This month, I embarked on a whistle-stop property tour, taking in the midlands and west coast of Ireland. It was disheartening to come across rural villages with buildings crumbling, shops closed down and petrol pumps now defunct. While sad, there is an assumption that this is caused by the collapse of the economy for the best part of a decade. But strictly speaking, this cannot be true. Many of these villages and small towns have been in decline for more than a decade. The only hint of the Celtic Tiger era is the rows upon rows of unfinished or partially finished 3-bed semis; planned but unwanted, new but on the road to decay. There was never going to be demand for this sheer volume. In reality, there was not even enough demand in these villages during the boom years to keep local shops open and in some cases even the schools have now closed. It is difficult to rationalise the planning decisions that allowed these ghost towns and villages to be extended. And it is impossible to envision a use for all of these units.
The market is a cruel master, while supply and demand levels might achieve some semblance of order nationally over the next cycle. What we are seeing on the ground is a widening of the already wide gap between urban and rural areas. In practice, urban areas have the potential to grow into their over-supply, whereas rural areas simply do not have that capacity. The poor medium term forecast for rural towns was further reinforced last week with the introduction of new rental limits for tenants in receipt of rent allowance. Whilst a handful of areas, notably Dublin and surrounds, had the limits increase, most other areas saw a decrease. These limits will stay in places for another 18 months. This will affect landlords and tenants, thereby effecting sellers and buyers.
In dealing with State and voluntary housing associations in the past, I am all too familiar with a general tendency to assign ghost estates as suitable to meet social housing needs. This is a crude attempt to marry the over-supply in regional areas with the growing social housing requirements of each Local Authority. Once again the powers that be are failing to recognise that housing needs are based not on national consensus figures, but on the lives of local people. These people are our neighbours, our family, the people we buy from and the people we sell to. Demand in the market is driven by human lives. And lives are built around so much more than the four walls and roof that provides shelter. Lives are created as we take our children from school and pick up a newspaper on the way; it is where we head to on a Friday evening when we clock off and where we spend our Sunday mornings when the sun decides to make an appearance. There are so many elements that go into creating a life that it is simply unjust to push already marginalised families ever further to the margins of society. I remember hearing once that you should never give a broken cup to a broken person. This simple but powerful message tells me that until we provide facilities and community services to our spread of ghost estates, they are not suitable or ready for use as homes- regardless of whether those homes are funded by the buyer or the State. This is not an insolvable problem, however it does require some joined up thinking by Local Authorities and a people-focused approached to dealing with the market. And it is not just the State or local Authorities that are responsible for creating solutions within the market; estate agencies also have a role to play.
Just this week I spoke with two estate agencies, one, a small office in a market town in County Mayo, and the other, one of the larger firms operating the Dublin market today. Surprisingly, both offices indicated their reluctance to deal with overseas or remote buyers who did not view the properties in person. This is entirely nonsensical and inefficient in the current market. We know that there is massive overseas interest in Irish property at the moment, from both ex-pats and foreign investors. Sellers and estate agents need to adjust their thinking and align their services to meet the changing demands of today’s buyers. We see this trend clearly through the Allsop Space multi-lot auctions (the next of which takes place on Thursday 4th of July). It is no coincidence that this auction house is experiencing success selling to overseas buyers as they are giving these buyers exactly what they want. The first rule of sales is to sell in a way that people want to buy; make it easy for them to buy, do not add to the challenges and obstacles that already exist within the Irish property market. At this stage, technology has improved enough for sellers to provide 360 degree views or online videos for prospective buyers. One auctioneer in Clifden described how she regularly shows properties to the same buyers summer after summer. This is costly and time consuming but more significantly it reduces the season of the market locally to 2 months a year. By cultivating and encouraging buying on-line, it would extend the season and improve local market conditions. In short, estate agencies must learn to accommodate remote buyers or lose the sales.