Coldwell Banker Estates

• Two thirds of first time buyers plan to buy in the next 12 months – up7%
• 78% have funds required to pay a deposit
• Dublin is still the favored location

Two out of three first time buyers say they intend to buy a property in the next year according to a new survey by leading Irish property website MyHome.ie.

This figure is up from 57% last Autumn while the number who do not intend purchasing has halved from 12.5% to 6.3%.

The majority of first time buyers expect to make the purchase in a 6 to 12 month timeframe while a similar number, 58%, expect house prices to fall slightly in the next twelve months.

Seventy eight per cent of first time buyers now have the funds required to pay a deposit, up 20% from last September.

A similar number, 75% have either received or are seeking mortgage approval, the same percentage as in September 09, suggesting first time buyer activity in the market has held firm over the last six months. Thirty six per cent have received mortgage approval but haven’t purchased a property yet while 39% are actively seeking a mortgage.

Of those who say they won’t be purchasing in the next year 27% said they were waiting for price to fall further, while the same number cited the current economic climate. Sixteen per cent said the lack of mortgage approval meant their plans were on hold.

Angela Keegan, Managing Director of MyHome.ie said the figures showed an encouraging trend as we head into what is traditionally the busiest buying period.

‘The fact that a third of first time buyers have mortgage approval is heartening as is the fact that almost 80% of first time buyers have the funds for a deposit. It is also clear that Dublin will be the first market to see increased activity as 64% of first time buyers wish to buy in the capital. A further 13% are focused on purchasing in the traditional commuter counties of Meath, Wicklow and Kildare’ Keegan said.

Not surprisingly first time buyers are also looking for cheaper property with 5% fewer respondents looking to buy a property between 300K and 350K, 4% more searching in the 200K to 250K. The three bed semi is the property type of choice as apartments continue to remain out of favour.

In his analysis of the results, independent economist Paul Murgatroyd, said first time buyers clearly do not expect market and economic conditions to deteriorate significantly within the next twelve months.

‘There is an expectation that house prices still have slightly further to fall (58% believe they will) but this survey reveals that this is clearly not the most critical factor for them when it comes to purchasing. Sixty four percent say they still intend to purchase in the next 12 months. This supports research which shows that location is a more important criterion than price for the first time buyer’ he said.

Murgatroyd said first time buyers are now the largest proportion of people taking out mortgages for residential property and it is very pleasing to see that over three quarters of respondents have saved money for a deposit, up 4% from last autumn.

‘While some first time buyers have been taking a wait and see approach to the property market over the last six months, most have clearly continued to save during that period, displaying the type of discipline favoured by lenders. This is a very positive development, especially in the current economic climate’ he concluded.

Printed in The Property Week – 21 Apr ‘10

First-time buyers are bypassing apartments for three-bed semis in good locations, says ISABEL MORTON

PROPERTY PRICES may have been slashed in half of late but it’s not all plain sailing for buyers, who are now at the mercy of their lending institutions and must cough up a hefty deposit, prepare for interest rate hikes and subject themselves to FBI-style background checks to ensure they are suitable candidates to be in receipt of one of the banks’ few precious loans. Mortgages are (as my solicitor describes them) as rare as hen’s teeth at the moment.

But, once they have actually managed to navigate their way through the mortgage minefield and have jumped through numerous flaming hoops, licked a few pairs of boots and prostrated themselves before their bankers, property purchasers then find themselves galloping up the home straight.

In the sure knowledge that they can now buy far more bricks for their bucks, first-time buyers are bypassing the first rung of the property ladder and rejecting smart apartments in favour of sensible suburban family homes, similar to those bought by their parents in the 1970s and indeed, their grandparents in the 1950s.

Once synonymous with the Celtic Tiger era and lifestyle, open-plan apartment living has been tried, tested and rejected. And as the first generation to have experienced living within the restrictive confines of many modern Irish apartments, their rejection of them now leaves us under no illusions about their obvious design flaws and failings.

