Investors test the waters as property prices fall further
Investors are beginning to test the waters in term of the residential property market.
The doyen of the market, Ken MacDonald, managing director of Hooke and MacDonald, says: "We have in the last week noticed some fresh investor activity, attracted by the reductions in prices and the buoyancy of the rental market in urban locations with good transport links."
He acknowledges that rents have come back by around 10pc, but says that some investors are placing this in the context of price falls of as much as 30-40pc for investment properties.
"Lower interest rates make property investment more attractive," he adds.
Nor is it as difficult as some commentators say in terms of persuading banks to provide mortgages for investment.
"Lending of up to 85pc is available for first-time investors. For seasoned investors, it is more normal that banks are looking for deposits of 20-25pc," he says.
Interest-only options are also available and lenders are offering anywhere between 3-5 year, interest-only facilities, depending on circumstances.
As can be seen from the rates table on this page, AIB is offering a three-year fixed-rate mortgage at only 4.38pc APR.
Meanwhile, Hooke and MacDonald also reports a healthy response from first-time buyers to sharp price cuts at some of its Dublin developments.
Over 70 units worth €21m have sold and 41 of these were in four projects developed by P Elliott & Co at Carrington, Santry; Arena and Priorsgate in Tallaght; and Mellowes Quay in Dublin 8.
Mr MacDonald says that the sales were partly in response to prices cuts of up to €150,000 as well as by the fall in interest rates. "It is now cheaper by over a third in many cases to buy than to rent," he said.
- Donal Buckley
