Home Truths

A mortgage broker who won't buy is a sign of the times, says Edel Morgan

RECENTLY AN estate agent told me the number of "sold" and "sale agreed" signs in his area indicated that the market was picking up and, if people are realistic with their prices, their properties will sell.

He explained that what we are going through is merely an "adjustment" and the people who adjust are the ones that will sell their property. Was he right? Or just clutching at circumstantial evidence to cheer himself up? Time will tell. An uncertain property market breeds all sorts of theorising, speculation and rumour and it can be hard to decipher which, if any of it, has value.

In the absence of anyone really knowing what is going to happen six months or a year down the line, people tend to look for signs, portents and symbolic happenings to point the way. If I wanted to disprove the estate agent's theory and provide evidence that the market is still very much in trouble I'd only have to look to my own area where a number of houses have been languishing on the market for
over a year.

Or could it be that he's right and, as soon as these vendors "adjust" to the idea that they're never going to get 2007 prices, their properties will sell. I received an e-mail last week about the "mothballing of an
entire unfinished apartment block" at Beacon South Quarter in Sandyford.

It read: "The mothballing involves wrapping, yes wrapping the unfinished six-storey high concrete structure in colourful sheeting with images of balconies and happy residents. I suggest that you need look no further for an icon as to the oversupply of apartments in south Dublin.

Also, I suggest that no one need talk about a recovery in the housing market until the 'wrapping' is taken off this unfinished block of apartments." The wrapping up of an apartment block does seem a fitting symbol for the state of the new homes market. It's no secret that some developers have abandoned plans to finish new homes schemes until the market picks up while others are looking to change planning permissions from residential to offices developments.

However it appears that sometimes market conditions can lead people to jump to conclusions. The developer Paddy Shovlin of Landmark Developments says that far from mothballing the development the wrap is a kind of "new age hoarding" to protect buildings under construction.

When out in Beacon South Quarter recently I checked it out - a building with a mesh covering on three sides superimposed with a drawing of the finished apartment block.

As one side of the block faces onto the shopping plaza, the wrap takes the crude look off an unfinished building and allows light through so workmen - there were a few around - can see what they're doing.

An uncertain market also breeds conflicting advice. You hear experts telling people it's a good time to bag a bargain while others say it's not as simple as just getting bargains, particularly for more vulnerable first-time buyers.

Karl Deeter, operations manager of the Irish Mortgage Brokers, said on Newstalk's lunchtime programme recently that while house prices are back to early 2006 levels, at the same time the banks are raising their rates creating a "see-saw effect". When asked if he'd buy now, he admitted he probably wouldn't.

He commented that people say renting is dead money "but then so is mortgage interest".

For anyone looking for a sign to help them decide whether to buy, maybe this is it. If a mortgage broker is advising people to think twice, then you have to sit up and listen.