Talking Property

 

Get over the slump and things will get going again, says Isabel Morton.

WE ALL LOOK back at opportunities missed. The job we should have accepted; the girl we might have married; the house we may have bought.

We rarely mention the job, as it implies we were rather stupid. We never mention the girl, as it implies we were very stupid. (And still are, if we are talking about it now, while married to someone else).

But for some reason, we regularly regale dinner parties with stories of how we were the underbidders on one house, hadn't the nerve to bid on another, or didn't feel we could stretch our finances further to buy the house of our dreams.

We feel somehow proud that we were even in the running for one of these properties. The fact that we didn't succeed appears to be beside the point. "If we knew then what we know now . . ." we say wistfully.

Just like those who come second or third in a race, no one will ever remember, or indeed care. If you didn't, for whatever reason, buy the property which turned out to be a winner, then you are a failure. No one wants to hear your sob story.

Throughout the last decade we smiled smugly and boasted of our success, as if we were solely and entirely responsible for the massive increase in the value of our family home. Whether we were selling it or not, we liked to keep abreast of the annual increase in value. It made us feel good.

A calculation was once done on a house on D4's Shrewsbury Road where, based on the original purchase price and subsequent sale price, the property increased in value by €11,000 per week, every week, throughout the years the owners had had the pleasure of living in their home. Not a bad investment by any standards.

There wasn't a home owner in Ireland who wasn't doing the same calculation on their own homes. We were worn out patting ourselves on the back. "We bought it for a song," we beamed, forgetting that we were put to the pin of our collar to service our mortgage.

However, having enjoyed a thick layer of double cream for the last decade, we feel deprived now that we are being served a somewhat thinner layer of single cream today. We must remind ourselves that we are still enjoying the cream.

The only people who are likely to suffer are those who bought a property at the height of the boom, in early 2006 and, without having since added value (extending or renovating), are now being forced to sell. They haven't had time to build up equity in their property due to the recent slowdown in capital appreciation. Therefore, if they could possibly sit tight for a while, they would eventually weather the storm.

For the majority of us who have owned our property for three years or more, we can relax in the knowledge that we were lucky enough to have benefited greatly from the boom years.

In 2005, Irish property owners were delighted with their property valuations. They bought and sold with impunity. There was a sniff of a world recession at the time, but not enough to scare the celtic tigers and their cubs.

By the end of last year, we had to accept the fact that property prices had dropped between 10 and 20 per cent. We are now back to prices achieved in late 2005. But what is wrong with that? We were delighted with them at the time.

So why exactly are we complaining now? Why are we moaning? Because property prices are not going up at the same manic pace as before? Pity about us. We were an innocent nation if we thought the upward spiral could continue forever.

But then again, we were an innocent nation, as we had never experienced anything like it before. Our neighbours across the water had been through it all under Thatcher in the 1980s, and to a far greater extent, but we had never experienced a boom before, let alone a bust.

So, what precisely, are we waiting for? Are we waiting to be told that prices are going up again? At which point we will all rush out to buy.

Like mindless sheep following each other around a field, waiting for one to make the first move, then the rest will follow. We all got such a fright last year, that we huddled up in the far corner of the field waiting for the sheepdog to herd us towards the gate.

Well the property gate is open again. Not quite as wide open as it had been before, but open nevertheless. So let's get moving. You can never buy at the wrong time. However, you can be forced to sell at the wrong time, for you.