Property market will be unpredictable in early 2013

Property market will be unpredictable in early 2013

The turkey had barely digested in peoples’ stomachs when headlines began to emerge about a stabilising property market.

From a CSO report just after Christmas, to three Barometers at the turn of the year, everyone seems to be in agreement that the decline in prices is halting. Well, in the capital at least.

The second half of 2012 saw a renewed optimism return to the market with the final sales figures for the year – still yet to be fully accounted for – well ahead of 2010 and 2011s.

Naturally, after the events of the past few years, people will greet such reports as the latest MyHome.ie Property Barometer with some scepticism.

It must be noted, however, that that information relates to the last quarter of 2012 and is in no way a prediction of what is to come in 2013.

First and foremost, it is only really the major urban areas that are showing a sign of stabilisation and that progress is likely to be hit by the withdrawal of mortgage interest relief, which was a definite factor in the increase in sales last year, and the introduction of the new property tax in July.

Other Budget cuts are also likely to have an impact while the biggest problem remains the availability of mortgage finance. Depending on what source you believe, somewhere between 40-50% of all transactions last year were made by cash buyers.

So what does 2013 have in store? Certainly in the short term, the market will do well to keep on stabilising.

One of the biggest issues remains a decent availability of stock, which is at its lowest ever point not only in our main cities but also in many towns around the country too.

Whether now is the right time to buy or not, as always, depends on a person’s individual circumstances.

Many people who have an aspiration to buy are holding off for the time being but equally this is having an impact on the rental market.

It is becoming increasingly difficult to get good quality family homes in certain areas that are available for rent. The property tax will also have a knock-on effects on the cost of renting with rents already forecast to increase by anything between 5-7% this year.

The reports at the end of last year might have been positive about the property market but as we look ahead to 2013 we face another uncertain future.

Let us know what you expect this year in our comments section below…

There are 22 comments for this article
  1. Dermot Kearns at 6:26 pm

    House prices in Dublin and surrounding counties will increase in 2013 simply because of a shortage of good quality 3 bed semis.Banks will be forced to lend in the first qtr of the year releasing badly needed credit for thousands of young couples.
    Irish people will always want to own their own home,live close to family members and good public transport.We will never see the house prices of 2005 to 2007 again but when the price starts to climb don’t be caught out. Now is a good time to buy.

  2. John McDermott at 3:03 pm

    I agree with your analysis.
    So many cash deals is astounding.
    Therefore only enticing properties well priced to sell are selling.
    Banks should get tough with buy to let investors and bring the market to its proper nadir/trough whatever.
    They cannot have their cake and eat it.
    One big problem will not go away however.
    Lack of family homes(three bed semi’s) in good urban locations, quite close to the center of Dublin.
    Apartments are a bottomless black hole-everywhere.!

  3. Aaron at 2:35 am

    I think that when property tax kicks in it is going to be a major player in holding up the recovery of the property market …. It will influence peoples decisions on what they are buying …. Certainly at the higher end of the market anyway ….

    Apartments were never good value either, no matter where they are positioned …. With ever increasing management fees and to add to that, the property tax …. you have the makings of yet another Goverment made disaster ….

    In Blackrock for instance, where a top apartment can still set you back €450,000, with ever increasing management fees of €2,600 and a property tax of €765, means a payment of €240 a month on top of a mortgage …? With ever decreasing incomes and everything else increasing, road tax, food, water charges, etc, etc …. makes then a very unnatractive proposition ….

    Government tinkering wll ruin this recovery, just has they ruined the motor industry with their crass, ill timed, early announcement in changes in the duties and road tax in 2008 ….

    It left the market left waiting to see what would happen …. Meanwhile the property market was collapsing and they made another announcement that in the forth coming budget there would be a change in stamp duty rates …. that had a detrimental effect in further slowing up the market ….

    Between the goverment and the banks they are slowly choking the life out of us, let alone the property market ….

  4. Proinsias at 7:42 pm

    Yes I agree with Paddy,

    There is no way house price are even near rock bottom, reading in the news papers last week regarding the rise in house prices by 1.2% was the last few properties being sold in time for the mortgage relief benefit.
    The greed (form money and so called property value) in people still has not dissipatted from the society, just think that a home in 1995 cost an average of 35k and in 2007 the same home cost 240k. Unless you are a magician or an absolute greedy blood sucking leach on society then you can see that this type of value increase in property is unsustainable and completely artificial.
    In a normal situation house prices only rise by approx 20% over the life time of the mortgage(25 years) to stay in check with inflation. So the house valued at 35k in 1995 can be valued at 42k in 2015. This is the realist value and the market will continue to drop to refleck this value.

  5. Patrick at 6:25 pm

    So many well illustrated points of view.All of which are very much in the hands of the gods, and not all of them are in heaven. We may put whatever complexion we like on the economy, but the bottom line rests with with the fiscal constraints brought to bear on the citizens of this impoverished state. Too many people gone to fairer pastures,too many at home with no pasture. Too many people with empty pockets. That in itself is enough to explain the position.But God is good, is he not? Yes the promised land as we know it,is yet again promises made and broken. Despite all of that, it by the very nature of things will come full circle,and just for a brief period we may enjoy a little respite yet again,wont we? well maybe. Optimistic.Happy 2013.

  6. Common Sense. at 6:02 pm

    Sales figures for the year mislead because they fail to take the quality of what is sold into account.

    While there might not be so much of a drop in the average price of a house per county, what you get for €50,000 now is enormously more than was on the market a year ago, because the stuff that failed to sell for a year or more is simply not about to be sold before the vendors admit defeat.

