Central banks will struggle to hold hard line as the economy slows

Interest rate cuts are on the cards sooner than anyone thought, but don’t expect a return to the super-low rates of old.

Finance Minister Michael McGrath said yesterday he expects a reduction in the European Central Bank’s main borrowing rate – which has been at a euro era high of 4.5pc since September – as early as the first half of next year.

His comments came as flash inflation estimates showed price rises slowing by more than expected in Germany, the bloc’s largest economy. German inflation came in at 2.3pc in November, the same as in Ireland, while inflation also slowed in Spain, feeding expectations of a lower eurozone figure ahead of its publication today.

Lower inflation and a third quarter economic contraction in the eurozone should allow the ECB to keep interest rates where they are when they meet in mid-December, after central bankers hit the pause button for the first time in over a year at their most recent meeting in October.

“Overall, inflation looks to be benign in the eurozone,” said ING’s senior eurozone economist Bert Colijn.

“For the ECB, this confirms the view that next year could bring about a first rate cut. With inflation trending down better than expected, this could happen earlier than expected.”

But ECB president Christine Lagarde told MEPs this week that inflation is still too high and that rates need to stay higher for longer, while other central bankers – including Ireland’s Gabriel Makhlouf – are saying a rate hike is not out of the question in the near future.

The eurozone is now closer than ever to meeting the ECB’s 2pc inflation target, following years of low rates and close to zero inflation.

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No inflation might sound good to consumers, but it can be an indicator of a stagnant economy, as it means consumers are not spending and wages are stagnating.

Higher interest rates across the world have stung the global and Irish economies.

Two international institutions – the OECD and European Commission – are now predicting a recession in the country this year, at least in the multinational parts of the economy, which tend to skew the data. Domestic sectors are expected to keep growing, although the recession could affect tax revenues, the OECD pointed out.

On the other hand, the OECD said lower interest rates could improve Irish growth, especially if the US economy keeps surprising on the upside, as it did in the third quarter.

But a tight labour market in Ireland means rising wages could drive inflation back up again.

Central Statistics Office data out this week showed average earnings grew by 4.6pc in the third quarter, compared with the same time last year, thanks to higher hourly pay rather than more hours worked.

While that is still lower than inflation, public sector wages grew faster, at 7.8pc. In the private sector, services, hospitality, health and IT saw inflation-busting increases.

“Outside of one quarter during the pandemic, this is the fastest annual rate of growth in the data going back to 2008,” said Goodbody chief economist Dermot O’Leary.

Source: Sarah Collins, Irish Independent 30/11/2023

Rising mortgage rates mean the savings that homeowners can make by switching their mortgage have doubled in the past six months.

Mortgage rates being charged by conventional lenders have breached the 7pc barrier for the first time in over a decade.

This means some households may be paying a record of up to €7,000 in extra repayments a year by not switching lenders, according to the latest Irish Independent/Doddl.ie mortgage switching index.

At the start of this year the maximum savings to be made from switching were around half the current amount, at around €3,590. Higher European funding costs have prompted a string of mortgage-rate rises from the main banks and the non-bank lenders.

The index is based on the average new mortgage drawn down in the last quarter of almost €300,631 and a highest roll-out variable rate of 7.15pc versus the lowest standard rate on the market.

The lowest non-green mortgage rate in the market is currently a three-year fixed at 3.85pc from Avant Money.

The 7.15pc rate is the one Finance Ireland customers are on coming off a fixed rate roll to when the fixed period ends.

Vulture funds are charging some of their customers even more, but do not offer new loans or facilitate switches.

The gap between the highest and lowest rate on the market is now 3.3 percentage points, the quarter three edition of the index shows.

Doddl.ie managing director Martina Hennessy said there are even cheaper rates available for those eligible for green rates or who have lower loan-to-values (LTVs).

Despite bigger savings to be made by switching, there has been a big fall-off in switching activity this year.

“People fear that they have missed the mythical boat, but the reality is that the repayment gap is widening, and it is now more important than ever to review your mortgage rate,” said Ms Hennessy.

“Fear of selecting the wrong options means that we do not act at all, and remain paying needlessly high rates of interest on our biggest outgoing.”

She said the pillar banks were initially slow to pass on rate increases, but this has changed and we continue to see rate increases throughout the market.

