Real Estate Alliance

Time to Get REAL About Property

- Real Estate Alliance Survey Results for 2009 Revealed -

National property group, Real Estate Alliance, today (19th March 2009) revealed the results of its annual property survey. The survey gives an insight into the views of those who are active or expect to be active in the property market in the year ahead. As part of Real Estate Alliance’s proactive approach to determining current market opinions and expectations, the study’s findings are designed to give Real Estate Alliance members invaluable insight into the marketplace to assist them in providing the best possible service for their clients.

The survey gave a snapshot of the type of buyers currently active in the marketplace. Of those surveyed, 37% were first time buyers while 38% were looking to trade-up. A significant number, 24%, were investors while the remaining 2% were seeking to downsize. (See below for more details on what each of these groups had to say about the property market in 09).

One of the most positive facts to emerge from this report is the indication that a majority of potential buyers (52%) intend to purchase a property in the next year and the majority (79%) believe that there is value in buying a property at the moment. The large percentage (61%) say that ‘seeing the right house’ would motivate them to buy now but a significant proportion (63%) are holding off because they believe that prices will fall further this year. 36% believe that prices will bottom out at the end of this year. 27% believe property prices will decrease by more than 5% in 2009. 50% believe it will decrease by more than 10%. Most respondents (63%) believe interest rates will drop to 1%.

 Respondents were asked a number of questions relating to building energy ratings and carbon taxing, revealing that the majority (65%) believe that building energy ratings will have no overall effect on house prices. A key finding from the report reveals that the majority (64%) don’t agree with carbon taxing homes although 66% believe that it will be used as a basis for the proposed property tax. 45% of investors and those trading up think that they can obtain a BER certificate online rather than through professionals.

Commenting on the Real Estate Alliance Property Survey 2009, Paul Grimes, Chairman of Real Estate Alliance and director of Grimes Real Estate Alliance in Ashbourne and Skerries, said; “We are heartened to report that 52% of those seeking to buy intend to do so in the year ahead. In particular almost 70% of first time buyers intend to buy in the next year. The widespread belief is that prices will continue to fall in the months ahead but that the bottoming out of the market will come towards the end of 2009. The majority of respondents believe that there is value in the market currently and that seeing the right house would provide the stimulus for them to proceed with a purchase.”

 “The results of the survey have clearly defined the challenges ahead for all Real Estate Alliance members to show potential buyers the value that exists and to use their experience and expertise to find the right house for clients. While there is an obvious reduction since the peak in the number of people active in the market place, those that are considering purchasing intend to do so in the months ahead and we can presume they will be monitoring the market closely in the belief that the bottom of the market will come towards the end of this year. Naturally, everyone wants to be ready to strike when this time comes”, he said.

A PICTURE OF THE PROPERTY MARKET IN 2009

FIRST TIME BUYERS

The majority of this group are between 25 and 30 years old. 48% are renting while 31% live with their parents. 66% of those renting are paying between €600 and €700 per month. A large majority (68%) of these potential buyers want to buy in the next year and most are motivated by “seeing the right house”. 54% are buying alone and 41% are buying with a spouse or partner. Interestingly, most of them have no preference between a newly built or a second hand house. The most popular budget is between €200,000 and €249,000. Most of these buyers (54%%) are holding off buying because they believe prices will fall in the months ahead and 22% are have problems obtaining finance. A considerable number of this group (59%) haven’t applied for a mortgage yet. Most First Time Buyers feel that the Home Choice loans will have little effect on the market. 79% of First Time Buyers think there is value in buying a house at the moment. 37% believe that property prices will bottom out by mid 2009. Most First Time Buyers (35%) believe that house prices will decrease by 5% in 2009. The majority of First Time Buyers believe that building energy ratings will have no effect on house prices and most don’t agree with carbon taxing homes.

TRADING UP

The majority (88%) of this group are not planning on selling this year while nearly 40% plan on buying. 80% of those planning to buy would like to do so in the next 12 months and 64% feel that “seeing the right house” would motivate them to buy sooner rather than later. 80% of respondents are buying with a spouse or a partner. 22% have a budget of over €600,000 for trading up.  A large majority (62%) are holding off buying as they believe prices will fall further and very few (9%) are having difficulty obtaining finance. Most of this group have not applied for mortgage approval in the last 12 months. Nearly 70% of people trading up believe the Home Choice Loans have little effect on the market. 62% feel that there is good value in buying a house at the moment. Nearly 70% believe prices will fall further while 37% believe that the market will bottom out in 2010. 56% believe that property prices will decrease by more than 10% in 2009. 53% believe interest rates will fall in 2009 to 1%. The majority of people trading up believe that building energy ratings will have no overall effect on house prices although 64% believe that energy ratings will be used as a basis for carbon taxing homes although the majority (60%) do not agree with carbon taxing homes.

INVESTORS

Investors represented 23% of respondents in this survey. Investors state that they are not planning on selling this year but 48% plan on buying this year and 85% in the next 12 months. A large majority (57%) are motivated by seeing the right house and 43% are motivated by the lower interest rates. Most investors (67%) are either buying with a spouse or partner while 28% are buying alone. This group have no preference between newly built or second hand houses. The budget for this group varies more than the other sectors with a majority favouring under €299,000.

 A large majority (75%) are holding off purchasing for now as they believe prices will fall further in the months ahead and 17% are having difficulty securing finance. 65% believe the home choice loans offered by the Government will have a little effect on the market. Most of investors (72%) believe that rental prices will go down in 2009.

A significant majority of investors (48%) believe that property prices will bottom out in late 2009. 65% believe building energy ratings will have no overall effect on house prices. 69% believe it will be used as a basis for carbon taxing homes. 72% do not agree with carbon taxing homes.

NOTE TO EDITORS

Real Estate Alliance is a strategic marketing alliance comprising some of the country�s best-established auctioneers and estate agents. Our key focus is on locally-owned and established estate agents. With one quarter of the alliance�s firms in business for more than a century, and with an existing IAVI president & five IAVI past presidents among the group�s members, the alliance is characterised by the established strength of its membership. In addition, membership is only open to firms led by members of the Irish Auctioneers & Valuers Institute or the Society of Chartered Surveyors.

Clients of REA members benefit from:

Real Advice

- Because member firms are locally-rooted and independently owned, they have first-hand market knowledge that ensures clients make only the best-informed real estate decisions.

Real Commitment

- Member firms are well established, leading local businesses built on delivering the best results for their clients.

Real Service

- Our member firms have the detailed understanding of the local property issues facing clients to ensure that they provide a superior range of client services.

Real Professionalism

- As Ireland\'s highest-qualified property professionals, REA sales staff are members of the IAVI or the SCS, the representative bodies for Ireland\'s top property professionals.

Real Confidence

- IAVI members complete far more property transactions than any other professional group. Our member firms harness this transaction volume to seize opportunities and speed the transaction process for you.

Real Coverage

- With more than 400 professional staff in 40 offices located nationwide, our member firms can provide the best real estate advice locally and nationwide.