Price wars set to begin over ‘niche’ properties
Country living has not become a priority for most buyers, according to summer property report
IRELAND’S property market is set to see all-out “bidding wars” for “niche homes” as buyers scramble to secure more space in desirable locations in a post-Covid world, according to leading economist Austin Hughes.
Hughes said space, proximity to transport and a garden in a desirable location top the list of people’s needs following the pandemic.
His comments come as early indications from the nationwide Residential Property Price Barometer by IPAV indicates house prices have risen over the past six months.
Meanwhile, Ken MacDonald, managing director of Hooke & MacDonald, has said the company is experiencing its busiest summer on record as people stay home to house hunt rather than jet off on their summer holidays.
HOUSE prices are on the rise as buyers flood the market following the country’s Covid-19 lockdown.
Early indications from the nationwide Residential Property Price Barometer compiled by Institute of Professional Auctioneers and Valuers (IPAV), which is not due out until this September, indicate strong activity in the market.
Speaking to the Sunday Independent this weekend, the chief executive of IPAV, Pat Davitt, said: “We have compiled prices up until the end of June and I can tell you that prices have gone up for the last six months.
“Properties are scarce. They are not plentiful and it is a seller’s market. For anything that is in any way attractive, prices have gone up.”
The news comes as one of Ireland’s leading economists, Austin Hughes, told this newspaper that people can expect “bidding wars” to start on homes that appeal to those looking for more space in good locations following the pandemic.
“If you have a home in a very desirable district with three bedrooms, a study, a converted attic, a big back garden and you live beside a park, there is no question the supply of those properties relative to demand has worsened over the past while and that more people are looking for those sort of homes,” he said.
“I do think there are sectors of the market and economy where the pandemic hasn’t had a [negative] impact and that will remain the case.
“I think we are talking about niche properties where you would see some significant [demand] and basically there will be some sort of element of a bidding war.
“Space, close to transport, with a garden: it’s all those elements that people have discovered they need because of the pandemic.”
However, Mr Hughes also warned that this will be in sharp contrast to another section of society who face uncertainty in income and employment.
“What seems to be happening is two things. On the one hand, there is a pent-up demand for people who have found themselves working in the wrong place, or discovered they need more space at home in order to work at home. Those people are getting into the market now and are aware there is some kind of limited supply because of the halt in construction.
“The critical issue is that there is a second round to come, in which there is a weakening of the economy and with that brings the impact on employment and incomes and, consequently, household mortgage financing capacity. It is a very uneven set of circumstances.”
Meanwhile, Ken MacDonald, managing director of one of the country’s biggest property agents, Hooke and MacDonald, said this summer is set to be one of the busiest on record.
“The pent-up demand that has come about because of lockdown has created one of our busiest summers. The level of enquiries and viewings and bookings for July has been phenomenal and we are expecting a very busy August, which is most unusual, because a lot of people are staying in Ireland so they are looking around.
“The demand for all types of homes has gone up — country properties in particular. We are selling properties in Mount Juliet and have seen enquiries quadruple in the last two months. We have sold six houses in Mount Juliet in the last six weeks. People feel they can commute from Dublin, work from home, enjoy the estate, golf and fishing.”
On the type of buyers flooding the market in these uncertain times, he said: “Some sectors are absolutely thriving — IT and the pharma industry are absolutely motoring along, so there is a definite shortage of accommodation for some.”
An impending fixed-rate mortgage price war is also helping people get on the property ladder as banks cut rates following the arrival of a Spanish competitor. Permanent TSB announced it will slash its rates, while Ulster Bank is offering €500 cash to switchers, after Avant Money announced in recent days that it will start offering Irish mortgages.
Meanwhile, Sherry FitzGerald is due to launch its summer Irish Residential Market Review tomorrow. Despite the ongoing uncertainty arising from the Covid-19 pandemic, the report says buyer sentiment remains resilient, with 82pc of respondents either ‘just as committed’ or ‘more committed’ to buying a new home.
And it seems talk of an exodus from the cities due to remote working has been overplayed. When asked for their priorities when it comes to finding a new home, access to reliable broadband was the top-ranking feature for buyers, followed by more outdoor space and a good energy rating.
Respondents placed less importance on access to the countryside and proximity to extended family, with only 35pc of respondents rating access to the countryside as ‘important’ or ‘very important’.
The figures come as Dr Brian Hayes, one of the country’s leading experts in demographics, told the Sunday Independent that he believes most people will still want to live in Ireland’s major cities.
“That’s probably reflecting my near 75 years and my innate conservatism,” he said.
“We are adverse to change. We are very slow to think of something totally different and my feeling is that the longterm trend will be maintained and once we have the vaccine, things will settle back.”
Meanwhile, delivery of new homes could drop to 17,000 or fewer this year, at a time when estimated demand is running at about twice that, according to IPAV.
This is despite the fact that the government was warned as far back as 2012 that there would be a major housing shortage coming down the tracks.
‘The pent-up demand has created one of our busiest summers’