Four in 10 property sales cash deals, forum told
UP TO 40 per cent of properties being sold around the country are going to cash buyers, a property conference heard yesterday.
Marian Finnegan, chief economist at Sherry Fitzgerald, said that 40 per cent of all “sale agreed” properties were being bought 100 per cent with cash.
Addressing the conference, organised by Property Industry Ireland, Department of Finance secretary general John Moran said the impact of tracker mortgages on the banking system was under “strong review”, although he stressed any decision was likely to be dependent on how Europe approached other banking crises.
He said it was difficult to explain to external investors the reality of the Irish property market, which is characterised by an oversupply of property in certain areas, while “in other areas we are going to be building houses shortly I expect”.
Mr Moran identified the lack of information about the property market as a key shortcoming that needs to be addressed.
Earlier, Minister for Finance Michael Noonan said the Government would not be extending the mortgage interest relief measures that were introduced in the last budget.
“I want to emphasise that this mortgage interest relief measure will come to an end at the end of this year,” he said.
In the last budget, the Government introduced mortgage interest relief of 25 per cent for first-time buyers and 15 per cent for non-first-time buyers who bought houses this year.
Mr Noonan also noted that only 40 per cent of mortgage lending being sanctioned by the banks was being drawn down.
Asked whether Ireland would consider creating a secondary market for mortgages, as is the case in the US, Mr Moran said that it “won’t happen soon”.
“I don’t think we’re there yet,” he said, pointing out that it would be difficult to convince external investors to buy in. However, the role that could be played by capital markets in Europe is something he had actively discussed with senior European figures.
He said that there was now a better understanding among international investors about the Irish economic situation.
“The questions that we are now being asked are much more sophisticated . . . [they] show a better understanding of the country.”
“If anything is holding back Ireland at the moment, it is the European picture,” Mr Moran added.