“The non-bank lenders, who were immediately impacted by rising funding costs, have more than doubled their rates in less than two years,” she said.

The Doddl.ie boss said the last time we had this higher-rate environment, between 2006 and 2008, people couldn’t switch as LTVs were dropping.

We are in the opposite place now and the homeowner’s hand is very strong, she said.

Due to property price inflation most mortgage holders rolling off fixed rates will have an improved LTV and will be eligible for lower rates due to their stronger position.

“With normal payback and in an increase in house values, even mortgage homeowners who purchased three years ago at 90pc loan-to-value may be below the 60pc threshold now and be eligible for sub-4pc rates,” said Ms Hennessy.

The mortgage adviser said it was important that mortgage holders question what interest rates are available on the market and not just settle for the rate offered by their existing bank.

She said the majority of those switching mortgage do so with the assistance of a mortgage broker.

Source: Charlie Weston, Irish Independent 6/11/2023

The number of first-time buyers (FTBs) approved for a mortgage has hit a record high.

Around 30,000 new buyers got the green light from lenders to take on a mortgage in the year to August.

It is the first time since the Banking and Payments Federation started compiling mortgage figures in 2011 that so many first-time buyers have been approved.

It comes as the asking price for housing rose slightly this month when compared with last year.

Prices were 1.1pc higher in the three months to September when compared with the same period in 2022, according to the latest House Price Report released by property website Daft.ie.

The banking lobby group said 4,534 mortgages were approved last month. Six out of 10 of those were for first-time buyers.

New buyers have moved to the forefront as there has been a huge fall-off in switchers and movers, who have been discouraged by higher mortgage rates.

Experts said first-time buyers were being boosted by the state support schemes Help to Buy and First Home.

These have been likened to “rocket fuel” for first-time buyers as they allow them to shave up to €100,000 off borrowing costs.

Despite the surge in first-time buyer mortgage approvals, the overall number of approvals in August was down 18pc on a year ago.

Banking and Payments Federation Ireland’s chief economist Ali Ugur said first-time buyers continue to lead the market.

“FTB mortgage approval values reached more than €8.5bn in the 12 months ending August 2023, while the annualised number of FTB mortgage approvals exceeded 30,000 for the first time since our data series began in 2011,” he said.

Mr Ugur said this suggests the pipeline for home purchase drawdowns remains very strong despite an overall slowdown.

Meanwhile, Daft.ie said the typical listed housing price nationwide in the third quarter of the year was €322,602.

Over the last year, listed prices are up almost 4pc, but are roughly 13pc below the Celtic Tiger peak.

In Dublin, prices in the third quarter of the year were just 1.4pc higher than a year ago, the lowest rate of inflation since prices started to rebound in late 2020.

Nationally, prices rose by 2.4pc in the second quarter when compared with the first three months of this year, Daft.ie said.

Prices in Cork city were just 1.7pc higher compared with a year ago.

In Galway, Limerick and Waterford cities, the rate of annual increase was higher, at between 3.9pc and 4.7pc.

Bigger increases were recorded outside the main cities.

There was an annual increase of 4pc in Leinster, almost 6pc in Munster and just over 8pc in Connacht-Ulster.

A chronic shortage of properties continues to blight the market. The number of homes available to buy nationwide on September 1 stood at just under 12,200.

This is down more than 20pc over the year, compared with the almost 15,500 available to buy on the same date a year previously.

Trinity College economist and author of the report Professor Ronan Lyons said: “Prices continue to rise, albeit at a slower rate than has become common over the last decade.”

He said prices were largely static in the second half of last year and in the first three months of this year, but they have risen again since then.

Prof Lyons said the supply of homes to buy was down at the levels only previously seen during the pandemic.

Daft.ie said the number of homes being built has held up, despite inflationary pressures.

Roughly 30,000 homes are expected to be built this year, Prof Lyons said.

The asking price for properties in Dublin city was up 1.4pc in the three months to September, compared with last year, to €433,100.

The rest of the country saw prices surge by 5.4pc, with a typical asking price of €275,000.

Source: Charlie Weston, Irish Independent 29th September 2023

With grants of up to €96,000 available to renovate vacant properties, a derelict cottage could be transformed into a dream home. Here are nine of the best revival projects on the market.

That tumble-down house in the middle of the lower field, where you played hide and seek as a child, could be your new home.

