Changes afoot at foundation level?

We’re all re-examining the way we live and the way we work in so many ways; like root-and-branch examination of our lives and of everything around us.
Changes afoot at foundation level?

There is encouraging news for young people entering the housing market for the first time. Picture: File photo

For many people – both on a personal and societal level – the advent of the Covid-19 crisis has caused a major re-think.

We’re all re-examining the way we live and the way we work in so many ways; like root-and-branch examination of our lives and of everything around us.

The same can be said for the Government.

Just a few months ago, so many policies that they are now enacting seemed completely unthinkable: the rent caps; the banning of landlords from evicting tenants to name a few.

And now, in the current draft programme for government, the historic coalition parties list its main priority in the area of Housing as putting “affordability at the heart of the housing system” and prioritising “the increased supply of public, social and affordable homes.” 

The Coalition parties also state that they plan to increase the number of public homes to be built to 50,000 units.

While the only numerical commitment in all of this still falls well short of what experts were stating as a necessary requirement back in 2012 (when a National Economic and Social Council report urged the Government to increase the social housing stock to 200,000 units), it does appear to represent a fundamental change in attitude and a recognition to some extent for the right of people to adequate housing.

People are now more inclined to put quality of life over fluffy extras, it seems. Picture: File photo
People are now more inclined to put quality of life over fluffy extras, it seems. Picture: File photo

This is encouraging news for young people entering the housing market for the first time as it gives hope that a greater emphasis will now be placed on houses as homes for people and families rather than merely as commodities made of bricks and mortar to be used and gambled like casino chips.

From the buyer’s point of view, there has been something of a sea-change in how we look at homes as well.

This latest unprecedented crisis has taught us to be careful in providing for future shock events and that is already translating into a more sober attitude to home purchasing.

On the one hand, there is a clear trend in people focusing in on what they need rather than on what they should aspire to have. 

The affordable, comfortable home close to amenities is favoured over the larger, harder to heat, farther out property with heavier mortgage repayments.

People are now more inclined to put quality of life over fluffy extras, it seems. On the other hand, there are those who can relocate.

Here, the emphasis is on putting an extra piece of land rather than extending – preparing for any future crises by growing your own.

House Viewings – Emphasis on Safety 

The IPAV (Institute of Professional Auctioneers and Valuers) for example, has laid down a series of strict criteria that all agents must adhere to in order to ensure the safety of clients. Picture: iStock
The IPAV (Institute of Professional Auctioneers and Valuers) for example, has laid down a series of strict criteria that all agents must adhere to in order to ensure the safety of clients. Picture: iStock

The virus hasn’t gone away and we’re all aware of how the right protocols will ensure that people can go about the business of inspecting houses without the fear of putting themselves at risk of infection, no matter how slight that risk may be.

To do this, auctioneers have been following a series of guidelines – following Government advice and protocols as well as adapting measures through national auctioneers’ associations.

The IPAV (Institute of Professional Auctioneers and Valuers) for example, has laid down a series of strict criteria that all agents must adhere to in order to ensure the safety of clients.

Open viewings are no longer possible and each viewing has to be a separate one with adequate time allowed between each visit to ensure that the property is sanitised and disinfected before the next appointment.

According to Shane Finn of Douglas-based auctioneers DNG Creedon, all of these necessary changes in the way that business is conducted have resulted in the same work being carried out at a slower pace when it comes to viewing new homes: “We had a house for sale recently where it was quite competitive and there were about seven bidders involved in the end and I put 45 potential purchasers through that property and gave each one a 15-minute appointment.

"That amounted to over 11 hours of viewings on that house. Previously, those viewings would have been done in about 2 hours’ worth of viewings.

So, it’s taking us a lot longer to do things. 

Viewings of occupied properties are only starting now. 

Here again, there are strict guidelines, as there are with unoccupied and new homes: “For occupied properties, the prospective vendors and purchasers will sign waivers before a viewing.

"We would organise viewings based on going to an owner’s house perhaps once or twice a week for, say three or four hours.

"They would clean the house down whenever we do viewings.” 

For new homes, the procedure is more straightforward, but guidelines are adhered to so that safety is assured: “We never enter the property with individuals in new homes that are vacant.

"Normally, we’d stand outside and offer them face masks and solution for their hands and then let them inspect the property.

