Tax Tips Prior To Year End

Home Renovation Incentive – [HRI] 

Who says tax deductibles can’t be fun? Have you heard about the home renovation incentive? Have you been dying to get the kitchen redone? What about retiling the bathroom? OR simply just a fresh coat of paint in the house? The HRI has you covered! It even covers buy to let properties, just make sure you have a tenant within 6 months of completing the works.

Where’s the trick you ask? So long as you ensure the contractor you get to do the works is a HRI qualifying contractor then you’re in the clear! That simply means making sure they are registered for VAT and are completely tax compliant. They’ll know how to file all the relevant paperwork . All you need to check is that they submit the payments in the HRI system online. It’s as simple as that!

You can then claim for the HRI tax credit the following tax year.

Here’s the mathsy bit:

This is an incentive that makes it possible to claim the VAT element of renovation work up to €30,000 excluding VAT . The maximum amount claimable is the VAT inclusive price of €34,050 so that vat element of €4,050 can be claimed back over a 2 year period following the year in which the works were carried out and paid for.

Rented residential Properties – Residential Tenancies Board [RTB]

Are you lucky enough to be a landlord? Then this section will be of interest to you! Nobody likes paying a mortgage, but what if we told you, that you could get a tax deduction for the interest on your mortgage? Thought that might get your attention! Simply register the tenent with the Residential Tenancies Board and you’re sorted!

For the mathsy bit:

Person B has a buy to let property. They have a mortgage on this of €200,000 with €8000 per year in interest. However they have been renting this property since January 2017 for €1000 per month, so that would generate €12,000 a year. They can deduct 80% of the interest cost, which is €6400, from the income, so they would be left with a taxable profit of €5600 and assuming a tax rate of 51%, their tax liability would be € 2856. If you haven’t registered with the PRTB your tax liability will be €6120 which is over double. That’s a huge difference and a HUGE SAVING!

How does it work though if you’re renting through the government? Then you’ve heard of The Housing Assistance Payment (HAP). This is a form of social housing support for people who have a long-term housing need. Where properties are let to the local authority for social housing for a 3 year period from 1 January 2016 the restricted amount of mortgage interest, 25% for 2016, 20% for 2017 and 15% for 2017 will be deemed to have accrued on the day after the final day of the 3 year period and should be deductible in year 4.

For more information check out the Revenue website or contact Comerford Foley Accountants and Tax Advisors on 051 396 703

'Trapped generation' hit by new changes to mortgage lending rules

Central Bank tweaks mortgage limits for those trading up

Second-time buyers have been hit by new changes to mortgage lending restrictions. Central Bank Governor Philip Lane left the rules much as they are, but he did make a slight adjustment to how the exemptions to the lending limits work.

This will largely hit the 'trapped generation' who are trying to trade up.

Most buyers will still be restricted to borrowing no more than three-and-a-half times their income.

First-time buyers will still be required to have a deposit of 10pc of the property's value, with a 20pc deposit needed by second-time, and subsequent, buyers.

But there are exemptions to the rules. Up to now, banks were able to allow 20pc of all borrowers an exemption from the income limits. This exemption did not distinguish between new and second-time buyers.

The exemptions allow the likes of a newly qualified doctor to avoid the income limit, as their income is expected to rise.

Now the regulator has said banks would be allowed to exempt only 10pc of second-time buyers from the income-limit rules.

However, banks will be able to exempt up to 20pc of first-time buyers from the rules, if they qualify for an exemption.

Lobby group Brokers Ireland said the changes made did not go far enough.

It said the existing rules remained too restrictive, especially for second-time and subsequent buyers, with good repayment capacity. It also claimed the limits are driving up rents.

But Prof Lane said this reflected the reality of lending at the moment, where new buyers often had the potential to earn more as their careers progress.

This meant they got an exemption more often than a second-time buyer.

"The larger allowance for above-ceiling lending to first-time buyers compared to second and subsequent buyers reflects the different characteristics of these two groups," said Prof Lane. "In particular, first-time buyers are typically younger, with current income levels lower, relative to expected future income levels."

It is not expected that the change to the exemption limits will lead to higher, or lower, overall bank lending.