Or maybe the old bungalow on the road from the village, covered in ivy and empty for the most of a decade, that might be simpler. Then again you could go mad altogether and get grants for both and then rent one of them out. This is not as daft as it might seem.

The Vacant Property Refurbishment Grant, a clever scheme that provides funding to refurbish vacant or derelict homes could breathe new life into the estimated 81,000 vacant residential properties around Ireland.

Applicants can get grants of up to €50,000 to renovate a vacant property, and up to €70,000 for a derelict property. Additional funding can also be allocated if the property is a traditional farmhouse or located on one of Ireland’s offshore islands.

For a house to qualify for funding, it must have been built before 2008 and left vacant for at least two years.

An SEAI grant of around €26,000 can be got to improve energy efficiency.

So, up to €96,000 can be accessed to help new owners take a wreck of a house and make it into a home. But not too fast. While one can get up to €70,000 or €50,000 grant aid, the ‘up to’ bit is important — you may not get it all, depending on the works and the paperwork.

A lot of boxes have to be ticked. To qualify for funding, the applicant must own the property, or be in the process of buying it. Planning permission must be obtained for buildings being converted from non-habitable places or vacant for a long number of years. Planning permission isn’t a given, even if there is an existing structure on the site.

Finally, approval for the grant must be obtained from the local council before renovation works begin.

The grant covers a number of work including demolition and site clearances, substructure works, structural works, internal and external finishings as well as building services.

Each service covered by the grant has an allocated budget; if the applicant goes over budget on a particular work, the owners must pay out of their own pockets.

Invoices must be submitted to the local authority, who will inspect the property to ensure works are completed.

The grant can be used to refurbish an eligible property either as a primary residence or as a rental property (if it is registered to the RTB — and it may be subject to additional inspections during the renovation).

If the property is sold or unavailable to rent within 10 years, the applicant must repay the local authority.

Similar rules may also apply to grants given to houses renovated as primary residences: if the applicant sells or rents it out within 10 years, the local authority must be repaid. If these terms are broken in less than five years, the full amount must be repaid. In the case of over five years but less than 10, then 75pc of the grant must be repaid.

Them’s the rules, so what kind of places and spaces might fit the bill if one wants to take on a revival project or two under the scheme?​

Meelickmore, Claremorris, Co Mayo

Guide price: €59,000

This stone dwelling is a real gem. Built in a traditional style and whitewashed, the cottage is ideal for those who want to put a modern spin on an old classic.

As a traditional farmhouse, this qualifies for an additional €7,500 in aid, to allow for expert conservation advice on refurbishment. Features such as the traditional fireplace could be maintained in a renovated interior.

There is also a traditional stone shed that could be used as a fuel store or integrated into the house.

While there is an electricity supply connected to the house, the water supply is available but is not connected.

The property sits on a 0.5ac site but a further 1.5ac to the rear of the cottage is available to buy separately.

The cottage is 5km from Claremorris and 3km from the N17 Galway to Sligo road.

Selling agent: Sherry FitzGerald Hanley​

​Mullanadarragh, Carrigallen, Co Leitrim

Guide price: €55,000

This quaint house needs total refurbishment but the buyer should be entitled to the additional €7,500 for conservation advice.

The remains of the traditional slate roof and the redbrick chimney could spark a theme for the renovation, while the 1.2ac elevated site provides plenty of space for an extension and great views.

The cottage is 3km from the village of Carrigallen and 11km from Arva.

Selling agent: Gordon Hughes​

Cloonlaheen Middle, Mullagh, Co Clare

Guide price: €99,000

Plenty of room for expansion with this cottage with a large backyard on a 0.8ac site. It has a spacious loft that could come into its own under the designer’s pen. The windows are single glazed and the door is teak.

Located on the Wild Atlantic Way, the house is 12km from Miltown Malbay and would be ideal as a bolthole for the Willie Clancy Festival or as a more permanent home.

Selling agent: Streets Ahead​

Corboley, Knockcroghery, Co Roscommon

Guide price: €95,000

Just outside the village of Knockcroghery (of clay pipe fame), this house is a particularly good candidate for refurbishment.

