The magazine of the Institute of Professional Auctioneers & Valuers
l a n o i s s e P rof
Focus on US Property market
& ConAGM ve tio n Fridan May 7 y Saturdth & May 8 ay th
IPAV AGM and Convention 2010
THE IRISH TIMES irishtimes.com
The Importance of CPD Welcome to the Spring 2010 edition of the Property Professional. It now appears that the long-awaited and much-talked about regulation legislation (Property Services (Regulation) Bill, 2009) for auctioneers and estate agents has been delayed. The McCarthy report proposed merging the National Property Services Regulatory Authority with the Private Residential Tenancies Board and this appears to have caused to the Government, and in particular, the Minister for Justice, Equality & Law Reform, to take stock and to reflect on the way forward. The Bill did have its first reading in the Seanad last year (full reports were carried in the Property Professional) but has been allowed to languish ever since. The property Professional is the Magazine of the Institute of Professional Auctioneers & Valuers
In the meantime, it would appear that the auctioneering profession will be left to its own devices of self-regulation, which has worked very well in the past. At a time of national recession, it is hard to justify further major expense on auctioneers or even the taxpayer to regulate a profession that is already quite well regulated.
129 Lower Baggot Street Dublin 2
The introduction of Continuous Professional Development, or CPD, as it is commonly known into IPAV’s education programme represents a major milestone for the Institute. Now formally in its second year of operation, the format is working very well for those who are participating.
Tel: 01 6785685 Fax: 01 6762890 E-mail: email@example.com Website: www.ipav.ie CEI Website: www.web-cei.com
Chief Executive Officer Fintan McNamara M.Litt. Dip. L.S. MIPAV(HON) Editor Tim Ryan Tim Ryan Communications Tel: 01 679 0380 Advertising & Design Designroom firstname.lastname@example.org Tel: 01 615 4715 Publisher Designroom www.designroom.ie
Property Professional Spring 2010 Views expressed by contributors or correspondents are not necessarily those of IPAV or the publisher and neither IPAV nor the publisher accept any responsibility for them.
Over the last weekend of February, the first of this year’s courses for property professionals which covers a range of topics of current interest to members and those working in the property profession was held in Dublin. However, while it is voluntary, the Institute and National Council would like to see many more members involved and I am making a special appeal in 2010 for all members to get involved during the year. All that is required is attendance at a small number of seminars and, or the afternoon session of our National Convention, as well as the regular reading of relevant material. There is also provision for obtaining CPD points by attendance at other relevant events organised by a parallel body or organisation. The downturn in the property market has provided an ideal opportunity for members to revise their knowledge and to upskill in new related areas of practice. Education is a lifelong process and while the profession of auctioneering and estate agency is one of the oldest, dating back to Roman times, it is also constantly evolving and adapting to an ever-changing world. As active practitioners in the field, IPAV members must learn to evolve and adapt with it. I look forward to meeting you at IPAV’s AGM & Annual Convention.
Fintan McNamara Chief Executive
AGM & Con ve Fridayntion May 7 Saturdth & May 8 ay th
Contents Meet the former Wexford Rugby International
Focus on the US Property Market
In the Dáil:
page 21-24 Spring Issue | page
Message from the President Dear Member As we prepare for the traditional spring season of 2010, there are at last some signs of activity at the lower end of the market. All the indications are that the market is finally bottoming out and that vendors who set realistic prices are selling their properties. However, it will take some time for people to become convinced that now is the right time to buy. According to recent figures from the Irish Banking Federation and Pricewaterhouse Coopers, many more people have received mortgage approval than have acquired a property. IPAVâ€™s advice to would-be purchasers is to first of all take time to carry out a comprehensive search of the marketplace but once a suitable property is identified to go ahead and make a purchase. There is very good value in the market now and people should not be afraid to make a move. The principal ingredient that is missing right now, not just from the property industry, but in tackling the wider economic crisis, is consumer confidence. Until the Government can instill confidence in all sectors of society the country will continue to drift and it will take much longer than needs be to end the recession. A start has been made in the two recent Budgets but much more still needs to be done, including a stimulus package aimed at generating activity and employment. IPAV, as an Institute, along with all other organisations and professional bodies must play its part in helping to get the nation rolling again. All members must strengthen their determination to continue to ride out this difficult period and to be ready for the upturn when it comes. The Institute, while aware of the constraints the current environment imposes on members, has been continuing to develop and progress its courses in trying to assist members in any way it can. Our Annual Convention is now looming large on the horizon and work is underway in making it another major success. Despite the economic gloom it is my fervent hope that as many of you as possible will make the worthwhile journey to Donegal on May 7 and 8. The Solis Lough Eske is a particularly beautiful hotel in a very scenic part of the country. Details of the weekend are outlined elsewhere in this issue. The AGM and Annual Convention are also, of course, opportunities to socialise with other members and to compare notes with colleagues. Many members find this aspect of the Convention of immense value and a source of great benefit in facing the many difficult challenges which the current economic situation poses. Finally I hope you enjoy our new look Property Professional magazine. I wish you all a successful year ahead and I look forward to meeting you in Donegal in May. Best wishes.
John Shaw President
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We cover all the steps on your journey.
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Cheaper to Buy
It’s Getting Cheaper To Buy Than Rent – If You Can Secure A Loan - PIBA
Rachel Doyle of PIBA
It is now becoming cheaper to buy a house rather than rent one, according to PIBA, the country’s largest group of Independent Brokers. Responding to the latest daft.ie survey showing that rents across the country rose by 1% in January, Rachel Doyle, Director of PIBA Mortgage Services said that “while it remains to be seen if the latest rental figures become a trend, nonetheless, the reality is that rental and house prices are now very closely aligned.” However, she warned that potential buyers do need to factor in interest rate increases. “Another consideration is the fact that there are very attractive long-term fixed rates on offer at the moment that will almost certainly increase.” She said the most recent tsb/esri survey found that house prices nationally have fallen 31.5% since the price peak in February 2007. “While there will be regional variations, taking the example of the average house price in Dublin of €278,767, repayments over a 30-year period at a 2.65% variable rate would be €1,011 per month based on a 90% Loan-To-Value ratio. By comparison the average monthly rent in Dublin is approximately €953. “Nationally the average house price is €213,183. Monthly repayments over 30 years on a 2.65% variable rate mortgage, based on a 90% LTV ratio would be €773 while the average monthly rent nationally is €765. “However, the biggest hurdle for those wishing to buy, particularly those in less than absolutely ‘safe’ jobs, and self-employed people, is the non-availability of bank lending.” Doyle went on to say that while there is speculation that house prices may fall further, some reports indicating by anything between 5% and 10%, potential buyers need to weigh up a number of factors very carefully, including the fact that house prices have fallen back in line with the average industrial wage. “A recent survey from DKM economic consultants and EBS showed that it now takes just 13.4pc of a couple’s combined income to meet a mortgage payment, down from 26pc in December 2006. “And while there are concerns about negative equity, it is worth remembering, if you are considering buying, that a reduction in value is not realised, unless you are reselling in the short-term. Finally, once the market begins to take off again the likelihood is that choices will become more limited than at present,” she said.