But director of financial services at Brokers Ireland Rachel McGovern said there was no rationale for differentiating between first-time and subsequent buyers.

She said the 10pc deposit rule should apply to all buyers, not just first-time buyers.

"And the 3.5 times gross income is too restrictive and should be eased to 4.5 times income for all buyers," she said.

"Many who bought at close to or at the top of the market have been unable to move. As their negative equity diminishes and their housing needs change, the rules compel them to find 20pc deposit before they can move. That is a mountain too high to climb for many."

Brokers Ireland, which represents 1,300 broker firms, said the rules were good in principle, but were introduced far too early in the cycle, and had the effect of locking many out of the market.

"They have the effect of driving up rental prices, as we had predicted when they were introduced, to the extent that it has become cheaper to buy than rent in many parts of the country. The winners are cash buyers and investors, unfortunately," said Ms McGovern.

Irish Independent

Budget 2018 Property Related Measures

€750m for housing finance
Up to €750 million of the Ireland Strategic Investment Fund, ISIF, to be made available for commercial investment in housing finance. The funds will be made available to a new vehicle to be known as Home Building Finance Ireland, or HBFI. The additional funds have the potential to fund the construction of an additional 6,000 homes.

Stamp Duty 
Change of rate of Stamp Duty on Non-Residential Property from 2% to 6% from midnight on 10 October. A refund scheme to operate in relation to commercial land purchased for the development of housing.

Vacant site levy
 A doubling of the current 3% levy rate that applies in the first year to 7% in the second and subsequent years. What this means in practical terms is that any owner of a vacant site on the register who does not develop their land in 2018 will pay the 3% levy in 2019 and then become liable to the increased rate of 7% from 1 January 2019. If they continue to hoard their land in 2019, they will pay 7% in 2020, resulting in an effective vacant site levy of 10% per cent over the previous two years.

Pre-letting Expenses
Rented Residential Property To encourage owners of vacant residential property to bring that property into the rental market, a new deduction is being introduced for pre-letting expenses of a revenue nature incurred on a property that has been vacant for a period of 12 months or more. A cap on allowable expenses of €5,000 per property will apply, and the relief will be subject to clawback if the property is withdrawn from the rental market within 4 years. The relief will be available for qualifying expenses incurred up to the end of 2021.

Capital Gains Tax 
A reduction of seven year period over which owners must retain qualifying assets to enjoy full relief from Capital Gains Tax to four years. An amendment will be made to Section 604 of the Taxes Consolidation Act 1997.

Mortgage Interest Relief
Tapered extension of mortgage interest relief for remaining recipients – owner occupiers who took out qualifying mortgages between 2004 and 2012. 75% of the existing 2017 relief will be continued into 2018, 50% into 2019 and 25% into 2020. The relief will cease entirely from 2021.

Need-to-know tips for the first-time buyer applying for a mortgage

Are you trying to save in the hope of securing a mortgage - but confused about what lies ahead?

In the year to date, mortgage approvals for first-time buyers are up 43pc year-on-year, but this doesn't mean it's an easy process.

Independent.ie spoke to the experts about what first-time buyers should be looking for:

What is the main thing to note when you’re shopping for a mortgage?

Managing Director at Bluewater Financial Planning Steven Barrett said the first thing a first-time buyer should look at is the interest rate that lenders are offering.

"It is so hard to get a mortgage these days, there are no myths really, it is actually a very difficult process," Steven told Independent.ie.

"The interest rate is the big thing to look out for, how much you’re going to repay.

"First-time buyers tend to look for the longer term which is better so you can borrow more money to get started. If you’re looking for the longest term, you’re looking to keep down repayments.

"This is new for people to hear, they’re not taught these things about finance or mortgages in school or college."

Independent financial advisor with 52Financial Ross Connolly said he would advise speaking to a mortgage broker.

"Obviously I'm biased but the benefits of having a broker are; we do the shopping around for the client, we build a file which would be neutral and throughout the process we think of which bank we think would be most suitable for the client," he said.

What are the red flags banks look for when you’re applying for a mortgage?

"Overdrafts that are not organised or arranged with any bank are also a big no-no," Ross Connolly said.