The L-shaped building with a later extension is in good structural shape but adjoins the original house, part of which has a galvanised roof and an exposed stone gable. ​

There are some stone outbuildings and an extensive garden area. It is connected to an electric supply and mains water and a septic tank. Athlone and Roscommon town are a 15-minute drive away.

Selling agent: Joe Naughton

Dromavally, Ballyseedy, Tralee, Co Kerry

Guide price: €45,000

A true traditional rural house, built with whitewashed stone, it is obvious that before the galvanised roof was added it was thatched. It should be in line for the €7,500 to be used for specialist conservation advice.

The site area of 0.12 ac is surrounded by mature trees. Close to the N21, the property is 5km from Ballyseedy and close to the town of Tralee.

Selling agent: Gary O’Driscoll & Co​

Carnaross, Kells, Co Meath

Guide price: €55,000 (under offer at €88,000)

This unusual structure on a 0.64ac site is in a somewhat untamed woodland with its own stream and surrounded by mature trees. There were plans afoot to develop the property just before the crash in 2007 — with the addition of a storey and a half and a garage — and it may be possible to revisit the planning permission previously granted.

It is 4km from Ballinlough and 6km from Carnaross, with Kells, Oldcastle and Virginia all less than 15km away.

Selling agent: Rogers Tevlin​

​Glenaguile, Toomevara, Co Tipperary

Guide price: €69,950

With a picture postcard appearance, this cottage is like the classic house drawn by every schoolchild. Set in rolling north Tipp country, it is the kind of place the refurbishment grant-aid was designed for.

It has a large traditional fireplace and exposed stone interior. Electricity can be easily connected to the building, which is also eligible for the SEAI scheme to improve energy efficiency.

The house is situated a 10-minute drive from Toomevara and 12 minutes to Borrisoleigh.

Selling agent: REA Eoin Dillon​

Glenasock House, Glenville, Co Cork

Guide price: €200,000

Associated with a 116ac farm at Glenville, between Mallow and Fermoy, this two-storey, four-bedroom house on 2.5ac has been unoccupied for some time and could do with complete modernisation.

It comes with some outbuildings. The house shares the entrance avenue with the yard but the drives forks to give separate approaches.
The property is 27km north of Cork city.

Selling agent: Dan Fleming

Source: Jim O’Brien, Irish Independent 28/09/2023

Rural dwellers expected to benefit from the extension, says Housing Minister Darragh O’Brien

The state scheme that provides funding to help people to purchase their own homes is to be extended to those building their own homes.

From this week, the First Home scheme is to be widened to include self-builders who are constructing their first home.

The scheme was set up to help first-time buyers to bridge the gap between their mortgage, deposit and the price of a new home.

With €400m put into it, the scheme had approved 2,000 first-time buyers in its first year, with this figure set to be exceeded in year two, its chief executive Michael Broderick said.

Up to now, it has been open to people buying newly built houses and apartments in private developments, and to renters whose landlords are seeking to sell the property they are renting.

Extending it means that self-build customers can benefit from ­financial support of up to 30pc of the total build cost of their home, to add to their self-build mortgage and deposit. Applications from self-build customers can be made online from tomorrow.

The shared equity scheme was rolled out in July last year.

It means the state body, First Home Scheme Ireland, takes a stake in the home that can be redeemed later.

Typical support for those using the scheme is €68,000. The scheme application process runs in parallel with the mortgage application process.

Mr Broderick said this meant that self-build mortgage applications should continue to be made separately through participating lenders.

The scheme is available to qualifying homebuyers and self-build customers who are taking out mortgages from AIB, Bank of Ireland or Permanent TSB.

In its first year, almost 2,000 buyers in 24 counties were approved for the scheme and almost 500 homes in 20 counties were bought using the scheme.

Eligibility for the scheme was extended to thousands of additional first-time buyers with effect from January 1, following the widening of eligibility criteria for homes in 30 of Ireland’s 31 local authority areas, with the limit for eligible homes increasing by up to €75,000.

Houses with prices of up to €475,000 and apartments with prices of up to €500,000 are currently eligible for the scheme, depending on their location.

Approximately 80pc of live approvals have been for buyers in Dublin, Cork, Kildare, Meath and Wicklow, with the remaining approximately 20pc spread across 19 counties throughout Ireland.

Housing Minister Darragh O’Brien said those who were building their own homes could now benefit from this scheme, which was a particularly important development for people who live in more rural locations who may have a site but not the full level of finance they need to build their new home.

