Charlie Weston: Whisper it, but property nightmare may be over
WHISPER it, but we could be at the end of the housing nightmare. The reason property owners should not go out into the street and shout out that we are at the end of our bricks-and-mortar bad dream is because too much could go wrong.
Sure, prices rose by the largest amount in five years last month.
It was the fifth month out of nine this year that prices have either risen or remained flat.
No doubt first-time buyers are buoying up the market at the moment.
These guys and girls are in a rush to purchase as they want to grab generous mortgage tax reliefs before they go at the end of the year.
For a couple buying a €200,000 house, the tax relief could be worth more than €2,000 next year alone.
But there is still much uncertainty.
After the new buyers have secured their mortgages and started decorating the sitting rooms and kitchens, there is likely to be a lull early next year.
This lack of new buyers, and the aftermath of another tough Budget, will likely calm the market.
And then there is the property tax that is set to be introduced in the Budget.
That sort of tax encourages more people to rent. In the last five years we have seen a 50pc surge in the numbers renting.
A lack of bank lending and high unemployment are also dragging back the market.
But there are also plenty of positive signs emerging for the housing market.
Estate agency Lisney said it was seeing multiple bidding for Dublin houses.
This was because demand was outstripping supply in what it called well-established parts of the capital.
The introduction of the new price register has helped clarify exactly what houses and apartments are selling for in every street and every town in the land.
This was long overdue.
Research carried out by Oxford-based housing economist Ronan Lyons on the new property price register indicates that prices have stabilised.
That is especially the case in the capital, where there is also evidence of prices rising.
Estate agents had been saying this for a while, but it was only this month that the Central Statistics Office picked up on a price jump in Dublin.
One of the big problems with the CSO's index is that it does not pick up on cash transactions, which could make up around 40pc of the market.
Economists said yesterday that this fact meant there was likely to be far more housing activity going on than the official CSO index was recording.
That could be a positive, especially as cash prices tend to reflect bottom-of-the-market values.
But it also points to the one big issue holding back the market -- a lack of bank lending.
Banks have come up with all sorts of wheezes to tell people that they cannot have a mortgage.
Having kids, oh dear. That will suck around €200 a month from your ability to service a mortgage, the lending office says.
That situation could not be any more crazy as people planning families, or those who already have kids, are the very ones who crave the security of owning their own homes.
And there is little sign that the lending famine will be sorted out until the banks get to grips with the near 170,000 existing borrowers who are struggling to meet their repayments.
There will be ups and downs for property prices for a while to come.