IF a borrower pledges his own home as security against the loan lent to him, then it is commonly known as mortgages. It is also popularly known as home equity loan. The mortgage sets forth the conditions of the loan, the manner you pay, duration of your repayment, and reserves the right to the lender to repossess the pledged collateral if the borrower fails to repay any portion of principal amount and interest. The borrower promises to repay the principal amount along with the interest rate to the lender on time.
Why Remortgage Nothern Ireland!
First of all you should know the value of your home at present and take help of some expert in this field. This way you exactly know the worth of your home, which becomes basis of approval an amount under remortgage Nothern Ireland. The remortgage lender in Nothern Ireland will lend you an amount that is required to pay off remaining mortgage and you can borrow even more depending on current value of your home. On taking remortgage option, you also would be availing larger repayment duration which again reduces monthly outgo towards installments.
Have you have paying high interest rates over a period of time on your mortgages, and your equity has built up ever since the real estate prices hiked? Now, you can avail of remortgages. The best solution from being fleeced from your lender and encashing your equity which has built up is remortgage Ireland.
While mortgage is a method of using your home or property as security against the loan lent to you. Refinance mortgage gives you an option to use the same property as collateral and utilize the current low interest rates by applying for a remortgage. Need to break free from astronomical interest rates? Then, go for remortgage!
Benefits:
Reduce your payments
Get a better remortgage quote
Consolidate all existing debts by Remortgaging
Reduce your payments
With years of having obtained a mortgage, your equity would have built up now. Make use of this built up equity, remortgage uk liquidates your equity, thus offering you lower rates with high equity value
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Compare your earlier mortgage rate with the current rate. If it’s lower than your existing mortgage rate, opt for a remortgage and reduce your payments by taking advantage of the current low rates.
Consolidate all existing debts by Remortgaging
Club your existing debts! You can meet your multiple mortgage loans by refinancing and combining them into one large remortgage loan thus brings down your interest rates drastically.
It is a known fact that financial markets all over the world are facing a recessionary trend. Property prices all over the world are showing negative growth because credit is hard to get. One market that has remained unaffected by this credit crunch is the Dubai property market. Development of properties is growing at an unprecedented pace, and most properties under construction will not be ready for occupation until 2010. Many large investors in the world still look at the Dubai property market as the most profitable investment. Also, no negative impact is seen in property rentals and resale of properties.
Most people felt that investment in Dubai’s property was a bubble waiting to burst. They were proved wrong, as Dubai is still considered to be the one of the most lucrative and the safest places for property investments. One of the main reasons for this is the ever growing property resale market. The property resale market is growing at a steady pace, and refuses to show any signs of negative growth. People investing in Dubai’s property market are brimming with confidence as they are confident of getting high returns on investments made on property. People estimate that prices of properties under construction will increase by at least 25 percent, and those completed will increase by at least 50 percent. All this makes Dubai property a great credit crunch investment.
Dubai no longer has larger oil recourses, but let’s not forget that it made huge money when it produced oil. The enormous amount earned by exporting oil is finding its way into the property market of Dubai. Property construction is developing so rapidly that it is hard to find a block where no construction is taking place.
One of the most talked about and happening projects is the one coming up at the Island of Ireland. If you looking to invest in penthouse suites, beach-facing homes and villas, then the Island of Ireland is the place to invest. Apart from Villas, Suites and Penthouses, you will also find restaurants, spas, cafes, boutiques and all other facilities that you can dream of. The total project area of Island of Ireland is over 225 000 square feet.
The Island of Ireland is not the only place you can invest in. Palm, which is situated at Jumeriah, is another investment hot spot. The project is in the shape of a huge date palm and is man-made. To build this giant date palm more than hundred million cubic feet of sand has been used. Palm is being constructed in the area between the gulf and the mainland. Once the project is completed it will address the problem of the shortage of beaches in Dubai. A monorail has been set up to take people to the Palm. Famous personalities like Michael Owens, Joe Cole and David Beckham have bought properties here.