Or perhaps Irish people are just not suited to apartment living or have an inherited obsession with owning their own little house with their own little garden?

Either way, classic well-located three-bed semi-detached houses with gardens, situated close to good transport links, schools, shops and other amenities, are in strong demand and in short supply.

“It’s all about growing their own vegetables and fruit, having space for recycling bins and bicycles, and wanting to revert to open fires rather than the remote control gas ones,” reported one middle-aged estate agent who said that the mood had changed and people wanted to revert to a more simple way of life with less gadgets and more “apple pie”.

Where once they wouldn’t have considered moving into their newly purchased abode until they had fitted, kitted and furnished it to the nth degree with brand new designer goods, people are now furnishing their homes in a more gradual fashion with second-hand items, family cast-offs and auction finds.

Almost overnight, the nation has discarded many of the trappings of the boom times and instead adopted an eco-friendly classic hippie existence.

This change of heart is in part due to the change in attitude by our lending institutions who were once so understanding of our sensibilities that, in addition to our basic mortgage, they kindly provided us all with another tranche of cash to cover the cost of such imperatives as temperature controlled wine cellars, integrated steam ovens and synchronised sound and lighting systems for our landscaped gardens.

Needless to say, banks will no longer finance such vagaries; indeed they’ll no longer even cover the cost of basic renovation work let alone anything else.

The days of proudly presenting your home as a gleaming reflection of your glamorous minimalist lifestyle are over.

Your white marble floors, designer wet rooms, sleek glossy kitchen units and integrated appliances, no longer impress buyers.

According to estate agents, today’s canny buyers are not taken in by lavish furnishings or distracted by smart décor.

They know precisely what everything costs and are only interested in getting maximum value for money and ticking as many of their myriad boxes as possible.

Buyers have gone back to basics. Location is, of course, their number one priority.

The old advice regarding buying the worst house on the best road rather than the best house on the worst road is now more applicable than ever.

Orientation is another big issue and estate agents report that asking prices must reflect the property’s orientation, as regardless of anything else, buyers are not prepared to pay as much for a property with a north-facing back garden.

Proximity to good transport links also rates high on buyers’ lists and prior to even viewing a property, they will have timed how long it takes to travel to and from work at peak rush hour and will have checked out local amenities.

If the property for sale ticks the above-mentioned boxes, then anything else is considered a bonus as far as today’s buyers are concerned. But, they are not prepared to pay for anything they now consider as unnecessary extras.

So, your expensive architect-designed glass box kitchen extension may well end up being replaced with a cosy farmhouse affair, more suited to housing numerous recycling bins, an eco-friendly range cooker and Wellington boots (your smart box hedging having been dug up and replaced with rows of vegetables).

Printed in The Irish Times on 22.04.10

THE upcoming auction by Real Estate Alliance of 72 properties ranging from a riverside mill with valuable hydro-power rights attaching, through commercial, retail, industrial and agricultural properties to residential homes should reveal a lot where prices are concerned. All come with published AMVs and it will be interesting to see what the final knockdown prices are in relation to these.

According to Daft.ie, the speed of the housing market crash is losing pace, but it is doubtful whether prices have yet bottomed out, despite Brian Lenihan’s predictions.

However, economists are warning that people thinking of buying a house who are holding back, waiting for prices to finish falling, could be taking a risk. Some mortgage experts have calculated that another 10pc fall in house prices would be wiped out by rising mortgage rates.

Buyers of new-build homes are at a distinct advantage when planning their finances. They know what they can afford. They know the price of the property they want to buy. So they know the size of the mortgage they need to apply for. Everything is straightforward.

Purchasers of second-hand homes, on the other hand, can find themselves seriously wrong-footed as they try to guess at the selling price of a house — particularly if they have nothing to judge it against. If a house up the road sold for €580,000 a month ago the chances are that, barring a bidding war, the house they are interested in will sell for in and around that price. But if there is nothing to go by they are dependent to a great extent on the honesty of the selling agent. It becomes a credibility issue.

