Home-owners’ “excessive and unrealistic expectations” about the price their properties are worth will be the biggest block to closing sales this year, according to a report published this morning.
Research from the Society of Chartered Surveyors Ireland (SCSI) says that overly-optimistic expectations is the primary reason why properties are now failing to sell.
Indeed, unrealistic prices are now a bigger problem to closing deals than any difficulties buyers have in obtaining mortgages or sellers have in finding other homes to live in.
In its annual residential property review, the society says the Republic’s estate agents remain confident that demand will increase across all property types this year, with prices expected to rise by 4 per cent this year.
Last year’s average forecast by SCSI auctioneers and estate agents was 8 per cent, compared with the year-to-November figures from the Central Statistics Office’s Residential Property Price Index, which found an annual increase at 7.1 per cent.
Prices in Dublin should rise by 5 per cent this year, compared with the 8 per cent recorded in 2018, according to figures gathered from auctioneers’ and estate agents’ records.
However, the CSO again produced more conservative numbers, finding that prices for houses rose by 5 per cent, while those for apartments rose by 6.5 per cent, according to its statistics.
Owners of one- and two-bedroom apartments are likely to see the highest price growth next year, with estate agents predicting one-bed apartments will increase in value by 6 per cent.
The SCSI’s director general, Áine Myler, said that while the market remained in good health, 2018 sales took five months to complete. Many deals fell through despite an appetite among buyers and sellers to conclude deals.
“Homeowners and prospective buyers alike are keen to make the sale happen and move into their next property,” she said. “The challenge for estate agents is managing some vendors’ excessive price expectations.”
She said that while she predicted continued house price growth “there will be winners and losers. It’s likely that the property market may correct for some high-value properties in Dublin in particular.”
She suggested that for the market to operate efficiently there was a need for “a regular turnover of sales to help purchasers and sellers to keep moving up and down the ladder. Potentially unrealistic asking prices can leave all parties disappointed, curtailing market movement when it’s needed most and as affordability limits kick in.”