Unrealistic Expectations And Imprudent Guide Prices

A report from The Journal on Ireland. “House price rises are beginning to stabilise across the country as more properties become available to buy on the market, it has been reported. Property website Daft has revealed that parts of the country also saw prices drop over the three-month period. Meanwhile, the number of properties available to buy on the market across the country also continued to rise during the third quarter of the year.”

“According to the report, almost 25,000 properties were on sale in September, roughly 1,000 higher than a year previously. The increase was almost entirely driven by Dublin, where the amount of housing stock on the market rose by 40% year-on-year, while the rest of Leinster saw stock increase by 7%.”

“‘Commentary on the housing market often questions the degree to which the laws of supply and demand apply to it,’ said Ronan Lyons, economist at Trinity College Dublin. ‘Nonetheless, just as the huge increase in supply in the mid-2000s pushed down prices once easy credit stopped, the much more proportionate increase in construction in recent quarters is having an effect.'”

From The Independent. “REA spokesman Barry McDonald said the Central Bank rule on mortgage lending would appear to be having an impact on the market as they increasingly define affordability in the housing market. ‘There is no doubt that the Central Bank Rules are achieving what they set out to do in terms of keeping a lid on prices,’ said Mr McDonald.”

The Irish Mirror. “Asking prices for houses fell by 2.5% in Dublin and almost 1% nationally in the third quarter of this year, it has been revealed. The figures were released in MyHome.ie’s latest residential property price report.”

“The average asking price for new sales in Dublin is now €375k, down nearly €9k from the last quarter. For the rest of Ireland this downward trend is less extreme but still significant, the average asking price of €268k down €2k since last quarter.”

“The author of the report, Conall MacCoille, said that while the slowdown had been anticipated, the extent of the drop in prices was still a surprise. MacCoille said: ‘The double-digit price inflation we experienced earlier this year was simply not sustainable and the slowdown we predicted earlier this year has now materialised.'”

The Irish Times. “For anyone wondering which way the market is moving, shifts in house prices on the property portals are revealing. A scan of recent asking-price changes on myhome.ie returns swathes of price cuts, with only a rare price increase dotted through. It’s clear that, faced with lending restrictions, buyers no longer have the wherewithal to buy overpriced homes. The market is self-correcting.”

“And if two big price drops registered in the past week are anything to go by, the corrections are not limited to the capital. Ballymorris House, the Wexford home of the bestselling author Eoin Colfer, went on the market with Sherry FitzGerald in May, seeking €1.65 million. On Monday the price dropped €400,000, to €1.25 million. That’s a 24 per cent reduction for the 416sq m (4,477sq ft) farmhouse and courtyard buildings. And no surprise, really: since January very little has sold in Wexford county for more than €500,000.”

“In Kilpedder, Co Wicklow, Belfield House, a period pile on 41 acres, came on the market late last month, seeking €3.25 million. Then, last week, this former home of the Odlums flour dynasty posted a €400,000 drop, taking the price down to €2.85 million, a 12 per cent reduction.”

“The managing partner of Hunters Estate Agent, Rowena Quinn, believes the pricing problem is endemic, and puts it down to unrealistic vendor expectations and imprudent guide prices being posted by estate agencies.”

“Quinn says it’s time for agents to mete out some tough love to clients, even if they don’t want to hear that their homes are no longer worth what they thought or wanted. ‘Inflated price expectations are simply not in anyone’s interest – particularly vendors, who we as agents are bound to represent. There will always be a feelgood factor for vendors when house prices are perceived as being on the rise. However, decisions relating to selling must be supported by a real understanding of the market and property valuation.'”