The credibility problem arises partly because so many properties were slow to sell over the winter and some have come back on the market with further price cuts. So bidders find it difficult to believe that anyone else would bid for the particular property that interests them. In addition, there are well-financed buyers who read reports that banks are not lending money and so these buyers are puzzled that anyone can afford to bid against them.

In this market, timing is more important than ever. If a three-bedroom or four bedroom house in the €400,000 to €700,000 price range is in good condition in an area which has had a strong track record then there’s a good chance that it won’t stay on the market for long. Consequently a buyer who really wants a particular property in this sector of the market may well lose out if they plan to test an agent’s patience.

One agent recounts how such incredulity was reflected in the approach of a buyer. “I told the prospective buyer that there was already a bid of €600,000 on a south Dublin semi but he didn’t believe me.

In fact, the buyer insisted on making a first offer of €590,000 and arguing: “Even if you have a higher bid I’m a better buyer as I have the finance in place.”

And another buyer recently posed this question: “How can I believe the agent when he says he has a bid of €510,000 for the house for which he was originally asking €540,000?”

Yet another buyer said: “I tried to cut out the other bidder by bidding €10,000 more than him and now the agent says the other person has bid €5,000 more than me. Can I believe the agent?”

The Construction Industry Federation has called for the establishment of a national register of house prices.

Since the Permanent TSB/ESRI house price index will no longer be published monthly, due to a lack of sufficient mortgage information, there is a sense of unease amongst the purchasing public. The price index was viewed as a trusted barometer of the housing market.

Official figures record that average prices have fallen 31.5pc since the peak of the housing market, but anecdotal evidence can put that figure at nearer to 50pc.

On the otherhand last month more than 900 bargain hunters queued up to view apartments at Tailteann Court, Mullingar, Co Westmeath, where 48 units were snapped up and the agent has a waiting list of 157 buyers for any sales that fall through or for the 15 units when they come to market. The attraction, of course, was the price. One-bed units were priced from €70,000, two beds from €82,450 and three beds from €98,000.

National Irish Bank appointed John McStay as receiver to the 63-unit development after the developer hadn’t sold a single unit. It had been expected to fetch up to €202,000 form some units.

It is quite likely that this scenario will be repeated across the country over the coming year.

- Valerie McGrath

Printed in the Irish Independent 16.04.10

THE ONLY real buyers in the property market right now are first-timers – and 75 per cent of them are looking for second-hand houses in older suburbs, where they’ll be near family and friends, says MyHome managing director Angela Keegan.

Why? Because some of them can now afford to – since if anyone’s getting mortgages, it’s first-timers – and they’re voting with their feet against buying in far-flung commuter towns.

It may be a straw in the wind, but this has to be good news – eventually – for the property market: if there’s movement at this level, the vendors of those houses will be able to move on and the market may start, however creakily, to move.

Both last week’s MyHome report on the state of the market and yesterday’s Daft report confirmed that, while asking prices are still falling, in the last quarter, they’ve fallen by the smallest amount (Daft says by 3.4 per cent, MyHome by 3.3 per cent).

Both property websites believe that their figures show that sellers who price their properties keenly will find buyers.

The fastest-selling properties in the country at the moment, says Keegan, are three-bed semis costing around €300,000 in west Dublin, in places like Lucan and Leixlip.

Property watchers fall on reports from the two property websites hungrily, because despite Government promises, they are still the only information available on the state of the market, especially now that the ESRI/PTSB price index has gone. And of course the reports are based on asking, not selling, prices.

Although it’s a month since Minister for Housing Martin Finneran announced he was going to establish a national house price register, on which a house price index would be based, we’re not holding our breath to see it, since legislation is needed to make it happen. Yes, as one commentator said recently, we’re steering blind after our worst property crash ever.

Printed in The Irish Times 08.04.10