~Carol Tallon, 02 October 2013

During  a discussion on the Irish residential market  this week I was asked to profile today’s home-buyers and I found myself struggling.  How to define the indefinable?  My life’s work right now is meeting with would-be buyers and capturing their experiences in the market.  In doing this, I can truly say that the only common characteristic among the current wave of first-time buyers and home-buyers is their shared relief that they either did not buy during the boom years or for those who did and sold well, that they are in a financial position to buy and move on with their lives.  Over the last few months the cross section home-buyers I have met with include, among others, a young couple in Canada who are counting the months (which they acknowledge may turn into years) until they can return to Ireland, to the new home they wish to purchase over the next few years, to raise their family.   On one hand, this might seem like a waste, living only for tomorrow and not fully embracing their new lives abroad.  On the other hand, this young couple are adamant that they wish to return to Ireland in time to start their family and their intention is to do this as soon as they can afford it.  So their plan is to continue living frugally, saving aggressively and watch the market back home until the right property appears.  They feel strongly that now is the time to buy in Ireland and they are genuinely terrified of missing the opportunity to buy at levels they feel are affordable.   It has not even crossed their mind that property might not continue to rise or that another crash could very possibly happen.  I can’t say that I share their eternal views of Irish property but they are adamant about their future, which involves a period home in the Capital with easy access to the DART line.

  Another couple I met recently, a middle-aged, same-sex couple whose  family commitments made it impossible for them to consider buying during the boom years, described their trepidation about making the leap now.  In fact, for them buying was not a natural step.  They had accepted that they were likely to rent long term and invest elsewhere.  However, the declining prices in their local area make buying a sensible option.  Their savings, which they initially thought would make a “decent” deposit, will actually fund a cash purchase of a modest home in their desired area.  This fact took them a while to understand and in their two years watching the market, local house prices have continued to plummet.  Recently, bank sales started to happen in this area, driving prices down further and the quality of home they can afford came as a pleasant surprise.

This couple are not alone, I am increasingly chatting to civil servants, particularly in their 40’s and 50’s, who genuinely believed that home ownership was beyond them.  Some have spent almost 20 years struggling to save for a deposit, in areas where prices were increasing in multiples of their annual income – a situation many described as impossible.  But the world has changed, so too have their little part of it.  They are what we would consider to be eminently solvent.  Their savings have gown, their demands have lessened and, all of a sudden, they realise that their deposit – which proved never to be enough during the racing Celtic Tiger era –  is perfectly sufficient to buy a modest house or apartment within easy commute of work. 

The changing demands of would-be buyers is probably the most stark difference when it comes to housing trends.  Where once a four or five bed detached home was the order of the day to fulfil the ‘family home’ brief, families now understand that a three bed semi or end of terrace might just work to serve the needs of the family and save up to €150,000 or €200,000 in additional mortgage repayments.  The focus is now on quality of life.  €150,000 (plus interest) less mortgage repayments may mean the occasionally family holiday when one is badly needs, or perhaps a work sabbatical for either parent if and when the time is right.

We speak so often of the victims of the boom there is a tendency to forget that not everybody prospered during that brief, shiny period.  Many struggled, toiled, lived modestly and saved.  They are not cursed with disproportionate lifestyle or crushed under the weight of inescapable negative equity – or worse.  These are today’s buyers.  Very few would pretend to have stayed out of the market because they knew what was coming.  Most were lucky and they  acknowledge it.

Finally, I would like to sign off with the news this week that, for the first time since Adamstown, buyers slept out from Wednesday night to Saturday, queuing to buy houses in Monaghan – a county with rampant oversupply of property and one that has seen barely 130 transactions all year so far…

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