Property crisis has moved from slump to crash...
...price guide reveals desperate state of the housing market and its negative effect on the value of homes all across Ireland:
First, we need to get our terminology right. To date, Ireland’s property crisis has been described as a slowdown, a downturn and a slump.
But today the Sunday Times Property Price Guide 2009 shows that we’re in the grip of nothing less than a full-blown crash — and, by world standards, a severe one at that.
In recent months, property agents have claimed that successive price surveys have not come close to reflecting the grim reality they have been experiencing on the ground. Now, with the help of our guide, you can realistically assess for the first time how the crash has affected the value of your home.
This survey is more accurate than any other; to put it simply, no rival survey is as specific as the Sunday Times Property Price Guide.
Here we examine the performance of more than 20 types of property in more than 60 individual micromarkets. We have achieved this using a nationwide panel of more than 60 estate agencies, all with hands-on experience in their specific locales.
Furthermore, the Sunday Times Property Price Guide 2009 is not based on asking prices. Nor is it based on data gleaned from mortgage customers who purchased their homes six months ago. It’s not based on what you think or hope your home might be worth — the price that you might, as a prospective vendor, ask an estate agent to achieve.
The following figures are based solely on the figures that our agents, working on the ground, know they can sell your home for in the current market.
So here comes the reality check.
On average, prices have fallen across our surveyed markets by 20% since this time last year.
In general, the areas that have been hit hardest are in Dublin, where a third of Ireland’s population lives. Most postcodes in the capital have experienced price falls of between 25% and 35%.
To put this in context, Britain’s big property “crash” of the 1990s saw house prices lose 30% across what was almost a decade. In Ireland, many locations have shed that much in just the past 12 months.
Generally speaking, apartments and new apartments have been the biggest losers. With investors shying away from buy-to-lets, new one-beds in Dublin’s city centre have seen their prices tumble by about €100,000.
The following tables show what each property type can be sold for today, the price it would have achieved a year ago and, speculatively, what agents believe it might be worth in a year’s time.
The tables reveal the worst year for Irish property prices in living memory.
So, what happened?
Put simply, a necessary correction to the market that was already under way in 2008 was swept off its feet by a perfect storm of global economic turmoil, the like of which has not been seen since the Wall Street Crash of 1929.
The normal mechanisms of the Irish property market were ultimately swamped by what was happening internationally. As a result, the number of completed sales plummeted. Nobody wants to invest when prices are falling; and, more ominously, those who needed to buy a home were prevented from doing so because banks no longer gave out mortgages in sufficient numbers.
If 2007 was dominated by a stand-off between buyers and sellers who refused to lower their unfeasibly high prices, then 2008 became the year in which the Irish property market was forced not only to take its medicine, but also to swallow a great deal more besides.
Like all businesses, the property industry needs sufficient trade and turnover to occur to benefit all those involved — the vendors, the buyers and the professionals who bring both parties together.
At the moment, trade has virtually halted, and without mortgages to fuel the market, the old terms and conditions under which we bought and sold homes in the past have been thrown out of the window.
Those who are lucky enough to have money to invest will be aware that the biggest property market killings have been made in downturns. If value does not already exist for them out there, it will certainly become apparent soon.
This time last year, agents may have hankered for the return of investors, but now they’d be more than happy to see a resumption of transactions by ordinary owner-occupiers. Ominously, however, unemployment, now rising at a rate of 1% per month, is likely to play a leading role in suppressing the market further in the months ahead.
Until some stability returns to the global market and banks start lending again, prices will remain, at best, static. At worst, they’ll continue to fall this year. To get to the level where a property will “wash its face” on a regular, old-fashioned mortgage — if that’s what it must take — average city houses might have to shed another ¤100,000 from their values.
If there is any good news at all to be gleaned from this survey, it is the speed of the correction. The faster we fall, the sooner we’ll hit the bottom, the sooner value will be realised again and the sooner trade in property will resume at a more efficient level. A slow, painful descent, drawn out over many years, would be an even worse scenario.
Where are prices likely to end up? Pushed for a view, most of our estate agents say they believe prices will flatline later this year. But nobody, of course, is equipped to predict that far ahead when each passing week seems to bring a new twist to the world’s financial crises.
From a report by Mark Keenan - Irish Times.
