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2008: Don't be afraid of the new market conditions The secondhand homes market Wade Wise, Savills HOK Will the strong supply of properties continue in 2008? Supply of properties for sale will decrease with prices stabilising with little or no growth for 2008. Buyer sentiment will improve with continued evidence of sales and value for money. What can vendors do to guarantee a sale? Don't be afraid of the new market conditions. The power of your position to effect a deal when you sell will put you in a strong position when making offers on other properties. It is a fact that prices have dipped but there are plenty of buyers out there. Select an agent with experience who knows how to make a deal happen and demonstrate a proven tract record. Any advice for buyers? Be brave enough to go for the house you want. Don't wait for other parties to come into the frame and compete with you. Put in offers that are reasonable with a time limit on them. What's a good buy in the current market? A range of properties are showing very good value at the moment, particularly city centre apartments and family homes with good transport links to the city. What effects will the new rates of stamp duty make to the market? The recent announcements to the changes to stamp duty will have a positive effect on the market particularly for buyers in the middle range. Substantial savings will encourage buyers go for their dream home. The new homes market What about the apartment market? Apartment living has been growing in popularity, particularly in Dublin and other cities and towns over the last decade, and it will continue to prosper in the year ahead. City living is here to stay and the dramatic improvement in design standards and overall quality of apartments in recent years will guarantee the future success of this sector. The fact that there has been a marked reduction in new starts of apartments over the past year balances out the supply and demand equation. How are developers going to shift unsold stock still on the market? It is a fallacy to suggest the amount of unsold stock on the market in Dublin is anything higher than normal. Some bizarre figures have been quoted in some newspapers in recent weeks which bear no relation to the factual position. Detailed research shows there are less than 5,000 units currently completed in Dublin and this represents less than 25% of the annual demand in the capital. In 2008, unsold stock will be sold in the normal way following marketing campaigns and there will be a good window of opportunity to achieve these sales, particularly in the spring and autumn selling periods. In some cases developers will wisely rent out finished units due to the strong letting demand and this will further reduce the stock from the sale market. Are we likely to witness even more public price drops? Some developers may reduce prices . . . however some of these developments were already overpriced in the first place and they are really only coming back to the price level at which they should have started out from. The prices in the new-homes market dipped by just a few percent over the whole of 2007 whereas in some instances much higher falls were experienced but they represented necessary adjustments taking a number of factors into account. What trends do you expect to see over the coming year? One of the most significant trends to emerge will be the emphasis on energy efficiency and the obligation on the residential sector to provide certification for purchasers in this regard. This is very welcome and will in fact be a huge selling point for new homes over secondhand properties. New homes already have a decided advantage over older properties due to their improved design standards and low maintenance costs compared to older properties which often require expensive upgrading or refurbishment." What new homes make good investments? From an investment point of view proximity to good transport is essential. New homes close to the Dart, the Luas and QBCs are proving extremely lettable at steadily rising rents and they invariably command good resale values. The auction market Are auctions still a viable means of selling houses? An auction is a great way to sell a house when it works as you can be pretty sure you have achieved the best price after a competitive auction. Another great advantage is that a successful bidder has to sign unconditional contracts there and then. Are we likely to see even less properties going to auction in 2008? The volume of auctions dropped from over 1,200 last year to about 400 this year in the greater Dublin area. I would think this figure might fall to about 300 in 2008. What type of properties are likely to come under the hammer in 2008? It will revert back to the way it used to be before the market went mad. The type of house being put to auction should be unique and special in a prime location and with good gardens. In such an uncertain market, how do you set a realistic AMV? There is no point in going to auction unless the vendors expectations are reasonable and in line with the market. The AMV should be at a level which will generate interest. What can vendors do to guarantee success at auction? There is no magic wand which can be waved to guarantee a successful auction . . . if there was we would have been waving it around a lot during the last year or so. The factors which maximise your chance of selling at auction include: choosing the right houses to go to auction; having reasonable expectations; picking the correct time of the year to come to the market; presenting the property to its best advantage; maximising its profile during the auction campaign; using an agent who is very active in your area as they should have a list of potential purchasers on their enquiry system. The country market Are prices likely to continue to fall? Country house prices, which admittedly took a dip during 2007, should hold at their present level and provided there isn't another series of interest hikes or further erosion in the financial markets they will stay where they are. With the stamp-duty issue and election now behind us, I feel there will be a greater level of stability in the new year. This should fuel consumer confidence which will lead to a greater number of sales. How will farm and agricultural land sales perform? My prediction is that land prices will not slip any further in the new year, although it is a pity the stamp duty brackets weren't widened in the budget. What type of properties will attract a sale? The better-located country houses/farms will always sell well and are easier to sell than more remote properties, especially in those counties that surround the larger cities. And period houses will always be more popular than modern. What areas of the country are considered a good buy? Period houses located within a commuter belt are always a good buy. Dublin's commuter counties include Wicklow, Kildare, Meath and parts of north Wexford, although you will get more property for your money in counties like Roscommon and Leitrim, where the capital appreciation wouldn't be as great. West Cork remains very popular with UK buyers even though prices are on a par with those of Co Wicklow. Any advice for vendors? Anyone selling should invite three firms of auctioneers in to value their property and never disclose their wish figure as this could influence the agents valuation figure. When they have received all three valuations they should work out the average. This is the asking price they should then quote and, provided they stick to this formula, they should be successful in finding a buyer. Any advice for buyers? Stick to your budget and, in the present climate, make one firm offer. Remember though, no vendor likes to receive a derisory offer. Tax-incentive schemes Anyone wishing to avail of tax relief on residential property though will need to hurry as the deadline for relief runs out in mid-2008. Is there still a role for tax relief in areas which remain neglected? We only have to look at the rejuvenation generated by tax-incentive development in key city centre locations over the past decade to see the success of the scheme. On this basis there has to be a role for selective redevelopment opportunities in the future. What type of properties will attract a sale? Location is key. Close to transport nodes and a good rental population will prove crucial. Any advice for buyers? Look at the percentage of tax relief available. Do your research. Compare pricing with other properties in the area and ensure you have access to a good rental market. When buying into a new development, look at the history of the developer and the quality of their previous developments. The rental market The rental market has softened somewhat in the last six weeks resulting in rents decreasing slightly. This is perhaps the result of an increase in supply, partly due to new developments not selling and being released exclusively 'to let'. Will more investors return to the market? Investors may return in the more central areas due to stamp-duty reforms and current price levels. However, this would only apply to central locations and modern apartments as the rental return is not viable for units over a certain level. What type of properties make good investments? Generally, modern properties which are in central areas, in good condition and well-served by transport links. Rathmines and Ranelagh are still very strong letting areas. There is also strong demand for the city centre and areas on the Luas line, like Dundrum. Any advice for landlords? React to market changes when they occur and adjust the rent accordingly; remember, a good tenant is an asset; invest time and money in the presentation of a property as tenants now have higher expectations.
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