"We stay away from overdrafts. You don't want to paint a picture of someone who is living from pay cheque to pay cheque. You don't want to be seen to be gambling or any excessive spending. We would cut that down. The accounts need to be clean."

He said that they advise customers to do an Irish Credit Bureau check on themselves online at www.icb.ie to make sure they haven't missed any old credit card bills or supermarket clubcards they didn't realise they had signed up for.

"The aim is to catch any missed payments at all," Ross added, "just so you have any questions answered before the bank has to ask them."

Steven Barrett of Bluewater Financial Planning said the first thing a bank will do is look at someone's credit rating.

“I’d always advise people to get a copy of their own records so they know what they have, it is the first thing a bank will do," he said.

"My advice to first-time buyers is to make sure the minimum credit card payments are paid off each month because that will affect your credit card rating and make it more difficult to get a loan.

“Missed payments on your direct debts are a big no-no as well. Banks do go through statements line by line. These days, people do spend a lot with their debit card, so your whole lifestyle is showing up on bank statements. If you miss payments, the bank will say, ‘well this person isn’t paying their bills and it is a red flag’.

“You can get declined for repeated missed payments,” Steven added.

What if I have savings or debt in other accounts, like a Credit Union account?

There is no problem having savings in a different account, you can bank and save whatever and wherever you want, mortgage specialist with Mortgage Negotiators Shane Connole advised.

"You can bank and save wherever you want, and you can walk in to get a mortgage wherever you want. Just because you bank with Bank of Ireland doesn't mean you can't shop for a mortgage with KBC," he said.

"The debt on the other hand, you can have your loans wherever you want but this may have a negative impact on your loan approval.

"The debt will absolutely contribute to your credit rating, but it can also have an effect on how much you're borrowing."

Is it true online gambling accounts are a 'no-no' when applying for a mortgage?

The short answer is yes. Steven Barrett of Bluewater Financial Planning describes online betting accounts as a “big no-no”.

“It’s a big no-no if you’re using Paddy Power and other gambling websites on a regular basis.

“When people gamble regularly, they tend to leave the money in the online account if they win and this only goes one way. If they can see that you’re a regular gambler, they will refuse a loan.”

If I’m renting, will the bank take it into consideration for a credit rating?

Banks will take your monthly spend on rent into account for your repayment capacity, Ross Connolly advised.

"When it comes to the savings aspect, the repayment capacity would be the correct label to put on it.

"A couple paying €1,000 a month in rent need to know that this €1,000 will go towards their repayment capacity for a €1,200 a month mortgage, it will be considered savings for want of a better word.

"If you can get a car loan cleared coming up to the application, this can also be considered as repayment capacity."

Can I get a financial gift from a relative?

Mortgage specialist with Mortgage Negotiators Shane Connole said the simple answer is "yes".

"There are no rules around it," he said, "but there are areas to watch out for. No bank likes approving mortgages where your own contribution is a 100pc gift. They would expect for a 10pc deposit, that 5pc of the money is your own savings and the other 5pc could be your gift. An example, you're buying a house for €200,000 and need a €20,000 deposit. You will need to show that €10,000 of that is from your own funds."

The second aspect of receiving a gift is to watch out for tax, Shane Connole advised.

"It's better to receive the gift from a relative in a direct bloodline, based on the tax position. If you're getting a gift from an aunt or cousin, the bank will want to know how you will pay the tax and revenue on it.

"Finally, the bank will want to see the gift money in your own account at a certain stage of the process."

Are there any myths or misconceptions you've come across?

"I wouldn't come across a lot of misunderstandings," 52Financial's Ross Connolly said, "but some people don't understand the reason behind the saving.

"The main reason to save is so you can prove you have the repayment capacity when it comes to your mortgage.

"If your mortgage repayment is €1,000 a month, they may look for €1,200 in repayment capacity in case there is an increase in interest rates.

"People nowadays do seem to be more educated about applying for amortgage.

"It is rare that I come across an online betting shop in a bank statement. There is a high level of advice out there," he added.

If I'm buying a doer-upper, can I get any special treatment?

There are a few things to note if you're investing in a doer-upper, mortgage specialist Shane Connole said.

