Unrealistic price expectations blocking house sales - SCSI Annual Residential Property Report examining market trends in Dublin29 January 2019
National residential property predicted to increase by 4% in 2019, with Dublin up 5% in 2019
The number of agents reporting an increase in market activity has halved in 12 months
Rents expected to increase by 5% across all housing sectors
72% of agents reported that one of the top three market concerns is that Landlords are exiting the rental market
1 and 2 bed apartments to see highest demand versus supply this year
Excessive price expectations from house sellers are likely to remain the number one factor for houses failing to sell in 2019, according to the latest research from the Society of Chartered Surveyors Ireland (SCSI). Price expectations are cited as the number one reason for properties failing to sell, ahead of mortgage issues or the purchaser finding another property.
The SCSI’s Annual Residential Property Review and Outlook report reveals that estate agents across the country believe that demand will increase across all property types with national house prices are anticipated to increase by 4% in 2019. Owners of 1 and 2 bed apartments are likely to see the highest price growth next year, with estate agents predicting 1 bed apartments will increase in value by 6%. Last year’s average forecast by SCSI auctioneers and estate agents was 8%, compared to the year-to-November figures from the CSO’s Residential Property Price which found an annual increase at 7.1%.
Within the Dublin area, Dublin City is expected to show the greatest demand, particularly in 1-bed apartment (for which 59% of agents expect excess demand), 2-bed apartments (61% expect excess demand), 2-bed townhouses (57% expect excess demand) and 3-bed townhouses (63% expect excess demand). The SCSI report also highlighted that it expects Dublin prices to increase by 5% in 2019. Last year’s average forecast for Dublin in 2018 was 8% growth while CSO figures for Dublin for 2018 up to November was at 5% with apartment price growth at 6.5%. According to Daft’s listed price analysis for Dublin in 2018, list price increased by 2.9%. This is largely due to Seller / Vendor Expectation. The majority (67%) of agents reported an increase in Vendor price expectations – this is down considerably from last year’s 92% national average.
Aine Myler, SCSI Director General said that whilst the market remains in good health, sales in 2018 were still taking just over five months to complete, and many were still falling through: “Homeowners and prospective buyers alike are keen to make the sale happen and move into their next property. The challenge for estate agents is managing some vendors’ excessive price expectations. Whilst we predict continued house price growth on average this year, there will be winners and losers. It’s likely that the property market may correct for some high value properties in Dublin in particular.”
Aine Myler continued: “For the market to operate efficiently, we need a regular turnover of sales to help purchasers and sellers to keep moving up and down the ladder. Potentially unrealistic asking prices can leave all parties disappointed, curtailing market movement when it’s needed most and as affordability limits kick in.”
On the rental front, landlords exiting the sector in all areas is ranked in the top three issues facing the market by three quarters (72%) of respondents. Almost the same number (70%) report increased tenant demand versus almost half (48%) reporting a decrease in landlord instructions. Rents are expected to increase by 5% across all segments despite the 4% rent cap, with the highest increases for 1 and 2 bed apartments.
Over 486 Estate agents, Auctioneers and Chartered Surveyors around the country took part in the survey in late November/early December 2018.