Mortgage Rates starting to fall
We are finally seeing some of the ECB rate cuts being passed through to mortgage customers not just with tracker rates but also with new fixed rates. It looks likely that more reductions in Bank mortgage offers will take place in the next few months.
Rates falling and demand still strong
ECB Interest Rates & Irish Bank Rates :
We have now seen the first major moves in the mortgage market since the ECB began cutting rates in the summer. AIB now have rates starting at just over 3% and other providers such as Avant have announced cuts to their fixed rates too. We would expect that there is still room for lower rates especially after the ECB cuts rates again in December as it is currently expected to do. We still expect the 3% number to act as a lower barrier to where rates may go but weakness in the German economy could change this. New providers and new products are also being introduced such as Nua Money who are now offering mortgage terms of 40 years. Traditionally lenders would only lend until normal retirement age of 67/68 but with people getting on the property ladder latter in life and more people separating and needing a new mortgage in their 50s some lenders are now extending the latest repayment age upto 80 years of age !
Irish Economy / Housing Demand
Remains (too) strong
Not much new to report. The latest figures from the Government show that there were less houses built so far this year compared to 2023 which shows just how little progress we are making on housing. It gets even worse… within this number of new homes there is a decreasing number of homes that are actually available to buy on the open market. Social homes are ramping up but the market for open market houses is shrinking. Bidding wars are still fierce. Expect to pay 10%-15% above asking to secured a second hand property. Estate Agents continue to report that landlords are leaving the market in droves which will push more people into the purchase market … at a time the delivery on new homes is falling.
Not a good mix.
The options facing current renters are not good. They are already paying high rents and are now more likely than ever to get a notice in the door from the landlord saying they wish to sell up. Mortgage brokers Dublin tell us that they see extreme pressures on this section of the market – the would be first time buyers or the pushed into becoming first time buyers faster than they had planned market to be more precise.
At Pangea Mortgages we have been dealing with numerous renters looking to get on the property ladder but are put off by the bidding wars and high house prices. Even for those who can apply for high value mortgages are put off as the bidding wars at the top end of the market are just as competitive as the mid range – this is a new phenomenon in the market this year. Areas like Rathgar, Ranelagh, Clontarf, Rathmines, Dalkey are seeing the same pressures as other areas throughout the country. We are also seeing an increase in customers looking to release equity in their homes to do major renovations rather than move home.
What’s next for the Irish Property market?
High Growth
Prices may well grow by another 10% next year as the high wage growth , government stimulus, strong population growth and falling interest rates combine to make a turbo charged demand side of the property market. The “worst case” scenario may well be a mild recession in Europe and a strongly growing (or spending) US economy. This lowers our currency Vs the dollar – which will increase our net exports and bring in even more gushing corporation tax – it will also lead to lower ECB rates which will fuel property price growth. The result of the US general election will be known shortly and could have a negative impact on Irish property if Trump wins. Strange times may lie ahead and the government for sure have not prepared adequately for them. With ever more flexible lending products coming to the market expect to see both more Bank debt and more cash being pumped into the
property market.
“Contact us to learn what the best options for your circumstances are.”
If you would like an initial consultation to assess how much you can borrow/save
and what your pension, insurance and investment options are please contact us
info@pangeamortgages.com or call 01-442 5064 // 085-8600728