"The key areas are; do you need planning permission, you need invoices for the work you're doing to the property, and you need to ensure the loan you're applying for does not exceed 90pc of the total end value of the property.

"If you buy a house for €200,000 and do €50,000 worth of work, this does not mean the end value of the house if €250,000.

"The rule is it's 60pc of the value of works. So if I buy for €200,000 and I do €50,000 worth of work, the end value of the house would be €230,000.

"A lot of people fall flat on that. Banks cannot lend more than 90pc of the value per completion.

"You will also need invoices and typically you need a registered builder's invoice."

Shane added that there is not a 'scheme' asuch in place for those buying doer-uppers, but you can receive the money in stages.

"You get the first part of the loan paid down when buying the house, and then your value of works is split into two payments. You receive one payment when half the work is done on showing an invoice, and you receive the second payment when the works are completed."

So, you’ve saved for your deposit – are there any hidden costs?

As well as your deposit, financial experts advise that you have the money aside to pay for the extra costs which include stamp duty, solicitors’ fees and surveying fees.

“First-time buyers will have to have a 10pc deposit saved, but you will also need to show that you can pay for the associated costs,” Steven Barrett said.

“You could be paying up to €2,000 for a solicitor, and when it comes to conveyancing, it does need to be done properly by a qualified solicitor. Cheapest is not always best.

“You are talking another few hundred euro for a surveyor, and you have to be able to show the bank that you have that in addition to your deposit.”

Any expert tips for the first-time buyer?

Bluewater’s Steven Barrett believes a separate savings account is key to securing a mortgage.

“Having regular savings each month is a big plus, having an account where regular money goes in and you don’t touch it,” Steven said.

“If you’re putting in a thousand euro on a regular basis but then taking money out of it, they’ll just say, ‘well, this person isn’t really saving’, even if it’s just every quarter, they’ll discount it or they’ll average it out.”

He continued; “Regular saving is the key. If mortgage rates go up by 2pc you need to show you can afford the higher repayments. If you’re paying rent, you need to show that you’re also regular saving in an account you don’t touch.

“You need to have control over your finances and try not to have any debt.”

Sunday Independent 10^th September 2017

Property Prices reached a peak ten years ago, where are we now?

It is now ten years since the peak of the housing bubble in 2007. The Central Statistics Office (CSO) started producing a Residential Property Price Index in January 2005 with a base figure of 100 and by 2007 the Index had averaged 130.3. In fact, the actual peak of the bubble was April 2007 when the Index reached 131.0 a 31% increase in house prices since January 2005. By December 2007 the Index had fallen to 129.2. Although very few realised it (or accepted it) at the time, the crash had started, there wasn’t going to be a soft landing.

By the end of 2008 prices had fallen by 7% in the year but the effect of the banking crisis accelerated the collapse in houses prices in 2009 with a fall of 19.2% in the year. The crash continued for another three years with falls in 2010 (13.5%), 2011 (16.2%) and 2012 (13.8%). The bottom of the market was reached in March 2013 when the CSO Index reached 59.7, a 55% fall from the peak. To give you some local examples, we sold a 3 bed semi with a garage for €300,000 in May 2007 and we sold the same house type in the same estate in September 2012 for €139,500, a 54% decrease.  A standard 3 bed semi-detached fell from €285,000 to €135,000. The higher end of the market was even more severely hit. In one example we sold a house in the summer of 2007 and sold the same house type a few doors away in February 2012 for €420,000 less.

Thankfully the market turned the corner in 2013 and there have been 3 consecutive years of strong price growth since with the CSO index now at 89.8, a 47% increase since August 2012. A typical 3 bed semi in Tramore is now selling at €195,000, a 45% increase, in line with the CSO figures but still 31% down on peak prices.

House prices to rise for up to 10 years - property report

House prices are shooting up by €2,000 a month and are now almost 12pc higher than they were a year ago.

Property price rises in Dublin are back outpacing the rest of the country, according to the latest report from property website Daft.ie, and it warned that prices will continue to rise for the next five to 10 years unless drastic action is taken.

The surge in prices is tempting more people to sell, with the number of properties being listed for sale continuing to rise.

More than 6,000 properties were listed for sale in May, the highest monthly total since the middle of 2008.

