What Now for Irish Property ?
House Prices heading towards our 10% Year End Forecast. Property prices in Ireland are now increasing at a 7%-8% rate and we expect this to continue. The same dynamics that have been present for years are still there. More demand than supply means prices goes up.
We could write this every month…. demand has never been higher.
Interest Rates
The headline ECB rate has barely changed since the start of the year as inflation remains above target. Expect this to continue for the rest of the year. There wont be the large scale cuts many people were expecting. The reality is that if Ireland had control of its own interest rates we should be putting them up to cool the housing market. The one or two cuts that we forecast for the rest of the year will have limited impact on the three pillar Banks and you are more likely to see cuts from ICS, Finance Ireland and Avant in their mortgages rates.
Economy / Housing Demand
Remains strong.
Its a real struggle for us to understand people who keep talking about Irish house prices falling and “you should wait until the market cools off”. This really is terrible advice for most people. That logic is that there was a big fall before in prices so it must happen again. Its a bit like thinking that there will be another Famine because it happened before. Madness. Houses are regularly now selling for 10% – 20% above the asking prices and our book of customers that have loan approval but cant find a property is at a record high. On the supply side the cost of building a home continues to increase, objections and planning problems continue and there is no magic solution on the Horizon. Anyone who is trying to get trade people to extend or renovate a property will know that getting someone at anything near a reasonable price is very hard to do. As we covered in our piece in the Sunday Business Post last week – the only thing thats going to moderate house prices is an issue in the labour market – especially the multinational sector which is the heartbeat of this country providing nearly 2/3rds of ALL tax income.
What’s next?
The ECB will most likely cut by 0.25% in September. The main Irish Banks will most likely not pass this fully on for new fixed rate offerings. People who expect Irish mortgage rates to go back down to 2% are going to be very disappointed. Ireland’s Property prices are up 7-8% over the last 12 months and we expect this to reach 10% by year end. Anyone waiting for rates to fall before switching mortgages could get burnt with this strategy. Could be time to get while the going is good. The budget that is coming is going to keep the economy hot and inflation within Ireland will remain above 2% in 2025.
“If you are a property owner releasing equity is best way to fund any major expenditure you have coming up.”
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
