Could anyone ever have foreseen such a series of headlines 18 months ago?
Monday, September 29, 2008
How bad is this going to get?
Could anyone ever have foreseen such a series of headlines 18 months ago?
Friday, September 26, 2008
Quotes of the Week
Week starting 22.09.08.
"It's very plain that the Government has been caught entirely flat-footed. Their flirtation with the property boom and the bubble in the property sector has seriously damaged the capacity of the economy to cope with more difficult times." Richard Bruton, Fine Gael finance spokesman, The Irish Times, 26.09.2008
"By slightly amending existing legislation, the Government could help stimulate this sector of the housing market by providing interest free loans of up to 20% of the value of the home for five years." Alan Redmond, IPAV President, 26.09.2008
"No lifeline should be thrown to first-time buyers. If there is a package, it will only end up being a bail-out for builders and will be of no benefit to first-time buyers." Karl Deeter, Financial Adviser, Irish Independent, 26.09.2008
"You are right to be sorry that you didn't sell in early 2006 when you could have. And you are right to be resentful of your neighbour who did. And no doubt, you would give anything to swipe the smug smile off his beaming face." Isabel Morton, The Irish Times, 25.09.2008
"It's very poor, with the lower priced properties moving quicker but not in any great volume. However, there is no sign of the market bottoming out at-all, at-all." Tom O'Higgins, RE/MAX Property Choice, on Ballybrack Co Dublin, The Irish Times, 25.09.2008
"The economic situation and lack of availability of development funding has had the effect of slowing down some new office developments and requiring that they be planned more rigorously and phased into the market. This should slow down development activity and may prevent an oversupply of office accommodation." Deirdre Costello, Jones Lang LaSalle, The Irish Times, 24.09.2008
"It is a great opportunity to get into the market at the bottom of the price cycle. We have seen a lot of movement in the last two weeks as a result of reduced prices and we would take the view that this has bottomed out now." Ken MacDonald, Hooke & MacDonald, Sunday Business Post, 21.09.2008
"As a result, you are probably looking at even better value for an investor’s point of view, in terms of what is out there in the market than would certainly have been the case." Geoff Tucker, Economist with Hooke & MacDonald Commercial, Sunday Business Post, 21.09.2008
"The very low rate of decline in July was clearly an aberration from the trend over the past few months. August re-establishes that trend and it's likely to continue through the rest of this year." Permanent TSB's Niall O'Grady, Irish Independent, 20.09.2008
"It's very plain that the Government has been caught entirely flat-footed. Their flirtation with the property boom and the bubble in the property sector has seriously damaged the capacity of the economy to cope with more difficult times." Richard Bruton, Fine Gael finance spokesman, The Irish Times, 26.09.2008
"By slightly amending existing legislation, the Government could help stimulate this sector of the housing market by providing interest free loans of up to 20% of the value of the home for five years." Alan Redmond, IPAV President, 26.09.2008
"No lifeline should be thrown to first-time buyers. If there is a package, it will only end up being a bail-out for builders and will be of no benefit to first-time buyers." Karl Deeter, Financial Adviser, Irish Independent, 26.09.2008
"You are right to be sorry that you didn't sell in early 2006 when you could have. And you are right to be resentful of your neighbour who did. And no doubt, you would give anything to swipe the smug smile off his beaming face." Isabel Morton, The Irish Times, 25.09.2008
"It's very poor, with the lower priced properties moving quicker but not in any great volume. However, there is no sign of the market bottoming out at-all, at-all." Tom O'Higgins, RE/MAX Property Choice, on Ballybrack Co Dublin, The Irish Times, 25.09.2008
"The economic situation and lack of availability of development funding has had the effect of slowing down some new office developments and requiring that they be planned more rigorously and phased into the market. This should slow down development activity and may prevent an oversupply of office accommodation." Deirdre Costello, Jones Lang LaSalle, The Irish Times, 24.09.2008
"It is a great opportunity to get into the market at the bottom of the price cycle. We have seen a lot of movement in the last two weeks as a result of reduced prices and we would take the view that this has bottomed out now." Ken MacDonald, Hooke & MacDonald, Sunday Business Post, 21.09.2008
"As a result, you are probably looking at even better value for an investor’s point of view, in terms of what is out there in the market than would certainly have been the case." Geoff Tucker, Economist with Hooke & MacDonald Commercial, Sunday Business Post, 21.09.2008
"The very low rate of decline in July was clearly an aberration from the trend over the past few months. August re-establishes that trend and it's likely to continue through the rest of this year." Permanent TSB's Niall O'Grady, Irish Independent, 20.09.2008
Friday, September 19, 2008
Quotes of the Week
Week starting 15.09.08.