“We designed this scheme to be flexible and to evolve so that it can help as many people as possible,” Mr O’Brien said.

“We previously extended it to help renters looking to buy their home from their landlord and now it’s the turn of self-builders.”

Source: Charlie Weston, Irish Independent 19/09/2023

Important Information Regarding Upcoming Affordable Housing Schemes

*Update as of September 2023

Cork County Council will advertise, in due course, the respective Affordable Housing Schemes when they are set to become available. Schemes will be advertised publicly via the Council’s website, social media channels and via print media. Advertisements will direct interested parties to the appropriate website/online platform from where they will be able to access the respective documentation (application form, FAQs, eligibility criteria, income limits, Priority Agreements, time frames etc.) and to make an application via the online portal.

Upcoming Schemes:

The following schemes are due to become available in the next number of months:

Scheme Location	No. of Units	Type of Units	Available to Apply
Cobh (Cluain Ard)	49	2 and 3 bed houses	Quarter 3 of 2023
Fermoy (Rathealy Close)	20	3 bed houses	Quarter 4 of 2023
Clonakilty (The Miles)	38	2 and 3 bed houses	Quarter 2 of 2024

Steps involved when making an application:

Step 1:

Registering:

• Register with the online platform. You will need the following information: your full name, a valid & active email address & a mobile phone number. You will generate a registration verification number via text message, which you will enter to complete the set- up process.

Step 2:

Log on:

• You will then be able to log on to the on-line platform to begin your application process. As part of this log in, you will generate a verification number via text message to your mobile device. You will then need to enter this six-digit code to log in.

Step 3:

The Application:

• You will be presented with a number of tabs, each of which will need to be completed.

Required documentation to support your application on the online portal.

• A mortgage Approval in Principle stating the maximum mortgage available to you. While it is not a requirement, it is recommended that applicants have their Mortgage Approval in Principle prior to applying for Affordable Housing, or at least be in a position to apply for a mortgage.
• Proof of income: PAYE employees: Salary Certificate, Employment Detail Summary, and payslips (3 if paid monthly, 6 if paid fortnightly and 12 if paid weekly). Self-Employed: Documents for previous 2 years: – Audited/Certified Accounts, Tax Balancing Statement and Tax Payment Receipt
• Proof of Citizenship: passport or birth certificate
• Proof of Right to Reside in Ireland: e.g. GNI Stamp 4
• Photographic Identification: Any one of the following documents: current valid passport, driving licence, National Age Card issued by An Garda Siochana, an identification form with a photograph signed and stamped by a member of An Garda Siochana.
• Proof of Present Address dated within the last 3 months. Any one of the following documents: Current utility bill (gas, electricity, telephone, mobile phone, or internet bill), bank statement/credit union statement, document issued by government department that shows your address, Statement of Liability P21 from Revenue.
• Proof of PPSN/Tax Registration Number: Any one of the following documents: Statement of Liability P21, Tax Assessment, Notice of Credits from Revenue, Letter from Revenue Commissioners addressed to you showing PPSN, employee details from Revenue, Receipt for social welfare payment, Letter from Department of Employment Affairs and Social Protection addressed to you showing your PPSN, Medical Card, Drug Payment Scheme Card, Payslip, P45
• Evidence of savings/deposit: up-to-date bank/savings account statements
• Evidence of first-time buyers’ status: completion of a self-declaration on the online portal and/or Revenue Help to Buy approval obtained from the Revenue Commissioners is an alternative documentary proof.
• Confirmation of eligibility for the Help To Buy Scheme: print out from Revenue portal – myAccount (PAYE applicants), ROS (Self-assessed applicants) confirming names of applicant(s) and maximum entitlement under the scheme. (Note that applicants are considered first-time-buyers only if BOTH are buying their home for the first time). VisitRevenuefor more information.

Source: Cork County Council

July saw a 22pc rise in the number of new buyers borrowing compared with last year

Rising numbers of first-time buyers are being approved for mortgages despite a sharp slowdown in the wider home-loan market.

Latest figures from the banks show a 22pc rise in the number of new buyers getting the green light to borrow in July compared with last year.

This is despite a surge in mortgage rates after a succession of European Central Bank rate rises and a cost-of-living crisis that is squeezing consumer budgets. Typical fixed rates are now around 4pc.

