Buyers are back in the market after pre-Budget blues
Now the Budget is out of the way, the property market is showing signs of recovery after the most stagnant autumn season for years. Stamp duty was just part of the problem, but the ambiguity around this issue created serious “buyer commitment” problems for estate agents.
The upside of September’s market glut is that buyers took over the driving seat for the first time in years.
Sellers were forced to look again at expectations, prices dropped and a few sales closed as a result. The remainder awaited Minister Cowen’s December 6th Budget.
Now agents’ mobiles are ringing again and viewings are up, despite it being late in the season.
A city centre guesthouse, for sale through Felicity Fox, had languished on the market since early autumn despite its great location. There have been several viewings in the past week and three bidders are actively competing for the property.
In Sherry FitzGerald’s Ranelagh branch, renewed interest in a sale which had fallen through earlier in the season, produced eight enquiries the day after the Budget. Offers are now close to the original sale price.
A noticeable increase in viewings since the Budget will inevitably filter into “sale agreeds”, says Simon Ensor of Sherry FitzGerald, adding that its new Docklands office was “flat out” with appointments last Saturday.
“Expensive houses are having a quiet time, but the more affordable end of the market is doing well. Sleepy semis further out in Dundrum and Bayside have been doing a lot of business since the Budget. It’s what we expected. People who were petrified to commit themselves are now thinking, if they don’t go out and buy before Christmas, they’ll end up paying for it in the new year.”
Lisney’s Denis Beare is finding viewing turnout unexpectedly good, considering the seasonal slow-down. Many properties that didn’t sell in the autumn have now sold, says Beare.
“People need more realism, after the very unexpected rise of 15 per cent in prices up to mid-2006 and a frantic market. Stamp duty certainly needs some reform, but that’s not why the market slowed. There was a huge amount of property on the autumn market, there’s never been so much, and that contributed.”
HOK’s Wade Wise noticed a lot more closings in the run up to the Budget.
"People had been holding off earlier on but, in the week coming up to the Budget, it seemed that they realised nothing much was going to happen and so activity improved.
“In fact, we sold more properties in November 2006 than we did in November 2005. Sentiment is good and I think that January is going to be a good month,” adds Wise.
Over at Gunne’s Fairview office there have been eight sales since the Budget and several contracts signed by people who had been dragging their feet.
“We’ll sell seven or eight more houses this week - about the same as last year,” says managing director Declan Cassidy. On 2007, Cassidy says the increased stock will give confidence to his team and prices should remain stable.
“If vendors have expectations of 10 per cent more next year, they’re wasting their time,” he warns.
Keith Lowe of DNG agrees with this optimistic view. “People who have been sitting on contracts have now decided to go ahead with sales and those sitting on the fence are now jumping over. Enquiry levels have gone way up. It’s off-season, so we won’t really know until February how the market will be in 2007.”
On the new homes front, Brendan Byrne of Sherry FitzGerald says reaction to the Budget is not yet obvious, with few showhouses open for viewing at this time of year.
“There is a better gut feel factor now - January, February and March will be fairly good. It all hinges on interest rates - an increase in rates will be detrimental to the market. There are a lot of people out there but they need to be helped in some way. Buying property is such a big decision, although it has become easier over the last 10 years.When uncertainty hits the marketplace, buyers will use that as an excuse not to go ahead. It doesn’t take much to knock them off,” says Byrne.
While much of the current new homes interest is from investors getting in before the end of the tax year, first-timers are also phoning, says Shane Daly of Gunne New Homes.
“First-time buyers were genuinely confused by mixed messages before the Budget. A line in the sand has now been drawn and things are looking more positive,” says Daly.
“There has been a good reaction to the Budget and enquiries have picked up, although December is traditionally not a good time for new home sales,” says Ken MacDonald of Hooke & MacDonald.
“Although interest rates went up, mortgage interest relief has given first-time buyers a good boost. And indicators are that developers are going to continue price moderation policy into next year,” he adds.
More of the same at Hamilton Osborne King, where Ronan O’Driscoll says the Budget has had no visible impact because of the festive season. “It’ll be the new year before we know what to expect. We’ll put our best foot forward,” he promises.