No matter who you are you’ll have a view on the estate agency profession.
Some will be critical and accuse us of making the wrong call on the way market would go. Cynics will say our job is to ‘talk up’ the market and we therefore can’t be objective. We even get blamed for fuelling the property boom which saw house prices explode in Northern Ireland (which is a bit unfair as we weren’t lending the money or queuing up as new developments hit the market. We were just refereeing the madness!).
The fact is no one could have predicted growth of around 40% in less than a year – or the subsequent reductions by much the same level – within the province’s housing market.
Recent house price surveys have told us what we all know: 2008 has been a year when values reduced by around 30% on summer 07 values following the most explosive price growth in Northern Ireland’s history. No surprise there? But it’s old news for most of us who want to know where the market is at now.
Much of the local housing market has now stabilised and, we could even say, is showing evidence of recovery.
Why do I say that?
Because the facts speak for themselves:
FACT 1 The evidence – both from the ‘real world’ and anecdotal sources – is that houses are now ‘officially’ selling again thanks to a combination of price reductions, innovative purchase options offered by developers and a growing realisation that life must go on.
FACT 2 This year – in the first eight weeks alone – we have sold 165 new and re-sale homes across our five branches. Compare this with January 2008 when we sold just two homes and you get a feel for how things are changing – not just for us but right across the market up and down the province.
FACT 3 Where vendors adjust their asking prices to reflect today’s market values (which broadly reflect those of late 2005 or early 2006) there are buyers out there.
Just two weekends ago at an open day to promote a housing scheme at Ballantine Gardens on the outskirts of Lisburn seven homes were sold. This isn’t hype: it’s fact.
FACT 4 Banks are beginning to lend again, albeit more prudently with larger deposits required in many circumstances and this has been made easier in the new homes’ market thanks to the support and innovation of developers.
After three years where the market was driven by ‘greed’ (ie short term speculation) there is no doubt it is slowly returning to one characterized and shaped by ‘need’ which should be the norm.
While we freely acknowledge the downward trend in values we believe the recent University of Ulster report which pointed towards a modest uplift in sales in December 08 points towards the market having ‘bottomed out’ in the last quarter of that year. Interestingly there have been situations recently where bidding situations have been seen once again.
Our analysis would suggest the market requires further price alignment amongst those who are either in denial or partial denial about the need to reduce prices by a minimum of 30% against those of summer 07. However, when vendors make these reduction houses are now selling.
What we need now is to regain a sense of perspective. Property should always be seen as a medium to long-term investment. Indeed many financial advisors believe property is a better long-term investment than stocks and shares.
Whether or not that’s the case the fact is that normal transaction levels will return to Northern Ireland sooner or later as we seek to upsize, downsize or re-locate depending on our own unique circumstances and – if the price is right – there’s a buyer for everyone.
Partner, Templeton Robinson
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