Blog – David McCarthy, Galway Talks – 22/08/2013

galway-bayfmIssue: Property prices increase by 2.3% nationally in year to July.

Comment: Any increase in property values has to be welcome news.  The figures are quite a surprise and point to a stronger market than most commentators expected. 

The figures from the CSO show only property prices in Dublin and groups the rest of the country together.  There was a considerable increase in Dublin house prices and a slight fall for the rest of the country.  It would have been interesting to see what the price movement was in regional cities, but the CSO does not give a breakdown .  Looking to the future, a return of confidence in the property market will help activity, however the level of lending and any major increase in repossessions will be  determine where values go.

Issue: Reports suggest that Investec Bank to enter Irish mortgage market.

Comment: Investec is the first bank to enter the Irish market for many years and is certainly a welcome move.  If they manage to take a reasonable share of this market, it will certainly help confidence in property.  Recent media comments have pointed to the fact that Investec may offer variable rates considerably lower than other banks.  If this is the case, it may force the others to reduce their rates, however it remains to be seen if this will occur. 

Issue: The Personal Insolvency Bill up and running.

Comment: The Insolvency Service is up and running, and Personal Insolvency Practitioners (PIPS) have been appointed.  How this legislation is going to work in practice, remains to be seen over the next year or so.  I would point to the fact that entering this process will be very painful for borrowers, over the 6 year period that the process will last.  Indications already suggest that banks would prefer to agree a voluntary arrangement with mortgage holders, rather than enter this process.  However for others the Insolvency route may be their only option.

Issue:  Troika gets €220m in fees from Ireland.

Comment:  As if we are not paying a high enough interest rate on the bail-out that we received from the Troika, it now appears that we are also being severely penalized with high fees for this facility, to the tune of €220m.  There is nothing new about this revelation that fees were levied on us. I think most people will be shocked to see how much it has cost us.

Issue:  ATM Fraud.

Comment:  The Garda Serious Fraud office has issued a warning about a new fraud at ATM’s.  Essentially, this scam involves the retention of your card in a device that has been placed in the ATM by a fraudster.  When you are unable to retrieve your card, an individual then offers to help! When retrieving your card the fraudster switches your card for a false one and this stage they also have details of your PIN. 

Remember– there are no ‘Good Samaritans’ at ATM’s.