Real Estate Alliance

REAL ESTATE ALLIANCE REPORT ON ACTUAL PROPERTY VALUES AT 50% FROM THE PEAK OF THE MARKET.

PRESS RELEASE

19th APRIL 2011

Nationwide property group Real Estate Alliance have released the results of their survey of the Irish property values for private treaty sales for the first quarter of 2011.

A new survey by nationwide property consultants Real Estate Alliance agents agrees that prices “achieved” for private treaty sales are down by an average of 50% from early 2007. The group surveyed their 35 nationwide offices on actual sales in the first quarter of the year, looking to compare prices with the market peak. According to CEO of Real Estate Alliance, Eimer O’Keeffe, “to truly ascertain the level of the marketplace it is important to look at actual sales at private treaty, rather than examining asking prices in various reports. 

She comments, “As market activity is slow in the November / December period, many of our client vendors put off reducing asking prices until mid January / February 2011 when activity starts back up.  Dropping prices when nobody is looking only makes a property look stale and vendors more desperate. There is no doubt that reports based on asking prices are inherently flawed as values for similar houses within the same estate can fluctuate wildly in - an example being Gleann Alainn, in Tullyallen, Drogheda where a similar 3 bed semi is today advertised by one agent at €230,000 and another at €150,000 or a 35% gap. We now call on Government to immediately implement the long overdue National Property Register”.

REAs nationwide reach means they we can see whats happening throughout the country and not just in pockets, and according to Real Estate Alliance, the most popular house type sold in the first quarter of 2011 was a 3 bedroom semi-detached home.  REA sampled their nationwide members, who reporting that prices in the first quarter of 2011 are back an average of 49% from the peak.  The smallest fall is reported in the Limerick region, which is back 37% from the peak; the largest fall is reported in the Meath area where prices are down 65%.

Whilst the average sale price for the quarter was €183,805, the median price reported for sales in the first quarter by REA was €156,000 down from a peak of €327,500.  A 3 bed detached house in Ballydowd Grove in Lucan, Co. Dublin sold in February for €330,000.  This is an attractive residence situated in a mature estate just a short walk from the village, and we estimate that it would have been worth in the region of €635,000 at the peak of the market.

A 3 bed semi in North Dublin fetched €190,000 compared to €380,000 at the peak and a 2 bed apartment sold for €131,000 in March compared to €325,000 in 2007, representing a 63% discount from peak to now. In the South of the City, a 3 bed semi-detached circa 850sqf sold for €307,000 in Q1in the Rathfarnham area and at the peak it was sold for €580,000 representing a 47% decrease while a 3 bed two story mid terraced house in the Rathfarnham area recently sold for €210,000 compared to €500,000 at the peak representing a 58% decrease.

Examples also include a cottage in Cavan that would have fetched €110,000 during the pead, selling for €60,000; a detatched dungalow in Co. Louth, with a peak value of €595,000  selling for €345,000; a semi detached home in Navan with a peak price of €319,950 achieving €149,950 and a 3 bedroom semi-detached Carlow property with a peak price of €210,000 making €91,000. A 4 bed semi-detached within walking distance of Newbridge town centre sold for €200,000 in March compared to €365,000 in 2007.

Real Estate Alliance put particular emphasis on the mean price of €156,000, as is factors out unusually higher or lower sales that may be achieved in the period. On the activity front, Real Estate Alliance members are also reporting that 2011 enquiry levels are trending upwards on 2010.  Having doubled on this time last year, they are now at a level previously experienced in Q1 2008.  “Whilst these figures are nowhere near the levels experienced when the market was in full swing, our report does show what’s actually happening on the ground” said group chairman Pat Riney, Orchard Real Estate Alliance. 

“Buyers are  begining to see an opportunity” continued Mr. Riney, “distressed sellers are making for opportunistic buyers.”

The strongest demand according to Real Estate Alliance is is for new residential property close to urban centres, particularly traditional  semi-detached and detached homes,  when priced correctly. The demand for apartments and terraced homes in secondary towns is assessed as “poor”  and there is no doubt that the higher than normal contract deposits being sought by lenders for this sector has effectively stopped sales - this is an area that NAMA are starting to look at with the two largest Irish financial institutions. 

Limited credit availability is still seen as the main impediment to sales proceeding and the spectre of a trend of rising interest rates are also identified as being a “significant”  influencing factor amongst first time buyers considering entering the market place according to REA.

As there is effectively no new building, most activity, say the group, is in the second hand or liquidated sales sector of the property where owner occupiers will continue to dominate demand over the next year.  REA do not see  sufficient  new supply being added to the marketplace, which, coupled with first time buyers picking up the most sought after 3 / 4 bedroom homes may well lead to rent increases towards the end of 2011  and, surprisingly, competition for properties in niche locations where the 50%+ drop in values witnessed to date have convinced purchasers that now is the time to re-enter the market.

“Landlords have been hit by increased taxes, increased mortgage interest rates and falling incomes in 2011”  says Eimer O’Keeffe CEO of Real Estate Alliance.  If supply does start to dry up in 2011, landlords may well look to recoup their losses.”  - this will be particularly pertinent if those first time buyers who wish to get on the property ladder continue to be frustrated in their attempts to get a mortgage.

Further Information:

Eimer O’Keeffe, Real Estate Alliance

eimer@realestatealliance.ie

086 8249040

Note to Editors

www.realestatealliance.ie

National property group Real Estate Alliance has 35 member firms nationwide. Real Estate Alliance member firms draw on vast experience in offering clients a top class service in residential, commercial, valuations, sales, purchases, lettings, agricultural lands as well as land development for housing sites, acquisitions, planning, zoning and professional consultancy, including rent reviews, arbitrations, CPO’s, lease renewals and appraisals. Membership of Real Estate Alliance Ltd is only open to members of the S.C.S.I