~Carol Tallon, 07 October 2013
I have been retelling the stories of house-hunters and property buyers since the market started to implode, back in late 2006, and the reason I do this is simply because buyers have no other outlet to have their say. This lack of voice is wrong and frustrating and damaging within the industry but it does not need to be. There has been much talk of this so-called ‘buyers market’ but there does not appear to be any deep appreciation of what this actually means. What is means to me is that, at the stage of the property cycle we find ourselves in now, would-be buyers are the dominant force – in theory, they are the influencers. But despite their position and the opportunity to do so, they are not influencing the market. Outside of Dublin, in many areas, they are sitting on the sidelines, waiting to be told when and where to buy and how much to pay; whereas buyers in the Capital are really struggling to come to terms with prices that are rising much too fast to be sensible. Every week I hear buyers saying that they do not see the value in the demand-driven areas of the city but still they bid, then outbid and then buy. It would seem to make sense that if you do not see the value, then you should not buy but accept that perhaps this cycle is not your time. Or perhaps buyers should take a stand where they feel the value to be and hold firm. This means not paying over the odds for a property out of fear that there is nothing else out there for you. This means not being prepared to pay €50,000 more than the last recorded sale on the street just to get rid of competing bidders. This means demanding more houses that are potentially suitable without being forced to pay a premium due to shortages that are verging on strategic. Simply put, this means buyers finding their voices and then making those voices heard.
Several years ago, the Department for the Environment when tackling the monumental issue of ghost housing estates nationwide, looked firstly at safety, secondly at social housing concerns and thirdly, they explored ways to deal with the remaining estates. They were of course right to focus on safety first. Their primary concerns were to replace safety railings, remove dangerous materials and to make safe the potential dangers associated with abandoned building sites – albeit building sites with tenants in situ. This drastically improved the quality of life for then residents, who had little hope of moving on or selling, due to mortgages with onerous levels of negative equity. The Department’s secondary concern, to deal with social housing was embarked upon in an all inclusive way. It brought into the fold Local Authorities, local charitable organisations and voluntary housing associations for the purpose of assessing likely social housing needs into the future.
After ensuring the safety of the most at-risk estates, they proceeded to make available the most suitable housing to those in need. Only then did they set about their third priority, which was dealing with the remaining estates. The Department took an usually – and wholly appropriate – commercial view of the huge task before them. They decided to focus on the end user and by this I am referring to the home-buyer or eventual tenant, because as we know, an investor’s needs are slightly more base. For them, if the figures stack up, walking distance to the local school or supermarket is simply not a concern. This is not true of home-buyers or tenants, they require more. And the Department for the Environment, to their credit, did what no other Government Department tasked with dealing with the domestic property market has done – they asked the right questions to the right people. Keeping their focus on the end user, they did not assume buyer trends or rely on scant, and often times irrelevant, market analysis. They asked potential property buyers not only which areas they would prefer to live in, but critically, what type of property would be most suitable for them. This focus allowed them to put the resources they had into the ghost estates that would sell quickly and provide the highest and most timely return. That is how to solve a problem, start with the solution and work backwards to provide it. Mission accomplished, the so-called ghost estate problem is somewhere between 20-25 per cent of what it was four years ago.
So why can’t all Government Departments work with the same results-based focus? Just this week I learned of a meeting that took place among senior officials behind closed doors, as our political system seems to favour, with the objective of examining the Irish residential market and proposing how best to move forward. In examining the market many views were sought, mainly from politicians, bankers, planners and developers. Astonishingly, no emphasis was placed on the needs of buyers or on the wants of buyers, or even on the end user, regardless of whether they are owners or tenants. As the market starts to pick up in terms of recovery, it would appear that hard-learned lessons really are fast forgotten. Only vanity projects that are ego-centric, like creating a one-off sports car that costs more to build than could ever possibly be recouped by way of sale, can afford to ignore the end buyer. Too many developers were allowed to build like this in the past and we are all paying the price. In order to avoid old mistakes and to plan for the recovering – and still vulnerable – market in a strategic and meaningful way, the voices of buyers must be heard and their influence must be felt.