• Would you buy property in the current market?
• Or is the current economic climate deterring you from buying a home?
• Do you think house prices will fall further?
• How much do you think property is worth now?

MyHome.ie is conducting a short survey to find out what your thoughts and opinions are on the current Irish property market.

By completing our survey (which will take less than 5 minutes!) you’ll be in with a chance to WIN a fantastic iPod Touch!

The devastating floods before Christmas and the big freeze in January saw insurance companies’ payout a massive €541 million; the payout exceeded the total of all serious weather events over the last decade, which stood at €358m. The Irish Insurance Federation (IIF) agreed that homeowners could now face at least at 20% increase, if not more, in their premiums as the industry seeks to absorb the half-billion euro cost of extreme weather damage.

But why pay this increase? Or why pay for home insurance at all?

Insurance is about protecting against risk but it has been reported that those affected by the recent floods and made a claim did not received the amount they were covered for. They also found it impossible to switch to another insurer and when they could get cover they were forced to accept an excess. It is also reported that half the number of insurance companies refuse to cover householders who have made a previous home insurance claim.

So while rising premiums for some may be a problem, the possibility of withdrawing flood cover in a growing number of areas or being refused cover is inevitable for others.

Have Your Say: Home Insurance: Why pay for it?

1. Should we pay for home insurance if we will not be given the cover we paid for?
2. Should we, the homeowner be penalised for making a claim due to extreme weather conditions? After all insurance is about protecting against risk?

Australian property prices rose 4.8% in the three months to December from the previous quarter, bringing the national average property price to $525,524 Australian dollars or approx €347,414. According to Australian Property Monitors, they expect prices will rise by as much as by another 10% this year.

So what are the Australians doing that we aren't?
A lack of supply is helping keep prices high and construction of new homes across Australia will struggle to keep up with demand this year due to Australia’s land use regulations. Land use regulations are laws enforced by the ozzy’s which govern land use planning in order to manage urban growth. The land use planning system helps to establish the conditions needed to protect and create attractive and efficient urban environments. Therefore there is a restriction on the number of properties built in Australia every year.

Along with Land use regulations, sales of newly built properties doubled in the December quarter from a year earlier. The jump was driven by a first home buyers’ grant there, which favoured purchases of new properties. Not only that but higher prices for existing properties relative to land and building costs in some parts of the country also drove demand for new houses.

However while this might sound all very positive, reports from Australia say that the rise in property prices means that an increasing number of owners are now struggling to meet their mortgage payments. According to a survey from the Mortgage Finance Association of Australia about 16% of property owners are struggling to pay loans.

Adele King, better known as Twink, could face the prospect of losing her home after she was issued with a repossession order. The Bank of Scotland began legal proceedings on Monday last to repossess Idrone House in Idrone Avenue, which she owned with her former husband David Agnew.

The conversation filler story broke just before the announcement that the moratorium on house repossessions is being extended to 12 months for all lenders.

However, the change which was ordered by the Financial Regulator does not mean that Twink has a year of breathing space as the order details that lenders must wait at least a year from the time arrears first arise before applying to the courts for a repossession order. The order also only applies to mainstream institutions as well as subprime lenders, which account for more than 40% of repossession orders coming before the courts. The 12-month requirement does not apply where a borrower is deliberately not engaging with the lender.

In a statement issued through her agent Twink said; "Unfortunately I find myself in this current situation -- no different to half of the country that have lost their jobs or, like me, are single parents -- trying to pay my mortgage, bills and raise two children on my own…It would appear that the trick is to owe the banks and building societies millions, not thousands, that way you walk away scot-free".

It has been estimated that they are approximately 35,000 people now in arrears, and figures compiled by the Courts Service show that 758 new applications for repossession orders were brought to the High Court in 2008, compared with 374 the previous year.

According to the latest Scottish House Price Monitor report from Lloyds TSB Scotland the housing market there seems to be recovering. Most areas are seeing property growth with average house prices increasing by 5.9% in the three months to the end of January compared with the previous three months.

The report also shows that although house prices are now rising once more, on an annual basis they have fallen by 6.8%. Following four quarterly price falls and two recent consecutive quarterly rises, Scottish house prices have regained the level last seen at the end of 2008. However, the number of house purchase transactions is still around half of the levels recorded before the onset of the recession.

Professor Donald MacRae, chief economist, Lloyds Banking Group Scotland commented, "The level of mortgage availability including for first-time buyers has increased while the cost of borrowing remains low for many mortgage holders. Although a house price recovery is evident in Scotland, it is based on much reduced levels of activity. Nevertheless, the Scottish housing market is now into recovery."