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Rents Show First Signs Of Levelling Off Rents across the country rose by just over 1% in January, according to the latest report published by the property website, Daft.ie. This increase while marginal is the first time rents have risen since they began to fall 24 months ago. The national average rent now stands at €765, almost 25% below peak levels seen in early 2008. The January increase follows sharp falls in rents during 2009. Over the course of the year Dublin rents fell almost 19%. Rents in Cork, Limerick and Waterford cities fell by 16%, while Galway rents fell by 11%. Elsewhere in the country, rents fell by an average of 15%. Over the past 2 years the number of properties available to rent has increased from an average of 6,000 at any one time, to over 23,000 in August 2009. In February 2010 that number has fallen to 19,000 - a drop of 20%. Commenting on the report, Ronan Lyons, Economist at Daft.ie said: “It is too soon to say definitively whether rents have levelled off, but the January increase does seem to be broadly consistent around the country. The levelling off is most likely a result of a steady fall in the number of properties available to rent nationwide. Over the past 5 months we have seen the stock of property available to rent fall by more than 20%.” * The Daft Rental Report is based on an analysis of all rental properties advertised on Daft.ie since January 2002, including over 130,000 since January 2009. This figure represents the bulk of the available properties to let in the country and therefore gives the most accurate and timely reflection of what is happening in the Irish rental market. Figures are calculated from econometric regressions using standard methods.
IPAV AGM and Convention
Plan Now For IPAV’s AGM & Convention! An Tánaiste and Minister for Enterprise, Trade & Employment, Mary Coughlan TD will be the Guest of honour at this year’s AGM and Annual Convention which takes place in the splendid surroundings of the Solis Lough Eske Castle, Donegal on May 7th and 8th.
An Tánaiste, Mary Coughlan TD
The Solis Lough Eske Castle (www. solislougheskecastle.ie/) is the first only five-star hotel and spa that dates back to the famous O’Donnell family that founded the nearby town of Donegal.
The weekend will start off as usual on the Friday afternoon of May 7th with the annual golf outing once again kindly sponsored by the Irish Examiner newspaper. This year the competition will be played at Donegal Golf Club, where Marguerite Stafford and her team from the Examiner will be on hand to meet and greet players. On Friday night there will be an informal get-together with a multi-choice buffet on offer and an opportunity to dance or just sing along with the entertainment. During the evening the golf prizes will be presented to the lucky winners. On Saturday morning the Annual General Meeting of IPAV will take place where a full report on the year’s activities and accounts
Fr day May i7 Saturdth & May 8 ay th
will be presented. There will also be an opportunity for members to ask questions on any item. After lunch members will gather for the Convention itself where we will have a number of speakers on different topics of interest to members. After the official hand over of the chain of office the incoming President will make his first address to members. Guest speakers at the afternoon session will be Professor Brian Lucey from the Department of Business Studies, Trinity College and Patrick Koucheravy, Property Economist with CB Richard Ellis. There will also be a presentation from Tom Lynch, CEO of the National Property Services Regulatory Authority. At the end of the session there will be a short Question and Answer session. Members should note that the afternoon session of the Convention will carry 2 CPD points, so all members are asked to bring their CPD cards with them to Donegal. On Saturday evening members will gather for the traditional drinks reception where there will be an opportunity for photographs and to meet old friends and make new ones. The reception will be followed by the Convention Dinner where the Guest of Honour will be An Tánaiste and Minister for Enterprise, Trade & Employment, Mary Coughlan TD. IPAV is keenly aware of the current economic situation and is determined to keep the cost to members as low as possible. “While the property market continues to be lack lustre, our Annual Convention provides a unique opportunity to network with members and other property professionals and to learn from fellow members,” said CEO Fintan McNamara. “It is also a great social occasion and those who make it a regular diary date always eagerly look forward to the next year.”
So make a date in your diary now, Friday, May 7th and Saturday, May 8th. The Drawing Room in Solis Lough Egish Castle
Solis Lough Eske Castle Solis Lough Eske Castle is a beautifully restored Gaelic Castle dating back to the 17th Century. This magnificent hotel is located within 43 acres of forest woodland hugging the shores of Lough Eske near the famous Bluestack Mountains and just 5km from Donegal Town, Co. Donegal. Amenities include Cedars Restaurant, Gallery Bar, Oak Bar, Lobby Lounge, Drawing Rooms and Spa Solis. All guests have complimentary access and exclusive use of the fully equipped fitness centre and swimming pool. It was the winner of the Best Luxury Country Hotel in the World 2009.
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Meet the former Wexford Rugby International turned IPAV Member By Tim Ryan From the outside it seems an apparently quiet January morning in the offices of Sherry FitzGerald Haythornthwaite at No. 1 Westgate, Wexford. However, inside former rugby international and IPAV member, Nick Popplewell is busy in the open plan offices working the phones and following up potential sales leads. The firm has a very practical and impressive office working system. All three negotiators, Adrian Haythornthwaite, Stephen Barry and Nick Popplewell along with administrator Aoife O’Donohue work in an open plan office together. There are no secrets and everyone can see what everyone else is doing. The walls are taken up by whiteboards on which are listed all the current properties for sale by location so that each negotiator can see what is for sale and what the price is by simply raising his head. Another board lists properties which have gone sale agreed, these are in red, those that have been signed are in red and when the fees have been lodged they go to black. Everything is simple and easy to follow by everyone in the office. Between 10 and 11am each morning the negotiators take no incoming phone calls. For this hour all calls are out as negotiators try to contact potential clients. “We try to make at least five calls each day to potential customers,” says Nick. “Follow-up is very important and we try to keep in contact with interested parties as best we can.” The system is bearing results. Despite the recession, the firm clocked up 84 sales last year. This year the firm has set a realistic target of 120 sales. A sales commission rate has been fixed at 2.5% [this is not negotiable]. The beginning of this year has seen a major turnaround in the level of interest and a number of sales have already been concluded. However, most of the activity is in the €100,000 to €180,000 category and this is where Nick sees the main area of interest for the foreseeable future.[Out of the 60 houses sold between June and December of last year 57 were below the 180k mark. Born in Dublin in 1964, Nick Popplewell is a relatively newcomer to auctioneering having joined the firm nine years ago. The son of a self-employed entrepreneur, he moved to Wexford at the age of nine where his father had a caravan park in Ballymoney.
