Hardly a
week goes by now without there being a report on the RTE news or a headline in
one of the national newspapers about soaring house prices in Dublin and the
emergence of a new property bubble. The lack of construction of family homes
since the crash coupled with the emergence of a highly paid IT sector, many of
whom are in their late 20’s and early 30’s,
has created a situation where it’s common for as many as 50 people to
view a house on the first day. Already young couples on excellent salaries are
being priced out of the market. This is not how a properly functioning property
market should operate.
Fortunately
what is happening in Dublin is not occurring in the rest of the country. In
Waterford there are very few new houses being constructed. This is due to a
number of factors not least the excellent value available to buyers in the
second hand market but also due to factors such finance for developers, high
development contributions, VAT and social and affordable requirements.
However
despite the absence of new houses we are getting back to a more normal property
market. Where houses are priced accurately there are numerous viewers, a number
of offers and in most cases deals are being done. Sales are happening faster
which is better for the owners and buyers feel their getting in at the right
time. A lot of buyers feel there is a lack of choice in the second hand market
but it appears that this will be a problem for a number of years to come. Buyers
however are not experiencing the frustrating & often upsetting scenario
that is playing out in Dublin.
With ECB
interest rates approaching zero we could see a situation by the end of 2014
where banks will charge to hold money on deposit. This will encourage more
people with savings to invest in property. With mortgage lending now rapidly
improving and a general confidence that the property market has bottomed out
the conditions are in place where hopefully we will see property prices in the Waterford
area beginning to increase, but at a moderate rate.
Barry Herterich BA MIPAV REV