A new report on debt in Irish Society recommends that the Government should consider introducing a mortgage to shared equity scheme similar to Scotland. Where a person is struggling to repay their mortgage or are at risk of losing their home to repossession the scheme would enable the state or a bank to take a financial stake in the home. This would allow the homeowner to reduce their own monthly repayments to a manageable level as the stakeholder would pay a proportion of the repayments to the lender.

The report entitled, "High Levels of Indebtedness in Irish Society" by the Joint Oireachtas Committee on Social and Family Affairs highlights the need for providing alternatives to repossession and also said, "Where lending has been reckless, all responsibility should not rest with the borrower but liability should be proportioned to the financial institutions and, if necessary, the broker that arranged the loan".

According to The Financial Regulator there are roughly 791,000 residential mortgages outstanding in Ireland and 26,271 mortgages in arrears of 90 days or more.

Have our say - Mortgage arrears;

• Should an equity-sharing scheme be introduced to help struggling homeowners?
• Should the state and financial institutions accept a proportioned liability for Mortgage arrears?

LOST, the final season with all its Lost mania is here. The last segment to the Lost saga is at last underway so hopefully we’ll all soon find out what is actually going on and how it’s all going to end… maybe?!

Well, whether we figure out what happens, follow the series or perhaps ‘lost’ interest along the way we can’t but admit that the island itself is gorgeous minus the whole parallel universe and mysterious happenings bit. Turns out, the island, with its white sandy beaches, lush tropical forest and mountains is not quite so hard to find or reach for that matter! Most of Lost was filmed on the Hawaiian Island of Oahu, in particular on the North Shore.

While I’m making out that the luxurious surroundings of the island are obtainable as you can buy property there, a home on the famous North Shore could set you back a million or two!

• Check out property at North Shore, Oahu Island (home of Lost!).

New measures contained in the Finance Bill will leave householders’ pockets even lighter.

The new bill proposes:

• An extension of the new carbon tax that will see a tank full of domestic heating oil rise by €43, domestic gas prices rise by an average of €41 a year and price rises for coal and peat
• The winding down of mortgage interest relief, although there is an extension until 2018 for its final abolition
• A rise in tolls by a fifth on the M50 and the Dublin Port Tunnel 
• Abolition of tax relief on bin collection charges worth €80 a year

Not only that but bin collections by local authorities will rise by 13.5pc from July as county councils will have to pay VAT for the first time. Car parking, swimming pools, the hiring of sports facilities and commercial water provision are also subject to the addition of VAT of between 13.5% and 21%.

The new measures were announced prior to the AGM dinner of the Dublin Chamber of Commerce last night where Brian Cowen said in his speech, “Sacrifices need to be made… as citizens we have an obligation to pull together in times of uncertainty… we should be prepared to look beyond our self-interest… We are going to come through it. Recessions end.”

Have your say:

• The New Finance Bill: Can we afford any more household charges just two months after a savage Budget cut public sector pay and reduced social welfare payments?

Santos Gonzalez Sanchez a mortgage lender and the president of the Spanish Mortgage Association revealed in a statement to the Spanish press this week that the country’s property market sector is 'bankrupt'. Sanchez who also speaks on behalf of the country’s mortgage lenders said that there is so much debt in the industry that finance for property development has effectively dried up. ‘The real estate sector is bankrupt… the viability of the property sector is in question and it is putting the financial sector in danger,’ he warned.

In summary, at the end of Q3 2009, Spanish developers had a combined debt of €324 billion in the Q3 of 2009. According to figures from the Bank of Spain this is the equivalent of around 30% of Spanish GDP. The interest bill alone is around €15 billion a year.

Some believe that Spain needs to create a ‘bad bank’ similar to NAMA where all the toxic real estate loans can be dumped, freeing the banks from their bad debts and enabling them to start lending again.

While we may have a year to prepare before a property tax and water charges are introduced and in full swing by the end of 2011, 2010 is not immune and householders will not escape the brunt of more charges.

The Revenue Commissioners have asked all local authorities for a list of all goods and services they provide to the public or to businesses at a cost, so they can be assessed for VAT at either 13.5 or 21%.

This means householders in all parts of the State who use local authority services for their waste collection are likely to face an increase in charges of up to 21%. Also included on the line up to face a hike are car parks, swimming pools, sports grounds and commercial water use.

The VAT changes are due to be included in the Finance Bill 2010 published next March or April and reports suggest that the changes are likely to be implemented by July.

Have your say

• More Household charges: Are these proposed VAT charges on local authority services fair? 