was the major sport at Newtown and in 1982 he played for the Irish Schools hockey team. Later he studied Business at the then Carlow Regional Technical College. His first job was with Lough Egish Co-op in Monaghan where he had dealings in the Department of Agriculture with another rugby great, Moss Keane. Already a devoted rugby player, he left his job and went to Australia to play the game for a year before returning in the late 80’s to play for Greystones and Leinster. Back in Dublin, he worked for some years in retail in Bray. Among his team mates in Greystones were future well-known names including Tony Ward, Tony Doyle, Paul McNaughton (the current Irish manager), John Murphy (hooker), John Murphy (full back) and Brian Rigney. A spell working in England as a broker followed, during which time he played rugby with London Wasps. But he was back in Dublin again after a time, working as a broker with Garban on Dame St. before turning professional – the first Irish player to do so – and moving over to play with Newcastle Falcons for four years. He played almost continuously for the 10 year period between 1989 and 1998 [ not a very productive era in Irish rugby] He has 51 international caps, 48 with Ireland and three with the British and Irish Lions in 1993 on the tour to New Zealand. In his book, ‘The Irish Lions 1896-2001’ Barry Coughlan, rugby correspondent of the Irish Examiner wrote of the 93 tour: “Ireland had only two players originally selected on that touring party - Nick Popplewell and Mick Galway - although the representation swelled to four eventually when Richard Wallace and Vinny Cunningham were flown out as replacements. Popplewell was an ever present on the Test side, the only one of the four to clinch a place, but he was also very active off the field. “Affectionately known as Poppy, he installed himself as ‘Judge’ for the many court sessions held during the eight weeks of the tour. “Ieuan Evans (of Wales) laughed as he recalled Popplewell’s way of doing business: ‘He was a pretty brutal judge, more like the hanging judge. If you had to stand in front of him and he had a hard day physically, the black cap came on automatically. He was deadpan in his delivery, his put-down lines were excellent but thankfully this wasn’t quite real life!
Quaker school His early schooling was in St Andrew’s College on Clyde Road in Dublin and he then went on to the Quaker-run Newtown School in Waterford. The school had a fairly free spirit in my time but I think it has tightened up a lot now.” Oddly, it was not rugby but hockey that was his first sport. It Nick Popplewell in the offices of Sherry FitzGerald Haythornthwaite in Wexford town.
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These days, by and large, he is happy to watch the game on TV and he has never been to see a game in Croke Park, rugby or GAA! Having married his wife Rachel in 1992, their three children Sophie (12), Rebecca (11) and Ben (8) take up more and more of his spare time but he does enjoy fishing to relax.
IPAV Membership Having retired from the game, Nick Popplewell joined Sherry FitzGerald Haythornthwaite nine years ago. He quickly immersed himself in all aspects of the profession, undertook an IPAV course, then run in UCD and was elected to membership.
(l – r): Paul Wallace, Keith Wood and Nick Popplewell during a training session in 1993. (Picture courtesy the Irish Examiner)
“On a more serious note, Poppy was a superb player. He had a great Test series. Nobody got the better of him on the pitch and nobody got the better of him off it either.”
Lean Period Unfortunately, Popplewell’s time as a player was a particularly lean period for Ireland in rugby. “Once I retired things seemed to change. So I think a lot of people will draw a correlation between me retiring and Ireland improving,” he jokes. “It’s a bit like the property market at the moment, it is cyclical.” Significant memories include playing for the winning Barbarians side that beat South Africa in Landsdowne Road with a front row comprised of Peter Clohessy, himself and a young Keith Wood. He was on numerous teams that played New Zealand ten times, beating them only once in the 1993 Lions Test series. He also played with the Barbarians for many years which was a major feather in any player’s cap at the time. These days he thinks Irish rugby is on the “Crest of a Wave” and that they are capable of beating any side on their day. “The IRFU has done a terrific job in growing and maintaining grassroots rugby in schools. “The Heineken Cup is as big a club competition as you will ever get in the world and it is fantastic for Irish rugby. The Magner’s League has a role but everybody knows the Heineken Cup. You’re more likely to blood a few youngsters in the Magner’s.”
“I think it is very important for an auctioneer to be part of a body like IPAV. The job comes with huge responsibilities. Selling a house is a major transaction for any person or family and us as agents handle vast sums of money so we have to be aware of the responsibility that confers. The firm runs regular in-house courses and he also tries to get along to IPAV seminars as much as possible. He also believes there is a very important social aspect to networking with other agents. The Wexford market peaked in 2006, he says and has been on a slide ever since. Typical three-bed semis that were making €270/280,000 four years ago are now selling for €160,000. But since last June, he says there has been consistency in the market. The main buyers are first-timers and holiday home buyers with buyers from Kilkenny and Kildare now purchasing as frequently as the Dublin buyer. Wexford has always been a popular spot to retire to. There are good rail and bus links and there is the attraction of the Rosslare ferry.” This year the firm has enjoyed a great start, he says. During the first two weeks in January we did 60 viewings which resulted in six sales. “It’s not rocket science. If you get your price right, you will sell the house. But the problem has been that different agents are NOT selling similar houses in the same areas because of very inflated prices, which is very confusing to somebody selling. Now is the time when competent auctioneers will “earn their money”. No vendor in today’s market will complain about his/her fee if you sell the property, says Popplewell. But along with his colleagues it’s a challenge he is eagerly facing.
Without a shadow of a doubt, he readily admits that the current Irish team is the best ever and Brian O’Driscoll the best player Ireland has ever produced. “All during his career he speaks out, puts himself under pressure and comes up with the goods. There are no hollow words. He shoots by the hip and then carries it through. He’s a real winner.” As well as being a first-class player, Popplewell says O’Driscoll can captain the side, doing both jobs superbly. Not an easy task and one few can do well. Unusually for somebody who has been so steeped in the game, Nick Popplewell has no involvement whatsoever these days. He did get involved with local side, Wexford Wanderers for a time but has since withdrawn completely.
All hands on deck! Nick Popplewell at work with Adrian Haythornthwaite, Aoife O’ Donoghue (left) and Mary Galavan
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New EU Directive allows Estate Agents to have an office in any Member State
IPAV President John Shaw and CEO Fintan McNamara pictured with the CEI President Manuel Nagrao and members the Romanian delegates at the CEI meeting in Brussels in November.
A new EU Services Directive which was due to come into national law in all member states by the end of 2009 allows real estate agents to have a one-stop-shop to open a new office in any of the EU members countries, the President of the Confederation of European Estate Agents, Manuel Negrao, has stated. During the last CEI Board Meeting, which took place in Brussels at the end of November, the CEI Board discussed the implementation of the EU Services Directive into national law. The period to implement the EU Services Directive into national law ended on 28 December. “In most members’ countries the process to implement the Services Directive into national law is progressing gradually”, explained Manuel Negrao. After all members’ countries have implemented the Services Directive into national law the European real estate agents will have a one-stop-shop to open a new office in any of the EU members countries.
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IPAV President John Shaw and CEI President Manuel Negrao at the CEI Directors meeting in Brussels
“All real estate agents in Europe should be allowed to open new businesses in EU countries,” he said. “During our conference the delegates from the 14 member countries in CEI noted that there are several restrictions by national trade law that prevent them from doing so”, added Manuel Negrao. “ CEI decided to undertake a survey in which these restrictions on the trade regulations in the EU member countries will be collated.” For CEI, as a central organisation, representing more than 90.000 real estate agents in Europe, the free movement of services is an essential for the professionals and for the profession. “The new European Standard for the Service of real estate agents in Europe, that will be published by the CEN shortly, will provide a backdrop in the negotiations with the EU authorities”, Manuel Negrao concluded.
