Waiting for the Budget to buy may not be best
SOME house hunters will soon need to consider a number of market influences including possible measures in the forthcoming Budget. Waiting until after the Budget may prove worthwhile, but not for everyone.
Despite the propensity for well advanced Budget leaks, finance ministers like to keep little nuggets for the property market until the day itself -- some of them positive such as increased mortgage interest relief, some negative like the €200 levy on second homes.
In the current lead-up, some commentators say we will have a property tax despite the Government previously signalling that we won't.
Speculation has gone on long enough and it would be better for us all if the issue was decided sooner rather than later. Already property industry groups, such as the surveyors and auctioneers, have signalled their willingness to accept a property tax.
Of itself that should not be a reason to hold off buying, after all the next property tax, unlike the last one, is unlikely to be a short-term measure that will be abolished within a few years. But for those home hunters planning to trade-up, such a tax change may have a beneficial spin-off -- provided it replaces stamp duty.
Abolition of stamp duty, while of no interest to first-time buyers, would be welcomed by families needing to move to houses that are big enough to accommodate growing children. Before having children some families bought apartments to get their feet on the property ladder but now find they need extra space. Others who progressed in their careers are upwardly mobile.
However, uncertainty over stamp duty may be among the factors holding them back -- along with the hope of further price falls. But the hope of further price falls may not apply to all house types in sought-after areas.
The latest Daft survey shows that asking prices rose slightly for certain houses in Galway and Limerick Cities as well as in South County Dublin.
In the latter area middle-sized houses had higher asking prices in the three months to September compared to the second quarter of this year, as three-bedroom homes in Dublin South County are asking an average of €328,000 in Q3 compared to €310,000 in Q2. A four-bedroom property in what is probably still one of the more sought after areas of the country, was asking €588,000 in Q3 compared to €549,000 in Q2.
Other property types in the area, including both one-bedroom apartments and five-bedroom houses continued to fall in Q3. As a result average prices across all house types in south Co Dublin fell by less than 2pc in the third quarter of the year.
In Galway City increases were seen for two-bedroom homes, up €15,000 to €231,000, four-bedroom houses, up €14,000 to €323,000 and five-bedroom houses, up €47,000 to €481,000. But three-bedroom units fell again. As these are only asking prices, it is not yet clear if these increases are sustainable. They may simply reflect how some vendors are playing hardball or they may reflect greater supply of better quality houses in more sought after neighbourhoods.
There has also been some anecdotal evidence that after increased sales of three- and four-bedroom houses in the middle of the year, some agents increased their asking prices in the third quarter. For instance, Buyers Broker reports a €60,000 increase to €460,000 for three bedroom semis in Orpen estate, Blackrock, Co Dublin.
Another factor to ponder when considering timing is the forecast that interest rates will rise next year. It may thus prove prudent to take out a fixed mortgage in the near future as it could generate savings for the first three years of the mortgage.
Auctioneers saw mixed results at the latest auctions. In Wicklow and Wexford, Quinn Property auctioned six lots and sold five of them although only one went under the hammer.
At Merginstown Glen, Dunlavin, Co Wicklow a traditional farm house on 12.35 acres with a €230,000 AMV, was withdrawn after bidding reached €185,000 and Quinn sold it later for a higher figure. A three-bedroom bungalow on a 0.9-acre site at the same address was withdrawn at €100,000.
Knockreagh, Ferns, Enniscorthy, Co Wexford, a 3.6-acre roadside holding with planning permission for a dormer bungalow, achieved €90,000 under the hammer -- well above its €55,000 AMV.
In Dublin GVA Donal O Buachalla auctioned a modern three bedroom house at 3 Carlton Mews, Ballsbridge Woods, Dublin 4. While the only bids came afterwards, the agents still seek offers close to the €700,000 AMV.
In Kildare two lots at Bishopscourt, Straffan, were withdrawn and the agents, Goffs Country, are in active negotiations. Lot one, a farmhouse on 10 acres had guided €550,000 and the bids reached €400,000. Lot 2, comprising 59 acres, guided almost €1.12m and the bids reached €650,000.