With annualised property price inflation at 6.1% in January, the latest CSO figures show, what can Dublin buyers expect from the current market? Graham Murray, regional director at estate agents Sherry FitzGerald, offers some counsel.
The average price paid for a home in Dublin is now close to €600,000, according to figures from the Central Statistics Office’s (CSO) latest Residential Property Price Index.
In the 12 months to January, the average price of a home purchased in Dublin was €592,594, up from 5.6 per cent in December.
A lack of supply is the main driver of price increases.
The spring market is open
The bad weather at the start of the year caused many vendors to hold off on bringing their homes to market.
This is the traditional time to bring homes for sale.
The weather is better, the evenings are brighter, and gardens are beginning to blossom.
We will see more stock coming to the market, which is still very active with first-time buyers, traders up and traders down.
Lending options have expanded
Buyers should buy and borrow within their means.
Having more lending options is a good thing. It means buyers don’t have to go with the bank they are with.
They can shop around, be it for the best rate or the best terms.
Family buyers are looking for homes with a decent BER rating
A home with a good BER rating and that has been extended will garner more attention from buyers in the family market.
You can see the demarcation in two similar styles of properties on similar streets in the same area.
The one with the better BER rating will outperform the other. It also allows buyers to avail of green mortgage rates.
That said, Murray says Sherry FitzGerald is seeing more younger buyers taking on a renovation, either to add value or create value by extending into a garage or an attic, for example.
A location that suits your needs
Lots of people are looking for different things in life.
Some are looking to get on the property ladder, while others want to buy in a location they want.
The latter will have to compromise on the type of home they can purchase and their ability to do the work needed for that property. Buy in a location that suits your needs.
If you have or want a family is the property near schools is one of the questions you should be asking.
Not everyone wants to buy and move and buy again and move repeatedly. Some may not want the suburban life. A really centrally located home will work for enjoying all the capital has to offer.
But maybe in eight, ten or 12 years, if you have children, you may wish to move to a more suburban location, to be near family or amenities.
For traders, location is key. They have a support network of friends and family in the area. And they don’t want to move from that.
Bungalows are trending
The bungalow, a rare enough type of building stock in the Dublin market, has become hugely popular, not just with traders down but also with families, as they are often in well-established locations and have big gardens that you can extend into.
Multi-unit potential
Some of the larger properties could present opportunities to friends or family members buying together, subject to having the additional funds to upgrade and possibly extend some of them.
Some of these could be divided into well-spaced apartments, if you have the additional funds to extend and there is the scope to get the requisite planning permissions.
You will need to have clear plans around how you purchase and clarity around what happens should one of the purchasers want to move on and sell their share.
Get to know the selling agents
The continual strong demand can mean buyers get frustrated with bidding and being outbid. Get to know the selling agents. While they work for the vendor, they do want to help find you a home.
Agents will ask you questions such as where you are moving to. If you don’t know what area you want to move to, let the agent know that you’re driven by budget, not location.
Let them know what you’re looking for.
Trading up, down or across
The recently launched BOI trade-down equity release product is a bridging loan that will allow those who want to trade down to put their home on the market and start looking for a place to live.
It allows them to purchase and then sell.
Let any potential agents know if you’ve secured a buyer, but not yet secured a sale. At the very least, get your home valued so you have an idea of what your purchasing power will be.
Chains
There are a lot more chain sales. Having yourself ready is essential if you want to be attractive to buyers.
If you’ve secured your own buyer, you’re in a really strong position. In some instances, you can compete against cash buyers.
Be flexible
Some sellers will need some flexibility when selling. They may still be looking to secure a place to move to.
If you don’t need to be in immediately, that can be a plus for some vendors.
Multiple-bidding
Multiple-bidding, bidding on several properties at the same time, is on the increase.
The concern an agent will have is that, if we go sale agreed, will they go through with it.
Cash buyers
If a vendor wants to sell quickly, they might prefer a cash buyer.
If buying in cash, you need to be able to show evidence of the ability to purchase at this price level, either by furnishing a bank statement or a solicitor’s letter.
Should you really keep your cards close to your chest?
A good agent needs to be able to go back to the vendor with details of potential buyers. All agents want to know where you stand financially. Divulging information gives comfort and confidence.
It isn’t about saying what your purchasing power is, but to give an idea of whether you have the ability to complete the purchase. Approval in principle is essential.
There could be two to three people bidding in and around the same level, agents don’t want to agree a home to a buyer who can’t purchase.
Some buyers do want to divulge information to a vendor by sending an email or a letter. Agents prefer that you send these to them to pass on, rather than a letter through the door.
