Property market recovery continues

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