The Latest MyHome.ie Property Barometer shows that in 2009 asking prices fell by 14.6% nationally and by 18% in Dublin.  This year I do not expect asking prices to fall to the same extent and believe that overall 2010 will prove to be a better year for the market compared to last, although asking prices will still be down 10% on average over the course of the year, with the real potential for higher price decreases in some sectors and areas in 2010.

With the economy forecast to exit recession, combined with the creation and functioning of NAMA, plus the benefit of low interest rates and the best housing “affordability” in over two decades, do you think the latter part of 2010 will mark a turning point in the property cycle?

If you think 2010 will present greater challenges that 2009 what will they be? What do you think are the “risks” that face the market? - Rising interest rates for variable rate customers as banks increase rates to improve their balance sheets? Negative Equity? Repossessions? Emigration? Unemployment? 

Let us know your views on the outlook for residential market in 2010 here…

President of the IAVI Aine Myler and MyHome.ie Paul Murgatroyd discussed whether we are at the bottom of the property price market on TV3s Morning Ireland.

A recent IAVI survey reported that residential property values had fallen by 20% on average in 2009. It also suggested that the market has bottomed out and values would not fall any further. Paul Murgatroyd said while there is more value to had in the market now, asking prices are still falling. However, there are signs of stabilisation in certain areas and activity in the market has improved with the number of enquiries by potential buyers doubling in the months.

• Rock bottom property on Morning Ireland, TV3

The news that the Mortgage Interest Relief scheme is to be extended for qualifying loans until 2017 is good for both existing home owners whose relief is due to expire and for new purchasers who will still be able to obtain mortgage interest relief for qualifying loans. The real benefit of this extension will be seen as and when interest rates start to climb late next year as the relief will climb in line with higher mortgage repayments thus cushioning some of the impact of higher rates.

However this continuation of the relief scheme is unlikely to be enough to encourage first time buyers to purchase in the coming years. In addition buyers might put buying intensions on hold due to the minister reaffirmed a commitment to introducing a property tax at a future point in time but did not specify when that would be. With the property tax potential buyers could be reluctant to purchase and pay stamp duty now given that stamp duty will likely be eradicated or substantially reduced upon introduction of the tax.

Have your say

• Would buyers remain reluctant to purchase and pay stamp duty now given that stamp duty will likely be eradicated or reduced as a property tax is introduced?
• Or would the continuation of the relief scheme be enough to encourage first time buyers to purchase?

MyHome.ie has welcomed the announcement by the Minister for Finance that mortgage interest relief will continue to be applicable for seven years for all qualifying loans taken out before 1st July 2010, and that transitional arrangements will be put in place for qualifying loans taken out  between 1st  July 2011 and the end of 2013. In addition, those people whose entitlement to Mortgage Interest Relief is due to expire in 2010 or after will now continue to receive relief up to the end of 2017.

However MyHome.ie has expressed disappointment at the “missed opportunity” that the Minister for Finance did not revise downwards the current rates of stamp duty for residential and non-residential property transactions in order to provide some small stimulus to trading in the property market at the current time.

Commenting on the Budget today, Paul Murgatroyd, economic consultant to MyHome.ie said…

Read full press release of the MyHome.ie response to the 2010 Budget

5 days and counting, Budget 2010 is nearly here and like other sectors the property market will not escape.

While it is reported that a property tax for all home owners is unlikely to be introduced this year, rumours are rife that an increase in the €200 property tax on second homes is on the cards.

The tax has made many newspaper headlines and has been the subject of much debate since its introduction in July of this year.  Less than two weeks ago the tax was again criticised after it was announced that the tax payment date for next year would be brought forward by 5 months from October to May as it fitted in better with the financial cycle of local authorities. Many homeowners say they have already paid enough on the purchase of a second property and that the government has also received its fair share from all properties purchased.

So far made the tax has made €48.3 million in local authority revenue.

Have your say:

• Should the €200 property tax on second home be increased in next week’s budget?
• Or should there be any property tax at all?

In the recent MyHome.ie Autumn Property Survey participants were asked to give their view on the future direction of price movements in the residential market over the next twelve months.

• 13% expected prices to increase slightly
• 18% of respondents expected prices to remain static at current levels
• 25% expected prices to fall by between 1% to 5%
• 23% expected prices to fall moderately, between 5% and 10%.
• 14% expected prices to fall significantly from current levels (10% to 15%)
• 7% expected prices to fall by 15% or more.

Therefore almost one third believe that prices are now at their lowest levels and almost half of all those surveyed expect prices to decline by less than 10%.

Does this mean that we are now at or are very close to the bottom of the market in some segments? Or are the opinions expressed more “hope” than belief? What does it say about when is the "right time" to purchase? Is there a belief that the establishment of NAMA will put a floor to the market in the year ahead?

