The Property Week – 06 Apr ‘10
2-bed apartments
The average asking price of a Dublin 2-bed apartment as of this week is €264,171 (65.23 INDEX) down from last week’s €267,030 (or 65.94).
3-bed semis
The average asking price of a Dublin 3-bed semi as of this week is €332,595 or 67.64 INDEX, down from €334,825 last week (or 68.09).
4-bed det
The average asking price of a Dublin 4-bed detached is €660,049 (61.99 INDEX), up from last week’s €657,915 (61.79 INDEX).
The Irish Times – Tuesday, April 6, 2010
OLIVIA KELLY
DUBLIN CITY Council owes more than €18 million in bridging loans and fees on a backlog of 158 affordable houses it has been unable to sell due to the property downturn.
The council is offering most of these houses and apartments for sale without any “clawback” penalties, which means that unlike most purchasers of affordable houses, buyers will be able to sell on their homes without making any repayment to the council.
The costs to local authorities of holding unsold affordable houses have been mounting since property prices began to fall. The affordable housing scheme worked while property prices were high as buyers on lower incomes could secure houses at lower cost to the open market.
In Dublin city the discount offered to qualifying buyers was typically in the region of 30-35 per cent, which meant the city council had waiting lists for for all developments coming on stream and was never left with unsold houses on its hands.
The Housing Acts required developers to provide 20 per cent of any new estate for social and affordable housing.
The affordable houses scheme operated through the council giving the developer lists of people eligible to buy an affordable house in that area.
However, if the first two people on the list rejected the house or apartment, the council was obliged to buy it from the developer at the agreed discounted price. The obligation then fell on the council to find a buyer.
The agreed price of the affordable house was generally set several months, and occasionally more than a year before the development was put on the market.
In 2008 the open market price of a development began to fall to where it was just nominally above the affordable house price. Buyers of affordable houses must pay a clawback to the council of the percentage of discount they received if they sell their house within 20 years. When the gap between the affordable house price and the open market price began to narrow, the prospect of being tied into a deal with the council for 20 years became less attractive.
However, when market prices began to dip below affordable prices, sales dried up altogether.
In January last year the city council admitted it had a backlog of 300 unsold houses that were costing it upwards of €300,000 a month in bridging loans and fees.
At that time it decided it would apply a further 25 per cent discount. It later took advantage of the relaxation of Government rules on affordable housing and began offering houses to anyone who qualified for the scheme, rather than just those who had been on the list for a particular area. The council has decided to cut its losses further by removing the clawback clause.
LOCAL AUTHORITIES have spent almost €1.4 billion buying second-hand houses for local authority tenants since 2004, according to figures that have been made available for the first time.
The collated figures were released by the Department of the Environment to Waterford Fine Gael TD John Deasy in response to a parliamentary question.
They show that the purchase of second-hand homes comprised almost one-third of the overall spend of €4.7 billion on local authority housing between 2004 and 2009.
There are massive disparities between local authorities on the amount spent on second-hand purchases. Mayo, with a population of 117,000, has spent less than €4 million during the five-year period. In contrast, Longford, with a population of only 31,000, has spent more than €35 million on second-hand homes during the same period.
There was also a huge spike in second-hand purchases during 2007. The overall figure for that year is €413 million, compared with €251 million in 2006 and €268 million in 2008.
In 2007, Dublin City Council spent more than €83 million on second-hand houses; South Dublin spent €56 million; the two Cork councils spent almost €80 million; and the two Galway councils spent €36 million.
Mr Deasy said yesterday that he was astonished by the figures, which show that local authorities spent three times more on second-hand homes than on purchases under Part V of the Planning Act – the legislative mechanism that was intended as the main vehicle to provide social and affordable housing.
In all, less than €500 million was spent on Part V during the five-year period.
Indeed, Part V spending was matched by the €480 million spend by local authorities on purchasing “turnkey schemes” (new houses and apartments in private developments) during the same period.
Two Fine Gael members of the Public Accounts Committee, Deirdre Clune and Jim O’Keeffe, will raise the issue with department officials at today’s meeting, which will be discussing affordable housing.
