On the move: Spring has brought daffodils, longer evenings and higher asking prices
It’s an incontrovertible truth of life that when you decide to do something it will suddenly seem that everyone is doing the same thing.
Tell someone you’re going to such a place on your holidays and they’ll respond: “Oh, we were there last year.” Got your eye on a new Nespresso machine? Join the queue. And as for buying a house, even in this subdued economy, with indebtedness still a huge issue, it still seems like everyone else has got there before us.
Having read this column, people will ask me how our progress is, before inevitably adding: “Oh, we bought last year.” Friends, colleagues, strangers – despite the reality of lower sales and a troubled economy it can sometimes feel like everyone is buying a house. Except us.
But I have been heartened nonetheless by some of these conversations that showed it took many people more than a year, if not more, to find a home. And they don’t regret having had to wait, because they say the house they eventually bought was the right one for them.
The only problem, of course, is the nagging concern that the people to whom I have spoken probably bought at close to if not at the bottom of the property market. And we’re still waiting on the sidelines. When it comes to house-hunting, possibly the only thing more stressful than trying to bid successfully and complete on a house is doing so when there is an ever-present fear that prices will suddenly spike, pricing us out of the market.
Judging by asking prices, the market appears to have made a significant leap in the time that we’ve been looking. It seems that – to my eyes at least – spring has brought daffodils, longer evenings and higher asking prices.
I’m not the only one to have noticed. On thepropertypin. com there’s a thread called “Asking prices – worrying developments” that questions the trend towards higher asking prices. But are these prices really a true reflection of the market?
When you’ve been looking at similar houses in a particular area for a sustained period of time, you start to get a fair idea of sale prices.
Sure, sometimes you will be surprised that a particular house made such a strong price but other times you’ll kick yourself for not having taken a chance on a house that appeared to be outside your budget but actually sold for considerably less.
In this regard, the Residential Property Price Register has been invaluable because, whatever prices properties are put on the market at, at least you have clear evidence of what sale prices are being achieved. And sometimes – thanks perhaps to cash buyers – the period between a house going on the market and turning up on the register can be surprisingly brief.
Of course prices move, so knowing with certainty what a house made six months ago may not hold up today. Where the price register helps again, however, is that it has made agents disclose sale agreed prices, (of course they can still fudge these but with sale prices now published it may make them less inclined to do so) and these can give you a more up-to-date view on the market.
We recently viewed a house I felt was overpriced given sale prices in the area. It has recently gone sale agreed at 10 per cent below the asking price. However, a factor that gives some credence to a jump in prices is the ongoing lack of supply. According to myhome.ie, supply in Dublin was down by a staggering 40.7 per cent in the first quarter of this year: just 3,627 properties came on the market, compared with 6,045 in the same period in 2012. According to the price register, more than 8,700 properties sold in Dublin in 2012.
With such a dearth of supply and plenty of buyers out there it’s no surprise there is upward pressure on prices.
While the property portal expects this quarter to be busier, given what I’ve seen so far, it’s unlikely to reach the levels seen last year, although it may get a boost later in the year following the introduction of the Personal Insolvency Bill and the expectation that the banks will put more seized properties on the market.
For the moment, then, any boost in the market is probably just down to simple supply and demand metrics – if and when supply starts to increase again, and provided there is no significant improvement in economic fundamentals, we could see prices fall off again.
So maybe sitting on the sidelines isn’t the worst place to be.