Minister urges people to buy before the end of the year

Minister urges people to buy before the end of the year

Junior Minister Brian Hayes

Junior Minister Brian Hayes has warned that the mortgage interest relief scheme will not be renewed next year and says people have until December 31st to draw down a mortgage if they want to avail of tax relief of up to €5,000 for first-time buyer couples.

Mr Hayes said buyers must act before the “train will have left the station”

He described the incentive as “an offer of a lifetime” that “won’t come again.”

He said: “All our futures are based on getting the property market going again. People need to act fast to avail of it.”

There have been calls to extend the scheme as the property market looks to be stabilizing but this has been firmly ruled out.

First-time buyers will get up to €5,000 a year for six years in mortgage interest relief if they buy this year.

Mr Hayes said there was evidence of increased mortgage transactions in recent months, and urged people who may already have mortgage approval to “transact” their mortgages in the coming months to avail of the offer.

“If they don’t get on it now, the train will have left the station and it will be too late to act,” the Dublin South West TD said. “People should be aware that it’s coming to an end, and they should buy if they can.”

There are 2 comments for this article
  1. James at 1:10 am

    High home prices benefit nobody. In Ireland far too high a percentage of
    income is spent on housing.

    The best way to get prices down would be to throw delinquent borrowers
    out and force the banks to immediately sell the properties on the market.
    The borrowers would then be able to rent the same homes at a fraction
    of the price.

    “Keeping people in their homes” is harmful as it artificially supports home
    prices. We need home prices to be 50% lower. People would then be able
    to pay rent with lower wage jobs.

  2. James at 1:06 am

    I am one of those cash buyers and as much as I would like my own
    living room I will continue to rent for the time being. I will be looking to buy perhaps in 2013 or even 2014.
    We almost bought last April and I am so glad we didn’t as the same 4 bed detached property (still unsold) is now being advertised at €27k below the April asking price. I am renting a new and furnished 4 bed semi for €750 euro a month, (9K per annum) and the interest on my deposit savings pays most of that.
    Those 1st time buyers who jump or are lucky enough to get mortgage finance so as to avail of the alluded tax benefits will be kicking themselves come 2014 when property prices have declined by a further 12%.
    They will be enjoying their mortgage interest relief but their houses will be worth
    less than they paid for them.

    ‘’The Truth About Irish House prices’’

    Be wary of signs of recovery in the Irish Property market.
    Like Britain’s housing market. Ireland’s is not uniform. In Britain prices are rising in London, but falling almost everywhere else.
    Ireland is the mirror image – prices are rising in rural areas, but still falling in Dublin. In August, prices in the capital fell by another 0.5%.

    And that’s worth paying attention to. Because as David McNamara of Davy’s argues, the rural property market is a poor guide to what is really happening. This is because it is ‘’illiquid’’ and ‘’dysfunctional’’.

    What’s happening is that, rather than cutting prices to where they would find buyers, heavily indebted homeowners are choosing to stay in their property as long as lenders are willing to let them. This shortage of housing means that those who do want to buy in rural areas have to pay a premium to do so.

    This mismatch between supply and demand is shown by the fact that mortgage lending and transactions outside Dublin are at historic lows.

    It’s not unlike the situation in Britain, where homeowners who can’t afford to move or remortgage are only able to cling on to their homes for as long as interest rates remain zero.

    McNamara also warns that auction and portfolio sales suggest that the scale of the fall in Irish house prices may be even greater than official data recognizes.
    Ulster Bank recently sold a package of apartments, along with some commercial
    property, at a price that was 70% below the 2007 peak, rather than the 50% that the house prices indices suggest.

    Buyer Beware.

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