Can you handle 210,000 viewings in one day?
Advertise in our Irish Examiner Property supplement every Saturday and your advert will be seen by 210,000 people.
Source: JNRS 2008/09
To Advertise, please contact, Property Advertising Tel: 021 4802100
To Sell or not to Sell?
By Pat Davitt FIPAV With mortgage interest rates looming and rents falling, the big question now for those with investment properties and in need of cash (and there are many) is whether or not to sell?
Old Style Investor If you were one of those early investors - and by early I mean you purchased in the 80’s or early 90’s - more than likely you made a decision at that time that you were in this for the long haul. You took care in choosing the locations, worked out how the tax breaks affected your income and did the projections on rents and yields and got professional advice on the likely capital appreciation over a particular time frame. Chances are you now probably have a small mortgage, if any mortgage at all. You can afford to sell your property to raise the cash. Naturally the property will not achieve the price you would like but in my opinion your property will move and you will get your cash. If, on the other hand, your property is providing you with a nice income stream and you have happy tenants, perhaps it might be a better option to seek other avenues to secure cash.
The New Investor However, if you purchased in the last three to five years and went into the market to make a quick buck, then more than likely you are now nearing negative equity. You may be experiencing void periods in your rental properties and other unexpected costs. Clearly a credit squeeze, a recession and a collapse in property prices and rents was not on your agenda for 2009. You are now beginning to understand the universal truth about property: that prices can fall as well as rise. And it may get worse. The €200 registration fee for rental properties is but a starting point and, with the exchequer in deep trouble, more property taxes seem inevitable. As for mortgage interest relief, now only 75 per cent of the interest on the loan can be deducted as a rental expense instead of the previous 100 per cent. That’s the reality? Now what to do? Most of the investors that I have met who fall into the new investor category tend to be in their 20’s and 30’s. Some have young families and others are single or just starting out. My advice is: there is no point waiting. The writing is on the wall. Interest rates will go up and rents are coming down. Talk to your bank manager and see what options are available to you. You have two choices:
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1. Take a hit now, suffer the loss, talk to the bank and move on. You are young and can make this up later in life 2. Accept that you are in this for the long term. Borrow the cash you need from family or friends to get you through these difficult times. Your property now is no longer an investment per se – but a burden and if you ride it out for the long term you will be all right. Yes, the market will come back but be prepared to wait at least five to 10 years. If you can fund the loss over this period you will survive.
Head in the sand The worst thing you can do is bury your head in the sand and just hope that things will get better. Accept that you are not the first and certainly not the last to lose money on an investment. Nobody is entitled to make a profit and there is always risk. When it comes to a recession and a property market collapse remember: “you didn’t cause it, you can’t cure it and you have no control over it. Believe in your own ability to earn going forward. Be grateful for your health. Financial losses happen. There are people in much greater need of our support and help. So if you are stuck between a rock and a hard place, take a longterm view, be grateful for what you have, make decisions and move on.
Multi - Unit Bill
Multi-unit Bill still with draughtsman There is confusion as to the Government’s intentions on the much-talked about Multi-Unit Development Bill which regulates the management of apartment complexes. The Bill was published in May 2009 and debated in the Seanad at Second Stage in June. However, there has been no sign of the Bill since then despite calls from the Opposition for the need to introduce it. The matter was raised again in the Dáil on 3 February by Labour’s Pat Rabbitte who said that for more than three years, deputies had been hammering away at the need for legislation governing the operation of management companies. “We cannot get answers to our questions about when the legislation will come into the House,” he said. “What do I need to do to get that information? Do I have to contact Deputy Mattie McGrath to find out when the Bill will be introduced in the House? Developers are going bust and management companies are disappearing at a time when people are suffering from flooding. Nobody can find anyone on the telephone who is responsible.” In reply, the Taoiseach said that on 2 February the Minister for Justice Equality & Law Reform wrote to the Whips to explain the various issues that are being considered, including the scope of
the Bill, the voting rights and the annual service charges. “He gave the Whips that information because this issue has been arising regularly,” he said. “He assured everyone that work on the development of the necessary amendments is proceeding with the Office of the Attorney General and the Office of the Parliamentary Counsel. We are anxious to bring this matter to finality as quickly as we can. There are complex issues involved. If it was a simple and easy matter, it would have been done by now. I acknowledge and accept that this matter has been ongoing for some time. We are trying to resolve the issues in a sensible way that will work for everybody and get the job done.” On February 9 the Taoiseach told Labour’s Joan Burton that, given the amount of interest articulated in the House on a constant basis in regard to this matter, the purpose of the recent correspondence was to bring people up to date as to what issues are being addressed. “I would like to see the legislation published and enacted as quickly as possible but it is being dealt with by the Department of Justice, Equality and Law Reform and it is a matter of priority,” he said. “Unfortunately, because there are so many issues involved in terms of getting a coherent legislative outcome, it is complex and difficult to finalise. It is not a question of the Government being indifferent on the matter. We are proceeding with this issue as quickly as is possible.” As we went to press, the Bill was scheduled for its second debate in the Seanad.
ERA signs Deal with Globrix.ie Dublin IPAV member Vincent Kelly is one of ERA’s franchisees which has recently announced a deal that sees all 4,500 ERA Ireland properties for sale and to let on www.eraireland.ie now featuring on the www.globrix.ie property search portal. He is pictured here with Joe Kavanagh, National Sales Manager, Globrix.ie (left) and Frank Doonan, CEO, ERA (right). “Globrix.ie brings ERA Ireland massive exposure to prospective property purchasers both in Ireland and abroad. When we combine this with our existing comprehensive online presence, we can deliver numbers of buyers to ERA Ireland properties that are unmatched in Ireland” “This online partnership fits perfectly with our marketing philosophy at ERA Ireland... Better by Technology,” said Doonan.
The launch of the marketing agreement was hosted by ERA Kelly Bradshaw Dalton at their superb new walk-in property sales showroom in Drumcondra. “We have confidence in the Irish property market and we continue to invest in enhancing customer service to our clients,” said Kelly who has just opened a new office in Drumcondra. ERA Kelly Bradshaw Dalton has one of the largest property portfolios under management in the city of Dublin. Globrix.ie is a free to list property search engine for estate agents. It revolutionises the way the general public search for a property. With its unique keyword search capabilities, it allows the viewer to find what he/she is looking for in a fraction of the time it would take on traditional property listings.
