I also am of the opinion that a new manufactured bubble appearing.
Last week alone, I inquired about three properties:
One relatively nice apartment in the 500,000-1,000,000 bracket, which was on the market for no time at all and the latest offer was already about 20% over the asking. Another apartment, which I think may have been about €1m was also a very high percentage over the asking price. These are apartments in reasonably good areas, not detached family homes with relatively low maintenance costs, they have big management charges associated with them.
And don’t think it is only the top-end apartments, I also inquired about one investment apartment that was totally basic, in an area I would consider to be undesirable in the €100,000-200,000 bracket and that went from having an offer of 20% under the asking to somebody coming in and offering 10% over the asking with nothing in between.
There is a frenzy out there at the moment, with people dying to buy everything in sight and pay whatever it takes to get it. Personally, it seems like it doesn’t matter what whether there is a lack of supply or not, people are going out and throwing money at everything on the market and bidding everything up to a ridiculous level. Coupled with this frenzy, estate agents are rapidly increasing asking prices and nobody seems to care. Last year, Sherry Fitz got €165k for a one-bed at 11 Merton Hall, Mount Saint Annes. This apartment was in very good condition and had good outdoor space.
Savills just listed the apartment above it, which is marginally bigger (I would image they’re pretty much the same size, and not even 60sqft between them as the estate agent claims) for €225k and it is an absolute dump that has been rented since it was built years ago. Even at that, it will probably somehow sell above asking when some genius amateur investor takes a look at it and falls in love with the 5% gross return. New apartments come up in Mount Saint Annes practically every week, I don’t think there is any problem with supply there. The same goes for other developments like Bushy Park in Terenure, where asking prices have been rapidly creeping up. Two ground floor apartments have come on the market recently; 35 Bushy Park came up about a month ago for €225k and I think around last week 115 Bushy Park came up at €295k. 115 has nice floors and bathroom, but it hardly justifies the price difference. It would be one thing if people just ignored these ridiculous hikes and bid logically, but it saddens me that 115 may get above the asking as people seem to just pay whatever agents ask for these days. Everytime EA’s bump up prices and the property sells almost immediately, its practically a concrete precedent for the next property on the market to be bumped up by another 10% above the last one listed, and so on, and so on.
I have pretty much given up on the market at the moment as I feel a lot of the price increases are caused by estate agents rapidly increasing prices, leading to average joe panicking with thoughts that his plans to buy may be slipping from his hands, leading to bidding wars, leading to further price increases. Sometimes I think that this country is beyond mad and I’m glad that I’m in no rush to buy any more property, because I pity people who are stuck in this the market at the moment ‘needing’ to buy.