Property prices in Dubai have gone up more than 10 times in last six years. There is an unprecedented rise in demand for ready-to-occupy properties, which has resulted in a shortage of these properties. This has resulted in the demands of many investors remaining unfulfilled. With people predicting that property prices will increase further, there are no signs of a slowdown in the Dubai property market. So if you are looking for investments with assured returns then Dubai property market is the right place to invest.
Dream Homes Worldwide offers dubai property and quality real estate for sale in other popular cities around the world.
Galway, Ireland, October 13th 2008: With the most difficult budget in decades facing us today, it will be interesting to say the least to see what will happen with mortgages in Ireland.
While the recent half of one percent cut in mortgage interest rates was very welcome, the likely increase in personal income taxes along with predicted increases in a range of other taxes is likely to offset any benefit in reduced interest rates.
Both the residential and commercial property markets continue to fall dramatically, and there continues to be substantial reductions in the growth of mortgages in Ireland.
Only a year ago Brian Cowen was bringing us the following welcome news:
”In the Programme for Government, we signalled that the first time buyer – and recent purchasers – would benefit from further increases in the ceiling on mortgage interest relief.
”Today, I will honour the Government’s pledge by increasing the ceiling on mortgage interest relief for first time buyers by 2,000 for a single person and 4,000 for a married couple or widowed person to 10,000 and 20,000 respectively.
”This will increase the maximum monthly relief available by about 33 and 66 respectively, bringing it to 166 per month for a single person and 333 per month for a married couple or widowed person.
”These moves are appropriate in ensuring additional support for a hard pressed segment of the housing market and should provide the necessary direction and certainty.”
These decisions were made in the boom times of the Celtic Tiger and while many expected an economic crash or at the very least a “soft-landing”, few could have expected the sort of disastrous ecomomic perfect storm that has engulfed not jus the Irish economy, but the entire world economy.
One thing is certain, the news will be very different today, and few can see a substantial increase in the number of mortgages in Ireland being taken out in the near future. Indeed, the general trends show that lending for mortgages in Ireland will continue to decrease over at least the short term, and could even continue to decrease for another 12 months, with many viewing it as an even longer range problem.
It will be interesting to see how the Minister decides to treat the different parties involved in the property and mortgage markets. While the general populace resents the amount of money made by property developers during the boom times and would be against giving them any further opportunties to make their fortunes, there must also be a realisation that the construction industry needs to get going again in order to minimise any further destruction to the number of those employed in Ireland.
Similarly, first time buyers will need to be encouraged to come back to the market. However, at a time when unemployment is on the increase, property prices are still falling, stock markets are in roller coaster mode, and taxes are being increased it will take a significant amount of work to encourage the first time buyers back into the market.
Michael Kelly is Managing Director of Mortgage Ireland Marketing Company Ridge Online Marketing. Ridge Online Marketing is focused on helping companies improve their online marketing visibility and specialises in mortgages, insurance and pensions in Ireland. Contact: Michael Kelly at mkelly@ridgebusiness.com. Further information www.mortgage-broker-ireland.com
It is always worthwhile to know something about the history or demographics of a local housing market before considering making an investment. The Irish market is no different in this respect. In fact, one could argue that the rapidly changing face of the Irish economy demands that the investor/house-buyer or renter should pay heed to some interesting and fairly unique statistics related to Irish home life.
1. Population Density –
21% of the population of the island of Ireland lives in Dublin, making the city areas in particular very congested. Relatively speaking, house prices are the highest around Dublin, yet plot sizes are at their smallest, meaning that you get much less space for your money here compared to the remainder of the island. However, many Irish employers are based in Dublin, so some house-buyers may have little choice but to make a purchase close to Dublin city. A further 18% of the population lives in the northern counties of Antrim and Down, influenced by the locations of some larger towns and the city of Belfast in particular. Whilst being busy areas, these large counties do not feel overly congested in the main. House prices generally give much better value for money than typical Dublin properties. If we dismiss the influence of the inhabitants of the remaining larger Irish cities (e.g. Cork, Galway, Limerick), then the greater majority of this large island has typically less than 2% of the overall 6 million population living in each of the remaining 29, more rural, counties. If relative peace and tranquility in a countryside home setting are your desires, then about 85% of the total area of Ireland can still provide this much treasured commodity.
