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What’s next for the property market?

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By Michael O’Connor    

This weekend I spent much of my time scrolling through various property websites, virtually searching through houses both at home and abroad.

Now don’t get me wrong, I do this quite a bit, but typically, I’m doing it out of curiosity more than intent.

Generally my wife sends me a link to a house, I have a nose at the pictures, and then I carry on living my life, the end.

This time it’s different.

The fact that we might actually buy one of the homes behind the link this time around adds a whole new and altogether stressful layer to a previously beloved pastime.

Like many, the idea of investing in property is something I have toyed with for a while. From a financial standpoint, I have never been overly drawn to the idea of real estate as an asset class.

Despite our cultural obsession with homeownership, there are multiple downsides. Blasphemy, I know, but bear with me.

Mortgage fees, property taxes, insurance, maintenance costs, estate agent fees, lack of mobility, landlord duties - to name just a few. All these seem to be conveniently forgotten when the back of the envelope property performance calc is being done.

Since 1940, the median home value in the United States, adjusted for home size, has increased at an annualised rate of 4.6%. After accounting for inflation, the average home value has risen by just 1.5% per year.

Stocks have generated roughly 7% per year over the long run after accounting for inflation. In other words, the stock market has generated returns at more than four times the rate of real estate appreciation.

With that being said, I do have some gripes with the stats above. Firstly, it ignores the excess volatility you get from the stock market.

Secondly, and more importantly, you can’t just strip out the leverage effect.

One final unique upside; if the capital appreciation isn’t what you expect, you can still live in it. The stock market doesn’t offer you a roof over your head.

Like most things in life, nothing is ever as good, or as bad, as it seems.

Property is no different.

With the background out of the way, let’s get into the important stuff.

Where do prices go from here?

My opinion: Do I think house prices are cripplingly high for first-time buys? Yes. Do I think they can go higher? Absolutely.

While I don’t think that property can continue to grow at the same clip into a rising interest rate environment, there are too many supportive variables at play to justify any significant move lower.

To read the full in-depth review of each factor driving the current property market and how long these factors will persist, go to www.theislandinvestor.com.

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Man released without charge in murder case

The man in his 50s arrested in connection with the discovery of a body of a woman in her 70s in unexplained circumstances in Ardshanavooley has been released without charge […]

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The man in his 50s arrested in connection with the discovery of a body of a woman in her 70s in unexplained circumstances in Ardshanavooley has been released without charge in relation to this matter.

Miriam Burns was found in her home on Monday afternoon after family and neighbours became concerned about her welfare.

A file is now being prepared for the Director of Public Prosecutions and investigations are ongoing under the direction of a Senior Investigating Officer.

Gardaí are continuing to appeal to any persons who were in the Ardshanavooley area between 5pm on Friday and 1pm on Monday and observed any activity which drew their attention, to come forward.

Any road users who were travelling in the area at these times who may have camera footage (including dash-cam) are asked to make this footage available to Gardaí.

Anyone with information is asked to contact Killarney Garda Station on 064 6671160, the Garda Confidential Line on 1800 666 111, or any Garda Station.

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Plenty of music and entertainment to celebrate Kilcummin talent

The successes of the Kerry, Munster and All-Ireland Fleadh’s were celebrated with Kilcummin CCÉ members, their families and friends in the clubhouse in Kilcummin on Sunday night. The talent within […]

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The successes of the Kerry, Munster and All-Ireland Fleadh’s were celebrated with Kilcummin CCÉ members, their families and friends in the clubhouse in Kilcummin on Sunday night.

The talent within the branch was clearly evident with a packed trophies table. Indeed some of the successes over the last number of months were replayed in a relaxed, jovial atmosphere that meant that all attending had a great night’s entertainment.

“We had demonstrations of winning sets across all age groups and then we moved onto the musicians who pulled out all the stops to entertain the large crowd, packed into the clubhouse,” Derek O’Leary, Kilcummin CCÉ PRO, told the Killarney Advertiser.

John Moriarty, who has recently retired from his role of Supervisor with Kilcummin Rural Development was acknowledged with a presentation to reflect the outstanding work that he has done to enhance and grow Kilcummin Comhaltas over his 25 years in his role, he added.

“Much thanks and praise was also offered to Mary, Adrian and Conor Moriarty, all involved in the progression of dancing and music within the Kilcummin branch. The music and entertainment continued with Helen Kerins and Denis Crowley late into the night. We’re looking forward to next year already!”

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