The property market in Ireland is hard to figure out at the best of times, lately – it’s been extremely tough. Before Covid-19, we had rents increasing strongly and purchase prices reasonably stable. With an extra ~500,000 people not in work, all logic would have pointed to a significant weakening in the property market. But this has not happened, why? And how can a mortgage broker like Pangea Mortgages help?
Wisdom & Experience
Our Pangea Mortgage advisors have both in abundance. What separates us is that we put our money where our mouth is, and we have advanced qualifications that other brokerages and especially the Banks can’t match. Lately, the life of a mortgage broker or mortgage advisor has been like an agony aunt for buyers, hearing their tales of woe from a dysfunctional property market and try to tell them everything will be ok. With the onset of Covid, many sellers withdrew from the market as they didn’t want people in their houses and they were also uncertain as to what would happen to their jobs / property market, so they have held off listing their homes. This, when combined with the building sites being shut for months on end has led to record low properties available for sale. See the report from Daft. Or here from AIB.
So why if people are uncertain and being cautious on the sell side is the demand approaching record levels? How does this work and what is the proof of this strong demand?
The proof is very much in the mortgage approvals – November 2020 saw the highest amount of mortgage approvals since the Celtic Tiger and Q1 2021 has seen an increase in mortgage demand Vs 2020 despite being in a full lockdown. Why? Why are buyers not as concerned as sellers?
Because it still makes overwhelming sense for so many buyers to pay the current asking prices!!
This concept of buyer value is driving demand. There is huge value for buyers in the market at present and your friendly Pangea Mortgage advisor can explain this to you in great detail. Some economists like David McWilliams believe the market is overvalued and buyers should now pull back – a very interesting article – listen here.
Very interesting – but wrong! And here is why:
If we start at the Celtic Tiger times – back then as a first time buyer, the underlying financial logic of buying a property was simply not there. Take a €320k apartment in Dublin, you could rent that apartment for €800 a month but the mortgage was about €1,600. So getting on the property ladder was costing you about €800 a month!! Ouch! If you held off buying, you were saving cash each month.
But the complete reverse is true now. People are paying €1,600 in rent and if they bought the property the mortgage would be far less. You are saving cashflow each month and paying off the debt (so you are getting richer). If an FTB can afford the repayments on a property and they would pay less buying than renting – they will choose to save money and own the asset. Contact Pangea Mortgages for more on this.
Another reason why demand has stayed growing is that not all potential buyers can just pull back for a year. If you are getting married, having a baby, moving for work, getting divorced or any of the other myriad of real world issues that happen – Covid or no Covid – you might NEED a property now. Life will always have these demands and they will always be in the property market dynamics.
There is also the issue that the demand side is now growing with new players that were not around 5 or 6 years ago. Investment funds are buying up huge swathes of property – primarily in Dublin and this is having a tangible impact on the market – driving prices up. They can afford to pay much much more than Joe Soap, fuelled by global zero interest rates and in need of a financial return are piling into Irish property. This is a trend we at Pangea Mortgages, best mortgage broker Dublin, believe will continue for several years.
We are not a just mortgage broker or an advisor to you. We know the dark arts… of how economics works and how it helps you to know if now is a good time to buy.
Do you know how interest rates and inflation will impact your property over time?? We do ! Understanding what’s happening now in relation to interest rates and money printing is absolutely critical to knowing what will happen in the Irish housing market. Don’t risk taking advice from an Estate Agent !! Call us now.
We can build you a financial model that will show you definitely the real costs/gains in buying a property and how much equity you can build up in your house overtime. These skills give Pangea a unique edge in the market and we are keen to pass this on to you! Call us to find out more.
Works for you!
Mortgage broker – yes please! All buyers should be thinking this. You get an employee for free (almost). The broker is there to advise you on the property market and how the entire process works from start to finish. They can tell you which Banks have the best offers for you, how much your monthly repayments will be. They are on your side. If you go to AIB, Bank Of Ireland or KBC. They can only sell you their Banks mortgages. They are salespeople. They don’t get paid if they send you to another Bank with a better rate – where a mortgage broker or a Pangea mortgage advisor gets paid no matter which Bank you use.
Paperwork – No Thanks!
Anyone who has ever gone through the mortgage process will tell you that its very, very paper heavy. Everything needs to be in hard copy and then dropped into the Banks. Their systems are dreadful compared to Pangea Mortgages. With our high speed online portal, you can avoid any hard copies and posting documents around. We are also available when you need to talk. We will get back to you. We don’t have bad music playing for 20 mins while you wait to speak with us ?. We respect our customers and want to make you happy.
Money, Money, Money
This is important. Irish Mortgage brokers are very good with this topic. They don’t just fob you off on a mortgage calculator Ireland is full of banks that will!. The best mortgage broker Dublin or elsewhere, will know the local market very well. They will be keeping an eye on what’s happening and what prices are being paid and bid. You will benefit from this knowledge. Our mortgage advisor will help you with a bidding strategy that could save you thousands. They will also look at the big picture to make sure that not only can you meet the mortgage repayments but that you have sufficient money left after that to have a life! No good sitting in 8 days a week. You don’t want a 35 year lockdown!! Pangea Mortgages, some would say the best mortgage broker Dublin – can give you a detailed financial review that will help not only secure a great deal on your mortgage but will save you money, money, money, anywhere they can!
All The Other Stuff
Buying a property is about much more than dealing with a mortgage broker and a Bank. There are many stakeholders you will need to deal with and many boxes to tick before you can move into your new home.
The most time consuming and daunting for most buyers is the legal process. Its really old fashioned and has outdated laws that require wet signatures and original documents. Whilst the rest of the world has move on, I’m afraid the government has left the legal world in the 18th century. But don’t fear – your mortgage broker is here. At Pangea we deal with hundreds of solicitors nationwide and can advise you of the best one to use. We are also well versed in the legal process and jargon so we are happy to contact both solicitors to push things along for you.
Insurances – also need to be arranged too as part of getting your mortgage. Your mortgage broker can help to arrange this directly. There are two types of insurance you need. For the property – buildings insurance and for you personally – life assurance. The reason you need to get life assurance is so that if anything were to happen to you the mortgage will be paid off in full. This is the Banks covering themselves – but there is no way around it. Its usually very easy and straightforward to get in place and can be completed online. It will be a monthly cost that you need to consider on top of your mortgage – Pangea Mortgages will work all this out with you.
Others – Estate Agents, surveyors, valuers. When you go sale agreed on a property you will need to get a survey done on the property. This is for you and not the Bank – a survey will help you tell if there are any material issues with the house (including structural problems). Even after you go sale agreed, you can still pull out if there is something discovered in the survey and we always advise getting one. Well worth it and usually costs less than €500.
Estate Agents are part of the property dance too. They usually wear nice shoes for the dance too! Remember they work for the seller of the property so be weary of anything they “advise” you on. Your mortgage broker works for you so always consultant them on anything an Estate Agent has told you and you are unsure of. Call Pangea Mortgages now!