Have your say:

• Should people now be seriously looking at the bargains that are evident in the market? or
• Should people wait for more certainty to emerge before starting their search?

If they wait for visible signs of certainty does that mean they have "missed the boat" in terms of buying at the bottom?

The High Courts have witnessed an "avalanche” of possession orders since September as the first wave of moratoriums against pursuing mortgage arrears by Sub-prime lenders ended. Some 18 repossessions were granted in the High Court on Tuesday of this week, the highest number in a single day this year.

Many believe that it is fair to repossess if a borrower cannot repay his or her loan, as the loan was taken out in full knowledge of the terms and conditions applicable.

However some ask: What do the Banks have to gain by repossessing houses in the present climate? Would it not be better for the banks to come to a renting arrangement with their customers, with a long term view to these people being able to restart their repayments when their situation improves? Would the home-owner support scheme proposed by Fine Gaels Richard Bruton not be more beneficial for both homeowners and lenders where NAMA would take an equity share in a home after negotiating a write-down in the outstanding debt with the bank or mortgage provider?

Have your say:

• Repossessions: If you can't pay, you can't stay?  Or
• Should lenders come to new repayment arrangements to help homeowners in financial difficulty?

Affordability continues to improve for first time buyers in the residential market the latest edition of the EBS/DKM Affordability Index shows. By the end of this year mortgage repayments, as a percentage of disposable income, will have fallen by 43%.

Only 13% of a first time buyer couples’ disposable income is required to meet their mortgage repayments (16% in Dublin). This is down from 26.4% (32.5%) and the end of 2006.

In addition developers in Ireland are now reporting that prices in the new homes sector are at, or are at least close to the bottom and many units are being sold below cost. 

With low prices, a surplus of available stock, low interest rates and the best affordability for years, is there now a potential window opening up in the market for first timers to consider purchasing in?

Or is there simply too much uncertainty around for people to commit just yet?

Where does the balance between uncertainty and opportunity really lie?

With economic recovery now establishing itself in the euro zone we can be sure that the ECB will eventually have to consider raising interest rates and potentially sooner than many would think, and almost certainly sooner than is likely to suit the domestic Irish economy, and that will lead to the window of opportunity starting to close.

Refinancing your way out of negative equity - The return of the 125% LTV Mortgage.  In order to have some form of normally functioning property market, people have to be able to trade their homes. The residential property market relies on this to function correctly, both to free up starter homes for new first time buyers coming into the market and to provide demand for homes further up the price scale.  In many cases people are prevented from being able to trade in the market, even if they have the income and ability to repay a larger loan and they cannot move because of the negative equity.
 
In the UK, the Nationwide Building Society currently offers a "service" (not a mortgage product) to existing customers which allows them to remortgage and carry forward negative equity debt to a new property, effectively a 125% mortgage in certain circumstances. 
 
Given the increasing number of people falling into negative equity in the Irish market, should something similar be made available at some point in the future in Ireland to facilitate trading in the market for people who meet the very strict lending criteria?
- Or would it simply be a case of refusing to learn from the mistakes of the past and another example of reckless lending on behalf of financial institutions?
- Or is transferring property debt into a type of personal debt going to be a necessary evil that we will have to consider in order that people can move?
- Should the couple who are Teachers or Gardai be prevented from relocating for work purposes because they are in negative equity - would that be of benefit or detriment to society and the economy?

Have your Say

• Should there be a facility available for home owners in negative equity who are looking to remortgage?

A new home-ownership support scheme that would help protect Irish families whose homes may be threatened by the downturn was proposed yesterday after the second stage of the NAMA legislation was passed on Wednesday night.

Eamon Gilmore said "The people who are having difficulty today in repaying their mortgages are those who had good jobs a year or two ago and certainly at the time they took out the mortgage". He added that "The ESRI has estimated that the banks had 35,000 householders 'in their sights' ".

The home-owner support scheme would allow NAMA to take an equity share in a home after negotiating a write-down in the outstanding debt with the bank or mortgage provider.

The property owner would pay the lower debt and would also pay a rental fee to NAMA for the equity share. The householder would then have a choice at the end of the process to buy back the NAMA equity share or to share the sale price with NAMA if the property was sold.

Have your Say

• Should NAMA provide a mortgage support plan for homeowners?
  

Should a database of all Sales Prices be made available to the public? Or should such information remain private to the persons involved in the transaction?