But it is nowhere near enough to meet demand, housing experts said.

The latest evidence of the ongoing surge in prices comes as the Government said it is reviewing the help-to-buy scheme, a move that prompted fears of a rush to buy in the coming months.

The national average list price during the second quarter of the year was €240,000,

This was 11.7pc higher than a year previously.

Prices are rising at a rate of €2,000 a month nationally, Daft.ie said.

For the April to June period there was a rise of 4.3pc in prices, which matched the rise in the first quarter.

The move by the Central Bank to relax strict lending rules for first-time buyers has seen property inflation in Dublin outstrip rises in the rest of the country.

Dublin prices jumped by 12.3pc in the year to June, to an average of €353,000.

This was higher than the 11.3pc recorded by Daft.ie in the rest of the country.

It was the first time since early 2015 that the rate of rise in the capital was greater than that in the rest of the State.

However, some cities have seen even stronger price surges than in Dublin.

In Galway, Limerick and Waterford the annual change in prices is even higher and is closer to 15pc, while in Cork city the rise is 9.2pc.

Elsewhere in the country, the average rate of inflation was 11.2pc, but this varied from 7.8pc in Connacht-Ulster to 13.4pc in the parts of Leinster that exclude Dublin.

And there is evidence that properties for sale are being snapped up quickly.

There were just 22,400 properties sitting on the market in June. This is higher than three months earlier but it is 11pc lower than the same time last year, and roughly two-thirds below the 2008 peak.

Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie report, said the move by the Central Bank to relax lending rules for first-time buyers, after two years, had helped drive prices further up.

"Whereas non-urban markets had driven house price growth in 2015 and 2016, Dublin again is seeing increases that are above the national average," he added.

He said that the rises meant it was even more important to address the high construction costs that are limiting the ability of supply to meet strong demand. The Daft.ie report shows the average price in Cork city is now €256,201, after a 9.2pc rise in the past year.

In Galway city properties are changing hands for an average of €268,535.

Limerick city has seen a 15pc surge in prices in the last year to €177,200, while in Waterford city prices are up 14.5pc to €158,861, according to the Daft.ie data.

Mr Lyons said house will continue to rise for the next five to 10 years unless drastic action is taken, saying the high cost of constructing properties such as apartments needs to be tackled by the Government.

Irish Independent

Save thousands on buying your dream home with this range of tax breaks

A range of tax breaks and grants can help you buy a historic pile, a place in the country or fix up a vacant property to rent out

Tax breaks and grants can be worth tens of thousands of euro to house buyers - particularly those buying property which needs work. So such State digouts should be at the forefront of your thoughts if buying either a home or an investment property - because they could considerably ease the financial burden of such a big purchase.

Tax breaks and Government grants shouldn't be your only reason to buy property but should you inadvertently fail to qualify for them, you could lose out on a lot of money.

Here are some of the main property tax breaks and grants worth knowing about.

Rural grants

Should you be considering moving into or back to the country, the Government is set to offer grants soon to those buying homes in designated rural towns - as long as the money is used to renovate or refurbish the property. The grants are part of the Government's plan to encourage more people to live in rural towns and villages.

The Government will take its first step towards the roll out of these grants in the coming months. A pilot scheme, which will be launched in the second half of this year, will examine ways in which properties that are not in use in town centres can be renovated to allow them to lived in.

"It is envisaged that under the proposed scheme, a grant will be available to owner-occupiers to renovate or refurbish premises in town and village centres, to make them suitable for residential use," said the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs, Heather Humphreys.

Vacant home loans

New government loans are expected to be offered to owners of vacant properties to encourage them to refurbish those homes and either put them on the private market for sale - or rent them out to private tenants. These loans are set to be recommended to the Housing Minister, Simon Coveney, in a report due to be published shortly.

There is already a scheme where you can get a vacant property repaired - as long as you make it available for social housing for at least 10, 15 or 20 years (depending on the cost of the repairs). The Repair and Leasing Scheme is aimed at owners of vacant properties who cannot afford the repairs needed to bring their property up to the standard for renting.

