I know there are many who will complain that the rising tide doesn’t seem to be lifting their boats and indeed that may well be true as people still struggle with wages and salaries, stuck in a rut while the cost of existing (I stepped away from the phrase, ‘the cost of living’) rises inexorably.
The cost of keeping a car on the road — it can no longer be regarded as a luxury — just goes up and up. Despite the fact that petrol and diesel (fuel) did drop a cent or two in the last month, the truth is that, according to a newspaper report last week, we are paying about 6 cent more for a litre of fuel this year than we were this time last year. That, according to a statement from the AA, means we are paying on average about €10 more per month this year to fuel our cars than we were paying last year.
The whole question of motor insurance is gone past a joke. We hear stories of increased premiums being sought that are 100% more than they were last year, with no explanation whatsoever from the insurance company as to why they are seeking the increase. This was confirmed when my own renewal came through the door a couple of weeks ago.
My premium last year was €660. This year they were asking for €1,060, an increase of 60%. I hadn’t, thankfully, had any accident.
I searched around a bit on the internet and got a quote of €760 for roughly the same level of cover. I accepted it, of course, and in a few days I’ll be replacing my insurance ‘square’ on my windscreen (I refuse to call it my insurance ‘disc’.) with one bearing the name of a different insurance company. The question, however, has to be asked, why should there be any increase? In particular, how can one insurance company give the same level of cover for €300 less than another?
What really annoys me is that every time I turn on the radio or television, my old company are running an intensive advertising campaign seeking new business and offering the ‘best’ rates.
It seems to me that a regulatory authority for the insurance industry is badly needed. I have already put forward, a couple of times on this page, a radical plan for motor insurance but I won’t bore the reader by outlining it again. It can be found by a search online through the back issues of this newspaper.
I did notice something in the newspapers last week that does, in fact, point to a probable economic recovery in the country. The Irish Examiner ran seven pages in its ‘Commercial Property’ section.
Proposed student accommodation developments get a number of mentions, whilst city centre shops seem to be on the move again. One state-linked body is reported to be taking a lease close to a shopping centre in the Patrick’s Bridge area for circa €55,000 per annum for 720 sq feet. That is about €76 for every sq foot of space.
Three shops, two on Oliver Plunkett Street and one nearby on Grand Parade, are reported to be worth €3 million and offer a return to a private investor of 8.25%.
Imagine that, 8.25% at a time when the banks are charging people for keeping their money in some deposit accounts.
There is a short report that a well-known Cork-located builders-provider is planning to add an extension of 10,000 sq feet to its already extensive 50,000 sq feet premises on the south side of the city. Such is the confidence that the firm have in the recovery that last year they already opened a second outlet on the north side of the city.
Another indication that Cork, despite the fears that some have arising out of Brexit, is on the up and up is seen in the price achieved for the new and impressive office block at One Albert Quay, next to the City Hall. It is reported to have changed hands for €58 million. On the same page that that is reported there is an advert from an ‘investor company’, saying it is “expanding its property portfolio in the Munster area with particular interest in Cork City” and seeking “development opportunities”.
As well as reports of student accommodation developments, it seems the hotel industry is doing alright too. It seems a prominent hotel in Lapps Quay has changed hands for a cool €35 million while a well-known premises on Washington Street/Western Road has changed hands for €24.5 million.
Why wouldn’t one invest in them, one may well ask, with a reported shortage of hotel rooms and a subsidised VAT rate, as discussed by me on this page last week?
One international property consultancy is offering an office investment opportunity to the willing investor that is now yielding an income of €257,000 per annum from a sitting tenant and another in the Little Island district that is yielding an income of over €217,000 per annum. Just imagine it. A win of a couple of million euro in the lottery and the lucky person could sit back and have an income in excess of a couple of thousand euro per week, after taxes, for the rest of one’s life, without ever touching the capital.
Other interesting figures that jump out at me from that ‘Commercial Property’ section include a city shopping centre that changed hands for in excess of €13.5 million; another office complex for in excess of €13 million and a medical centre in a town about 35km outside the city that changed hands for over €1.5 million.
While all these big commercial opportunities are presenting themselves and, it seems, being availed of, the down-to-earth housing market seems to be showing sure signs of growth too.
There is little more to be said, than has already been said, about the rental market. One has to pity the young people today who have just left college and wish to make their careers in Ireland. I was speaking with a college lecturer recently and I asked him if there was any statistics available for how many graduates actually emigrate. I cannot recall the exact figure he gave me but it was astonishingly small — I think it was well less than 20%. They are coming out of their courses, with hard-earned degrees and post-graduate achievements, and going into jobs in which salaries have been fixed for the last number of years and in a lot of cases are less than what their colleagues are paid. Then they have to find some place to live and the rents demanded are crippling.
Would somebody tell the pay negotiators, including the government, that rents are very much part of the cost of living?
It seems to me too that the whole question of buying or selling a property in this country has taken on an unnatural complexity that causes so much anxiety to both vendors and purchasers that it should be regarded as a health hazard. I wouldn’t be surprised that, if it was investigated, the whole question of selling or buying a property must contribute hugely to mental breakdowns.
Not to mention added costs. Those who have a title registered in the Land Registry must start off by ordering a copy of their record in that registry (called a ‘copy folio’) with a map attached. That costs €40.
In some circumstances, an engineer must be employed to survey and confirm that the boundaries are as represented on the map. That costs on average a further €350.
The Incorporated Law Society draft contracts (that everybody uses) include a requirement that a vendor must furnish a letter from the local authority confirming that the roads abutting the property are “taken in charge” by the council. For that they charge €100. That applies even if the property is on the side of a main street in a town or alongside a national road (with an N number), not to mention a secondary or local road.
The way the taxation authorities have used property transactions to assist in the collection of taxes is a scandal. If a vendor has lived in a house for years and never owned another property he/she must prove that the property being sold is not a “Non-Principal Private Residence” and that there is nothing due as such. Proof must also be provided that there are no Household Taxes or Local Property Tax outstanding.
All this adds to the work that a solicitor has to do and, of course, adds to the cost.
When it comes to proving compliance with planning permissions there is a full essay that could be written about that.
Take extraneous/unrelated matters out of conveyancing. Taxation matters should be dealt with directly with an individual and not used to complicate the buying or selling of a house.
Ah well! The economy is recovering — but the man on the 203 or 208 bus must pay and pay and pay.
Contact Michael at email@example.com