At the end of another busy property year we are taking a few minutes to summarise the current situation locally and nationally,
writes Austin Egan of Appleton Property, with a few hopes thrown in for next year …
Well it's hard to be brief when speaking about property after such a busy year. We are about to see a change of government and after a plethora of election promises never before seen, we are looking forward to seeing what changes the new regime will bring forward.
In 2024 residential property prices are reported to have risen in the order of 10%. The rise in prices has continued since the sharp elevation immediately after the Covid lockdowns. There are many factors that have contributed to this continuous rise in property values. Savings built up over the pandemic and pent up demand caused the initial post covid jump in prices. Since then we have seen lowering interest rates with three more cuts coming before next summer, a loosening of Central Bank rules in 2023 and, to some extent, wage growth.
In Kilcullen for example, the most recent three bedroomed semi detached home we sold was €389,000. The last two four bedroomed semi detached homes we sold were both €460,000. These sales represent the highest price paid for these house types to date in Kilcullen. These three examples were particularly well presented, had good BER ratings and all three were properly presented for sale and had been substantially improved since the time of build. We have seen the same level of elevation in values across the board on smaller homes, apartments, country homes and property in the rural villages surrounding the town. We expect a further elevation in property prices in 2025.
We all know for sure the principal factor driving house prices is the low level of supply and the high level of demand. This has been a repetitive theme in the media for some time now.
We effectively have two residential property markets, New Build Homes and Second Hand Homes.
When a first time buyer purchases a new build home there is no linked transaction. A house is built and someone in need of housing purchases it with no subsequent effect on the overall market. Whereas, when someone sells a second hand home it is most often the case that they then buy a larger, or smaller, home. This seller in turn buys another home and the transaction is replicated up and down in the market. This ripple effect provides an opportunity for people to ‘right size’ their homes. The additional benefit here is that people are then not hoarding larger homes with empty bedrooms they don’t need. They are not then paying to heat and maintain these unused spaces and are not burdened by the maintenance of large gardens, higher LPT etc. These properties are then released to people at a different stage of life who need the space for their younger families etc. The only incentive currently for people to sell their family home is the fact that the sale of a principal private residence is completely tax free. Stamp Duty is 1% up to 1 million euros and is therefore not a barrier to exchanging residential property. We would like to see people further assisted to sell their family home when they no longer need the space. Perhaps a scheme similar to the Help to Buy Scheme for first time buyers could be introduced for down sizers to encourage and assist people making their move.
Incentivising builders to build retirement friendly smaller homes would also facilitate this movement in the market. By incentivising, I mean writing a cheque - financially compensating builders to produce what may be less profitable but highly sought after homes. We consistently assist people in making this move and are familiar with the challenges and how they can be overcome.
Across the country this year there has been a significantly lower level of second hand sales transactions than in previous years. While all individual sales transactions are strong, there has been less movement in the market due to this low level of supply. We don’t need to refer to statistics to illustrate this point. Everyone in the market knows that the surge in volume particularly at the back end of this year did not happen. What we now have are many people waiting to identify a suitable property to purchase prior to putting their home on the market.
We would encourage all these people to enter the market. Property sales are subject to contract. In this tight market we are seeing a greater level of co-operation between buyers and sellers in terms of time frames allowable for closing. Once agreed up front, this can allow a person additional time to identify a suitable property to move to. It is also the case for those selling their home to buy another that they will need to be Sale Agreed to be considered. In this competitive market, when competing with cash buyers and loan approved buyers who are not selling a property, we would strongly advise that a person has their home sale agreed. This puts them in a ready position and makes their offer more attractive to a vendor. If you are sitting on the fence, you may find that fence to be your permanent position. We would suggest that you make the move, advise any potential purchaser up front of your circumstances through your agent and arrange that flexibility from the outset. Despite the challenges in the market people tend to navigate successfully through it and get where they want to go. We are here to assist with this process. For us, agreeing the terms of the sale properly at the outset leads to a successful sale in the end.
We look forward to providing our services into our 15th year in business in Kilcullen. I have been involved in property now for 30 years. I am available to advise and assist those thinking about selling. Get in touch and we can have a free of charge, no obligation conversation about the value of your property and the sales process.
Austin Egan is a member of the Institute of Professional Auctioneers and Valuers since 2004. He is a Recognised European Valuer and the owner of Appleton Property Kilcullen. 045 482 759, 087 131 1133, info@appleton.ie
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