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Focus on US Property Market
An Opportunity to profit on the US Downturn? European investors don’t fully appreciate the scale of the collapse in the US property market – or the extraordinary investment opportunities it offers, writes Peter Cluskey. Investors have a different view of the world to ordinary folk and it’s all summed up in Warren Buffett’s famous mantra: “Be fearful when everyone else is greedy – and greedy when everyone else is fearful.” Boy, how right that little gem is turning out to be …
scrutiny, not just because it looks like a great investment, but also because it’s pretty indicative of the investment opportunities on offer right across the States. (Florida is another location worth looking at … but later.)
That’s why it struck me as I leafed through The Financial Times last weekend that the Sage of Omaha would have smiled benignly at the hardcore analysis of the US property market delivered by Ella Sherman, Asia Pacific Manager of Worldwide Investments, a former banker who has built up her own global property portfolio.
What Ms Sherman doesn’t say about the Detroit investment is that it’s part of a rental scheme fully guaranteed by the US Government – undoubtedly one of its most attractive aspects for the risk-averse. You’ll probably come across this elsewhere in the States at the moment. So how does it work?
“The recession in the US is as bad as the Great Depression”, Sherman enthused. “Such bad downturns don’t come around that often – so clients are seeing this as an opportune time to buy good-quality rentable properties at rock-bottom prices …”
Well, Detroit has a serious shortage of affordable housing. With a population of 5.4 million, there’s a current waiting list of almost 10,000 people.
Another reason I smiled was that when Sherman was pressed to give one good example of where her readers might make a killing she chose Detroit, Michigan, and what certainly appears to be a remarkable investment opportunity which had come across my desk from the US arm of estate agents, Assetz International, just a few days before.
Detroit Detroit – as Ms Sherman would no doubt tell us with a rueful smile – has suffered what the Americans call a double-whammy. Like the rest of the country it’s been hit by falling house prices and an ailing economy, but on top of that, it’s home to one of the industries hardest hit by the downturn, the automobile industry – so an already difficult local economy has been compounded by thousands of job losses. Here’s Sherman’s view of the particular investment that’s being offered: “Among the best-selling investments is a repossessed properties rental scheme. Three and four-bedroom detached houses cost around $45,000 (€33,000) and $47,000 (€34,400), which is cheaper than the cost of building them. “That price is also 40 percent below the market value, which is already low. The scheme is achieving 21.5 percent gross rental yields on properties fully managed by an experienced, locally based agency. Some Asian buyers have bought entire streets…” And it’s not just wily Asians. Wealthy Russians have their eye on US real estate as well, according to New York lawyer, Edward Mermelstein, whose firm has an office in Moscow, and has closed, amongst many others, two deals worth $1 million (€734,000) and $3.8 million (€2.78m) in the past month alone. But let’s stick with Detroit for the moment, because, as Ms Sherman rightly suggests, this is a development which bears closer
Spring Issue | page 12
However, under a scheme run by the US Department of Housing and Urban Development (HUD), three- and four-bedroom family homes are refurbished and the rents are paid wholly or in part by the government. That’s the real beauty of this scheme from an investor’s point of view – the rent is taken care of. The wonderfully named HUD Section 8 Housing Choice Voucher Program (HCV) – which has been in existence, believe it or not, since 1937 – is regarded as one of the most successful of its kind in the States, benefitting tenants and landlords alike. Any tenant evicted from a HUD home loses the right to join a HUD or HCV programme anywhere else in the US in the future – so the number of problem tenancies is miniscule.
Net yield of 17.26 per cent Broadly speaking, how do the finances work out? Here’s one example from Assetz International: The house costs $45,000 (€33,000) to buy. The rent per month is $850 (€623). That’s a rent per annum of $10,200 (€7,500). Annual deductions – including property tax, management fees and buildings insurance – come to $2,534 (€1,850). That leaves a net rent of $7,766 (€5,700) – which, in turn, is a net yield of 17.26 per cent.
Focus on US Property Market
There’s no arguing about a net return of more than 17 percent on a gross rental yield of more than 21 percent. But if you’re wondering about capital appreciation, how about this: you’re buying for around 40 percent under the market value … and the refurbishment is carried out under the HCV programme … so once the remedial work is carried out the properties are typically valued at around $90,000 (€66,000) – still cheap but twice what the investor pays for them. Assetz International is currently arranging weekend trips to Detroit to view the range of properties and, with the aim of reassuring potential purchasers as much as possible, they’re arranging meetings with officials of Detroit City Council, the Department of Housing and Urban Development and the property management company. (Unlike some viewing trips during the boom times these trips are paid for by the investor, though hotel reservations, airport transfers, etc. are arranged by the agents.) Just why US realtors are looking for overseas investors and desperately trying to forge links with foreign estate agencies is graphically illustrated in the 2009 yearend statistics from foreclosure specialists, Realty Trac – which show that the long list of distressed property “hotspots” is led by California, Florida, Nevada and Arizona, with numbers increasing in Washington, Oregon and Idaho, despite slightly improved economic data out of the States in recent weeks. On top of those, places such as Utah, Arkansas, Portland Oregon and Rockford Illinois, all posted foreclosure rates above the US average during 2009. And markets such as Honolulu, Minneapolis and even well-heeled Seattle – home to Microsoft and Boeing amongst others – saw foreclosure activity increase at more than twice the national pace. Is all this about to change? Probably not in the immediate future. According to Robert Shiller, Professor of Economics at Yale University, author of the prescient Irrational Exuberance and founder of Standard & Poor’s Case Shiller Home Price Index, property prices will continue to stagnate this year and through 2011 at least – barring a dramatic turnaround in the economy, of which there is most assuredly no sign.
Professor Robert Shiller of Yale University
So this could well be the time to test Warren Buffett’s theory of value investing. To quote the Sage again: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it …”
We’ve seen Miami Vice, so we know that Florida is the resort capital of the US. It led the property micromarkets where prices became most overblown during the boom – so that now, like Detroit, it offers some quite extraordinary investment value.
