Just the Words

I have to ask because I am getting conflicting information.

The International Monetary Fund says that Irish house prices are overvalued by 30%, which is a frighteningly high figure. The governor of the Central bank disagrees, he says: “the recent falls have brought prices back to realistic levels.” The National Irish bank says in its quarterly report: “house prices have almost ‘bottomed out‘ and that sales activity will return to normal in the second half of the year.” But then when you look at the actions of mortgage lenders, you can see that they are thinking houses are currently over valued. So who should you believe?

I talked to a friend of mine – an estate agent, he says that when a property comes in it either goes out again so fast they barely have time to print the details – or it sits on the books for months. The properties that are selling like hot cakes are of two main types:

The most popular type is a property that can be significantly improved or extended, there are lots of property developers out there and they like these, as they can quickly do the improvements and re-sell the house. Which brings us to the second type of property that is selling quickly – houses that are in good shape ready to move into (such as those just improved by a developer) so I heartily recommend those books on how to make your home attractive to potential buyers.

I also asked about new builds, these seem to be making mortgage lenders very jumpy right now. My friend told me that the ultra luxury (as in million plus) and the just more than starter level (2 bed 2 bath), are selling even before show homes are finished.

Then there is location to consider. Some of the more expensive areas of the country (South County Dublin and Wicklow for example) have seen large price drops. However in Galway city prices have recently increased!

But what does this mean? Will house prices fall further? I am going to be frustratingly unhelpful and say – it depends on the property and on the area! The discussion above is just broad brush strokes. After all demand for housing is still rising. If you are a property investor then there are turbulent times ahead between house prices and mortgage lenders. But if you are looking for a home to live in for a while, now might be a good time to pick up a bargain. But be cautious, don’t plan on buying with the smallest deposit you can right now – and hope to re-mortgage in a few years. That is a risky tactic right now. Buy a home you want to live in.

And above all get a professional to help you with the mortgage, you will need every advantage you can get.

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