You asked and we heard you. Navigating the property market in a post-COVID world can feel overwhelming. Whether you were planning to buy pre-pandemic or you’re just starting to get your ducks in a row, we’ve called on the amazing property expert Breffnie O’Kelly to answer your burning questions.
You’ll remember Breffnie from out Number 1 podcast, The Home Stretch, a must-listen if you’re considering getting a mortgage. Now, Breffnie is back with some incredible advice.
Breffnie has a range of services available online – check out her website here for more.
Is now a good time to buy or should you wait?
Breffnie says, “There are lots of unprecedented things happening right now in the world, in Ireland, and in the Dublin property market. The biggest changes in the Dublin property market that we’ve seen over the past six months are an increase in the supply of properties advertised to rent in Dublin (65% increase June 2020 versus June 2019) and a decrease in the number of properties available for sale in Dublin (15% decrease June 2020 versus June 2019).”
“The indications are that the extreme volatility indicated by these figures is beginning to transform into something more stable especially as it relates to the supply of properties for sale.”
“If, after the world has experienced the type of seismic shock caused by Covid19, you
– still have current loan approval
– still are able to make the necessary repayments
– still need a home in Dublin
then this in my view is a good time to buy. Here’s why:
You’ve proved your finances can survive a major shock
You have just survived an unprecedented world catastrophe and have come through with your finances, income source, and health intact. This has shown you that you and your income stream can survive extremely challenging times and this should give you comfort as you face into the commitment of borrowing a significant sum of money.
Least volatile part of the market
The market that you are likely to be buying in eg. the under €400,000 market, is the least volatile of the property markets. By this, I mean that property prices under €400,000 fall by the smallest percentage during a property downturn as compared with properties in the higher price brackets.
As a rule, you can expect that higher value properties drop by a greater percentage in a downturn, and properties with a lower value experience a smaller percentage drop in a downturn.
Golden moment
The fact that you can borrow and want to borrow and have time to look for a property constitutes what I would describe as a golden moment. You can’t take for granted that all of these factors will last indefinitely. Your job may end, you may get a new boss that you don’t like and wish to leave your job and start somewhere else ( such a job shift is likely to put your mortgage approval in doubt until a six month probationary period at the new job is over), you may experience a health event of some sort. Who knows what may happen so it makes sense in my view to act now while you can.
Supply is good
There is a reasonable level of supply in the market. Although the supply of properties for sale in Dublin is lower by 15% than it was last year this is not really an enormous difference and you should find plenty of properties to suit you. The supply shortage isn’t in my view, sufficient to cause a rise in prices due to lack of supply so I would not be concerned about this.
It’s not just about the money
Looking for properties and searching online takes up a large amount of your free time. By buying now you will have the benefit of not having to think or talk about this topic anymore. You can now move on with your life.
The exact right time is visible only in the rearview mirror
The highest point of a property boom and the lowest point of a property downturn are only ever visible in the rearview mirror. It’s impossible to predict the exact lowest point of a property downturn or even recognise it when you’re in it. It’s only when the actual sale prices for a wide range of properties have been logged on the property price register and compiled into a pattern that conclusive evidence can show the lowest point of a property downturn. So by putting pressure on yourself to buy at the absolute perfect lowest point of the market, you are in my view, trying to achieve the impossible.
If you don’t need to sell it in the near future, an immediate drop in value may not matter.
If the property that you buy this year proves to be worth less next year the fact that its paper value has decreased, may not in fact matter if you don’t actually have to sell it next year. Ireland’s property market tends to move in boom/bust cycles and if you don’t have to sell during a bust cycle, there is ample precedent for you to expect the bust to be followed by a boom cycle.
A recent example of an Irish property boom/bust cycle is the world-famous Irish property boom which peaked in 2007 followed by a fall to a shocking low in 2013, which in turn was followed by a significant rise to a peak (in Dublin) of prices in 2018 which may now be followed by a fall. Given that you’re a first-time buyer it seems reasonable to expect that you’ll stay in your new home for at least a couple of years by which time it’s not unreasonable to think a property boom period may have started to develop.”
Are you ready to house hunt? To be in with a chance of winning Breffnie’s First Time Buyers course OR a consultation with the property expert, head to our Instagram. For more expert advice and insight from Breffnie, visit her website.
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