This scheme can be particularly useful if you already own your home and have just inherited a property which is run-down - but you cannot afford to renovate it. The cost of any repairs will be initially met by your local authority or an approved housing body - but that cost will over time be taken out of the rent you earn from leasing your property to social housing tenants.

To qualify for the scheme, your property must be suitable for social housing and it must also have been vacant for at least a year.

The scheme, which was initially piloted in Carlow County Council and Waterford City and County Council, has been rolled out nationwide. Before signing up however, bear in mind that you're likely to earn higher rent on the private rented market - and that you could raise money for repairs from your credit union or bank.

Landlord tax breaks

In a bid to encourage 'accidental landlords' to continue to rent out their homes, tax breaks for such landlords are being considered by Government.

In a public consultation earlier this year, the Department of Finance set out some possible tax measures which might be introduced for landlords. Some of the measures mooted include a tax exemption or relief for income from long-term leases, and tax relief for the capital repayments of a mortgage. Currently a landlord can get tax relief on the interest that arises from the mortgage of the rented property - however, relief cannot be claimed on the capital repayments (the portion of the mortgage repayment which is paid off the balance of the original loan).

Landlords and homeowners can already get tax breaks for repairs, renovations or improvements under the Home Renovation Incentive (HRI) scheme. Some of the work which qualifies for HRI relief includes extensions and attic conversions, the fitting of windows, garden landscaping, plumbing, rewiring, and the repair or replacement of septic tanks.

Historic homes

Should you wish to buy a historic home and get tax breaks for renovations - without the inconvenience of opening your home to the public, consider buying a property under the Living City Initiative, where owners of residential houses at least 100 years old can claim tax relief and refurbishing costs - over 10 years.

The Living City Initiative tax breaks can only be claimed on buildings in the historic centres of six cities - Dublin, Cork, Limerick, Galway, Waterford and Kilkenny.

As the scheme was extended to landlords this year, they can also claim tax relief on the cost of refurbishing a rented property.

In this case, the relief - which is given to landlords and owners of certain commercial properties in the form of a capital allowance - is claimed over seven years.

There is another scheme that offers tax breaks to the owners of historic homes - however, you must allow public access to your property to be eligible for it.

Under Section 482 of the Taxes Consolidation Act 1997, tax relief from income tax or corporation tax is available to the owners of certain historic homes or gardens for expenditure incurred when repairing, maintaining or restoring their properties.

"Reasonable" access (of typically 60 days a year) to the building or garden must be given to the public - unless it is in use as a registered guest house for at least six months a year.

The Government is reviewing this scheme so it may be discontinued - or replaced with loans or grants. The review is examining whether Section 482 tax relief is the best way to help the Government achieve its aim of preserving historic homes - or if funding should be granted instead. A public consultation was launched last February and the submissions are being assessed. In 2009, the Commission on Taxation recommended this scheme be discontinued.

No matter how tempted you are by tax breaks, don't take on a historic home lightly - as the renovation bill could run into tens of millions.

Many historic homes are listed buildings. "When you take on a listed building, you are obliged to ensure your building doesn't become endangered through damage or neglect," said Michael Brennan, business development area manager with Ecclesiastical Insurance, which specialises in insurance for historic homes.

"If such a building becomes damaged, the local authority will want it restored to its former glory. Costs can start to spiral quite quickly when you're restoring an old home."

Hire a specialist architect or surveyor before buying, Brennan advises. "If you hire a standard surveyor or assessor, you could run into trouble," he said.

"You need to be especially aware of the condition of the building. It could have stone and brick walls and a lot of internal architecture. You could discover there's mould in the walls or damage to the roof. A lot of older buildings have old pipes which may need to be replaced with something new and modern. Once you've bought the building, you are legally obliged to maintain it."

As always with property, buyer beware.

Source: Sunday Independent

Virtual reality tour for Cluain Larach development in Tramore

Check out our Virtual Tour of the four bed detached house in Cluain Larach, Tramore.

http://www.propertypartnerstramore.ie/residential/brochure/3832033

Housing shortage to drive land prices up 15pc in 2017

Residential development land is expected to be the star performer of the commercial property sector in 2017, with prices set to rise by up to 15pc in Dublin and by 11pc elsewhere, according to the Society of Chartered Surveyors Ireland (SCSI).