"Consumer confidence is shot for lots of reasons, house prices will fall further and no one in their right mind is going to buy a house in the current environment". Jim Power, Friends First economist, The Irish Times, 19.09.2008
"It has been one hell of a ride since The Irish Times launched Ireland's first property supplement 20 years ago this month. In that time the property industry has changed the face of Ireland and brought enormous wealth to a great many people." Jack Fagan, The Irish Times, 18.09.2008
"It seemed as if everyone, knew the price of their own house. For a nation so famously reticent about money matters, we were suddenly well able to tell all and sundry what our house was worth now and what we paid for it. Not that it was professionally valued or anything but because it was here in black and white in the auction results or in the asking prices." Bernice Harrison on 20 years of The Times Property Supplement, The Irish Times, 18.09.2008
“The market is extremely challenging but we have a fantastic product in a superb location right in the heart of the city – it will clearly take longer to sell than it would a year ago but we’re confident because of the uniqueness of the product we will certainly sell them.” Michael O’Flynn, O'Flynn Construction, on the 17-storey Elysian tower which opened in Cork, The Irish Times, 18.09.2008
It was "completely incongruous" and he warned against allowing "the desired financial return of any developer to be a valid planning consideration." Dermot Desmond, Businessman, on Treasury Holdings' plans to build a 35-storey, 152-metre hotel in the Docklands, Irish Independent, 17.09.2008
"The forthcoming Budget should revert to the way mortgage interest was dealt with 20 years ago in this country, whereby one was allowed full relief on interest paid on principal mortgage at marginal rate... this would force people to buy houses and would have an additional benefit in terms of social stability as opposed to having a renting culture, which is the way matters have drifted." Michael Gilmartin, head of commercial lending at IIB Bank, The Irish Times, 17.09.2008
"Of the €12 billion invested in commercial property by Irish investors last year, €10 billion was invested abroad. The Irish economy could do with a slice of that €10 billion at the moment. At the same time, foreign investors are not investing in commercial property in Ireland." Tom Parlon, Director General of the Construction Industry Federation, Sunday Business Post, 14.09.2008
"The worst that can happen is that it doesn’t sell and then you can simply try again in early 2009." Michael Grehan, Sherry FitzGerald, Sunday Business Post, 14.09.2008
"Consumer confidence is shot for lots of reasons, house prices will fall further and no one in their right mind is going to buy a house in the current environment". Jim Power, Friends First economist, The Irish Times, 19.09.2008
"It has been one hell of a ride since The Irish Times launched Ireland's first property supplement 20 years ago this month. In that time the property industry has changed the face of Ireland and brought enormous wealth to a great many people." Jack Fagan, The Irish Times, 18.09.2008
"It seemed as if everyone, knew the price of their own house. For a nation so famously reticent about money matters, we were suddenly well able to tell all and sundry what our house was worth now and what we paid for it. Not that it was professionally valued or anything but because it was here in black and white in the auction results or in the asking prices." Bernice Harrison on 20 years of The Times Property Supplement, The Irish Times, 18.09.2008
“The market is extremely challenging but we have a fantastic product in a superb location right in the heart of the city – it will clearly take longer to sell than it would a year ago but we’re confident because of the uniqueness of the product we will certainly sell them.” Michael O’Flynn, O'Flynn Construction, on the 17-storey Elysian tower which opened in Cork, The Irish Times, 18.09.2008
It was "completely incongruous" and he warned against allowing "the desired financial return of any developer to be a valid planning consideration." Dermot Desmond, Businessman, on Treasury Holdings' plans to build a 35-storey, 152-metre hotel in the Docklands, Irish Independent, 17.09.2008
