend it.  The good news is that there are some solid answers.  It is generally accepted that there are certain things that can increase your selling price more than others.  Don’t go out spending money until you get advice from the experts on what return you may get from your investment. Whether you are getting ready to sell or simply want to remodel now for the best value when you do sell later these are some things that usually give you a better return on your investment.

The Kitchen

Remodelling the kitchen is one of the most important things you can do in your home especially if the kitchen is dated.  It is often one of the first rooms a potential buyer will see and it should make an impression.  The kitchen is often considered the soul of the home and most people spend a good deal of time there.  Upgrades to countertops, cabinets, and appliances are one of the wisest investments you can make in your home.

The Bathrooms 

Second only to the kitchen, the bathroom is the room in the house where dated fixtures or flooring can cost you a sale.  People want a bathroom that is clean, comfortable, and modern.  Neutral colours are best whether a paint finish or tiling as this is a place of privacy and peace so the less fuss the better.  Spending money on a bathroom remodel will almost always be the best way to spend your money and you will see it in your selling price.

The Front  

Getting people in to look at your house is the first step.  First impressions last so as potential purchasers approach your hall door ensure that that the entrance is appealing and welcoming.  Spending some of your money on the front exterior of the house and the landscaping can be advisable.  Improving the look of the house from the outside means you can bring more people in to look and to buy. 

The Back Garden

People love the idea of having some attractive outside space to entertain friends and family.  Also parents usually emphasise how important it is to have a garden for the little ones to play in.  Money can be well spent on a good tidy up and enhancement of any outside space regardless whether it is grass, decking or another finish.

Remodelling your property now for a better sale price later can be a smart move.  As the sooner you do it the more you will be able to enjoy it before it is time to sell and move on.  If well thought out and done correctly to a quality finish you can definitely make additional profit.

To learn more click here

Setting up a home office

When purchasing it is good idea to consider if this property will suit if you should decide to set up an office from home in the future.

More and more people are starting to work from home.  Not only the self-employed but also a lot of companies are now allowing their staff to operate from their home.  If you are looking for a property be sure to take this into account.   Should you start doing your job at home you will need to be able to set up the right space in your private dwelling.

Consider the location

Working from home can be difficult especially if other people are around during your working hours.  You will need to find a location with as few distractions as possible.  Equally that is why you need to visit the location where you are thinking of buying at different times of the day to establish if the area at certain times is overly busy and potentially noisy

Consider the current style of the property

Does the style of the property meet your demands as it currently is.  If so then this can save you a lot of time effort and money.  However it’s not always possible to achieve your dream and most people have to compromise a little when purchasing a property.  Check out properties which already have additional unused space e.g. outside shed, garage, large attic area with adequate headroom.  Many properties for sale have owners who are currently running their business from the dwelling a typical example of this are all the online companies that have been set up in recent times.  In some cases an outside  shed or garage may have already been converted with this use in mind.  Ideally if this has been done correctly then there will be adequate existing electrical power points and heating.     

Consider the potential

Equally think about the potential to extend or convert in the future to enable you to achieve the additional space that you will need should you choose to work from home.  Once again an outside shed may have offer huge possibilities.  Likewise people nowadays in general prefer to park their car in the driveway instead of going to the bother of using the garage.  There are a lot of garages that are currently only being used for storage.  Of course attics can offer the perfect solution to finding that extra space to work from.  An attic conversion can be done provided the design of the house allows for the head height necessary to make the conversion workable.

Consider how to make the best use of the available space

If you have a whole spare room to yourself and lots of space then you can purchase a full-sized desk in whatever style suits you.  However if space is restricted be sure to test out a desk to see how it fits for you before you commit to purchase.  Measure your room in advance and allocate how much can be put in the space you have.  No doubt you will need workspace for a computer, printer, telephone, filing facility ?  How many drawers do you need?  Even with a wireless internet connection in your home wires can get in the way.  Use zip ties to keep them clean and organized and label each with what it goes to so that if things ever get unplugged you can get it all hooked up again quickly. A small rolling cart is great for printers or accessories and can be rolled out of the way when not in use.

Your home office can be very comfortable and successful if you pay attention to the details.  Ideally keep the workspace away from things like the television or any place where kids might be playing, as these can obviously be a distraction when you're trying to work. Look for a place near a window for natural light and make sure you will be able to make the space comfortable for your use without a lot of expense.  The perfect work space can be created no matter how much room you have to work with. 

To learn more click here