People may have noticed the advert in the Metro this morning for Barrack Homes, who seem to operate around Newbridge way, offering a “rebate” of 12K in one particular development if you pay up front, sign contracts early etc…this 12k “rebate” is on homes starting from 374K, or a pretty significant reduction of almost 4% in the original price. Its obvious why builders/EA’s are going for these cheap tricks but my question is this: when the TSB/ESRI compile the HP stats do they factor this in or do they simply ignore the “rebate” and thus give artificially high prices?
These gimmicks are relatively new, so I’d doubt that the PTSB/ESRI methodology can take account of them.
So if they dont take into account the cheap tricks, this begs the question to what extent is the HP falls being underreported? Of course, we’re not just talking about rebates here, you can add newly upgraded kitchens, 42" Plasma TV’s and whatever else the builder decides he must throw in.
Banks require mortgages holders to pay a deposit in order to protect the banks if things go wrong.
For a buyer in these developments the bank is essentially loaning 105% of the actual value of the house.
If they get wind of it then they may not be too keen to lend.