"The forthcoming Budget should revert to the way mortgage interest was dealt with 20 years ago in this country, whereby one was allowed full relief on interest paid on principal mortgage at marginal rate... this would force people to buy houses and would have an additional benefit in terms of social stability as opposed to having a renting culture, which is the way matters have drifted." Michael Gilmartin, head of commercial lending at IIB Bank, The Irish Times, 17.09.2008
"Of the €12 billion invested in commercial property by Irish investors last year, €10 billion was invested abroad. The Irish economy could do with a slice of that €10 billion at the moment. At the same time, foreign investors are not investing in commercial property in Ireland." Tom Parlon, Director General of the Construction Industry Federation, Sunday Business Post, 14.09.2008
"The worst that can happen is that it doesn’t sell and then you can simply try again in early 2009." Michael Grehan, Sherry FitzGerald, Sunday Business Post, 14.09.2008
Friday, September 12, 2008
Quotes of the Week
Week starting 08.09.08.
"The housing market is still in the throes of correction and it may well be 2009 before signs of stability emerge... Yet the monthly fall in July was only 0.2pc and the annual pace of decline also slowed, this time to 9.4pc from 9.7pc. As a result, Bank of Ireland projects an 8pc fall for the full year." Bank of Ireland chief economist Dan McLaughlin, Irish Independent, 12.09.2008
"It might start with the parent saying, 'that's too much, I wouldn't pay that'. Then the surveyor will have a go and advise them to drop a bit more and finally, just as they are about to sign the contract, the solicitor might say, 'tell them you're just about to sign the contract, but you want €20,000 off'. It's heart-breaking. For the vendor that is." Steven Manek, Douglas Newman Good, The Irish Times, 11.09.2008
"For the first time ever in Ireland the majority of homes being purchased by single people are being bought by women. The trend was heading this way before prices started falling but it appears to have accelerated considerably." Suzanne McGuinness of IFG Mortgages, Irish Independent, 11.09.2008
"If we get it wrong at the planning stage we're fighting a losing battle on other fronts. I think planning in some authorities is lacking coherence and consistency at national, regional and local level." John O'Connor, Chairman of An Bord Pleanala, Irish Independent, 10.09.2008
"We're probably going to Government at the worst time in the last 20 years and there's no doubt about that and that's a disadvantage for us." Brendan Kenny, Limerick Regeneration chief executive, The Irish Times, 10.09.08
"It will be a sad day for Dublin if one of its most attractive inner suburbs is destroyed in the fashion proposed here, if this is allowed to go ahead." Former PD leader Des O'Malley on developer Seán Dunne's plans for a 37-storey tower on the site of the former Jurys and Berkeley Court hotels in Ballsbridge, The Irish Times, 10.09.2008.
"The key issues facing first time buyers in the property market are: the lack of ability to obtain an appropriate level of finance and the lack of confidence in the market regarding when property prices will bottom out." Eoin Whelan, Director in Tax at BDO Simpson Xavier, Irish Independent, 09.09.2008.
“However, the other indices painted a somewhat more encouraging picture. Housing activity has to be curtailed to allow the supply overhang to be worked off and starts have, indeed, been minimal in recent months. The housing PMI index has oscillated around 25 for much of this year indicating that activity continues to decline but that the rate of decline has stopped accelerating." Pat McArdle, Chief Economist at Ulster Bank, 08.09.2008.
"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe." Hank Paulson, US treasury secretary, The Irish Times, 08.09.2008
"A four-bed period home off the South Circular Road could have cost up to €1.8 million when the market was at its height; now it’s down to €1.2 million or €1.3 million. If you are looking for a home to trade up to, somewhere that you plan to stay for a long time, that has to be seen as good value." Felicity Fox, Sunday Business Post, 07.09.2008.
