Real Estate Investment Trust Case Study

1479 Words6 Pages
The property values in some parts of the local market appear to have finally got back to an upward trend. Although current prices are still significantly behind levels seen in 2006/2007 there has been considerable growth in some parts of the country. The largest area of growth is in Dublin. According to CSO figures for 2013 residential property prices in the Dublin, region increased by circa 15.7% in 2013 compared to 2012. However, property prices are still 49.1% below their highest level in February 2007. Property investment incentives There have been a number of initiatives introduced by the Government to try and stimulate investment in the property market. One of the most significant initiatives is the introduction of the Real Estate…show more content…
For many people, the property is seen as such an investment. According to the 2013 “ Rental Report” gross property yields on average across Ireland are 6%. In Dublin, the yields range from 5.2% in South County Dublin to 8.1% in Dublin City Centre. Rent levels continue to grow year on year. Access to the property is still quite difficult due to lack of property supply in desirable areas and a lack of access to finance. Of course, it is impossible to predict how the market will fare in the coming years and so, as with any investment, there is a risk of the yield on investment reducing. Using your pension to buy property Individuals considering whether to invest in the property market might consider using their pension funds to purchase the property. One of the main benefits of using a pension fund to purchase property is that you can use monies which have not been subject to income tax to purchase the property. Property purchased outside a pension fund is purchased from post income tax proceeds or else purchased using borrowings that must be repaid using post tax income. Given the current marginal rates of tax, up to a maximum of 55%, it is clear that significant savings can be made by using your pension fund to invest in property rather than investing through after tax income. Of course, not all individuals have control of where their pensions are invested, but
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