Real Estate Alliance

REA welcomes new ECB rate cut

The most recent announcement by the ECB slashing their interest rates by seventy-five basis points has been warmly welcomed by Healy Hynes of Hynes Real Estate Alliance.  The ECB move now makes their benchmark rate less than half of what is was in October when it stood at 5.25%

The European Central Bank 0.75% cut to its main lending rate brings the bank's rate down to 2.5%.  This decrease comes on top of two previous cuts of half a percentage point each over the past two months.

The reduction is aimed at reducing mortgage repayments, making borrowing cheaper and putting more money in the pockets of consumers. A number of Irish banks have already promised to pass the reduction on to their customers.

Healy Hynes of Hynes Real Estate Alliance has welcomed the move saying it will help to bolster the property market.  “It’s a buyers market out there and any move that makes housing more affordable to buyers has to be welcomed.”

The next step according to Mr. Hynes is for the banks to ensure that lending is made available to buyers who wish to take advantage of the massive improvement in housing affordability that has taken place in recent months.

“The move by the government to introduce the Home Choice Loan scheme is a recognition that the banks are not lending as they should be – the credit market is constricted and needs to be freed up sooner rather than later.  Low interest rates are of no material benefit if the banks do not lend.  The Japanese economy had 0.5% interest rates for 7 years, which they have now dropped to 0.3%.  Japanese banks however have spent the last 2 decades repairing balance sheets and restricting lending.  This is not what we want to experience here.”

Mr. Hynes was quick to point out the material benefit that has accrued to househunters in the last while.  “This is a very real and concrete improvement in the position of homebuyers.  Between interest rate cuts, price reductions and changes in mortgage interest relief, first time buyers are now better off to the tune of almost €500 a month, compared to just 18 months ago.” Mr. Hynes commented.

According to Mr. Hynes, there is now an unparalleled opportunity, particularly for first time buyers and families looking to trade up. “They are now in the driving seat, which they haven’t been for a number of years.”  He said.  “And it’s time for them to take advantage of that.”

Mr. Hynes expects that with building effectively curtailed for quite a while yet, 2009 will see the stock of homes now available drying up.  “We do anticipate investors to be the first to pick these up” he said,  “and by the time the media is reporting the market has improved, the real deals will already have been secured.”

Mr. Hynes advised that anyone who has been looking at buying and hesitates much longer would end up ruing the date.  An old adage goes “you’ll never buy at the bottom of the market or sell at the top, instead, look to buy when the reward is high and that’s exactly the situation we have right now.  We’re closer to the bottom that the top of the market, which is exactly where a buyer wants to be.”

Healy Hynes is director of Hynes Real Estate Alliance, Athlone and a board member of national property group Real Estate Alliance.

NOTE TO EDITORS

Real Estate Alliance is a strategic marketing alliance comprising some of the country�s best-established auctioneers and estate agents. Our key focus is on locally-owned and established estate agents. With one quarter of the alliance�s firms in business for more than a century, and with an existing IAVI president & five IAVI past presidents among the group�s members, the alliance is characterised by the established strength of its membership. In addition, membership is only open to firms led by members of the Irish Auctioneers & Valuers Institute or the Society of Chartered Surveyors.

Clients of REA members benefit from:

Real Advice

- Because member firms are locally-rooted and independently owned, they have first-hand market knowledge that ensures clients make only the best-informed real estate decisions.

Real Commitment

- Member firms are well established, leading local businesses built on delivering the best results for their clients.

Real Service

- Our member firms have the detailed understanding of the local property issues facing clients to ensure that they provide a superior range of client services.

Real Professionalism

- As Ireland\'s highest-qualified property professionals, REA sales staff are members of the IAVI or the SCS, the representative bodies for Ireland\'s top property professionals.

Real Confidence

- IAVI members complete far more property transactions than any other professional group. Our member firms harness this transaction volume to seize opportunities and speed the transaction process for you.

Real Coverage

- With more than 400 professional staff in 40 offices located nationwide, our member firms can provide the best real estate advice locally and nationwide.