There was a 10pc fall in the overall numbers cleared for a home loan.

A collapse in the number of switchers had dragged overall mortgage-approval numbers down, the Banking and Payments Federation Ireland (BPFI) said.

Last month, banks approved a total of 4,747 mortgages. First-time buyers got 2,918 mortgages. This works out at six out of 10 of the overall numbers approved for a loan to buy a home.

Mover-purchasers accounted for 1,148 approved, or 24.2pc.

The overall number of mortgages approved fell slightly in July compared with the previous month, but was down 9.7pc on the same period last year.

Mortgages approved in July were valued at €1.35bn. First-time buyers accounted for €837m of this, with mover-purchasers accounting for €391m.

The value of mortgage approvals remained the same month-on-month but fell by 6.7pc over a year.

But there has been a huge fall in switching activity as mortgage hikes, particularly those from non-bank lenders, have made moving mortgage provider less attractive.

Remortgaging or switching activity fell by 78.6pc in volume terms year-on-year, and by 80pc in value in the same period.

New-buy activity is being boosted by the State’s Help to Buy and First Home schemes, and by banks offering lower-rate “green mortgages” that apply to newly-built homes.

The average first-time buyer was approved for a mortgage of €287,000 in July, up €10,000 on the average for the same month last year. This reflects rising property prices.

Ali Ugur, chief economist of the BPFI, said that the mortgage approval figures showed that, despite a wider market slowdown, first-time buyer activity remains strong.

He said it was the fifth successive month in which first-time buyer mortgage approvals had risen in year-on-year terms.

“This sustained growth meant that almost 30,000 first-time mortgages, valued at nearly €8.4bn, were approved in the 12 months ending July 2023, the highest annualised levels since the data series began.

“In addition to the more than 22,000 Help to Buy applications reported by the Revenue Commissioners up to the end of July, these approval figures demonstrate that the pipeline for FTB mortgage drawdowns remains very strong.”

Mr Ugur added that, in the last year, the value of mover-purchase approvals was close to €3.9bn, the highest value since the series began.

“However, this in part reflects rising average mortgage values, with the average mover-purchase approval exceeding €340,000 for the first time, at €340,957 in July 2023,” he said.

Overall, there were 55,246 mortgage approvals in the year to July, valued at €15.4bn.

European Central Bank rates have risen nine times since last year, with the three main banks pushing up their fixed rates by around 1.5 percentage points over that period.

The interest rate on new mortgages has hit its highest level in years and is expected to rise even more in the coming months.

At 4.04pc, the average interest rate on a new mortgage in Ireland rose significantly from 3.84pc in May, according to the most recent figures from the Central Bank.

The 0.20 percentage point jump on the average in June was the second biggest increase in the Eurozone.

Soucre: Charlie Weston, Irish Independent, 25th August 2023

Buyers are being forced to pay more for homes despite a fall in transactions in the market over the last year.

New figures based on the State’s Property Price Register show that the typical price of a home was up €28,000 in the second quarter of this year compared with the same period last year.

The median, or typical, price is now €318,000, according to data technology company Geowox.

This means sales prices were up almost 10pc in the three months to June compared with the same period last year.

A total of 13,378 houses were sold between April and June. This was down 4.8pc when compared with the same period last year. This amounts to 672 fewer residential property sales. ​

Just 2,466 of those sales were for new homes, Geowox’s analyst Marco Giardina said in a report.

The data shows a bigger rise in new home prices than those for second-hand homes. This is in keeping with Central Statistics Office property price index figures.

Geowox said new homes had a typical price of €410,000 in the second quarter. This is up 9.3pc in the past year.

Just two years ago, a typical new home was selling for €345,000.

New home sales are being boosted by two state schemes for new buyers, the First Home scheme and the Help-to-Buy scheme.

For second-hand homes, the typical sales price was up 5.5pc in the past year to €290,000. This is up from €240,000 in the second three months of 2021.

Wicklow is the most expensive county, with typical prices for a home of €425,000. Buying is far less expensive in the north-west counties, where prices range from €150,000 to €185,000, the Property Price Register shows.

Leitrim has the cheapest houses, with a median price of €150,00. Roscommon is not far off with a median sales cost of €160,000.

