Regulatory uncertainty blocking housing investment, Elkstone warns
Uncertainty around future regulations is frustrating investment in Ireland's undersupplied housing sector, investment firm
Elkstone
has warned.
In its latest assessment of the private investment market, Elkstone claimed the regulatory environment here, in particular the system of rent controls, had created 'a paradoxical situation where, despite clear structural supply deficits similar to other European markets, Ireland's development pipeline is stalling precisely when new housing is most desperately needed'.
The Government's
rent pressure zone
(RPZ) system which limits annual rent increases to 2 per cent or inflation (whichever is lower) and which expires this year is currently under review.
While the industry wants the rules loosened, Opposition parties claim they keep already high rents in check.
READ MORE
'Rental caps introduced with the intention of protecting vulnerable tenants in our tight housing market have created an unintended consequence by capping growth for rent and investments,' Elkstone's chief investment officer Karl Rogers said.
'Increasing construction and financing costs are becoming locked into projects, making many developments financially unviable for developers,' he said.
Elkstone's report also warned that the Irish energy regulator's moratorium on new
data centre
approvals was redirecting potential investment to competing European markets.
'This infrastructure bottleneck represents an opportunity for private investors in
renewable energy
projects that could alleviate capacity constraints while supporting Ireland's climate goals,' it said.
Elkstone, best known for its investments in start-ups such as Flipdish, LetsGetChecked and Manna, said Ireland's economy is forecast to grow at a pre-tariff rate of 4.2 per cent, in gross domestic product (GDP) terms, outpacing the euro zone. Yet this masked 'potential vulnerabilities in an economy heavily dependent on FDI [foreign direct investment], with President Trump's recent trade policies and tariffs creating significant uncertainty for Ireland's multinational-driven economy'.
'These potential vulnerabilities could be counterbalanced by developing a stronger domestic tech ecosystem through Ireland's underfunded venture capital sector, which currently lacks institutional investment and needs a domestic venture champion to nurture local start-ups,' it said.
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Irish Times
3 hours ago
- Irish Times
How to buy a home by yourself
'How in the name of GOD are single people meant to buy their own home?' That's the title of a Reddit thread where solo first-time buyers in Ireland trade war stories and seek advice. Having house-shared for 13 years, 'Michael' has worked his way up the ladder at work and lived like a monk for six years to get mortgage approval in principle. Now he finds himself repeatedly outbid by couples. Other solo buyers pile on with similar woes. READ MORE There's the odd apocryphal tale of the tenant whose landlord took pity and sold to them at a discount, or the lowball bid that was miraculously accepted – but solo buyers can't bank on miracles. If you're buying on your own, here's how to give yourself the best chance. Who are the solo buyers? If you're a solo first time buyer, you're not alone. Almost 30 per cent of first-time buyers are buying on their own, according to Central Bank figures for 2023. The average value of a first-time-buyer mortgage approved in April this year hit a record €330,123, up by more than 8 per cent in a year, according to Banking and Payments Federation Ireland (BPFI) figures. [ Move now or wait: First-time buyer and fixed mortgage rates Opens in new window ] First-time buyer lending limits of four times salary mean a single buyer would need earnings of €82,500, to borrow this amount. You will need a 10 per cent deposit too. That's about €33,000 if you are drawing down the average amount approved for first-time buyers nationally. Buying in Dublin is a different story and is 'extremely challenging' for solo buyers, says Ross Harrison of Dublin city-based mortgage broker Finplan. The median house price there is about €475,000. The majority of solo first-time buyers he sees work in tech or professional services and have higher-than-average salaries of €65,000 to €100,000. 'Those borrowing on a single income of between €60,000 and €80,000 are moving to Kildare,' says Harrison. Out in the commuter belt, Shane Tobin of Portlaoise-based Low Quotes mortgages agrees that it's not easy for solo first timers. 'They are typically borrowing in the region of €260,000 to €320,000, purchasing properties in the mid €300,000s and they are using the Help to Buy scheme. They couldn't buy without the Help to Buy,' says Harrison. The solo buyers he sees succeeding have significant savings, many get family support, and they will have to be open to relocating to more affordable regions, says Tobin. Ramp up If you're thinking of buying a first home, prepare for a lengthy on-ramp. Talk to a mortgage adviser at least 12 months out from purchasing and they will set you straight on wooing a lender. Bank statements that show a 'buy now pay later' habit, credit card debt, missed direct debits or someone routinely sliding into pay day on fumes really won't fly. 'We are seeing an awful lot of people using those [Klarna] facilities without realising the knock-on implications,' says Ross Harrison of Finplan. 'A bank will factor in that debt when assessing your ability to repay.' How to manage your pension in these volatile times Listen | 37:00 Use the 12 months before your mortgage application wisely, says Shane Tobin. 'A lender will look back at six to 12 months' bank statements, so you need to behave appropriately to be a serious contender to draw down a loan of €200,000 or €300,000.' Get forensic One of the most disheartening things for a buyer is being outbid. Where couples, who can borrow four times their combined income, or investors are competing for the same property, the solo buyer just doesn't have the same muscle. You can try to short-circuit some of this frustration by getting forensic about the type of first home you can most likely get over the line. If you're thinking of buying a first home, prepare for a lengthy on-ramp. Photograph: iStock With your 'four times income' borrowing number in mind, and your likely savings, use the Central Statistics Office's property prices by eircode app and the residential property price register to guide your search. Properties in Dún Laoghaire-Rathdown, for example, had the highest median price paid for a dwelling at €665,000, according to the CSO's residential property price index in March. By contrast, median prices in Dublin 10 were €311,000, or €440,000 in Dublin 15. The commuter belt widens options too. Median property prices range from €275,000 in Portlaoise to €280,000 in Arklow. In Drogheda the median price is €360,000, in Enfield it's €385,000, Naas is at €421,000 and Newbridge is €425,000, according to CSO figures. 'For people who are not open-minded about location, it's very difficult,' says Tobin. Solo buyers are opting for one- and two-bed apartments over houses too. 'A three-bed house used to be the first house 10 years ago, but that's an absolute luxury for the first-time buyer now.' [ Typical price paid for home by first-time buyer up €88,000 on five years ago Opens in new window ] Government schemes Many solo first-time buyers are availing of Government schemes to get them over the line. The Help to Buy scheme gives a refund of up to €30,000 of income tax and deposit interest tax you paid in Ireland over the four years before the year you apply. This can be used to bump up your house deposit, but it applies only to new-build homes valued at up to €500,000. Another option for first-time buyers is the shared equity, or First Home Scheme. This can be used in conjunction with the Help to Buy scheme. Under this scheme, the Government and participating banks pay up to 30 per cent of the cost of your new home (or 20 per cent if you're also getting Help to Buy), in return for a stake in the home. 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4 hours ago
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Child-related benefits lift 150,000 children out of poverty, ESRI finds
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Irish Times
7 hours ago
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Michael Healy Rae's property management firm records over €840,000 in profit over two years
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