April 9, 2017
This was a busy week of property news with the quarterly reports issuing from Daft.ie and MyHome.ie. Average houses prices (nationwide) are up almost 10%, worryingly, we are on trend for double digit growth over the next 12 months but hopefully we won’t get near the 25% increases we saw just a few short years ago. I don’t know about you, but recently, I have found myself taking days to get through the Sunday papers so, in the spirit of separating the news from the noise, here are the key property highlights:
Sunday Property (8 pages)
Great lead article by Ronan Lyons ‘7 ways to negotiate the current property market’ wherein he addresses the conflicting signals coming from the market right now – from empty houses around the country to the burgeoning bubble in the Dublin area. Ronan comes down on the side of “an acute and growing shortage of supply” over the past six years. Just one of the interesting distinctions he makes is that during the boom years (2001-2008) there was not an excess of building, which means that the over-supply of stock as the market crash was more to do with unemployment and changing population trends (like emigration) that excess stock – makes sense.
While surging price increases in Dublin (25% in 2014) and demand consistently outstripping supply might appear to some as a new potential bubble, the Central Bank lending rules drastically reduce the likelihood of this.
As for the 7 ways to negotiate, these include well worn – but still useful – advice like having all financial work done in advance so whether you are a mortgaged or cash buyer, come to the table ready. Also, avoid major purchases and, if possible, delay moving jobs, in the run up to your mortgage application.
As for the ‘Buy or Wait?’ question, apparently it’s still a good time to buy if you qualify for the full help-to-buy rebate. [I don’t personally agree with this, given the tight lending rules in places, most mortgaged applicants at the moment qualify so, logically, if everyone is competing on the same basis, it is not longer a competitive advantage and the successful buyer will still be paying a premium due to stock shortages.]
Commentator Philip Farrell congratulates sellers “it’s your market”, but speaking to estate agents and intending buyers nationwide, I would suggest that this applies to the Dublin/urban and commuter areas only.
There is some good news for homeowners in negative equity as the start to see some relief with rising house prices – again, this is really only true in urban areas where prices have increased approximately 40% since the crash.
There is little relief for renters as we just don’t know how effective the new rental measures and introduction of the rent pressure zones (RPZ) will be. Anecdotally, we know that some landlords have been more strategic or, dare I say, creative than others about dealing with these measures.
There is some worthwhile advice for landlords, and accidental landlords in particular, about compliance issues within the changing regulatory framework – ignorance of the law is no excuse and landlords must make themselves familiar with these changes. Luckily new technology (www.prop-tech.ie) is streamlining the letting and managing process for hands-on investors and landlords.
Commercial property editor, Ronald Quinlan outlines some of the key strategic investments in Dublin’s industrial heartland and reports on the €27.6m in sales at the most recent Allsop online auction, which attracted in excess of 3,700 bids.
The Sunday Times
Move (8 pages)
No publication tells the story of a property quite like the Sunday Times and this week’s line-up of featured properties are certainly one worth going beyond the paywall for. ‘Carlow’s Erindale House, bought by the Iron Duke for a mistress, is on sale or €1.35m, writes Linda Daly’. Also, No. 10 Sussex Road is a great opportunity to buy a house for the almost the same price as an apartment in that area – it’s stunning to boot!
Columnist Lorcan Sirr can never be accused of being optimistic about the market but when he nails it, he really nails it. This week he talks about how home ownership in the capital is fast becoming an impossible dream for middle class professionals who are forced to rent. He makes the important point that entrepreneurs tend to come from the middle classes and these are the people who provide employment and drive the wider economy. While he does acknowledge that talk of classes might seem out of date, Ireland is, by no means, a classless society – again, definitely worth going beyond the paywall for this one and, no, I’m not on commission!
There’s a topical article about the return of German suppliers of bespoke, prefabricated eco homes to Ireland with a proposed new development of 24 high-end houses in Skerries. An Board Pleanala is due to make its decision in June. The house spec looks good, if you are interested, you can go straight to the development homepage www.holmpatrickcove.com
The Sunday Business Post
Property Plus (14 pages)
As our bulkiest weekend property read, the SBP rarely disappoints. The lead story is by financial advisor Paul Merriman (AskPaul.ie) who sets out 10 crucial pieces of advice for intending buyers. Along with the obvious best practices, he starts with the vital – but often overlooked – question that would-be buyers ought to ask themselves before going down the route of applying for a mortgage, that is; ‘rent or buy?’ After a decade working exclusively with buyers, I know that too many people put themselves under pressure to buy before they are ready. In the current market, when supply outstrips demand in urban areas, it simply doesn’t make sense to buy if it means compromising on essentials and paying a premium for a home that is not quite right. Waiting 24 months for new supply to hit the market might be the wisest way to go so kudos to Paul for leading with this. He also advises buyers to take their time and enjoy the experience, which is entirely underrated advice – stress can often be a signal of other concerns. Finally, he deals with post-purchase financial decisions and the costs likely to be incurred AFTER buying your first time. Very sensible and worth pushing past the paywall if you are considering applying for your first mortgage in 2017.
Karl Deeter in his column brings us another perspective on Brexit and the likely consequences for the Dublin market: ‘Making money from the problems of others’. In light of derogatory talk about ‘vultures’ in the property market, he compares Ireland’s position to benefit from Brexit with the funds who benefited from our market implosion. He closes with an interesting question “Does this mean that when we benefit from the misery of others that we are the vultures?”.
Leanne Byrne has a good piece on Dublin’s latest co-working space for creatives, the Tara Building, on Tara Street, Dublin 2. Officially launched last week, the space already has more than 50 members, from traditional startups and software developers to illustrators designers and poets. In the spirit of giving back the the community, the team behind the Tara Building are offering quarterly scholarships by way of free space to social entrepreneurs and creative arts practitioners.
No journalist knows the Dublin commercial property scene better than Donal Buckley and on page 12 he gives us the low-down on restaurants and cafes around the capital: ‘Well-located eateries are the flavour of the month’. The restaurant in The Capel Building, formerly Gary Rhodes’ restaurant recently sold at auction for €1.4 million and the Seapoint restaurant in Monkstown sold for €1.25.
Ireland’s Propery Time Bomb
Elsewhere in the main newspaper, there is a special three-page report ‘Ireland’s Property Time Bomb’ that is definitely on the doomsday-scenario side of the property debate but certainly raises some interesting points on Nama’s missed opportunity (Constantin Gurdgiev) and discrepancy in figures supplied by the Department versus those supplied by the industry (Stephen Kinsella).
“Private sector housing developments are not the solution to our housing problem – they are part ofthe problem itself”. [Could not disagree more!]
In his article entitled ‘We have the land. What we don’t have is the planning’, Matt Cooper, arguably unfairly, calls local authorities and planners “a hindrance to the proper development”. [After spending two days this week with planners at the Irish Planning Institute’s AGM, I agree with the premise but disagree where the blame lies – this is very much a political system and until we remove the politicians, how can we blame the administrators and practitioners?]
Let me know if I missed any property stories this week …