Wednesday 13 December 2017

The higher the price of the house, the thinner the air

Stephen Day, divisional director with Lisney
Stephen Day, divisional director with Lisney

Stephen Day

This year will likely be remembered for its lack of supply. For the properties that do make it to the market, some types, prices and areas are certainly doing better than others.

In south Dublin, where I operate, the lack of supply, Government incentives and a renewal of confidence are a strong wind behind the movement of the market up to €800,000.

Where the prices are higher, the air starts to get thinner. Characteristic of market growth, the stronger numbers are being achieved closer to the city centre. Properties that were previously considered comparable in areas such as Killiney and Foxrock are finding it hard to share in that momentum, while Blackrock, Booterstown and Mount Merrion have seen some great results.

We can't ignore the fact that this is in part due to the availability of some reputable local schools.

Turnkey properties still demand a significant premium due to growing building costs and the desire for an easy life.

The buoyant rental market has maintained the strong demand and purchase price of apartments, although the rental rate of growth has stagnated due to lack of affordability and recent changes in the law.

Despite a few minor wobbles after the Brexit result in June 2016, many experts anticipate that the UK leaving the EU will, in fact, have a positive impact on the Irish property market. However, this remains to be seen.

So, with everything that is going on in the market, what has changed since 2006? We are now heading into the summer months - a time when estate agents would traditionally be winding down for a quiet few weeks of sales. But fortunately this can't be said for 2017. The market will remain busy throughout the summer, particularly for apartments and the very active sub-€800,000 market.

In an increasingly litigious world, the art of a contract for sale is becoming all the more difficult and is creating one last, but often significant, hurdle to getting a property sold. This part of the process has become a lot more onerous and is becoming more lengthy, uncertain and frustrating for all involved. The standard Law Society condition brought in to ease a borrower's risk, where a bank might not proceed with a mortgage, has been the most significant difficulty facing non-cash sales.

This time 10 years ago, Lisney was holding up to 15 auctions a week. In 2017, we might advise 15 in total. The benefits of sale by auction for a vendor are unfortunately frustrated by a buyer's reduced appetite to do due diligence for a property that may never be theirs.

However, agents are starting to embrace technology. At Lisney, through Facebook Live, video and 3D tours, we are expanding our viewing reach to overseas buyers, who are viewing homes directly from the comfort of their own living rooms.

Watch this space.

Stephen Day is a divisional director with Lisney

Sunday Independent

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