Property Values Decline by 20% in 2009 but Signs of Activity Return to the Market

The Irish Auctioneers & Valuers Institute Annual Members’ Survey for 2009 reported a decline in average residential property values of around 20% for 2009.

In Dublin, property values were down by an average of 20.1% and in the rest of Leinster values declined by an average of 21.5%. In Munster, property values declined 19.2% on average while in Connaught/Donegal values were down by an average of 19.3%.

Commenting on the results of the 2009 annual members’ survey, IAVI President Ms Aine Myler said, “These annual results are in line with our expectations for 2009 and consistent with our belief that the average residential property values would decline 40-50% from peak to trough. The survey results indicate that the market floor is close, if we have not reached it already.

Our members have reported that there are signs that the residential market is beginning to stabilise in certain locations and that most of the adjustment in values has already taken place. A sizeable majority of IAVI members in Dublin experienced a pick-up in activity in the final quarter of 2009, with many recording an increase in residential property enquiries, viewings, offers, sales agreed and sales closed (see table below).

"2009 was an extremely difficult year for the commercial property market but it was a year of two halves. The first saw very little tenant or investor demand while there was an increasing level of supply of all types of property. The second half saw a real pick up in both tenant and investor demand and deals. There are signs that 2010 will be a little better than 2009. It is fair to expect though that this will not be a tide that lifts all boats as both tenants and investors steer towards prime property. NAMA added to uncertainty during 2009, but now that it is established and taking the transfer of loans, we hope the uncertainty will fade as its modus operandi becomes apparent.

“The IAVI has repeatedly called for a National Property Price Register to give consumers access to real-time, transparent and accurate market information. Providing timely, clear details and descriptions of price movements will undoubtedly improve understanding and confidence in the sector. This information is readily available and just requires the political will for its establishment. While we are pleased that it has been proposed in the recent ‘Programme for Government’, there is a real urgency to address this issue as quickly as possible,” she said.

Download the full survey here.

www.pfq.ie

It’s the little things!

This is our office window.

Until yesterday, the 3 sections were the same.

Details of properties on our headed paper, together with a photo and price.

As the property market has fallen, some prices have reduced by a small amount, some substantially.

These price reductions were put on our front window, but did not seem to generate much interest.

Yesterday, I did the price reduced details in a different format.

Non-branded paper. Large red border. Headline “Substantially reduced”.

We put these in the centre section of the window last night.

It is 4.15pm as I write and already today 19 separate walk-in enquiries have come from the Substantially Reduced section!

Some of them are great value.

Yes that is €75,000 for a cottage!

Simplicity, clarity, singleness works as well in window display as in life.

www.pfq.ie

May viewing and offer figures

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

Misplaced Optimism?

We are told that we are in the bust part of a "Boom and Bust" cycle in the property business. It is hard to know if we are at the start, middle or end of the bust, but we are certainly somewhere in it.

Not all agents see things this way though. I received a brochure in the post from an agent in Kilkenny, promoting a development site, close to the town centre. A difficult sell in current circumstances, I would have thought. But no, the agent thinks otherwise.

The covering letter says(in bold red print):

Developers, get ready for the Property Upturn!

Do they know something that we don't?