How much should we bid?
If there was one certainty for the house buyer during the property boom, it was that you would be paying over the asking price.
I remember my then boyfriend, now husband looking for his first house a few years ago and doing the maths as to what was in his budget. ‘If it is asking €350k, it will probably go for about €395k’, and sure enough, a few weeks later the sales results would be published in another national newspaper, bearing his theory out.
A few years later, in April 2008, the newspaper ceased publishing house prices achieved. There were question marks over some of the data supplied to the newspapers by some agents and the National Consumer Agency threatened prosecution unless accurate results were provided. This left all agents, the majority of whom had no intention to mislead, in a quandary as the Data Protection Act prohibits agents from revealing the exact price without written permission from both the vendor and the buyer. And that, as you can imagine, never happens.
For a while we still had How much should we bid? auction results – as the auction takes place in public the results are easily available – to somewhat guage the market, but as the market dwindled, the auctions were few and far between. In Dublin alone there were 1,500 auctions in 2006: I could list the handful that took place in 2009. So today, as much to the chagrin of the agents as the buyer, we have no house price data available to us.
This lack of information about the market is perhaps the least talked about of the many factors responsible for the current stagnation. Though both bodies representing estate agents in Ireland have called for a national register of house prices to ensure greater transparency, nothing has been done. The proper implementation of the proposed property tax will, of course, make such a move necessary, but we shall have to wait and see.
In the meantime, many buyers are hesitant to take the plunge in what they see as a blind market. Jeff Harvey, a freelance photographer and his partner Breege, who works as a Registrar with the HSE, live in a four-bedroom house in a residential estate in Tullamore, Co Offaly and are keen to move out to the country so their young son Ruadhán will have more space to run around as he grows up. They have seen a house they like, but lack of information makes them hesitant to bid:
“Something could be worth one price and the people price, so we don’t know what’s what.” Jeff told propertyplus. “The valuation of houses is based on what’s selling and we don’t have that information. The value of our house seems to have dropped so much, we don’t know where we are. Because of the uncertainty of the price we can get for the house we are in, we are reluctant to even put in a bid on a new house. “If we do, because of all the conflicting reports in the papers, we don’t know do we come in with an offer of 30 or 40pc less than they are asking and be laughed at – we don’t know the value of the market, we don’t know the value of the house. We don’t even know what we can afford because we don’t know the value of our own house.
“As a buyer, you are looking for information, you are looking for guidance from people who are supposed to be impartial but it is never impartial. If there was a register of house prices like there is in the UK, you would be going in with more information and you have more control over your decision making because there are not as many variables.” Journalist Angela Doyle, and her fiancé Stephen Stuart, a maintenance fitter, are looking to step on to the first rung of the property ladder, and havesimilar reservations.
“Stephen proposed just before my 30th there in November which was the most romantic and perfect thing ever. We are looking to buy this year as we are getting married next year. I want to get our house before the wedding. Of course we are cagey about buying in such an unpredictable economy but at the same time renting is driving us mad too. We're paying out what we'd be close to paying on a mortgage anyway.”
The couple are looking at apartments in Kilkenny, and are attracted into the market by the current drop in prices and the low interest rates, but the lack of information available is a worry.
“People are worried that the market will go down further and there is no confidence in asking prices” Angela told propertyplus. “If you do buy a house in the morning and the value drops would we all go belly up? If we knew what the apartment next door sold for, or a similar one somewhere else, that would provide us with some benchmark as to whether we should buy or not.”
In their annual survey released last week, the IAVI repeated their call for a national property price register, similar to that in the UK, to provide more transparency in the market.
The information is already there. Just a small change in the law would eliminate this barrier for buyers and give people more information with which to make a decision that has a huge impact on their financial futures. We can’t loosen the purse strings of the banks, or control interest rates, but this is something that could be easily done. Minister Ahern, it’s over to you.