The property market is awake. Here we go again?
Rumblings about resurgence from estate agents, bankers and brokers are bolstered by rising prices and solid demand in particular areas. So, have we learned anything?
On Thursday Bank of Ireland unveiled a new €2 billion mortgage fund for first-time house buyers. It comes on the back of a similar fund it announced last October. Of that first tranche of mortgage money, the bank says €1.2 billion worth of loans have now been approved.
Gavin Kelly, the head of consumer banking at Bank of Ireland, says it is seeing “strong evidence” that property prices and people’s incomes are stabilising .
“These factors are contributing to improved consumer sentiment and an increase in the number of people considering the purchase of a home,” he says. “We expect strong demand to continue, particularly in urban areas, as affordability has improved.”
In fact, the bank is so confident that the demand is there that it is opening three of its largest branches at 8am “so that busy customers can make early mortgage appointments” and is appointing “mobile mortgage managers”, who will meet Dublin customers at a time and place that suits them. “We hope to engage with as many people as possible over the coming months,” says Kelly.
But the banks, the estate agents and the brokers are not exactly impartial bystanders so it is hardly surprising to hear them talking up the market. Buyers, on the other hand, have nothing to gain by talking of recovery, yet their stories chime with what industry figures are saying.
John Lush from Greystones, Co Wicklow, wants to buy but has had no joy since he started looking in the spring. He and his wife bought a house in Newtownmountkennedy, Co Wicklow, in 2005 and almost immediately moved to New Zealand where they lived for more than six years. When the Lush family came home in 2011 they had doubled in number; their 800 sq ft bungalow seemed very small for the couple and their two young boys, and they immediately started planning to move.
They sold their house this year for a lot less than they had paid for it, but savings from their New Zealand adventure and some parental help have put them in a position to buy. They have loan approval of up to €350,000. “We started out looking for a very specific type of house,” Lush says. “We wanted a four-bedroom house within walking distance of Greystones. So did a lot of other people, as it turns out.”
He says that dozens of would-be buyers have been at almost all the public viewings they have gone to since the hunt started. “We have bid on four or five houses so far and we were using last summer’s prices as a guide. But that means we have gone in too low and people are bidding 20 grand more than us from the off.”
He says the four-bed properties in the area that cost €340,000 last year are now fetching €400,000, an increase of at least 20 per cent.
“It is all very frustrating but we not going to lose the run of ourselves. We are renting a place in Delgany, and paying less than we would if we had a mortgage, so that has taken some of the pressure off. I don’t know where the market is going to be but we are certainly more careful than we might have been before.”
He says he and his wife are wary of bidding wars and if one starts, they just back off. He believes many buyers are similarly cautious. “I think the crash has taught us all some real lessons and my generation will be reluctant to get stung again. But who knows, in 10 or 20 years time it could all start all over again.”
Edward Carey, the Enfield auctioneer, agrees. “I think the bubble could certainly blow up again. I am not sure we have learned any lessons. Do we ever?”