June 21, 2024


Mad about real estate

The 2010 Property Market In Ireland

In 2007, Irish property prices fell, rather than rose, for the first time in 15 years. Property prices fell by 22 {ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} in 2009 and by 20{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} in 2008. Prices for certain segments of the market, such as luxury houses, apartments and holiday homes declined by greater amounts during this period.

Mortgage brokers have reported that the banks have become far more selective with regard to mortgage applications, with first time buyers in secure employment being the only group that can feel in any way confident about receiving a mortgage.

According to the Demographia International Housing Affordability Study, the average house in Ireland costs 3.7 times income, which the study classes as “moderately unaffordable”.

Will property prices continue to reduce at similar levels in 2010? Most estate agents in a recent Sunday Times report predict a static market for 2010, although a “sizeable majority” foresee further house price reductions.

In 2010, banks may increase interest rates to existing customers, with or without corresponding interest rate increases by the European Central Bank. The banks will still be very wary of granting new mortgages to applicants without the most secure forms of employment.

Rental rates will most likely decline in 2010, as more and more foreign nationals return home and overall rental demand decreases. The introduction of a residential property tax will not help the property investment markets, as such a tax will reduce even further the income from property rental.

Many buyers are looking for 3 bedroom semi-detached houses suitable for bring up a family. They are not interested in one or two bedroom apartments which are generally too small and were never designed for family life.

The fall in property prices over the last two years now allows buyers to purchase in areas closer to the centre of large towns, near other family members or closer to their place of employment.

Almost 1,000 repossession orders were issued in 2009, and over 26,000 home owners are now at least three months in mortgage arrears, so many more repossessions may follow in 2010.

However, it may well be that houses that have been repossessed by mortgage institutions will be withheld from the property market to avoid increasing the already large stock of houses for sale, which would drive house prices down further.

This article is only intended as a basic general summary and you should always seek professional advice where necessary.