    Those who fancied the chance to sell a derelict ruin at a fancy price are going to have to think again in view of distressed, newly built 3 or 4 bedroom family homes at the same sort of money.

  7. PMM at 5:06 pm

    I predict a 10% rise in the price of homes in South County Dublin in 2013 due a shortage of product. Having been a property bear since 2002 and having felt very lonely for many years, I am now a property bull and feel equally lonely.

  8. David at 5:01 pm

    Brian Cooper is right.

    I’ve no doubt whatsoever that there are a VERY large number of people all waiting for the whole shooting match to kick off again; all thinking, “this time I’ll bail-out and sell up before it all goes pear shaped again”.

    It’s like a ‘Le Mans’ start. You can almost feel the tension.
    When will it ever end?

  9. Rez at 3:39 pm

    It would be great if things did pick up in 2013 but the fundamentals simply aren’t there yet. Looks like 2014-2015 at the earliest, and that’s if things do start improving and there are no more big shocks – big ‘ifs’ in these times.

  10. Caroline at 1:56 pm

    It’s hard for vendors to realise that they do not have the luxury of unrealistic selling prices in a buyers market and that their property is only worth what people are willing to pay for it, especially when they bought at the top. However,those that do realise this are needing to sell and so will price realistically. Everything is still overpriced however prices will continue to fall as the economic situation continues to take its toll on potential buyers income. Banks are lending but based on GROSS combined salaries which is a one way ticket to spending too much monthly take home on your mortgage leaving little room for savings, a spouse losing their job etc the bank offered us a mortgage of 3 times more than we are willing to spend on a house ….that was 2 months ago ! Buyer beware !

  11. Marian at 1:22 pm

    I agree with Tommy

  12. GC at 12:51 pm

    I predict market price bottom in mid 2015. So a long time to go yet in a rocky, slow decline.

  13. Bernadette Flynn at 12:44 pm

    We sold our house 9 months ago and have been trying to buy since then. We are currently renting as we cannot find a house to suit us. We find the biggest problem is that there are 1000’s of properties still on the books that have remained at the same unrealistic price for 2 years or more and the vendors are not dropping and obviously the estate agents are not encouraging them to drop – so we are stuck and they are stuck – we can’t buy and they can’t sell. We took a huge hit on our own sale, stupidly thinking everyone else was doing the same. A lot of people still have not accepted the reality of the situation – in the meantime our budget is getting smaller with the rent we are paying.

  14. Mike at 11:41 am

    I agree with Paddy.

  15. James Gormley at 11:40 am

    Why do you keep asking questions that would need more than a crystal ball to give the right answers? Even the so-called experts – the estate agents – consistantly get it wrong.

  16. Brian Cooper at 11:29 am

    We are already beginning to forget the devastation caused to the whole country as a result of spiralling house prices, caused by easily available credit, greedy developers and selfish and greedy estate agents – calm down folks and don’t fall into the trap again. Irish property prices are still overvalued,with a glut of empty houses and apartments all over the country together with thousands of negative equity mortgages. Don’t be fooled or hoodwinked by those with vested interests!!!!

  17. Paddy at 11:19 am

    The New Year appears to have bought some editorial policy change at Myhome.ie, no more buy, buy, buy, property industry propaganda, now we get sensible, considered articles. This is a major change for the better, long may it last.

    Paddy’s opinion of the 2013 property market is; the end of tax relief, emigration, reduction in rent allowance, property tax and increased payroll deductions / indirect taxation will in general push prices downward. A shortage of quality properties means good houses in good locations will sell quickly when the asking price is reasonable. Ever increasing heating and transport costs will make large rural McMansions virtually unsellable at any price. Apartment prices will continue to drop as the combined effect of over-supply, poor locations, rent allowance reduction, bad complex management and the failure of boards of management to evict non-payers of management levies are felt. Quality Dublin apartments in well-managed complexes adjacent to busy public transport routes could be the best Irish property investment of 2013.

    But in general Irish housing remains far too expensive. Proof of this is the disparity in value between farm land and land zoned for housing; the vast increase in the value of the land is passed-on to the house buyer. This must be stopped by means of compulsory purchase by the local authority of all building land at normal agricultural land prices with a system that ensures the savings are passed on the house purchaser. A strict probation on building in country areas would produce great benefits in urban planning and efficiency, and stop the spoiling of our beautiful countryside with thousands of mostly ugly houses, many complete with a leaking septic tank.

  18. Tommy at 11:06 am

    plus all side effects like unemployment, property taxes and emigration…

  19. Tommy at 11:03 am

    prices will fall again…everybody say its already 50-60% off!! and noway go any lower. yeah its true 50% off, but of what price???! off unnormal rised prices!! check the prices before Celtic tiger came, and you will know how many % will fall again this year and next year..sad but its true

  20. keith at 11:02 am

    The fact that interest relief is gone for first time buyers, which on a mortgage of 250/300k means an increase in repayments of approx €300 for a couple means that the house prices on the medium to low area will most likely fall in 2013. If your mortgage costs 300 more per month….then the amount you can borrow drops.

    This is not taken into account in any reportong i have read but is a major factor to consider in affordability – the basis banks are lending on. The banks utimately control property prices by their willingness to lend capital.

  21. James at 10:54 am

    I think residential property values will start to increase again this year albeit slowly at first. I would advise anyone considering a purchase to do so now.

  22. Mark at 10:40 am

    House prices will finally hit rock bottom but not until mid to late 2014. The banks will spend this year clearing out their poor performing properties and this will put a downward pressure on prices.

Leave a Reply