Inquiries herald rise in housing activity

ESTATE agents and mortgage brokers reported an increase in inquiries last month as more buyers hunt for bargains.

With house prices expected to fall by 7% this year, a survey from Goodbody stockbrokers found more than 67% respondents experienced an increase in activity since the beginning of the spring selling season.

This compares with 41% reporting an increase in a similar survey in August.

“The results make for more encouraging reading,” said Dermot O’Leary, chief economist at Goodbody Stockbrokers.

“However, we are loath to call a turn in the housing market just yet given that house registrations trends continue to worsen, house prices continue to fall, the unsold stock remains at an unreasonably high level, and is growing and credit conditions are tightening.”

Mr O’Leary said first-time buyers are faring relatively better than investors and mover-purchasers, in terms of activity trends.

He said government assistance, in the form of increased mortgage interest relief and the abolishing of stamp duty, is bearing fruit.

Goodbody also said its forecast for a 7% decline in average house prices this year still looks realistic as does its forecast for a decline in gross new mortgage lending of 10%.

It also said house completions are still expected at 50,000 this year, before easing to 40,000 next year.

“On prices, more than half of the respondents to our survey believe further declines are likely over the next twelve months,” he said.

Ireland’s housing market was the worst performing in Europe last year, according to a report last week.

Builders have cut back on construction output and slashed prices to drum up interest from potential homebuyers deterred by higher borrowing costs and speculation of a property-price crash.

While the ECB has left its key interest rate at 4% since June as the collapse of the US subprime mortgage market pushed up credit costs and economic growth cooled, it has dashed speculation and will cut interest rates soon.

Menolly Homes this week reduced the prices of four-bedroom houses in Dunboyne, 17km north of Dublin, by €105,000 to €495,000, to lure buyers.

Dalriada Homes also has cut about €100,000 from the price of houses it’s selling in Dublin.