2. Housing Density –
Half of ireland’s 32 counties can boast having less than 15 houses per square kilometre on average. In five attractive counties (Kerry, Mayo, Donegal, Leitrim & Roscommon), statistics prove that there are 10 or less existing homes per km² on average, making most areas outside of the towns and larger villages appear comparatively deserted by most European density standards. County Fermanagh is Northern Ireland’s least densely developed county with 12 dwellings per km² overall. By comparison, on average, there are 456 homes squeezed on to every km² in County Dublin.
3. New Houses – just 15 years ago, in 1993, there were 21,000 new homes built in the Republic of Ireland. Year on year since, the prospective buyer has had a greater choice of new houses and apartments to select from. Incredibly, last year saw the annual amount of new homes coming on to the Irish market rise to over 100,000.
4. Housing needs – whilst there has been a general increase in the size of new homes built, with 3 bedrooms being the typical sleeping provision offered, the number of people living in each house (on average) has fallen significantly. Forty years ago, 4 people sharing one home was the statistical norm. Nowadays, maybe influenced by the higher availability of apartments, the statisticians tell us that the average home occupancy is just 2.8 persons.
5. Types of Homes – 88% of Irish residents still prefer to live in traditional houses, rather than flats or apartments. Roughly half of these (43%) enjoy the benefits of living in a detached home. In rural locations, newer homes are commonly built on plot sizes of typically a half-acre, giving generous space for car parking, gardens, patios and children’s play areas.
6. Buy or Rent? – in 2006 the number of occupied dwelling places in Ireland had passed 2 million. In these homes, 20% of occupiers (that’s 1 in every 5) had chosen to rent their property rather than buy it outright. The more expensive city areas, and Dublin prices in particular, have greatly influenced these countrywide statistics. Also in 2006, the average weekly outlay for a privately rented Irish home had passed the €200 mark.
7. Occupancy & Vacancy Stats – the 2006 census in the Republic of Ireland concluded that 15% of homes existing at the time were unoccupied. That could easily translate into the amazing statistic that 300,000 houses, cottages or apartments remain vacant. As these figures come from a period before the current housing market slump, the investor or tenant should take note and not pay over the odds with so much availability to consider. Over 200,000 extra new homes have been built in Ireland in the last couple of years. The property vacancy rate has probably increased accordingly, contributing to the sudden but not unexpected end to the Irish housing boom.
8. Buy to Let – for the first time in many years, average Irish property rents began to fall in the first quarter of 2008. This is good news for prospective new tenants, but not so good news for landlords. When one considers the quantity of vacant existing property crying out for a paying occupier, there is little prospect of rents rising again in the short term.
With at least 170 000 vacant houses in Ireland… guess what will happen with prices? Bear in mind it’s 4 mln people size country! TV3 – News at 5:30 2010.03.05 www.tv3.ie (videos/news at 5:30)
Even the most optimistic and upbeat property developers in Ireland must now be accepting that the sales values of new and refurbished properties returned in the residential market in 2006 and early 2007 were unsustainable. It is hard to believe that some of these practised entrepreneurs are a little shocked at the realisation that property prices cannot rise and rise at rates far in excess of general domestic inflation levels.
As a nation, Ireland should be proud that it was able to combat and overturn its historic residential housing shortage within a single decade since the year 2000. This achievement was even more commendable when one adds that the country also catered for thousands of their own returning Irish emigrants plus economic immigrants from fledgling eastern EU states spurred on by tales of Celtic Tiger riches for all. The building boom needed extra foreign workers to complete the developers’ ambitious plans in record time, and the workers in turn needed new homes to live in, temporarily at least in many cases.
The speed of building was great for the developer. Mass production leads to the lowest possible site costs and outgoings. The rapidly rising population of newcomers to the Irish state initially opted mainly for short-term leasing of new homes. Rental incomes for landlords and developers went into overdrive. In a booming economy, property values tend to get ascertained from the forecast rental capacity of a housing or commercial unit rather than a calculation based upon the cost of the land plus “bricks & mortar”. This scenario is fine if rent inflation stays in line with general price increases for the domestic consumer. But Ireland’s property market overheated and got out of sync with the general economy.