Cork and Galway are at the other end of the scale. In Cork the typical sales price is €306,000, with Galway homes selling for €290,000.

Around county Dublin and its commuting counties of Wicklow, Meath and Kildare, prices are higher than the national median.

Prices nationally have been shooting up since 2013, when the median price of a residential property was around €130,000.

As recently as the second quarter of last year, the typical price was €290,000.

Every county experienced a rise in property prices with the exception of Clare. Typical prices in Laois have surged by 22pc when compared with a year ago. In Longford, prices shot up by 21.4pc.

In Tipperary, Louth and Mayo prices jumped by between 15pc and 16pc.

In the capital, there were big jumps in prices in the Dublin 1 and 2 postcode areas. Dublin 6 had a 28pc fall in prices in the last year.

The typical price for an apartment is now €270,000, up from €166,000 in 2016. For houses, the median price is €328,000, up from €186,000 in 2016.

Source: Charlie Weston, Irish Independent 4th August 2023

Sort It: Regardless of the budget, there will always be areas that will need to be scaled back

Making your home renovation dreams come true can be a challenge, especially when your budget doesn’t quite align with your wishes. We all have that wishlist of improvements we would love to make, but sometimes reality forces us to make compromises. We all feel we could do more if we had more money, but the truth is, regardless of the budget, there will always be areas that will need to be scaled back. The key is to be realistic and invest in the areas that will enhance your quality of life. Here are some helpful tips to navigate this process and ensure you make the most of your budget.

Cost

Be realistic about your financial situation. Take the time to research and understand the costs of the home renovation project you plan to undertake. While it may be tempting to rely on the experiences of family or friends who have completed similar work, keep in mind that their projects might have been done a long time ago. Furthermore, people often downplay costs to make it appear as though they received a great deal. So, instead of relying solely on others’ experiences, gather information from reliable sources and professionals in the industry.

When planning your renovation, don’t forget to consider the additional costs associated with refurbishment and building. It’s not just about the new extension; you need to factor in the expenses involved in integrating the existing structure with the new addition. Will there be any other work required, such as plumbing or electrical upgrades? These hidden costs can quickly add up, so it’s important to account for them from the beginning.

Non-negotiables

Identify the elements you refuse to compromise on. These aspects typically have a lasting impact on your daily life and overall satisfaction with the project outcome. Quality is often a non-negotiable criterion for many homeowners as it directly influences the aesthetics, functionality and longevity of the finished product. A well-executed, high-quality finish can elevate your living experience and add value to your property in the long run.

Layout

The layout of your home is another crucial aspect you shouldn’t compromise on. Investing time and effort into getting the layout right can save you money in the long run.

Consider how you use your space and how it can be optimised to better suit your needs. Simple changes, like opening up the kitchen to create a more sociable and functional area, can have a significant impact without breaking the bank.

Energy efficiency

Improving your home’s energy efficiency is another area worth prioritising. While it may not be the most glamorous aspect of a renovation, investing in insulation, heating systems and high-quality windows is a wise choice. These improvements not only enhance your comfort and quality of life but also contribute to long-term energy efficiency and cost savings. Prioritise these essentials to create a comfortable and sustainable home environment.

Trade-offs

Making significant savings may involve sacrificing speed, as cutting costs often requires allocating fewer resources to the project. This can lead to a longer timeline, with tradespeople fitting your project in between other commitments. While this may extend the duration, it can be a reasonable trade-off if your budget is a primary concern.

Budgeting

Think ahead and spend on elements that will be costly to replace or upgrade in the future. For example, investing in durable flooring, quality kitchen appliances or well-constructed cabinetry can save you from costly replacements down the line. By making these wise investments now, you’ll avoid the need for costly renovations in the near future.

Patience

Remember, you don’t have to do everything at once. Prioritise your renovation goals and tackle them in stages. By breaking down the project into manageable phases, you can spread out the financial burden and give yourself time to save for each stage. This approach allows you to enjoy the process and appreciate the progress as your home transforms over time.

Planning

No matter which compromises you decide to make, effective planning and communication are vital to ensure the smooth execution of your project. Set clear expectations from the outset and establish open lines of communication with your contractors and tradespeople. Discuss your priorities and non-negotiables, and strive for transparency regarding timelines, costs and quality expectations. Doing so minimises the chances of misunderstandings and fosters a collaborative environment that aligns with your goals.