Mr Deasy said a Department of the Environment circular from early 2007, issued under direction of the then minister of state for housing Noel Ahern, requested local authorities to “take an active approach to acquisitions”.
The Waterford TD said he wanted the department to disclose why it expressly encouraged local authorities to buy up so many private houses and apartments during 2007, and asked did the huge increase in spending that year have anything to do with the general election.
Both he and Ms Clune said they will pursue the question as to whether local authorities exceeded their capital allocations during 2007. “Why was there a policy to buy up so many houses right at the top of the market in 2006 and 2007 instead of looking at different solutions?” asked Mr Deasy. “And why is there such a difference between the amounts spent by different local authorities on second-hand housing? We need to know if the money could have been better spent.”
The Department of the Environment said yesterday that housing programmes were always achieved through a mix of build and purchases, including second-hand homes. “In order to achieve the targets in their housing programmes, local authorities who had less activity under Part V would have purchased secondhand or turnkey properties to meet their targets,” said a spokesman.
It was also contended that there had “been a good-value secondhand housing market in recent years as prices fell”. The department also pointed out that Part V activity had increased and that second-hand purchases had fallen in recent years.
Ms Clune, a TD for Cork South Central, said that she was doubtful that local authorities got value for money or “bang for their buck” when they bought so many second-hand houses when prices were moving towards a peak during 2006 and 2007.
Printed in The Irish Times on 01.04.10
The Property Week – 30 Mar ‘10
So far, to date, in 2010, about 2365 properties have come newly onto the market in Co Dublin. Just over 60% of that stock (1466 properties) is in our first-time buyer category of under €350,000.
123 of those properties are currently marked “sale agreed” according to our tracking, which is 8% of the properties in that price bracket. [CHECK YOUR SALE AGREED LISTINGS IN OUR DATA TO MAKE SURE WE HAVE THEM ALL.]
Those 123 properties represent the vast majority of all the properties that have gone sale agreed since January in Co Dublin (66%).
However, of the 808 trader-upper properties (34% of the new stock) that have come onto the market in Dublin since January, 59 are currently sale agreed, which equates to a rate of 7% in that price bracket – quite close the the FTB rate.
In contrast, at the top of the of the market, over €900,000, only 92 properties have been brought new to market, and only 3 are currently sale agreed according to our tracking. That’s only a 3% rate of going sale agreed.
The Property Week – 29 Mar ‘10
2-bed apartments
The average asking price of a Dublin 2-bed apartment as of this week is €267,030 (65.94 INDEX) down from last week’s €271,035 (or 66.93).
3-bed semis
The average asking price of a Dublin 3-bed semi as of this week is €334,825 or 68.09 INDEX, up from €333,512 last week (or 67.82).
4-bed det
The average asking price of a Dublin 4-bed detached is €657,915 (61.79 INDEX), up from last week’s €655,476 (61.56 INDEX).
Buyers who seek to buy at the bottom of the market always run the risk that they may not get their timing right, so consequently most investment experts advise buying before the market is expected to hit the bottom.
On the basis of recent forecasts from the Economic and Social Research Institute (ESRI), then next year would appear to be the time to buy as it expects the rate of house price fall to slow from 14pc this year to 5pc next year before levelling off in 2011.
However, Bloxham Stockbrokers expects prices to start increasing by the end of this year.
The Property Week – 16 Mar ‘10
2-bed apartments
The average asking price of a Dublin 2-bed apartment as of this week is €272,413 (67.27 INDEX) up from last week’s €272,321 (or 66.24).
3-bed semis
The average asking price of a Dublin 3-bed semi as of this week is €325,788 or 66.25 INDEX, up from €324,905 last week (or 66.07).
4-bed det
The average asking price of a Dublin 4-bed detached is €658,170 (61.81 INDEX), down from last week’s €665,329 (62.49 INDEX).
The Property Week – 15 Mar ‘10
2-bed apartments
The average asking price of a Dublin 2-bed apartment as of this week is €272,413 (67.27 INDEX) up from last week’s €272,321 (or 66.24).