"The housing market is still in the throes of correction and it may well be 2009 before signs of stability emerge... Yet the monthly fall in July was only 0.2pc and the annual pace of decline also slowed, this time to 9.4pc from 9.7pc. As a result, Bank of Ireland projects an 8pc fall for the full year." Bank of Ireland chief economist Dan McLaughlin, Irish Independent, 12.09.2008
"It might start with the parent saying, 'that's too much, I wouldn't pay that'. Then the surveyor will have a go and advise them to drop a bit more and finally, just as they are about to sign the contract, the solicitor might say, 'tell them you're just about to sign the contract, but you want €20,000 off'. It's heart-breaking. For the vendor that is." Steven Manek, Douglas Newman Good, The Irish Times, 11.09.2008
"For the first time ever in Ireland the majority of homes being purchased by single people are being bought by women. The trend was heading this way before prices started falling but it appears to have accelerated considerably." Suzanne McGuinness of IFG Mortgages, Irish Independent, 11.09.2008
"If we get it wrong at the planning stage we're fighting a losing battle on other fronts. I think planning in some authorities is lacking coherence and consistency at national, regional and local level." John O'Connor, Chairman of An Bord Pleanala, Irish Independent, 10.09.2008
"We're probably going to Government at the worst time in the last 20 years and there's no doubt about that and that's a disadvantage for us." Brendan Kenny, Limerick Regeneration chief executive, The Irish Times, 10.09.08
"It will be a sad day for Dublin if one of its most attractive inner suburbs is destroyed in the fashion proposed here, if this is allowed to go ahead." Former PD leader Des O'Malley on developer Seán Dunne's plans for a 37-storey tower on the site of the former Jurys and Berkeley Court hotels in Ballsbridge, The Irish Times, 10.09.2008.
"The key issues facing first time buyers in the property market are: the lack of ability to obtain an appropriate level of finance and the lack of confidence in the market regarding when property prices will bottom out." Eoin Whelan, Director in Tax at BDO Simpson Xavier, Irish Independent, 09.09.2008.
“However, the other indices painted a somewhat more encouraging picture. Housing activity has to be curtailed to allow the supply overhang to be worked off and starts have, indeed, been minimal in recent months. The housing PMI index has oscillated around 25 for much of this year indicating that activity continues to decline but that the rate of decline has stopped accelerating." Pat McArdle, Chief Economist at Ulster Bank, 08.09.2008.
"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe." Hank Paulson, US treasury secretary, The Irish Times, 08.09.2008
"A four-bed period home off the South Circular Road could have cost up to €1.8 million when the market was at its height; now it’s down to €1.2 million or €1.3 million. If you are looking for a home to trade up to, somewhere that you plan to stay for a long time, that has to be seen as good value." Felicity Fox, Sunday Business Post, 07.09.2008.
Friday, September 5, 2008
Quotes of the Week
Week starting 01.09.08.
"Let's remember this about the housing market - it is a market like any other market that is going through a process of adjustment. That adjustment has to take place."
Brian Lenihan in The Irish Times, 05.09.08.
"Affordability has improved a bit, but people are always reluctant to take the plunge while they see prices falling and while there are concerns about employment and the economy generally." John Sheehan, NCB, in The Irish Times, 04.09.08.
"There are two problems with this market - lack of money and lack of confidence . . . If we can provide one, we might be able to help the other”
Ray Grehan, Glenkerrin Homes in The Irish Times, 04.09.08.
"One of the biggest problems facing first time buyers and those trying to trade up is the banks' increasingly tighter lending. This is one way the Government could help borrowers, with a 'right-to-buy' scheme of shared ownership."
Joan Burton, Irish Independent, 03.09.08.
"We are sticking with our view that prices will fall by 30pc from peak levels. Anecdotal evidence points to the view that prices have fallen significantly further than 12pc."
Dermot O’Leary, Goodbody Stockbrokers, Irish Independent 02.09.08.