The latest findings of the MyHome.ie Property Barometer show that nationally, asking prices have fallen 22% since the peak of the market yet plenty of sketchy evidence exists showing that actual sales prices have fallen far in excess of this amount, upwards of 40% and more in some cases.

During the boom, asking prices acted as a starting point for negotiations, with sales being done at prices in excess of the asking price. More recently, asking prices have become something more of an aspiration for sellers, with many sales being concluded below asking price in this buyers’ market.

So taking all this into account, is it time for a publicly accessible database detailing accurate information on all residential sales transactions in the State, similar to the system operated by the Land Registry in England & Wales? Or should such information remain private, as it currently is under the Data Protection Acts?

Have Your Say:

• Would the availability of such price information provide for more transparency in the property market?
• Or would it simply hinder the efforts of sellers in trying to achieve the maximum price possible for their property, which they are entitled to do?
• Should the general public have a right to know how much a person paid for, or received for, a house they bought or sold in what is essentially a private sales transaction?

So far the main focus of NAMA has been what impact it will have on the banks. But probably the greatest impact will be the change it will have is on the Property Market. So are the possible outcomes of NAMA?

Scenario 1:
The Government takes on developer loans; Irish banks get cash and start lending money to house buyers, who get 90% mortgages and buy house(s). A new property boom starts and in five years time with back in a familiar place with X billion in bad property loans – albeit bad mortgages, rather than developer loans – but more debt none the less

Scenario 2:
Banks will have to repay international lenders and bond holders with the money they receive from the Government. With jobs losses, increased taxation and a possible NAMA levy, housing finance availability will be reduced and fewer people will be in a position to take out mortgage. Although it may be a slow road back to recovery this should help and result in stabilising the property market.

Have your Say

• Will NAMA just reflate the bubble? Or will it stabilise the property market?
• Should we support or reject NAMA?

Minister for Finance Brian Lenihan hopes to release the legislation bringing the National Asset Management Agency (NAMA) into play over the coming weeks. 

Yesterday was the deadline for Irish banks to report back with a detailed breakdown of their property portfolios, giving NAMA its first chance to review loans across several banks. This is probably the biggest decision to face Ireland since the creation of the state, and its effects could be felt for decades should we get it wrong.

However, there are two opposing views from the main parties in Ireland, Taoiseach Brian Cowen is insisting that the best advice has been sought on this topic:

“The proposal we have brought forward is on the basis of the best international advice, including the European Commission and the International Monetary Fund, and we are doing this in consultation with the European Central Bank”

And Enda Kenny’s (Fine Gael) preference would be to setup a “Good Bank” because NAMA will:

“ transfer the responsibility for dealing with toxic loans from the banks who made them, and the investors who funded them, to the Irish taxpayer”

Property Feedback Friday is back and we are asking for your view on NAMA.

Have your say:

• Should NAMA be giving money to developers to complete commercial projects?
• Are you worried how NAMA will value the toxic loans?
• Do you think NAMA is the right solution?

The deadline date for the €200 tax on second homes is fast approaching but many homeowners of second homes are questioning is this €200 property tax really fair and debating whether or not they should cough up the cash.

Many homeowners say they have already paid enough on the purchase of a second property and that the government has also received its fair share from all properties purchased, as one blog commenter said "the government has already received over 40% of the proceeds of every single property by way of VAT on materials and services, Income tax on labour, stamp duty and other indirect taxes which they sanctioned such as development contributions and commercial rates!". So why should you now have to pay an annual €200 property tax?

But be warned, those who miss the deadline date or don’t pay the tax on their second home(s) you will incurred a 10% late fee for every month after the deadline up until the fine is paid. On top of all that you can also expect to receive a fine of up to €2,000 and any outstanding charges and unpaid late payment fees will remain as a charge against the property for up to 12 years, even if the property is sold!

Have your say:

• €200 Property tax on second homes: Are you being fined for making an investment?
• Haven't you already paid this tax when you forked out on stamp duty?

If you are new to mortgages, then it’s also likely that you are new to the options available to you. Annuity mortgage, repayment mortgage (surely they all have to be repaid), offset mortgage, interest only mortgage, endowment mortgage, are all mortgage buzzwords that you will hear being bandied about. But what do they actually mean and which one is for me?

Well, for most us, the most common type of mortgage taken out is the annuity mortgage, which is also known as a repayment mortgage. This works as follows. You borrow money and then you pay it back monthly with interest. Simple as that. While this is the most common type of mortgage, it is by no means the only type. Get your lending institution or broker to explain the different types to you, so that you know exactly what you are buying. You wouldn’t buy a car without knowing the model, colour, engine size or price. So why buy a mortgage if you are unclear about exactly how much it will cost you in the long run.