In 2008, in general, it can be said there has been little in the way of good news. What started out a slow year with indications that prices would fall across the board, turned out by the end of the summer to have developed into what many property experts would describe as a freefall. With fluctuations in falling prices varying considerably depending on location across the country, nowhere escaped the carnage. Price falls varied from as high as 40per cent in some of Dublin’s commuter belt, with even traditionally nlue chip locations in the capital seeing falls as great as 20per cent. Galway, universally recognized as being recession proof in property terms didn’t escape either.
For first-time buyers in Ireland and particularly in Galway, making a decision to buy property has looked like a minefield. To buy now while prices are low or to wait for a possible further drop?......Having made the decision to buy, where to get a loan?..... Even with the vastly reduced prices, lending institutions (which are having troubles of their own ) seem to find it difficult to loosen the purse strings for all applicants. “At present there is little to encourage a more positive outlook,’ says Property Partners Maxwell & Heaslip joint director, James Heaslip. ‘In theory, cuts in interest rates and falling house prices should be encouraging new buyers to feel optimistic again, but, the lack of availability of finance is hampering most potential buyers especially the most vulnerable first time buyers who have no property to trade up.” Mr Heaslip adds, “For example, a buyer could now buy a range of three bedroom semidetached residences on the west side of Galway city varying from as low as €260,000 up to €300,000 with the average price for a three bed semi being around €275,000. With a 90per cent purchase price loan over 35 years based on a first-time buyers’ mortgage rate of 3.85per cent, at present would be only €1,060 per month. Considering the average rent for the same size property in Galway city is €900 per month, for the price of a good night out each month you could own your own home. As Irish people, it is in our make-up to aspire to homeownership as we are acutely aware of the cyclical nature of the property market or to put it in simpler terms ‘What goes up must come down’ and vice versa.
“While is has taken time for all those involved in the property business, agents, developers and vendors alike, to grasp the nettle of reality and revise asking prices downwards, there has been some movement in sales where pragmatism and reality has prevailed. Property Partners Maxwell & Heaslips have had some excellent results in 2008 across a broad range of property types and prices and expect 2009 to show a modest improvement helped by the number of potential buyers who have been waiting for some positive indications and biding their time before buying. As new housing developments have virtually come to a standstill for the past 12 months, it will only be a matter of time before the laws of supply and demand kick in and provide a stimulus to the stagnant market.”
One thing is for sure, the heady days of buying a property and flipping it on for a 15/20per cent profit in a 12 month period are gone for the foreseeable future. In the current market conditions, buying property must be treated as a long term investment. It is now, unquestionably, a buyers’ market and undoubtedly there is some terrific value out there for those fortunate enough to be in a position to buy without relying on the banks. However, the last quarter of the year has seen some of the institutions offering deals to buyers and it can only be a matter of time before others follow suit and offer similar products. As with so many facets of economic life, the essence of the property markets relies, to a large extent, on confidence and perception. As one of Galway’s most respected property firms Property Partners Maxwell & Heaslip will continue to provide a progressive and energetic service to all our clients, especially in these difficult times. James Heaslip adds “it is easy to provide a service in a rising market where things are good and properties almost sell themselves, but we are here and have been here for the past 40 years and intend to continue to providing a professional, efficient, and ethical service to our wide client base, both old and new.”
