2011: Would you buy property in the current market?

2011: Would you buy property in the current market?

2011: Would you buy property in the current market?Latest property reports show that nationally house prices fell 3.2% in the fourth quarter of 2010, bringing the fall for the year to 13% and a total decline from the peak of the market in late 2006 to 34.6%. However, this overall decline in asking prices in 2010 was not as severe as in 2009 and rate of decline in asking prices has eased.

With house prices are back to 2002 levels and affordability back to mid-1990 levels it is now thought that people who were priced out of the market during the boom years may be enticed back into the market during 2011 as better value emerges across all property types. Agents also hope the changes to stamp duty may get the 2011 market moving as it would allow potential buyers who have been on the fence to avail of the very significant reduction in prices in recent years, “The reduction in stamp duty will afford people greater opportunities to trade up and down in the market and will offer people greater mobility”.

However, the changes in stamp duty now also mean that for the first time in years First Time Buyers will return to paying stamp duty. Rachael Doyle, director of PIBA Mortgage Services said the changes are not good news for First-First Buyers; “For First Time Buyers it will be an extra cost inhibiting those wishing to get on the property ladder particularly at a time when acquiring lending is extremely difficult… Taken the abolition of mortgage tax relief it is yet a further impediment for First-Time Buyers”.

That said, First Time Buyer or not, other issues that might deter potential buyers from taking that all important first step on the ladder include the interim property tax measure due to commence in 2012, the VAT increase from 2013 and the introduction of water charges in 2014. Not only that but the severe measures of Budget 2011 hit most households hard and left some in a precarious financial position and there is no doubt that be incomes will be squeezed further in 2011.

Nonetheless, while it is clear 2010 had been a very challenging year for the property market and the economy, better value is emerging across all property types and set to improve even more so during 2011. With house prices back to 2002 levels and affordability back to mid-1990 levels, for anyone contemplating buying a home, properties have never been as affordable.

Have Your Say:

  • Would you buy property in the current market?
  • Or is the current economic climate deterring you from buying a home?
  • Is property affordable for potential buyers in the current market?
There are 4 comments for this article
  1. steve at 9:27 am

    im looking at possibility of a move to ireland inside the next 12 mths,
    realisticly , after looking into the financial situation over there i think asking prices are way above true market value,
    realistically if i brought now, all predictions favour the market to continue downward for the next few years,
    meaning i’d be buying to loose money = negative equity
    given the large numbers of irish folks leaving the country,
    and the large amount of properties for sale
    i think the only way to get the stagnant housing market moving forward is realism regards asking prices

  2. Karl at 9:58 pm

    Would I buy a house now? Only at much less than the current asking prices. None of the drivers that push up property are present; falling incomes, increasing taxes, rising unemployment, emmigration, rising interest rates, falling sentiment, stricter lending criteria and amounts!! This year could be another steep dip. Sit tight buyers and it will be a self fullfilling prophesy.

  3. Peter O’Connor at 1:31 pm

    Certainly IF I had money NOW is the time to buy.

    Though in truth if I had €70k I invest in my stream an put a 7kW micro-hydro in. 7kW/hr = 168 /Day => 1176kW per week = 61152kW/annum
    ESB are paying 13ct per kW
    and that’ll only go up in time. Germany for inst pays 45ct for renewable sourced electricity. €27,-/annum is a nice pension – that’ll go on paying long after I’m gone. Imagine the loans I could get on that premise.

  4. AV Watt at 1:06 pm

    • Would you buy property in the current market?
    Buy property only when it is a better investment than the alternatives. At present all good investment funds are returning double-figure growth and some very good ones have returned over 50% growth in the past 12 months. What yield will a house in Ireland produce; 2% perhaps, and the hassle of owning a fixed asset and dealing with tenants, no thank you, I wont be buying yet.
    • Or is the current economic climate deterring you from buying a home?
    No, not in my case, what’s stopping me is the poor value for money; lots of miserable little houses and apartments in areas with next to no infrastructure and offered at crazy prices.
    • Is property affordable for potential buyers in the current market?
    Yes, assuming the buyer is stupid enough to pay what is asked, but then the property industry propaganda machine is powerful and influences the weak and uninformed.

Leave a Reply