Philip Farrell, CEO of Real Estate Alliance, believes that measures should be introduced which reflect the reality of Ireland’s ‘three-tier’ property market.
“The big issue here is the variance of property values through three distinctive tiers – Dublin, the commuter counties and large urban areas nationwide such as Galway and Cork, and finally, the rest of the country,” said Mr Farrell.
“These follow different patterns and the price of an average house can range from €60,000 in some counties to €425,000 in particular parts of Dublin and as result of this, people buying in the capital may require a net deposit of €70-80,000.
“The new mortgage borrowing cap will exclude most first-time buyers from purchasing in Tier One, or the greater Dublin area.
“This will, in turn, increase the pressures on rental values, which are back to levels only 10% off their peak of 2007, unlike property values which are still up to 40% off their peak.
“There is absolute merit in what the Central Bank are introducing and it is to be welcomed in assisting in the prevention of a property bubble in the future.
“This has proven successful in particular parts of the world, especially Asia.
“However, it remains somewhat untested in this part of the world.
“Real Estate Alliance would suggest that two alternatives be looked at, if the cap is to be introduced.
“We call for the Central Bank to acknowledge the three tier market by introducing realistic brackets for different house prices, which would assist in removing the geographical inequities which are apparent in the sector.
“We would also back the introduction of an insurance policy, which the borrower would take out to provide protection on the differential between 10-20% of the deposit if the loan defaults.”
Real Estate Alliance (REA) is Ireland’s leading property group of
Chartered Surveyors with over 50 branches nationwide, comprising many of the country’s longest-established auctioneers and estate agents.
Available for interview:
Philip Farrell, CEO Real Estate Alliance
086 250 3515 / email@example.com
Darren Hughes, MediaConsult 086 2937037 firstname.lastname@example.org