Real deal: the business of property
Watch your house
With just 24 hours to go to the first of three games Ireland is playing in Euro2016, and all of them taking place in France, no doubt many Irish fans will come home dreaming of buying a French home.
How is that market performing? The most expensive areas not surprisingly are Paris and the Cote d'Azur, including Monaco, one of the smallest country's in the world but with prime rents as high as €44,000 psm.
Paris shows rents of up to €13,500 psm for a top city centre address, in comparison to Dublin's €4,150 psm.
If you're looking for value, the place to buy is Normandy in northern France or Burgundy in the heart of the country where values are at €1,600 and €1,700 psm respectively.
Residential property prices in France rose in total by 150pc between 1997 and 2007. What followed after 2007 was what we had been hoping for here - 'a soft landing' - moderate single-digit increases and decreases in values. Average values today are back at their 2008 levels.
However, controversial new rental control caps introduced in 2014 in French cities with a population greater than half a million eroded some of the increases. And it will be interesting to see what, if any, further rent controls are introduced.
Home ownership figures stands at 65.1pc and rising, while Irish figures stand at 69pc and falling.
Interestingly 10pc of the 2.8m properties are vacant - a situation not dissimilar from ours. Perhaps their local authorities view this as a bank of possible social housing too.
The Brexit factor
It's not long until Britain votes on whether or not to stay in the European Union. There's no doubt the result will be close with a recent poll showing 43/42pc in favour of staying in. The Don't Knows at 15pc will decide it. Meanwhile the stock markets are predicting significant volatility in prices before and after the vote on June 23, whatever the result.
What is the potential impact on Irish property? Well, uncertainty is already affecting the property market. Recently, UK-based investors had been very active in the Irish market because of the strength of sterling.
However, interest from UK buyers for the larger country homes is down in recent weeks with most purchasers adopting a wait-and-see approach. According to Roseanne de Vere Hunt of Country Homes at SherryFitz, "The number of UK-based potential buyers actively looking has decreased in recent weeks with the uncertainty of the Brexit vote affecting confidence."
A report out on Friday from Your Move has indicated that property prices in the UK for May were down 0.4pc, the steepest fall since November 2011.
This may just be a wobble over Brexit but, either way, it will be interesting to see what impact if any the result has long term on UK-based residential and commercial investors looking at properties here. In the event of a No vote, sterling is likely to weaken, making it more expensive for UK investors to buy in Ireland.
The outlook? Very mixed with storms possible, so bring an umbrella just in case.
When a private treaty sale falls through…
When a sale falls through it creates a headache for vendors and purchasers alike. Over the last few years when the market was at its lowest ebb, many agents reported that as many as one in every two sales were falling through, mainly because of lack of access to finance, chain sale issues and people changing their mind mainly because of a lack of confidence in the market. Today, that figure has improved and is approximately one in four, but it's still very high.
The UK market is similar in many ways to the Irish market. One significant difference though, is its size. Approximately 1.2m sales will take place there this year compared to approx 45,000 in Ireland. A new report from Mortgage Advisers in the UK looks at the most common causes of sales falling through. The top four reasons are - 27pc as a result of a vendor simply pulling out of a sale; 21pc due to the purchaser's own house sale falling through; 21pc because the buyer found somewhere more suitable; and 22pc as a result of the vendor receiving a higher price or 'gazumping'. In my experience - and there are no stats available - the incidence of gazumping would not be as high here. Gazumping is actively discouraged by most agents in this country.
Given the fact that selling the family home is one of the most stressful things you can do, there is a strong case to be made for amending the way we sell property by private treaty. One possibility would be to bring it more in line with the way auctions work so that, once the initial deposit is paid, the buyer is legally obliged to proceed.
Approximately 90pc of properties are sold by private treaty in Ireland so if it was made more difficult for people to pull out of a sale, it might reduce the levels of stress and the additional costs involved for all parties. Purchasers would need to have access to contracts prior to agreeing a sale which is already happening with online auctioneers such as Allsop. And it would bring the benefit that both buyers and sellers would not agree a sale until such time as they are serious about proceeding.
The week that was
- Variable rate reduction
AIB announces reduction of lending rate to 3pc for all customers. PTSB reduces rates for all new customers, Bank of Ireland rates remain unchanged.
- Grianan Estate, Donegal
2,400 acre organic farm comes to market. Price: €17m. Selling agent: Savills
- Rents higher than 2007
Figures released this week by RTB highlight the fact that average rental values in Dublin are now 0.2pc higher than in 2007.
- Housing market 'broken'
Minister Richard Bruton, representing the Government, acknowledged to the Dail Housing Committee: "There is no system more broken than the system of housing in this country."
- Radisson Farnham Estate, Cavan
Hotel with 1,200 acres comes to market with a price tag of €20m. Selling agent: Savills