By 2004 & 2005, new house buyers had to accept valuations driven upwards by comparisons to potential rental income from equivalent tenants. The banks and mortgage brokers were happy to lend large sums for the purchases of property which seemed certain to have ever-increasing capital value. With big mortgages readily available, house sales in prime urban areas were closed at prices now an incredible three times higher than market rates of the late 1990’s. House prices in the outlying rural locations followed suit.
A national growth market was well established and builders large and small invested in development sites nationwide. The banks could freely lend to developers knowing that regular sales kept the cash circulating, and house-buyers were content to take on high mortgage repayments in the knowledge that their investment was sound (according to the lenders and their own economic commentators).
In hindsight, it is obvious that the “boom” had to end somewhere. When saturation point is reached in terms of supplying the housing demand, sales naturally decrease. Then extra sales are forced or encouraged by offering discounted sale prices. Before you know it (as first seen in Ireland last year) the market value for a commonly available property type falls for the first time in years. Most buyers are not fools, and the next wave of sales is influenced by the demands of customers seeking out improved bargain offers. The developers should not be shocked to realise that just as they were happy to support the rapid escalation of property prices (whilst lining their pockets) they are now the primary instigators of house price reductions and the much-needed re-stabilisation of the property market in general. They certainly cannot blame the consumers and lenders who bought into their grand schemes in previous years.
As an example I can summarise the exploits of one typical Irish property developer who, whilst remaining nameless, is honest enough to quote a few facts and figures. In 2003, after dabbling in a few small but successful self-build schemes, an opportunity presented itself to buy some land with imminent planning permission for residential homes. The land alone would be a good investment as it was forecast to almost double in value in a matter of 2 or 3 years when surrounding plots were developed. So the land is purchased and our investor is soon persuaded by local success stories to fund the building of a couple of upmarket large family homes.
By 2004 he can report that a total outlay of just over €500,000 per unit buys him a highly saleable asset worth €1 million when finally presented to the market in early 2005. A fantastic profit margin which would have been difficult to match anywhere in the property world. However, his financial advisors are quick to tell our developer that desirable high-end property values are forecast to rise by around 40% per annum for the foreseeable future. If he holds on to his new developments for a year or so, maybe getting some short-term rent into the bargain, these units costing half a million euros to build would zoom into the €1.5 million plus category during 2007, making him a millionaire (in theory). He could now borrow even greater sums and expand his property development empire.
When 2007 arrived, our developer was delighted to see similar-sized homes selling for as much as €2 million. He borrowed even more money and developed more sites, dazzled by his accountant’s reports of unexpected wealth. Almost undetected at first, the boom then faltered. A few sellers in the market needed quick cash and sold their assets at a little less than previous peak values. A trickle of cut-price offers became the market-place norm. Our “millionaire” developer had never actually sold a property in the boom years. His stock had to be re-valued at realistic 2008 rates, tax bills paid off and big loans repayments were eating away at his bank balance. He had no option but to dispose of a few units …… and quickly.
Not long ago, our developer and multiple property owner had been a typical key player in hiking up and relying on house valuations in a market of high demand. Now he is instrumental in seeking a much fairer price for his commodity. After a couple of sales, he is still a comfortably wealthy man. But he cannot afford any more investment in an uncertain market. So there will less building completions for a few years as he and his fellow boom-time developers cool off and invest in other places. When new home demand is high enough again in Ireland, the cycle will begin once more, only this time the pace of development will not be so hectic. Steady growth will lead to a much more stable and secure Irish housing market in years to come.
Residential building output in Ireland has fallen by one third in the last 12 months. That figure demonstrates how “over-developed” the property market had become, driven on by over-zealous financial investment. The market simply overheated in a fairly unique set of circumstances, so the corresponding cooling-off period will probably take a little longer than we all hoped. House sale price reductions have lessened on my website in the second half of 2008, so there is evidence that stability has commenced in the Irish property market. A sustained period of stable, sensibly priced Irish homes will help everyone in the longer term.
