I know it is only the 29th of May as I write, but for the first time in ages, there are no viewings set for Saturday, so I can complete the May figures with some certainty. Whether that is an indication of the market, or just the Bank Holiday weekend, I do not even want to think about. The sun is shining and I have 3 days away from work. Family commitments (ponies) will take up much of the weekend, but that’s good too!
Following the trend from last month’s viewing and offer figures, activity in May 2009 is approximately half that of May 2008.
Here they are:
May 2008: Viewings 128 Offers 36
May 2009: Viewings 63 Offers 28
The number of viewings is down by 50.8% from last year’s figure.
The bright side again this month is that offers, while reduced, are only down by 22.2% from last year.
Lots of people ask me how that is.
My explanation is that last year, people were expecting a large fall in prices, and while viewing plenty of properties, took more of a back seat while waiting to see what happened.
This year, only those very focused on buying a home are viewing.
The lack of finance has also reduced the number of potential homebuyers significantly, with only those in permanent, pensionable employment (is there really such a thing?) qualifying for a mortgage.
Unfortunately, despite the lowest house prices for 5-6 years and the lowest mortgage rates ever, the banks lack of liquidity has forced many would-be-buyers to continue paying up to €10,000 a year in rent, rather than owning their own home.
Hopefully the sun will shine for June-September and the figures will improve. We will see.
Have a great Bank Holiday weekend.
www.pfq.ie
Compliments on your blog, great content & smashing pics!
ReplyDeleteI think it’s a little simplistic to look at this purely as a credit availability issue. This is a multi-dimensional problem.
In my view, today’s potential buyers are more discerning. People are worried about their jobs, they’re listening first hand to friends, colleagues and family discuss negative equity experiences and earnings are under pressure from wage cuts and increased income tax.
House prices are still dropping and when they consider the over supply situation and comments from figures like John Hurley and Paul Krugman people are probably betting that prices haven’t reached the bottom.
Rents are also dropping, tenants know that they can put pressure on landlords to drop rent and in a lot of cases they find they are pushing an open door. Landlords agree to drop rents to keep tenants or drop rents to attract tenants because they don’t want to risk paying the full mortgage for an extended period.
Tenants (potential buyers) are taking the view that there is no rush and that by waiting a year they may save more than the 10k to which you refer.
Hi Anon,
ReplyDeleteThanks for dropping by and for the compliments.
Great analysis of the current situation.
I agree that a lot of people are afraid to buy at the moment, but I feel that this is occassioned by a lack of job-security, rather than a feeling that prices will fall further.
Certainly rents are falling, but house prices have fallen hugely since peak in 2006/2007. In some instances, in the region of 40%! They may fall more, they may not...who knows? If some liquidity comes back into the market, there is a lot of pent-up demand, which will certainly result in more sales. If not, then the current level of sales will be at best maintained.
Meeting with potential buyers indicates to me that, if they see a suitable property, most of them would buy now rather than wait for the unknown. All that is missing in many cases is availibility of finance.