The property market in Dublin has been open for business throughout the last five years of uncertainty and price drops. It was much reduced and this translated into fewer estate agencies or mortgage brokerages, with less staff and resources. Buyers felt the impact as enquiry calls went unreturned and levels of customer service followed the general trajectory of the market – downwards. Viewings at your convenience became a thing of the past, with agents opting for open viewings (“we are adopting the American model”). It is questionable whether this approach is the best one for sellers in a market where over-supply exists. However, these open viewings are not only efficient but, when managed correctly, can help foster the herd mentality. Bring all buyers together in a small space at the one time and suddenly, offers come in and a bidding war commences – but only if you are lucky enough to be selling in one of the more desirable suburbs of the capital. Regardless of the market, this is not the optimum approach for buyers. Many will miss out on the opportunity to view, which effectively rules out the property to buy as very few investors and, dare I say, no home buyer is going to buy, sight unseen. As the market picks up in Dublin, and all of the indications, from Central Statistics Office to price register data, suggests that it is, agents are at that stage of busy but not yet ready to expand or hire more staff. Another few months and I would expect to see the property recruitment pages starting to emerge. The property crash proved to be a great leveler for property service providers. Long established firms that had some degree of ‘fat’ built up ran out of reserves and downsized.
Smaller firms and new sole traders emerged and, aided by popular property sales websites and an entirely changed form of marketing, for the first time, they were able to compete with the big boys. Social media entirely changed how estate agencies reach out to buyers and how those buyers then access properties. In practice, the best firms, large or small, are responding to changes and following the direction of the market. Buyers are leading the market, give them what they want. Yes, the crash was a leveler and this gives any firm the opportunity to rise to the top.
But this does not tell the full story.
Nationwide, particularly in many smaller rural towns, the business of property came to a grinding halt in 2008/2009. Buyers are finding that banks, mortgage brokers and estate agents are increasingly reticent to progress applications (“You really wouldn’t qualify”), or facilitate viewings in certain locations (“the house is in fairly poor nick and the owner is not going to drop the price – are you sure you want to view?”).
Just this week I met a young family who were struggling with the process of buying their first home. The couple, originally from Poland but living and working in Ireland for many years, had visited a local mortgage broker who did not appear to find their case encouraging. He was helpful and requested some documentation but not everything that would be required to submit a formal application to any bank. Whether he wrote these people off as tyre-kickers, which I understand to be a huge drain on the resources of smaller offices, or as people unlikely to secure a mortgage is not clear. Their experience with their local bank branch was less encouraging so they continued with their application through the broker. I was surprised to learn that they were not aware of the existing tax relief on mortgage interest payments, which runs out at the end of the year. Not their bank, broker nor estate agent had mentioned it. It raises the question, how many buyers are operating outside of the sphere of traditional property media and information, where their only knowledge of the market comes from the sales listings? Previously, all information came from local estate agents, does this still happen?
Recovery in Dublin is well underway; Galway and parts of Cork are seeing increased levels of transactions. While Waterford and Limerick continue to lag, it is expected that the trend of regional city recovery will see positive movement over the next twelve months. What we need to see happening now, for the sake of recovery and progress, are signs that rural property service providers are open for business. I have no doubt that tyre-kickers remain, but there are genuine buyers who need to introduced to the opportunities that exist. If you are tasked with selling six NAMA controlled houses in your town – tell buyers. Not all will buy today, but they become the buyers of tomorrow. For many, this will feel like opening the shutters after the afternoon siesta – it might not be easy but this is the right time.