The new President of the Irish Auctioneers and Valuers Institute (IAVI) believes that property remains a sound long-term investment despite the recent economic slowdown.
Addressing the IAVI Annual General Meeting last Wednesday, Edward Carey reminded those present that Irish home prices have increased in all bar one of the previous 38 years.
Cumulative growth of home prices during that time stands at 4,800 per cent, with second-hand prices experiencing an increase of 3,175 per cent in 34 years.
“The current price correction is welcome and brings prices back to end 2005 levels, which are sustainable,” said Mr Carey.
“Now, we find ourselves in a more demanding market, which others may fear, but in which I see opportunities.
“There is activity in the market and properties will continue to sell where people perceive value. Although prices may have decreased, demand is good, rents are stable and people are still looking to set up homes all over the country.”
Added Mr Carey: “This is fundamentally an issue of supply and demand coupled with the availability of finance and we are in no doubt that the supply side remains positive with continued immigration and good employment figures.”
Mr Carey reflected on the IAVI’s role in the Revenue Commissioners’ recent efforts to access member files in order to identify Irish buyers of foreign property.
He said that they were “concerned that its members may be exposed to civil action for handing over confidential information, which the Revenue Commissioners were not legally entitled to receive in the manner sought”.
He continued: “banks have suffered for relying on similar assurances from Revenue in respect of its powers. The IAVI encourages tax compliance but will always insist that the State, in seeking information, must itself act legally.”
The new Minister for Finance will have to adjust transfer taxes in the light of Taoiseach designate Brian Cowen’s stamp duty reform in last year’s budget, Mr Carey stated.
Without this adjustment, a major impediment to mobility and a more efficient use of property stock will remain in place.
“The whole economy benefits from a buoyant but sustainable property market and there is a need to retain Irish investment at home and to encourage inward investment,” he said.
“The current commercial property stamp duty rate of nine per cent merely drives investment abroad at a time when our economy could benefit from internal investment.”
Edward Carey acknowledged the ‘changed business climate’ that his members are operating in.
He said that the time has come “to sort out the trained professionals, for whom property is a genuine career, from those who perceived the boom market as a way to make a fast buck”.
Estate agencies must ensure that those it employs “are imbued with a sense of customer service and that agents need to recover the win-win philosophy that brought success before the boom years”.
Meanwhile, the IAVI President spoke of his relief that the Bill to establish the National Property Services Regulatory Authority will be dealt with the Oireachtas in the current Dáil session.
“The IAVI has actively sought the establishment of such an authority since 1931, when we proposed in a Private Member’s Bill that (IAVI) would merge into a State Authority with mandatory education and registration for all agents,” he said during his address.
“It seems that, 77 years later, State thinking has caught up with that IAVI foresight and we welcome this move to establish such an authority.”
“Although IAVI members are professionally qualified, are required to engage with Continuing Professional Development, hold licences from the courts, produce tax clearance certificates and maintain Professional Indemnity Insurance, we have had to compete with those who simply put a sign up outside a house and call themselves auctioneers.”
Edward Carey said that the public deserves a trained, professional service.
“We want anyone who offers an estate agency service, of whatever nature, without a licence, to be detected and prosecuted,” he said.