Written by
Susan Salkeld
Proprietor of Propertysteps.ie - where you can read more on property matters, or advertise property and related services located in Ireland or worldwide.
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Most of the western world, if not the entire first world, seems to be reporting that property market price inflation is decreasing or stalled. In the worst-hit areas we even hear tales of a lowering of house prices and negative equity for some unfortunate new homeowners who jumped on to the property bandwagon at the peak of the recent property boom. High Street inflation never lets up, so it’s natural for property investors large and small to feel that the end of the world is nigh.
This state of mind is undoubtedly an over-reaction. The human psyche drives modern man to ensure he has a place he can call home in the shortest possible time after leaving his childhood days behind in the former family house. Fair enough – but does this man of our times actually have to own his home outright, in theory at best? And more tellingly, does this man have a god-given right to expect that with home ownership comes enough lifetime’s wealth to be able to retire from working for an income at his chosen time? The latter scenario is a common desire, and it is based upon the premise that property values will always rise faster than other commodities.
We are now finding in Ireland and elsewhere that we have come to the end of a period where property value inflation was outstripping general living cost rises. But we should not be surprised because we have had these ups and downs before. The general trend though is that property prices commonly rise again fairly rapidly after periods of stagnation. It’s all about supply and demand.
The demand for new homes or at least of people looking to move house will never cease. Why? Because many old homes become dilapidated for a start. Then we have the new young families who need their own space and cannot expand into the limited environs of parental homes. On top of that, the modern world economy relies upon many workers who must be mobile throughout most of their working lives, thereby prompting housing development and property transactions countrywide and often internationally. And don’t forget those that opt to upgrade or downsize by choice due to family or personal needs.
What about the supply side? The builders can’t build fast enough in boom times because handsome returns on their property investments are almost guaranteed. If landbanks are purchased just prior to a stalling of property sales prices, then naturally there is no rush to build and sell at reduced profit margins. So any oversupply rate reduces until it balances demand. This is the period being experienced in many parts of the US and Europe at present.
In Ireland currently, un-named property commentators repeatedly get column inches reporting that house prices have dropped by nearly 10% in just 12 months. This type of statement is more than likely associated with party politics prompted by the Irish government’s opposition rather than informed economic commentary.
Let’s take a quick look at what the “Irish House Prices in Freefall” sensational headlines really mean when based on the 10% drop in a year statistic. The house price index is based on sales closure prices, not size of property or land acreage; these latter factors generally tend to grow on average at a moderate rate over each decade because we all want bigger and better homes regardless of our individual domestic needs. So bear in mind that the average price of a house per country tends to grow because the asset is getting bigger as well as reflecting local general economy inflation.
In Ireland last year, the average price of a house had risen incredibly to over €300,000 from nearer to €200k a decade earlier. That statistic is part of the local Celtic Tiger boom folklore which lending institutions rammed down our throats when selling home loans and risk-laden mortgage deals up until just a few months ago. The 2007 €300k average home was a bit bigger and better than houses available in the year 2000, but it was obviously grossly over-valued in real terms. It didn’t cost that much more to build than the average house completed and sold in 2000, evidenced by the great numbers of new self-builders who wanted a share of the money-spinning action.
In mid-2008, the average price of a house in Ireland is €275,000. This seems to be getting closer to a sustainable valuation (if you seriously want to sell, that is) for the average property size available which is typically 3 bedrooms, multiple bathrooms and all the latest mod-cons. A bonus in rural Ireland is that you might even get a generous half-acre of land thrown in.
So the “sensational” loss of over €25,000 on average off every Irish homeowner’s wealth is not a true loss as such at all. It is just a realisation of long-term property asset value. Anyone who spent their invisible extra €25k in less than 12 months was a greedy fool, and we shouldn’t have any sympathy for them if they don’t display the caution and prudence of serious property investors.
Anyway, it will not be long before the local property market detects the first signs of increased demand again. Sellers will start hiking up prices and the whole cycle will slowly start to revolve again in our favourite upwards direction.
