8%-10% increases keep coming

The latest indexes and property price increases by the property industry sees a continuation of trends that we have seen since Covid. The market expects growth in prices of nearly 10% this year which would bring property prices up by ~50% since Covid

1.ECB Interest Rates

All indicators are that the ECB will lower its rate to 2% by the end of the summer. This will mean that mortgage rates in Ireland should be around 3%-3.5% with most lenders by September time. This is well below long term norms and makes no sense for the Irish economy given the strong economy and shortage of housing. This could be serious fuel on the fire.

2.Housing Supply :Remains DeadNo chance this improves anytime soon. We cant see it breaking out of the 30k-40k range in the next 2-3 years. On top of the existing problems that have long been talked about we are going to see even greater bottlenecks in water and electricity which will mean bodies like Irish Water will actively begin objecting to housing developments - just when you thought it couldn't get any worse.... Madness. Prices for new build properties continue to increase and Banks are also increasing the minimum cost per sq. meter they will accept for new build projects. Its near €2,000 per square meter now and rising. We seem to be doing our best as a country to ensure we put as many barriers and obstacles as possible in the way of building houses. But yet there is no real pressure coming on politicians to solve these issues........Its going to reach a stage where by the time we have solved the zoning and objecting problems that no one will be able to build a house at a price level that they could then sell on.

3. Solutions - same as last time (not a new Czar)

Remove the Government from the market. Reduce regulations, taxes, rules etc to allow the private market build private homes. Let that be the focus. The help to buy, first home scheme, housing assistance payment, rent caps, 55% tax rates on rental income, 33% Capital Gains tax are all a disaster. Everyone is losing as this stage - think about it - the biggest fund IRES has lost nearly half its value and wants out of the market, landlords who should be benefiting from these sky high rents are leaving and there is a shortage of supply for renters. You need money in life ! And you especially need people with money to build houses. If we need 400k houses over the next 5 years thats going to cost about €160 billion. The Government doesn't have that money and the locals don't have that. The only way out is to bring back investors by changing Bank rules, taxation rules and removing the rent cap. Investors have to see a way to make money or they don't invest !! There seems to be a public belief that they will invest just because people need houses.

Madness.

So what about you ? Mortgage rates in Ireland now start from 3%. Its time to take advantage of that. If you own a property you will have benefited from prices rising nearly 50% in the last 5 years. You will have a large amount of equity in your home. This Equity - when used properly can have a major positive impact on your long term finances. You should never need a personal loan or a credit card again! Your pension should also be maxed out .... if you know how to use this equity correctly.

john@pangeaireland.ie

085-8600728

Frequently Asked Questions

How late is too late to switch mortgage lenders?

You can switch mortgage lenders up until the closing date, but the process becomes riskier and more complex the closer you are to closing. Delays, increased costs, and potential impacts on your home purchase timeline make it crucial to evaluate all pros and cons before making a late change.

Can you switch mortgage lenders after fixed rate period?

Yes, you can switch lenders after a fixed rate period, but breaking the rate with your original lender may incur fees. Additionally, you will need to secure a new rate and secure with the new lender, which could have cost implications depending on market conditions.

What are the costs associated with switching mortgage lenders late in the process?

Costs include new valuation fees, potential expedited underwriting or processing fees, and possible penalties for breaking a fixed rate.

How can I negotiate with a seller if I switch lenders late?

Communicating transparently is key. Inform the seller promptly, explain your reasons, and outline your plan for minimising delays.

Does switching lenders late always result in delays?

While delays are common, how significant they are depends on factors like the new lender’s processing speed, requirements, and how quickly you provide necessary documents. Working with a mortgage broker can help streamline the process and reduce delays.

Property Market Update May 2025