Unwise compromise

While compromises are often necessary, certain scenarios should serve as red flags, warning against sacrificing certain criteria. Quality should rarely be compromised, as it directly impacts your long-term satisfaction with the project. Cutting corners or accepting poor workmanship can lead to costly repairs, replacements and ongoing dissatisfaction.

When it comes to the safety and structural integrity of your home, compromising is never advisable. Ensuring compliance with building regulations and engaging experienced professionals are essential for a successful project. Prioritise the structural soundness of your home and the wellbeing of your family above all else.

Source: Denise O’Connor, The Irish Times, 07/07/2023

Borrowers have been warned to brace themselves for a ninth rise in European Central Bank (ECB) rates.

The latest imminent hike means 400,000 mortgage borrowers are exposed to a “ticking time bomb” of higher rates over the next two years.

These are people on tracker rates, variables and those coming to the end of fixed rates.

This year alone, more than 60,000 homeowners are due to come to the end of a fixed rate, which will put a massive squeeze on their finances.

The ECB is expected to announce another 0.25 percentage points rise in its key rates next week.

The move will mean some people coming off a fixed rate could end up paying an extra €3,500 over a year to lock in to a new one after a succession of increases in the cost of new fixed rates in the last year.

Analysts are expecting another 0.25 points rise in September, at which point they expect ECB rates to peak, according to a survey of economists across Europe carried out by the news wire service Bloomberg.

Mortgage broker Michael Dowling, of Dowling Financial in Dublin, said around 60,000 mortgage holders would be coming to the end of fixed rates this year.

He said fixed rates had risen by between two percentage points and 2.5 points since they last fixed.

This means a family on a €300,000 mortgage will typically be coming off a 2.75pc fixed rate.

Now they will be faced with fixed rates of 4.5pc.

These consumers will face almost €300 a month in higher repayments, which works out at more than €3,500 over a year, he said.

About 120,000 mortgage accounts are on tracker rates, according to Mark Coan of money guide MoneySherpa.ie. These borrowers will be automatically hit with higher lending rates.

Around 164,000 are on variable rates, with many of these unable to opt for a fixed rate because their mortgage was sold to a vulture fund, and past arrears issues have turned them into mortgage prisoners.

Mr Coan said that, according to the latest Central Bank financial stability note published in April, 64,093 residential fixed rates would rise this year, and 71,214 next year.

This means 135,307 in total potentially rolling on to variable rates in the next two years.

The same report puts the combined number of variable mortgages, including trackers, at 284,858.

That means 420,165 mortgages are exposed to interest rate increases over the next two years, when those on variable, tracker and those coming off a fixed rate are added together.

“There is a time bomb ticking under the Irish mortgage market with 420,000 mortgages due to be hit with rates north of 4.5pc,” Mr Coan said.

“By the time households cotton on to the hikes, it’s likely the current low fixed-rate options will have been withdrawn from the market.”

He said most people did not realise they could switch to a longer-term fixed rate now without a breakage fee.

“If you are on a short-term fixed rate, variable rate or tracker rate, you should talk to a broker as soon as possible to get market-based advice on your switching options.”

Start Mortgages recently wrote to thousands of its customers to tell them their mortgage rates would rise by 0.75 of a percentage point this month.

Last month, 9,500 mortgage prisoners, whose loans are serviced by Pepper Finance, were told they are due to get letters this month telling them rates are rising by up to one percentage point.

Credit union mortgage rates are the only ones that have not gone up in the last year.

This is because credit union lending rates are not dictated to by the ECB rate. Instead, loans from the credit unions are funded from member savings.

The key ECB refinancing rate is 4pc, but is expected to go to 4.25pc when the ECB governing council meets on Thursday week.

Daragh Cassidy, of price comparison and brokerage Bonkers.ie, said the ECB was likely to hike its main lending rate, off which trackers and variable rates are priced, to 4.25pc when it meets next week.

He said there was a good chance that the key ECB refinancing rate could hit 4.50pc in September.

“This means the average tracker ­customer could soon be paying a rate of around 5.6pc or 5.7pc while the best rate available to prospective first-time buyers will likely be over 5pc by the end of the year,” he said.

Source: Charlie Weston, Irish Independent 18/07/2023