One of the most experienced local market watchers is Peter Zalewski, a director of the appropriately-named estate agents, Condo Vultures, who says that activity picked up noticeably in the second half of 2009 – after prices had fallen by around 30 percent. Zalewski’s figures show that just over 2,350 condominiums were sold in the state during 2009 – of which 1,655 were sold in the second half of the year. “Those reduced prices”, he says, “triggered a buying frenzy by foreign nationals with strong currencies and by private equity groups who finally started to purchase again and completed more than a dozen bulk deals by the end of the year.” It’s certainly remarkable to see, just three or four years on from the recordbreaking prices of 2006 and 2007, advertisements in the weekend property section of The Financial Times last week declaring: “Huge Waterfront Condos in Fort Myers, Florida! Unbelievable Value!! Priced to Move! Act Now!” And if all those exclamation marks weren’t enough to spur your interest, then the prices might drop by more than 50%: down from $758,900 (€557,000) to $229,900 (€168,700), from $720,900 (€529,000) to $229,900 (€168,700), and from $635,900 (€466,750) to $239,900 (€176,000). And the setting at North Star Yacht Club isn’t bad either … www.northstaryachtclub.com. Coincidentally, Assetz International also has 70 percent discounts on threebedroom detached houses in Fort Myers with rental yields of around 13 percent gross or 10.9 percent net after property tax and management fees. And then there’s Knight Knox International, who have a development of “distressed condos” in Tampa, with prices for a one-bed starting at a 70 percent reduction of $59,900 (€43,900). There are tenants already in place so the rent is guaranteed, with a net yield, say the agents, of 10 percent. This is a gated development, by the way, with a pool, a serenity spa and tennis courts, among other amenities. What do the independent experts think? Are these deals as good as they look? Well here’s Dr Séan Snaith, Professor of Economics at the University of Central Florida in Orlando: “The imbalance of supply and demand puts the buyer in the driving seat. A large inventory and the continuing weakness of the dollar compared to other currencies means there are some awesome deals at the moment. For international buyers, 2010 will be a great time to buy in Florida.” Annette Reeve, a director of Mayfair International Realty, takes the same view, and believes the tipping point is being reached where investors can resist temptation no longer. “Buyers have been watching the bargains right through 2009, they don’t believe prices have much further to fall and now they’re deciding to go for it”, she suggests. “I believe there’s a whole lot of pent-up demand out there …”
Spring Issue | page 13
Focus on the US Property Market
Washington DC: The Beginning of an Upswing? Just over one year ago, US President Barak Obama and his family moved into 1600 Pennsylvania Ave., Washington DC (the White House). In this article written for the Property Professional, Washington realtor Caryn Gardiner of Long & Foster reviews the property market in the US capital over the past year. Caryn Gardiner
The Washington area housing market is beginning to recover. Towards the end of 2009, sales in most jurisdictions were up, mostly inspired by the $8,000 (€5,840) first-time buyer tax credit which has been extended to April 30, 2010 with a new addendum that allows present home owners who have owned their home for the past five consecutive years to get a $6,500 (€4,745) tax credit. There was a surge in November when the buyers believed the tax credit would end on November 30, 2009 as previously decided. However, in December there was a lull once buyers saw they had an additional seven months to use the tax credit. With the tax credit incentive, historically low interest rates and low house prices, the buyers are driving the market. So, what’s happening in the DC area market? Houses are selling with multiple offers. If a house is in good condition, priced appropriately, and located “close-in” to the District, it is receiving more than one offer, resulting in a bidding war. These houses are usually priced under $750,000 (€547,500) and most likely for first time home buyers. Recently I had clients who were looking in the $350-400,000 (€255 - €292,000) range. They were prepared to bid over the asking price, give the sellers a free two week rent back after closing (which allows the sellers to live in their house for an additional two weeks while the new buyers pay the mortgage, taxes and insurance), and take the house “asis” after they lost their third house to a bidding war. Yes, this was two months ago and not four years ago.
Multiple offer The difference between the “multiple offer” market of today and 2005 is the possible appraisal (valuation) issue. Appraisals are ordered by the bank which is lending the buyer money to determine the house’s value. The bank will ultimately use the “appraised value” to determine the amount they are willing to loan the buyer rather than the purchase price. In a declining market (DC has recently been upgraded to a “soft” market) many appraisals are being challenged. If a home’s appraisal (the bank’s value) is less than the purchase price, there are two choices: the buyer can make up the difference with cash or the seller can reduce the purchase price to the appraised value. If neither party is willing to do this, the contract becomes void. Whereas appraisers used to be able to use comparables from six months ago, the banks of today are requiring them to use comparables from 60 days or less. If a house was sold more than 60 days ago, the appraiser will
Spring Issue | page 14
give a price adjustment to compensate for the decline in value. For loans over 1 million dollars (€730,000) most banks are requiring two independent appraisers. This means more cost for the buyer (who is paying for the appraisal) and more stress for the seller. Each deal is more complicated and more intense for all parties in this market. The good news is the market is changing. Prices are trending up with the re-entry of investors into the low-end (up to $350,000 (€255,000)) market. The inventory is still significantly low resulting in a high demand for property for the ready and willing buyer. Days on market continue to decline compared to both the end of 2009 and the previous year. Properties “close in” (the District, Arlington, Alexandria, Chevy Chase and Bethesda) continue to sell quickest, but across the region, time on market is moving closer to the region’s long-term average. This should cause buyer and seller expectations to move closer to a balance, facilitating an increase in transaction volume. “The ratio of inventory to sales (months of sales) continues to decline in all jurisdictions from one year ago. The metro-wide ratio of 5.4 months’ worth of listings is below the normal, healthy standard of six months, signalling that demand is beginning to outpace supply.” This MRIS* data will hopefully inspire sellers to put their homes on the market rather than wait for the market to turn. The average sales price in the 3rd quarter of 2009 is 93.2% of list price, (MRIS DATA) the highest share in five quarters. Sellers continue to make concessions to buyers to facilitate sales, but those concessions are less and less. As a result, buyer activity has increased and properties are selling faster.
10001 Edward Avenue, Bethesda, MD Listed at $1,199,000 sold for $1,149,000 in Jan 2010.
Focus on the US Property Market
In the DC metropolitan area, homes are selling in an average of 72 days, down from 81 days in the 3rd quarter and 104 days one year ago.
Navigating the market The Washington DC area housing market appears to be in recovery due to consistent buyer activity, especially in the lower price brackets. If we continue along this path, we should eventually have a very balanced, healthy market for both buyers and sellers. Sellers still need to lower their expectations and appraisals are contributing greatly to a “reality check”. If a house doesn’t appraise, the buyer cannot get the loan he/she wants and ultimately the seller is left with a choice: lower their price to the appraised value, or hope for another buyer who has a different lender with a different appraiser. As the latest comparables are reflecting the current market, realtors are pricing new listings appropriately and the appraisal issue has lessened. As demand and supply come into balance, we should see continued price traction in coming quarters. The pace of the recovery may be uneven, but by spring 2010, we expect that renewed demand will yield yearly price gains, particularly in neighborhoods close-in to DC, where inventory is more limited and demand is strongest, but extending to the Outer suburbs by late 2010/early 2011.