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The forecast is contained in the SCSI's Annual Commercial Property Review and Outlook Report for 2017, which is due for publication today.

The predicted increase in the price of residential land is informed by the responses of 380 SCSI members to a national survey carried out by the society and by in-depth interviews with senior industry figures on the outlook for the market.

With the combination of the Government's recent introduction of the 'Help to Buy' scheme and the easing by the Central Bank of its mortgage deposit requirements expected to spur demand from first-time buyers, builders are expected to commit in greater numbers, and on a greater scale, to the commencement of new housing developments. This anticipated upsurge in activity is expected to drive residential land values at all levels of the market.

Average prices for residential development land in Dublin are already being propelled at the higher end of the market by aggressive bidding and speculation in relation to prime infill and brownfield sites in the capital's most sought after locations.

In Dublin 4, two sites are leading the charge in this regard. In the case of the former St Mary's Carmelite seminary on Bloomfield Avenue in Donnybrook, an Irish hotelier is understood to be fending off competing offers from several developers including Ballymore Properties, Cairn Homes and Rohan Holdings with a bid in excess of €16m. At some €6m above the guide price, that €16m figure equates to a price per acre of €5.17m for the 3.09 acre site. The outcome of the bidding war could see either a 200-bedroom hotel or up to 120 high-end homes being developed on the former seminary's lands.

Elsewhere in Dublin 4, the disposal by State broadcaster RTE of up to half of its 31-acre Montrose campus could easily secure in excess of €70m (over €4.6m an acre) and see the potential delivery of up to 500 new homes on the site. While agents Savills have yet to offer the lands to the market formally, a number of the country's biggest developers are, unsurprisingly, believed to be gearing up to bid for the site.

Outside of the market for residential development land, the SCSI believes the value of land for new offices will continue to grow strongly in Dublin in 2017, with an increase of 12pc following the 17pc figure recorded in 2016. Beyond the capital, the increase is expected to be far more restrained at just 3pc, reflecting the fact that post-Brexit demand remains confined, for now at least, to Dublin.

The industrial sector, which proved to be the best performer of all sectors in 2016, is forecast to grow strongly this year, with prime rents in Dublin predicted to rise by between 8pc and 9pc.

In the retail sector, prime retail zone A rents in Dublin are being forecast to grow by 7pc, compared to the 12pc recorded in 2016. Rental growth for shopping centres in in the rest of Leinster are forecast to grow by 8pc this year, while prime city rents in the Connacht/Ulster region are expected to increase by 5pc. A more modest increase in rent is being predicted by the SCSI for Munster.

Commenting on the SCSI's views in relation to the retail sector, the society's president, Claire Solon, said: "In Dublin, a shortage of retail units and unsuitably sized floorplates are two primary challenges, along with rising rents. In the rest of the country, two problems identified were over-supply and excessive rates, the latter being raised as an issue particularly in Munster. Another area highlighted is cross-border retail leakage, which is an increasing concern to the retail sector in the border counties."

Indo Business

Supply Issues Continue to Drive Price Inflation in Tramore

Property prices continued to rise in Tramore throughout 2016 across all levels of the market. Although transaction levels in Tramore were down 8.2% in the year the value of residential sales rose by 13.5%. This reflected the increase in house prices but also greater activity at the higher end of the market with Property Partners Barry Herterich negotiating the three highest value sales in the Tramore area last year. In general prices in Tramore rose approximately 12% during 2016.

Demand for houses in Tramore is being driven by a number of different types of buyers. As in previous years first time buyers are typically looking for three & four bed semis whilst young families looking to trade up are looking for detached houses in the €250,000 to €350,000 bracket. In addition there is now a strong and growing demand from older buyers looking to trade down usually to a property close to the centre of the town or with a sea view. Investors are also prevalent at the lower end of the market for properties up to €120,000 which offer higher yields.

The indications are that prices will continue to rise in 2017 driven by the continuing lack of supply, the relaxation by the Central Bank of its mortgage lending rules as well as the governments ‘Help to Buy’ incentive for first time buyers. After four consecutive years of strong price growth, albeit from a low level, the big question now is, how long will this boom last?

Barry Herterich BA MIPAV REV