Impact of a New Government on the Property Market

The Property Industry Ireland (PII, a lobby group of IBEC) have issued a industry report looking at the impact a new government (when we get one!) will have on the property market.  The report is called 'The First One Hundred Days in Housing' and predicts that the number of new homes delivered in 2017/2018 will be determined by policy decisions made within the first three months of the new Dail.

If this is true, then the entire country will be watching with interest as low supply is the single greatest challenge in the marketplace at the moment.  This is particularly true in Wicklow although Wexford is starting to see some  new developments completing and coming on stream.  Here at Kinsella Estates, we  are delighted to be launching a new scheme shortly, you can register your interest with us by email Michael@KinsellaEstates.ie and we will release details shortly.

The lack of housing supply means that people are stuck.  Owner-occupiers are stuck in so-called 'starter homes' that are badly needed for the private rental market;  first-time buyers have mortgage approvals ready-to-go but cannot find suitable new homes and large home-owners are unable to trade down when the time comes as there are no local homes available.  This has a knock-on effect for social housing locally and the rental market in general.  The obvious solution is to make more new homes available and that is what is need now from government.  Given uncertainty surrounding who will be our new Taoiseach, it is difficult to guess how the Cabinet will be made up.  If priority is given to social housing, then delivery is likely to happen where the housing lists are longest, for example, in Dublin.  However, if priority is given to first-time buyers, then delivery will be focused on delivering affording houses along the commuter belt, for example Wicklow.  

Since 2009, the construction industry has delivered significantly less housing units per year than were needed.  Seven years on, the shortage has reached crisis point.  We can see this every day with the level of enquiries we get from  buyers who are frustrated with the lack of choice out there.  For people who are considering selling their home or investment properties over the next few years, it makes sense to do so before new supply starts becoming available over the next 12-24 months.  If this is something that you have been thinking about, you can speak with me directly on Tel:  +353 53 94 21718 and I can talk you through local supply and demand in the immediate area.

The PII has made several recommendations to the impending new government, calling for the  appointment of a cabinet level minister with oversight for housing, infrastructure and planning policy.  At the moment this position is at the level of junior minister.  A cabinet level minister would report directly to the Taoiseach.  They have also called for emergency planning and development legislation (for three years) to fast-track new private and public housing developments through the planning process.  It also recommends a review of the tax-base of property, taking in the local property tax (LPT), stamp duty, VAT and development levies.

I would love to hear your thoughts on these recommendations - do you have any to add to these, whether as a future buyer, seller, investor or developer in the Wicklow/Wexford area?

For specific queries or to speak with a local property expert about your buying and selling needs in Wexford, Wicklow and surrounding areas, contact Michael, Alan or Eileen Kinsella at www.KinsellaEstates.ie . 

Alternatively, you can email me directly on michael@kinsellaestates.ie or telephone : +353 53 94 21718

Why Knowing the Value of Your Home is Important

It has never been more important to know the value ofyour home or investment property in Ireland. But this is quite difficult to do when every quarter brings with it different - and often times conflicting - reports from media surveys, the Central Statistics Office (CSO) and property portals like Daft.ie and MyHome.ie. An accurate idea of value is necessary for the following reasons 

(1) Financial Planning 

The first step to personal financial planning is to list all current assets andliabilities. Properties owned are assets but any mortgage or charges secured against them are liabilities.In order to analyse and understand your current financial position, you must know the up-to-date value of the property minus the total outstanding loans and changes secured against it.

(2) When selling 

This is the main time and reason for people enquiring about the value of their home or investment property. Having an accurate market valuation and likely achievable sale price early on will help you make the right decision about whether or not to bring your property to market and, if so, what is the most strategic price to come to market at. Understanding local property market supply and demand from buyers will play a huge role in determining the asking price.

(3) Insurance 

This can be a tricky area of valuation for homeowners as despite what most people think, the market value of the property is not, in fact, the correct valuation for insurance purposes. Insurance works on the reinstatement value, that is, the cost of rebuilding the property, in the event of fire or other insurable event.While this might not vary much from one year to the next, there can be a big variation over the course of a few years, depending upon construction rates and cost of materials.

(4) Property Tax

Our Local Property Tax, or LPT, was introduced in 2013 and values submitted at that time remain in place for the remainder of this year. However, new valuations will be required in order for 2017 self-assessment. Home-owners are reminded that the next LPT valuation date is the 1st November 2016. 

(5)Succession Planning 

Similar to personal financial planning, for property owners who are thinking about how to provide for family and loved ones after their passing, it is necessary to know the value of their property holdings to understand their financial worth. This will help owners to make decisions about the best time and method of passing or disposing of their property

Factors that determine the value of your home 

(1) General Factors 

Recent achieved sales price of comparable properties.This information comes from the National Property Price Register. In order to be relevant, it must be recent. Comparable properties currently on the market. This is of lesser importance than Price Register data as it relies on asking prices only, which might be strategically high or low. Current local market tends, supply and demand. Remember, your home will be competing against similar homes for the attentions of the same buyers locally.

(2) Property-specific Factors

• The age and overall condition of your property might make it above or below the average market value for your area. 
•  Similarly, presentation of the property can affect market values by up to 10 per cent. A well presented home has neutral decor and has been de-cluttered, with well-maintained gardens. More importantly, well-presented homes tend to spend shorter time on the market. 
• Extra features like a converted garage or attic space or a kitchen extension will add to the value of your home.For example, according to a report by Daft.ie last year "every additional bathroom is associated with a 10 per cent higher price" 
• Landscaped gardens or outdoor rooms will always enhance the market value of your home. It is worth noting here that some so-called improvements can actually reduce the value of your home, for example, turning spare bedrooms into walk-in wardrobe in a small house or an ill-designed extension that takes over the garden.

Consequences of getting it wrong 

(1) Insurance 

Undervaluing your home, or the reinstatement value of your home, may result in your taking out inadequate insurance cover. In such instances, where a claim arises, you may be penalised under your policy by having to pay the proportion of the reinstatement costs that is undervalued. For this reason, it is crucial to have the property sufficiently insured.

(2) Over or under paying Local Property Tax (LPT)

 LPT returns are self-assessed but if you knowingly or recklessly undervalue your home in order to keep your tax bill low, you could be hit with a penalty of up to €3,000. The penalty is set at the amount of the property tax bill of the corrected valuation. In addition to this penalty, you will have to pay back the tax underpaid together with 8 per cent interest per year on the amount of underpaid tax. It is important to understand that reliance on the Revenue Commissioners' own online guide to value your home is no defence as this is intended to be a guide only. Valuations submitted back in 2013 are valid (only if correct) until 2016 but a new valuation will be necessary in time for 2017 LPT return.

 If you have any queries or concerns about the valuation of your home or investment property in Wexford, Wicklow and surrounding areas, speak with local property experts Michael, Alan or Eileen Kinsella at www.KinsellaEstates.ie www.KinsellaEstates.ie or email me directly on valuations@kinsellaestates.ievaluations@kinsellaestates.ie or telephone : +353 53 94 21718