"Current trends can be attributed to a range of factors including consumer expectations of further house price reductions, the uncertain outlook on the economic and interest rate fronts, as well as the increased cost of funding for lenders."
Pat Farrell, Chief Executive of IBF, Irish Times, 02.09.08 on mortgages drawdown rates.
“Client companies who experienced difficulty in recruiting suitably qualified and experienced staff during the heady days of the market have also, with the firm's blessing, taken the opportunity to recruit from within the firm.”
Savills HOK statement in relation to staff being hired by its commercial customers, Sunday Tribune, 31.08.08.
"I don't see any quick fix over the next few months, and it may even get worse next year . . . but if investors can afford to ride out the next 18 months, then there will be growth once the market comes back to some sort of normality and the banking crisis starts to ease."
Brian Leslie, Managing Director of Primafinance.ie, Sunday Tribune, 31.08.08.
"Let's remember this about the housing market - it is a market like any other market that is going through a process of adjustment. That adjustment has to take place."
Brian Lenihan in The Irish Times, 05.09.08.
"Affordability has improved a bit, but people are always reluctant to take the plunge while they see prices falling and while there are concerns about employment and the economy generally." John Sheehan, NCB, in The Irish Times, 04.09.08.
"There are two problems with this market - lack of money and lack of confidence . . . If we can provide one, we might be able to help the other”
Ray Grehan, Glenkerrin Homes in The Irish Times, 04.09.08.
"One of the biggest problems facing first time buyers and those trying to trade up is the banks' increasingly tighter lending. This is one way the Government could help borrowers, with a 'right-to-buy' scheme of shared ownership."
Joan Burton, Irish Independent, 03.09.08.
"We are sticking with our view that prices will fall by 30pc from peak levels. Anecdotal evidence points to the view that prices have fallen significantly further than 12pc."
Dermot O’Leary, Goodbody Stockbrokers, Irish Independent 02.09.08.
"Current trends can be attributed to a range of factors including consumer expectations of further house price reductions, the uncertain outlook on the economic and interest rate fronts, as well as the increased cost of funding for lenders."
Pat Farrell, Chief Executive of IBF, Irish Times, 02.09.08 on mortgages drawdown rates.
“Client companies who experienced difficulty in recruiting suitably qualified and experienced staff during the heady days of the market have also, with the firm's blessing, taken the opportunity to recruit from within the firm.”
Savills HOK statement in relation to staff being hired by its commercial customers, Sunday Tribune, 31.08.08.
"I don't see any quick fix over the next few months, and it may even get worse next year . . . but if investors can afford to ride out the next 18 months, then there will be growth once the market comes back to some sort of normality and the banking crisis starts to ease."
Brian Leslie, Managing Director of Primafinance.ie, Sunday Tribune, 31.08.08.
Thursday, September 4, 2008
Energy ratings appearing on property brochures
We're just starting to notice a few 2nd-hand properties being advertised with their energy rating. Because this will become a significant factor in the valuation of property we will of course be including it in our comparables data. It will appear in the Additional Information column for now.
Tuesday, September 2, 2008
This Month's Top Headlines
What stories have you been reading. The following were the most clicked-on headlines on PropertyWeek.ie in August.
It is interesting to observe that the overwhelming sentiment of the most popular headlines are negative, which is both consistent with the current gloomy economic outlook and affirms the notion that bad news sells.
Can positivity within the property industry and media break the downward property spiral?
It is interesting to observe that the overwhelming sentiment of the most popular headlines are negative, which is both consistent with the current gloomy economic outlook and affirms the notion that bad news sells.
Can positivity within the property industry and media break the downward property spiral?
1. HOK gives blessing to firms to take its staff in cost-cutting bid
ONE of the country's leading estate agents, Savills HOK, has given its blessing to the recruitment of staff by its own commercial customers as it attempts to reduce staff numbers in the face of the property slowdown.
2. Property market in 'crisis' as homes sell at discount
THE property market is in "crisis" with homes increasingly being sold at below-market asking prices, according to estate agents and auctioneers.