3-bed semis
The average asking price of a Dublin 3-bed semi as of this week is €325,788 or 66.25 INDEX, up from €324,905 last week (or 66.07).
4-bed det
The average asking price of a Dublin 4-bed detached is €658,170 (61.81 INDEX), down from last week’s €665,329 (62.49 INDEX).
THE Government must abandon or reform the €500 million Home Choice Loan scheme as it is unrealistic, according to brokers.
The Professional Insurance Brokers Association (PIBA) said the controversial scheme which aims to help first-time buyers purchase a house has had “less than a handful of successful applicants”.
The Home Choice Loan scheme came into effect on January 1, 2009, but has been heavily criticised as being a bail-out for builders and a programme of subprime mortgages.
Complaints submitted to the European Commission allege the plan is contrary to competition rules as it only applies to new homes, and is only open to people earning more than €40,000 a year.
Director of PIBA mortgage services, Rachel Doyle said a basic requirement for the scheme is that the prospective borrower must have already been declined by two separate lenders but added that the terms applying to the Home Choice Loan are fairly similar to those applying in the wider market.
“So it is well nigh impossible for most people to succeed, as evidenced by its lack of take-up since it was introduced over a year ago. Altering the scheme to include second-hand houses as well as new builds will have no effect on take-up since that is not the issue,” she said.
The PIBA said it would also question the rationale for such a scheme in the first place.
“The Home Choice Loan scheme should either start lending or fold up tent and put the taxpayers’ money to better use – rather than keeping this scheme open for aesthetics.
“We would urge the Government to act urgently on this. There is much greater affordability in the market now. First-time buyers getting into the market now could avail of good long-term fixed interest rates that are unlikely to remain at current levels in the short to medium term,” said Ms Doyle.
Printed in The Irish Examiner Wednesday, March 10, 2010
Read more: http://examiner.ie/business/call-to-reform-home-choice-loan-scheme-114098.html#ixzz0hliqwlFg
By Charlie Weston Personal Finance Editor
Tuesday March 09 2010
TWO-thirds of prospective first-time buyers feel now is a good time to purchase a home, despite fears about losing their jobs, new research shows.
About three in 10 are actively looking for their first home, while six in 10 say that they will be actively looking to buy before the end of the year, according to the research commissioned by EBS Building Society.
Mortgage experts said many potential buyers are fearful that interest rates will rise if they do not buy soon. If this happens it could cancel out the benefit of possible further falls in prices.
House prices have fallen about 30pc since the height of the property boom in early 2007, with many economists predicting that they have further to go.
But the move by Permanent TSB to increase its standard variable rates for the second time last month, and warnings from AIB that it will hike its mortgage rates before the summer, have sparked fears of dearer home loans.
The research also shows that potential buyers are shopping around for their mortgage, while the average amount that they expect to spend on their new home is €260,000.
The EBS said that 53pc of respondents report that they were concerned about their own job security, while 22pc said they were worried about that of their partner.
Also evidenced from the survey is that 29pc of respondents stated that they were looking for a bigger house than they had originally planned for, the EBS said.
More than a third of prospective buyers stated that they were now looking in an area that previously would have been too expensive for them.
Kevin McNerney, director of the Mortgage Finance Company, said interest rates were at historically low levels but were not expected to stay there.
Advantage
“Mortgage interest rates, which directly impact affordability for new buyers, have reduced significantly in the past 12 months.
“The only question that someone should have is whether they are secure in their current employment.
“If they are then they should seriously consider taking advantage of the significantly reduced prices and historically low interest rates,” Mr McNerney said.
Last week the European Central Bank (ECB) held its key interest rate at 1pc, but economists warned that mortgage rates for many existing customers would go up anyway.
ECB governors could now wait until the end of this year or early next year before they push up the eurozone rate, economist Alan McQuaid said.
But he warned that once European rates start to rise they will eventually reach 4pc over the next two to three years.
Personal finance
- Charlie Weston Personal Finance Editor
Irish Independent