THERE has never been a better op- portunity for first-time buyers in Ennis to enter the property market. That’s the opinion of Michael Ley- den of Leyden Auctioneers.
There are now approximately 150 newly built houses for sale in Ennis and he says that if people don’t buy now there is every chance that they could again be priced out of the mar- ket.
‘First time buyers have everything going for them at the moment. They don’t have to pay stamp duty on new or second hand homes assuming they are going to be owner-occupiers, there is a €10,000 room rent allow- ance available and there has been a substantial increase in owner-occu- pier’s mortgage interest relief. With conditions as they are at present, first-time buyers should be much more active in the housing market.
“There are statistics coming from the financial institutions to say that they are receiving as many applica- tions as before, however, there is less of an uptake on these. They are get- ting approval for mortgages, but they are waiting and waiting and waiting
for something to happen. The prices are as low as they are going to go and now is the time to act,” said Leyden.
With the advancement of the Budget date there are two schools of thought among those involved in the prop- erty market. Some are of the opinion that they should rush in to buy now before the budget announcements, in case they cause a shake-up in the house market that would lead to a rise in prices. The other school is that potential buyers should wait until af- ter the Budget and reap the benefit of possible incentives that the Govern- ment may offer.
“Ennis is bucking the trend at the moment. Other towns of the same size are not in the same situation. Some of them have a large amount of houses for sale. Despite all the furore regarding over-supply of new homes in the Ennis property market, Leyden Auctioneers have established after research that there are approximately 150 new homes built and ready for sale in Ennis town and it’s environs.
“This is alarming considering that around 450 students sit the leaving certificate in Ennis each year, mi- grants and returned immigrants can account for up to another 200 people,
and it is estimated that the popula- tion of Ennis will increase to 36,000 people in 2014 from a current 28,700. Also if there is a rebound in the mar- ket it will take builders at least a year to catch up, therefore a shortage is already looming,” said Leyden.
This shortage is coming on the back of market conditions, but Ley- den warns that if the market doesn’t kick-start itself soon, there will be a serious shortfall between supply and demand.
Padraig Howard of Drumquin Con- struction is of the opinion that we are very close to this. “The builders have cut back the amount of projects they are involved in. The number of starts next year will be negligible. Homebond registrations are down by something in the region of 80 per cent this year. This is the lowest level of housing starts in County Clare since 1994. We are now talking in single figures.”
There are certain factors that are stopping the market from kicking back into life, and while stamp duty doesn’t affect first-time buyers, ac- cording to Leyden, it has the biggest effect on the market.
“I feel that the 7 per cent rate
of stamp duty on purchases over €125,000 is penal and crippling and should be revisited. My view would be that a 4 per cent band should be introduced between €125,000 and €750,000 and a 7.5 per cent band over €750,000. The middle market and investment market are suffering because of the current 7 per cent and 9 per cent rates.”
Both Leyden and Howard are ada- mant that neither the building trade nor the auctioneering trade want to see house prices rise to the levels that they were at 18 months ago.
“We need a stable market. Drum- quin Construction was selling three houses a week in 2006. Now we are selling one every two months. The demand is there, but buyers aren’t taking the plunge. A microcosm of this happened in 2002 when buyers stopped buying for 12 months,” said Howard.
“Tf there is a rebound in the market, it will take the building trade 12 to 18 months to catch up to demand. There is a lot of planning in the pipeline, but due to the effective embargo on planning by Clare County Council development can’t start. From the date that planning gets the go ahead,
it will take a year to a year and a half until they are ready for sale. Next year the market 1s going to be in lim- bo and it will be 2010 before we see any serious action,’ says Leyden.
Howard agrees with this statement saying, “If this happens you’re going to have increased demand, but with no supply.”
Nobody wants to see history repeat itself and despite issuing warnings about the future of the property mar- ket, the pair are upbeat about what is ELOVb OTM UL
“The economic outlook isn’t so bad. There will be lower interest rates, it is rumoured that the budget will provide serious incentives for buyers and it is hoped that the credit crunch will be receeding,” concluded averore