3. Estate agents close under market pressure
Newer agents take the biggest hit while established companies drop salaries and diversify into rentals and commercial property.
4. House prices still have long way to fall
FAT cats certainly won't be rushing out to buy property over the next year-and-a-half.
5. What's going to happen to property in 2009
The 'Sunday Tribune' surveyed a wide range of property experts and found broad agreement: things are going to get worse.
6. Property prices set to plunge 40pc from their peak
THE housing market is going through a drastic correction at the moment which will see prices fall as much as 40pc from their peak, according to a survey of economists.
7. RE/MAX 'Super Auction' of cut-price homes to woo first-time buyers
Currently, Re/Max is planning a pilot 'Super Auction', to be held in Galway on 12 September. If this is successful, the company plans to expand the concept nationwide.
8. Builders' holidays are all over
THE BUILDERS' holidays have turned out to be more "staycation" than vacation this year. For many construction workers and tradespeople, the focus is now on surviving the months ahead.
9. Repossession bids surge by one-third
THERE has been a sharp jump in the number of cases where banks are seeking the possession of homes and businesses.
10. New station to cut city travel times
A NEW railway station offering 25 daily trains into the heart of Dublin will open today.
Monday, September 1, 2008
A pattern of price drops is establishing itself
A friend of mine put his apartment on the market some months ago. The agent said that during the boom he would have got well over €400,000 for it, but as things were he should put it on at €370,000, which he did. A few months later when no one had been to even see the property, the agent suggested dropping to €340,000 which my friend agreed to without hesitation. A few people came to view it at that price but no offers came in. My friend contacted the agent the next month and suggested a further drop to under €300,000, which the agent did happily. In the end, the apartment sold for just shy of that.
We all know this phenomenon is making a bad situation much worse. Vendors' expectations are still too high. Agents are still keen to take instructions and so are being over-optimistic about what they can achieve - overpromising at the start knowing they can then talk the price down when the vendor sees no offers coming in. Buyers are responding predictably to the signs. They see loads of price drops, and even see that nearly every property that comes on the market is now having its price brought down after a short time. So they're waiting before they even arrange a viewing. And with the number of successive price drops they're seeing on individual properties around them, they're expecting the pattern to be repeated across the board, and so a new pattern is created irrespective of how realistic the starting price was: if you haven't dropped the price on your home a couple of times at least, buyers aren't recognising value for money.
Pricing has become a nightmare for both agents and vendors. Commentators have been saying for some time now that agents need to manage vendor expectations and make sure they list their properties at realistic levels. They seem to have failed to do so for a long time and compounded that by competing with other agents for instructions on the basis of fantasy list prices rather than on actual service and sales skill. Vendors' greed is certainly a big factor too, but now even if both are curtailed, it seems you NEED to overprice at the start of the marketing in order to allow for the inevitable price drops that suggest the price is value for money.
We all know this phenomenon is making a bad situation much worse. Vendors' expectations are still too high. Agents are still keen to take instructions and so are being over-optimistic about what they can achieve - overpromising at the start knowing they can then talk the price down when the vendor sees no offers coming in. Buyers are responding predictably to the signs. They see loads of price drops, and even see that nearly every property that comes on the market is now having its price brought down after a short time. So they're waiting before they even arrange a viewing. And with the number of successive price drops they're seeing on individual properties around them, they're expecting the pattern to be repeated across the board, and so a new pattern is created irrespective of how realistic the starting price was: if you haven't dropped the price on your home a couple of times at least, buyers aren't recognising value for money.
Pricing has become a nightmare for both agents and vendors. Commentators have been saying for some time now that agents need to manage vendor expectations and make sure they list their properties at realistic levels. They seem to have failed to do so for a long time and compounded that by competing with other agents for instructions on the basis of fantasy list prices rather than on actual service and sales skill. Vendors' greed is certainly a big factor too, but now even if both are curtailed, it seems you NEED to overprice at the start of the marketing in order to allow for the inevitable price drops that suggest the price is value for money.
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