So the conclusion is “don’t panic” and take some time to reflect on why existing homeowners feel uneasy every time this cycle reaches its low point.
Property is a reasonably sound investment, and it gives the buyer the obvious immediate attraction of having somewhere to live (or work in the case of commercial premises). However there are other ways to exist comfortably which don’t involve organising your life around the demands of meeting hefty monthly mortgage repayments and fretting about why the value of your property doesn’t always rise at a consistent rate.
Many young people are opting to rent property. The so-called home-owning critics immediately shout that house rent is “dead money”. To a degree, yes, but if renting frees up income to invest in markets which don’t fluctuate in boom & bust cycles, then isn’t the oft-struggling mortgage payer something of a hypocrite? And who actually owns the majority of private domestic homes anyway? If a homeowner misses a mortgage payment you soon find out that the big financial institutions cold-heartedly treat lenders as no better than tenants of real estate upon which their businesses are founded. And furthermore, as tenants with much less rights than conventional renters of property who have fair and equitable rental agreements with their landlords to rely upon in times of hardship.
It’s interesting to note that in previous generations the majority of house dwellers were tenants, particularly in towns and cities. Most homeowners can probably quote that their parents or grandparents lived in rented accommodation, and that is a reason why they strive to ensure that they and their dependants have the security of home ownership. What security, if you worry about why your investment and lifestyle is not always as good as you dreamt? Our ancestors survived, without the disposable income levels of today, so perhaps the property rental option should not be dismissed so readily.
Maybe the biggest lesson to be learned by property investors when global economy growth recedes is that only a few property types are guaranteed to grow in value (in the longer term) at a rate generally in excess of other inflationary factors. These are the well-maintained properties in desirable locations whether they be urban or rural. Funnily enough, my experience tells me that these properties are likely to fall into the cheaper price category or the other extreme, the high-end luxury home. The middle range property, by its very nature, forms the bulk of property sale listings, so the seller struggles to promote his property above the multitudes of similar priced homes or sites.
I suppose it can be summed up as follows:
First-time buyers, transient workers, students and 2nd home buyers will always provide a ready market for low-end “affordable” property, particularly in urban settings. High earners will always want to upgrade to luxury properties in secure and private surroundings, particularly in established districts of like-minded people. The rest of us, by far the majority, continue to buy or rent in the mid-price range through necessity of location or finance limitations and a natural desire to match or slightly better our neighbours’ lifestyles.
Property buyers, renters or vendors in all three of these categories can benefit greatly from registering with web-based property advertising portals such as my own site (www.Propertysteps.ie). The exclusive luxury homes and the lower-end smaller properties are instantly brought to the fore from hundreds of listings by easy-to-use search functions which detect price range and/or location. The more attractive middle range properties also benefit in that household features and property type listings enable the website browser to easily compare the best value for money of numerous properties in a chosen location.
In Ireland, where we are based, I can report that Property Agents say that websites such as ours have contributed greatly to stability in the mid-price range domestic property market. Sale closures in this category, for sensibly priced houses, are regular and commonplace, thereby propping up the market in general. This contradicts the doom & gloom reported in the media, no doubt created by “worried” homeowners who aren’t even active in the buying and selling of property. The lazy expectation that easy money can be made simply by buying and living in a home for life smacks of greed, not reality. These merchants of doom should be ignored.
We also read in the press about the owners of expensive houses for sale having to dramatically slash prices to arouse interest. Probably, not maybe, the asking price was unrealistic and based upon outdated market value. The eventual selling price of a luxury home will still have made the purchase a sound investment if it was bought at any time except the very peak of the recent boom. Again, I can report in Ireland that Agents say that there is still a waiting list for desirable upmarket properties. The best of these homes are sold via website mailing lists or by the uploading of the property brochure to Propertysteps.ie and similar internet property portals.
For a fraction of the cost of press advertising, our best value for money website gets quick results. Often you never even see a For Sale sign being erected for property in the more exclusive address category, yet new occupiers appear and everyone involved in the transaction is delighted. You don’t read about these everyday success stories in the media; it appears to me that only boom, doom or gloom stories sell newspapers when the local economy is discussed.