...price guide reveals desperate state of the housing market and its negative effect on the value of homes all across Ireland:
First, we need to get our terminology right. To date, Ireland’s property crisis has been described as a slowdown, a downturn and a slump.
But today the Sunday Times Property Price Guide 2009 shows that we’re in the grip of nothing less than a full-blown crash — and, by world standards, a severe one at that.
In recent months, property agents have claimed that successive price surveys have not come close to reflecting the grim reality they have been experiencing on the ground. Now, with the help of our guide, you can realistically assess for the first time how the crash has affected the value of your home.
This survey is more accurate than any other; to put it simply, no rival survey is as specific as the Sunday Times Property Price Guide.
Here we examine the performance of more than 20 types of property in more than 60 individual micromarkets. We have achieved this using a nationwide panel of more than 60 estate agencies, all with hands-on experience in their specific locales.
Furthermore, the Sunday Times Property Price Guide 2009 is not based on asking prices. Nor is it based on data gleaned from mortgage customers who purchased their homes six months ago. It’s not based on what you think or hope your home might be worth — the price that you might, as a prospective vendor, ask an estate agent to achieve.
The following figures are based solely on the figures that our agents, working on the ground, know they can sell your home for in the current market.
So here comes the reality check.
On average, prices have fallen across our surveyed markets by 20% since this time last year.
In general, the areas that have been hit hardest are in Dublin, where a third of Ireland’s population lives. Most postcodes in the capital have experienced price falls of between 25% and 35%.
To put this in context, Britain’s big property “crash” of the 1990s saw house prices lose 30% across what was almost a decade. In Ireland, many locations have shed that much in just the past 12 months.
Generally speaking, apartments and new apartments have been the biggest losers. With investors shying away from buy-to-lets, new one-beds in Dublin’s city centre have seen their prices tumble by about €100,000.
The following tables show what each property type can be sold for today, the price it would have achieved a year ago and, speculatively, what agents believe it might be worth in a year’s time.
The tables reveal the worst year for Irish property prices in living memory.
So, what happened?
Put simply, a necessary correction to the market that was already under way in 2008 was swept off its feet by a perfect storm of global economic turmoil, the like of which has not been seen since the Wall Street Crash of 1929.
The normal mechanisms of the Irish property market were ultimately swamped by what was happening internationally. As a result, the number of completed sales plummeted. Nobody wants to invest when prices are falling; and, more ominously, those who needed to buy a home were prevented from doing so because banks no longer gave out mortgages in sufficient numbers.
If 2007 was dominated by a stand-off between buyers and sellers who refused to lower their unfeasibly high prices, then 2008 became the year in which the Irish property market was forced not only to take its medicine, but also to swallow a great deal more besides.
Like all businesses, the property industry needs sufficient trade and turnover to occur to benefit all those involved — the vendors, the buyers and the professionals who bring both parties together.
At the moment, trade has virtually halted, and without mortgages to fuel the market, the old terms and conditions under which we bought and sold homes in the past have been thrown out of the window.
Those who are lucky enough to have money to invest will be aware that the biggest property market killings have been made in downturns. If value does not already exist for them out there, it will certainly become apparent soon.
This time last year, agents may have hankered for the return of investors, but now they’d be more than happy to see a resumption of transactions by ordinary owner-occupiers. Ominously, however, unemployment, now rising at a rate of 1% per month, is likely to play a leading role in suppressing the market further in the months ahead.
Until some stability returns to the global market and banks start lending again, prices will remain, at best, static. At worst, they’ll continue to fall this year. To get to the level where a property will “wash its face” on a regular, old-fashioned mortgage — if that’s what it must take — average city houses might have to shed another ¤100,000 from their values.
If there is any good news at all to be gleaned from this survey, it is the speed of the correction. The faster we fall, the sooner we’ll hit the bottom, the sooner value will be realised again and the sooner trade in property will resume at a more efficient level. A slow, painful descent, drawn out over many years, would be an even worse scenario.
Where are prices likely to end up? Pushed for a view, most of our estate agents say they believe prices will flatline later this year. But nobody, of course, is equipped to predict that far ahead when each passing week seems to bring a new twist to the world’s financial crises.
From a report by Mark Keenan - Irish Times.