Ferrybank auctioneer and letting agent David Ennis believes that any notions of the property market bottoming out any time soon remain premature, adding that businesses must remain positive in these difficult times.
“It’s not easy right now for anyone working in property,” he told The Munster Express on Thursday last.
“But there’s little to be gained from moaning about things or feeling any self-pity. We’ve got no option other than to do our best, hope we’ll ride this thing out and come out the other side.”
Mr Ennis was speaking after the latest Daft.ie House Price Report revealed a near 30 per cent drop in city asking prices since 2007, with county asking prices having experienced a 27 per cent decline.
“There are a number of unknowns still out there, such as NAMA, but we have to wait and see what impact that’s going to have on the sector,” he continued.
“Looking at things as they stand now, it’s hard to imagine 2010 being all that different to last year, particularly in terms of new or recently built houses selling.”
But Mr Ennis’s outlook differs slightly from that of Bloxham Stockbrokers, who believe the market will bottom out during the first half of 2010.
Not only that, but property prices could rise by as much as 10 per cent by year’s end, according to Pramit Ghose, Bloxham’s managing partner.
In its ‘annual surprise list’ released on Friday last, Bloxham suggest a ‘modest recovery’ in the ‘prime’ residential and commercial property sectors.
This relative upsurge, in Mr Ghose’s view will be catalysed by “pent-up demand, attractive yields, renewed international demand and improving mortgage availability”.
While David Ennis would, no doubt, be pleased if Mr Ghose’s crystal ball is in proper working order, he believes the recovery in prices will materialise, but just not as quickly.
“There’s absolutely no doubt that there is exceptional value out there in terms of second hand homes, with a significant proportion of them being sold with fixtures, fittings, furniture and so on,” he said.
“But overall, I’d suggest that we are unlikely to see any sort of noticeable recovery until 2011 at the earliest, but we’ll just have to sit tight, wait and see and hope that better times will follow.”
What, in Mr Ennis’s view, needs to happen before the ‘bottoming out’ of the market can be declared?
“First of all, you need a volume of stock to make that call, something which we don’t have in the city right now,” he stated.
“So with that particularly in mind, it is difficult to conceive anything other than further price reductions during 2010.”
With asking prices now comparative to those recorded in the 2003/04 period, there is one stark difference between the market now and then: the flow of credit to would-be home owners.
“Restrictive lending has well and truly kicked in over the past year in particular,” Mr Ennis continued.
“Unlike the boom years, when overtime and shift premiums were taken into account when mortgage applications were being assessed, monies earned by such means now are off the agenda as far as lenders are concerned.
“We have a number of tenants currently who would have absolutely no difficulty in getting a mortgage just a few short years ago.
“But given the changing practices of financial institutions, many in reliable lines of work now find themselves slipping through the net, so to speak.”
In its 2009 review, Daft revealed that the average city asking price last year stood at €195,881 (down 29.2 per cent on ’07) with the average county price coming in at €237,526 (down 26.9 per cent).
On a year-by-year basis, city asking prices in 2009 fell by 23.2 per cent when compared to 2008, with the decline in the final quarter of ’09 down 11 per cent on Q3.
Meanwhile, county asking prices during 2009 were 23.2 per cent lower than the previous year, with the quarter-on-quarter change standing at minus 8.6 per cent.
In contrast to his Bloxham colleague’s sunnier view, Alan McQuaid (writing in the Daft.ie report) said there is little sign “that things will improve dramatically on the housing market front any time soon”.
Seeking a chink of light amidst the gloomy data, Mr McQuaid said that the rate of decrease in asking prices “appears to be easing off”.
But he stressed: “It is difficult to see the property market improving dramatically until labour market conditions get better and consumers become more confident about their job prospects going forward.
“And even then, consumers will be relying on the banks to make credit more freely available than what they are doing at the moment.”