We’d explain that there will have been people in the property before them and that there will be people going in after them.

"We ask them not to touch anything and if they want anything opened, we’ll try to open the various doors and/or cupboards for them and leave foot stops.

"If they do inadvertently touch something, we ask them to tell us so that we can go in and wipe it down.” 

Overall, while the nuts and bolts of viewing houses has become a slower process, there is a good level of compliance and understanding from the public.

Good use is also made of virtual video tours and 3D virtual tours of property.

Post-Covid Demand Stronger than Ever 

Far from being a dampening factor on the housing market, the Lockdown seems to have created the phenomenon of pent-up demand. Picture: File photo
Far from being a dampening factor on the housing market, the Lockdown seems to have created the phenomenon of pent-up demand. Picture: File photo

“Prices haven’t changed at all,” says Shane Finn, DNG Creedon.

“Actually, they’re possibly stronger with certain properties at the moment.” 

Far from being a dampening factor on the housing market, the Lockdown seems to have created the phenomenon of pent-up demand.

It could even be described as “locked-up” demand: “I think that during the lockdown, a lot of first-time buyers would have been stuck at home with their parents.

"A lot of them would have been saving… some would have been living in rental property and sharing with people that they’ve discovered they don’t like… We’ve found that the Lockdown experience has spurred people on.

People that were sitting on the fence are no longer sitting on the fence.

In many cases, there are now more viewers for the same properties that were advertised back in February.

“In the three weeks we’ve been back, we’ve probably sold more property than we had in the first three months of the years,” says Pat Quirke of PF Quirke & Co Auctioneers in Clonmel, who is another of the many agents who have found that the house-buying market has restarted with a bang.

Paul Hannon, Director of Sherry Fitzgerald New Homes in Cork city, is also reporting a lively re-start in the housing market: “Our agents are busy facilitating a large number of private viewings arising from the high level of enquiries received over the past number of weeks,” he says.

“Last week nearly 30% of all our sales agreed nationally, which totalled 230, were new home sales… despite the trepidation at the start of the pandemic, there seems to be little evidence of any slowdown in sales activity and prices are holding firm”.

From the construction end of things, it’s a case of so-far-so-good, according to Conor O’Connell, Director of the Southern Region of the Construction Industry Federation (CIF).

“The initial reports following the re-opening of the construction sector following Covid have been positive – better than a lot of our house-building members would have expected.

"The market response has been good, interest has been good… better than we had anticipated.” 

Some Lending Institutions not Taking into Account Full Income 

Many people’s ability to borrow has been adversely affected by the Covid crisis. Picture: iStock
Many people’s ability to borrow has been adversely affected by the Covid crisis. Picture: iStock

Under the Covid-19 Wage Subsidy Scheme, many employers were able to retain staff based on a Government subsidy of 79% of the employee’s wages.

However, some banks have accordingly disregarded the subsidy and instead have only considered the 30% level as their income; thus making many people ineligible for mortgage amount that had been approved during the pre-Covid era.

“We’re hearing reports similar to that,” says Conor O’Connell (CIF), “but we’re seeking certainty from the banks as to the way in which they will treat people on the Wage Subsidy Scheme going forward.” 

Now, some banks are changing their policy in this regard and it seems as though many of them will follow suit.

New Government, New Start?

New Minister for Housing, Darragh O’Brien Picture: Gareth Chaney Collins
New Minister for Housing, Darragh O’Brien Picture: Gareth Chaney Collins

"It does mention all facets of the industry, from social and affordable to private residential sales.

"So it seems as if there’s going to be a significant focus on the residential construction sector and improving supply generally.” 

Moreover, says Conor O’Connell, (CIF) the draft Programme for Government offers hope that there will finally be a balance struck between private and public housing needs: “You need investment in all areas of the housing industry and, as far as we can see the initial principles in the Programme for Government seem very positive towards an improved housing supply in Ireland.

“And what is particularly welcome in the Programme for Government are statements around Shared Equity Schemes.

"We very much believe that the introduction of a Shared Equity Scheme could be a game-changer for the affordable housing market.

“As far as we are aware, the feedback is that all the building sites in Cork have been re-opened, which is very welcome news.

"So we’ll see what the remainder of the year can bring.”

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