Washington v. the Nation By most measures the Washington metro area housing market is performing better than most other metro areas. The Washington metro area is ranked third on a list of “2009 Best Cities” by Kiplinger’s Personal Finance magazine. This is mostly due to a healthy economy, diversified culture and employment opportunity. The average sales price in the District of $482,075 (€351,000) in the 4th quarter of 2009 represented a 2.6% increase from the 3rd quarter, and a decline of 4.5% from the 4th quarter of 2008. In the Washington metro area, the Federal Housing Finance Agency (formerly OFHEO) reported a 0.3% annual decline in home prices for the 12 months ending September 2009, compared to a decrease of 12.2% for all of 2008. FHFA reported a national average home price decline of 3.8% for the 12 months ending September 2009. In contrast, the National Association of REALTORS reported a national average home decline of 11.2%, and a Washington area decline of 2.5% for the 12 months ending in the 3rd quarter of 2009. (FHFA and NAR use different methodologies to calculate price changes)
The Bottom Line We can look at statistics all day long, but the bottom line is supply and demand. A buyer who is ready, willing and able to buy in this market is looking for value and condition. The value is determined by the purchase price and then confirmed by the appraised value (which is ordered by the bank that is providing the loan). In addition, the buyers of today want the sellers to work with them which and to pay for their closing costs. If you are a first-time home buyer the $8000 (€5,840) tax credit can now be used to pay for the buyer’s closing costs which is helpful to the seller as well. The condition of the house is equally important. In the “old market” (2005), buyers were buying houses “as is” without inspections. Today, if a house is renovated and in ‘turn key” condition, it will sell much faster and at a higher price. The buyers feel a sense of entitlement after living through a seller’s market for so long. And, ultimately, they are right. A house should be in good condition and should reflect the proper value. Sellers still need to adjust to this new mentality but they are getting there. As they become comfortable with the current conditions, hopefully the sellers will start to put their homes on the market in good condition and sell at market value. We will see a balanced, healthy market which ultimately is good for everyone. *Caryn Gardiner, a realtor with Long & Foster Real Estate, is licensed in Maryland and Washington DC. She is a third generation real estate professional, a member of The National Association of Realtors, Greater Capital Area Association of Realtors, Beverly Hills Association of Realtors, Californian Association of Realtors and has won the International Diamond Society Award in 2003, 2004, 2005, and Chairman’s Club Award in 2006, 2007, 2008 & 2009. She graduated Cum Laude from The University of Michigan, Ann Arbor, MI. *Long & Foster is the largest privately-owned real estate company in America as well as the largest real estate company in the Mid-Atlantic region. They have over 200 real estate sales offices and 13,700 sales associates covering the region. *Metropolitan Regional Information Systems, Inc. (MRIS) is the nation’s largest Multiple Listing Service. MRIS serves nearly 50,000 real estate professionals spanning Maryland, the District of Columbia, Northern Virginia, and parts of West Virginia and Pennsylvania – a total of 22,000 square miles.
11602 Ridge Mist Terrace Potomac, MD Listed at $1,199,000 sold for $1,139,000 in Dec 2009.
Spring Issue | page 15
More Property Jobs To Be Lost - Surveyors The Society of Chartered Surveyors has predicted that 40,000 more jobs will be lost in the property and construction sector throughout 2010. This means that the number employed in the sector will fall to under 100,000 having been as high as 267,000 as recently as 2007. The President of the Society of Chartered Surveyors, Ken Cribbin has described the Government’s failure to tackle the unemployment crisis in the sector as “totally unacceptable”. In his speech at the SCS’s annual dinner in February, Cribbin pointed out that while the Government had taken action to tackle the banking crisis and to stabilise the public finances it had failed dismally to provide leadership to the property and construction industry and the wider economy had suffered as a result. President Mary McAleese addressing the Society of Chartered Surveyors dinner
“As a matter of urgency the Government needs to tackle this unemployment crisis. That involves real political leadership and engagement and we need it now,” Cribbin said. In that context the SCS has called on the Government to appoint a Chief Adviser to head a new Construction Industry Consultative Council. This body would be tasked with promoting a sustainable industry over the medium to long term. “At present responsibility for the Public Capital Programme is dispersed across nearly all government departments. A ‘Construction Chief’ would oversee the delivery of the Public Capital Programme and take advantage of the lowest tender prices in a decade to get this sector and the country’s economy working again,” he said. Cribbin pointed out that at an optimum level of output, the sector could support direct employment for 150,000 people.
Property tax In his speech, Cribbin also reiterated the SCS’s support for an annual property tax. He said that as long as the tax was introduced in a fair manner with the money raised, ring-fenced to fund local authorities, the Society would support it. “While the introduction of a property tax would be controversial and deeply unpopular, recent events showed that local authorities
President Mary McAleese and Martin McAleese with Ken Gribbin, President of the SCS
needed proper funding,” he said. “Recently we have seen local authorities all over the country struggle to deal with issues such as flooding, road maintenance and water supply. This tax is badly needed to ensure local authorities can meet their obligations and provide a professional service,” he concluded. The guest of honour at the annual dinner was the President of Ireland, Mary McAleese, who was accompanied by her husband Martin. Over 800 guests from all over the country attended the event.
Tender Prices Down 29% From ‘07 Peak New figures from the Society of Chartered Surveyors show that construction tender prices fell by 17.2% over the last twelve months. The index for the second half of 2009 shows prices decreased of 7.5%. The figures also show that by the end of the year tender prices had fallen 29% from their peak in the first half of 2007. The Chairman of the Quantity Surveyors Division of the SCS, Micheal O’Connor said the figures showed that the trend in below
Spring Issue | page 16
cost tendering was continuing and he warned that this could not continue. “The index records tender prices every six months and this is the fifth straight decline in a row. While there was a need for a correction, the continuous fall in tender prices and the extent of those falls year on year is forcing firms to take on jobs at below cost. This situation is not sustainable for any period and we are seeing that with the amount of firms going out of business and the catastrophic rise in unemployment in throughout this sector.”
The SCS has been calling on the government to take advantage of the lower prices and invest in public infrastructural projects. The Society also wants the government to appoint a Chief Adviser to co-ordinate the industry.
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3 IPAV Headquarters, 129 Lower Baggot Street, Dublin 2 B.Sc. (Hons) in Property Management (3 years) By arrangement with the College of Estate Management (CEM) at Reading University IPAV certificate graduates may top up to degree level through their distance learning programme.
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For further details on any of the above courses, please contact: IPAV Headquarters, 129 Lower Baggot St., Dublin 2. Telephone: 01 – 6785685 Fax: 01 – 6762890 e-mail: email@example.com Website: www.ipav.ie
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Right Mortgage, right advice
Right Mortgage, Right Advice.... By Justin Brown, Managing Director, New Horizon Financial
Buying a first property is possibly one of the most expensive purchases that most clients will make in their life. Whether it is an apartment or house, the process of buying it can be both daunting and an extremely rewarding experience. The first step to buying a house is to find out how much one can actually afford. Review monthly income, expenses and savings. Always remember that as a first time buyer, one will need a substantial amount of cash in hand to settle closing costs and deposit. The budget should also leave room for insurances as well as other sudden expenses like an increase in interest rates. It is important to plan when thinking of applying for a mortgage as there are a number of factors which can hinder an application if they are not addressed first. Banks are very reserved at the moment when it comes to lending money, so it is vital that the right picture is painted for them when applying for mortgage approval. Make certain that the client’s bank accounts are maintained in good order, making sure that they are saving on a regular basis. Missed direct debits and missed loan repayments are regarded negatively when it comes to underwriting a mortgage, so make sure the last six months are clear of any mistakes. Lenders will want to see a build-up of savings to provide funds for a deposit, although most will allow a partial gift from parents as part of the deposit should the client not have the full amount in savings.
