Thursday 23 November 2017

New mortgage rules to attract investors for Irish homes - Savills

Savills has emerged as an international giant in the property game
Savills has emerged as an international giant in the property game Newsdesk Newsdesk

The new mortgage restrictions will have a game-changing impact on investor demand for Irish homes, according to a leading property advisor.

In the latest report on the Irish housing market, Savills report that the recently announced quantitative easing (QE) programme will also attract investors, despite the expiry of Capital Gains Tax Incentives last year.

Economist and Director of Research Dr. John McCartney, Economist and Director of Research said that "by increasing the down payment that is needed to qualify for a mortgage, the Central Bank rules will inevitably lead to first time buyers spending longer in rented accommodation". 

"This guarantees a stable platform of demand which will undoubtedly encourage landlords to invest.  At the same time, investors will be driven into property by low returns on cash deposits, and these are being further depressed by quantitative easing,” he said. 

Furthermore, the investor profile for residential property in Ireland is changing dramatically, according to Director of Residential, Graham Murray.

"On one hand, the recovery in house prices has provided the opportunity for many of the ‘accidental’ boom-time investors to exit the market and, reflecting this, investors were our second biggest seller group last year.  At the same time, a new breed of more professional, yield-driven landlords is flooding into the market – in fact this new generation of investors represented our biggest single group of buyers last year”.

Savills believes that the Central Bank mortgage rules will do nothing to reduce the rate of house price growth - despite popular opinion - and will only result in a change in the mix of buyers

Savills expects that house prices will continue to rise in 2015 due to an overall shortage of supply relative to demand.  However, because compounding price growth over the last two years has raised baseline prices, the percentage rate of growth will be more moderate than before. 

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