When a client feels he/she is ready to get approval in principle in place he/she should seek independent advice from a broker. The broker will generally deal with more than one lender therefore taking the legwork and stress out of the process. The broker will search the market for the best rates available and present the application to the banks. Having approval in principle means the credit files have been reviewed and the lenders are prepared to offer a mortgage on the basis of the information provided. A letter will be issued showing the client’s borrowing power, which can be used to show estate agents or sellers that he/she is a serious buyer. Getting a loan pre-approved can save a lot of time and is worth every effort as it will set a bench mark on how much a person can afford to borrow. Only a small number of lenders will loan 92% of the purchase price for first time buyers, falling back to 90% and down as low as 80% for some. My advice is to advise clients to do homework and get speaking to an independent adviser before applying directly to a bank. The broker will explain the different interest rates and options available and help you make the right decision. Remember the ECB interest rates are at a record low, but there is speculation that they may rise in the latter half of 2010. It is important to take this into account if availing of a variable interest rate. As we have seen already this year, it doesn’t take the ECB to increase rates for the Irish banks to increase them, therefore a fixed rate will give security against this.
First Time Buyers Positive about Housing Market – Survey. New research shows that first-time buyers are positive about the housing market, despite persistent job security concerns. The EBS Building Society’s research, published on March 8, shows that 67% of potential first-time buyers feel that now is a good time to buy a home. About three in ten are actively looking for their first home, while six in ten say that they will be actively looking to buy before the end of the year. The research also shows that potential buyers are shopping around for their mortgage while the average amount that they expect to spend on their new home is €260,000. The EBS also says that 53% of respondents said they were concerned about their own job security, while 22% said they were worried about their partner’s job security
Spring Issue | page 18
Myhome.ie Reports Encouraging Signs Of Life In The Residential Market
MyHome.ie has seen encouraging signs of life in the secondhand residential market over the last six months with a consistent month on month increase in the number of properties being “sale agreed”, which began in September last year and has continued over the autumn and winter months. December 2009 showed a marked increase, with the highest number of sale agreed properties of any month during 2009 which goes against the more normal trend of December being one of the quietest months in the sales calendar. But as we know these are far from “normal” times. The rise in activity in the market since December can be attributed in part to lower prices, and not least to the Budget, which brought a most welcome extension to the mortgage interest relief scheme for qualifying home loans meaning new mortgage applicants who meet the qualifying criteria can continue to avail of the full seven years of mortgage interest relief. Anecdotal evidence suggests that current activity in the market is concentrated at the entry level to the market, with First Time Buyers proving the most active in the current climate. This is backed up by anecdotal evidence from individual estate agents but more significantly by the recent Irish Banking Federation data which shows that First Time Buyers are now the single largest segment of the mortgage market, by volume at 35% and by value at 41% of the total market. First-Time Buyers and Mover Purchasers together now account for nearly three-quarters of all mortgage credit issued and more than half of all new mortgages according to the IBF.
in that particular month last year. According to the data, Dublin has seen the largest rise in house sale activity since the turn of the year, with 658 properties sale agreed in January in Dublin compared with just over 200 in the same month last year. Sale agreed properties in Leinster also increased by a similar percentage during the same period with significantly higher levels of sale agreed properties reported in Counties Kildare, Wicklow and Meath. Most analysts agree that Dublin will be the first area to experience any sort of stabilisation in prices, with it being the primary employment centre in the country and this is borne out by the statistics showing that demand has picked up in the capital albeit from a very low level twelve months ago. The increased level of market activity is not just measured by the volume of properties sale agreed although this increase is entirely consistent with the overall increase in traffic volume to the MyHome.ie website. Since September 2009 there has been an increase of over 50% in the level of enquiries being made through the site to estate agents, which signifies that there are buyers who wish to take their property search to the next level by contacting individual estate agents through the MyHome.ie site rather than simply browsing the website. Naturally not all of these enquires result in sales transactions but compared to six months ago it is a definite improvement in market activity which is most encouraging given the difficulties the residential market has experienced over the last three years.
First-Time Buyer activity remains the key to an overall improvement in the residential sales market as it is the first-time buyers who provide the lifeblood for the market as a whole. Only when prices at the entry level show solid signs of stability due to stable demand levels will activity increase further up the value chain. In the capital, the larger price correction of three bedroom semidetached homes relative to apartments, means that for the first time in over a decade the “traditional” starter home is now in scope for many First Time Buyer couples. This relative “value” combined with a shortage of available properties of this type indicates that three bedroom semidetached homes in the capital will likely be the first to show signs of price stabilisation.
Increased sales activity The trend of increased sales activity has continued in the early part of this year. In January, the MyHome.ie website recorded a 300% increase in properties “sale agreed” when compared to January 2009, notwithstanding the low level of transactions
Spring Issue | page 19
A new garden
Eight Simple Steps to a New Garden! With renewed interest in gardening and “grow your own”, the Property Professional in association with An Bord Bia outlines the basic steps to preparing a garden. Preparing a new garden is not a daunting task, it is in fact a rewarding activity and easily achieved. A new garden instantly raises both the status and value of your property. We’ve outlined eight simple steps to get you started.
Step One: Knowing What You Want Your new garden could be anything from a space to entertain in or a green gym to an exterior dining area or a safe play area. It could become a backyard allotment or in the case of a front garden – a potager filled with delicious edibles and a section of your favourite herbs. Growing your own is not just economical but environmental: with no packaging or transport it means a healthier you and a healthier planet.
Step Two: Site Utilisation Of course a garden could be all of the above. There is no need to rush into any action. If you take a little time to watch the space, watch where the sun is strongest or settles longest, it will reveal the perfect place for a vegetable plot (most vegetables need at least six hours of sunlight daily). Watch where the sun falls in the afternoon – your perfect seating area. Any waterlog after a rainy day might hint a natural site for a pond and quickly drained places can host beautiful borders.
Step three: Assessing Your Soil Literally scratching the surface is the best starting point. Grab a handful of your garden’s soil - a plug about half the depth of a trowel will do. Hold it in your hand. How does it look? How does it feel? The darker the colour the more likely it is to be nutrient rich. If lighter in colour then the tendency is for it to be lacking in sufficient quantities of one, or all, of the sixteen chemical elements nutritionally required for healthy plant growth. Texture is an important growing factor – clay and organically improved soils hold water and nutrients well, while sandier soils allow minerals to leach out and water to drain away quickly. Clench your hand, let that action squeeze the soil into a shape, if that shape remains when you release your grip, you have clay. If it parts with a tap you have good humus (organic matter). If it crumbles straight away you have sandier soil. The advantage of sandier soil is that it heats up earlier and gives crops a head start, but it needs compost/manure added to bolster nutrition. Clay is slower to start in spring. However, any manure/compost added will be held in place for seasons. But before we make any changes, we should mark out the areas.
Step Four: Creating Beds or Borders Your observations of the site and your wish list (vegetable patch, seating area, tree, flowering border, play area etc) will have given you a good idea of the potential contents, shape and encompassment of your new garden. Now it’s simply a case of marking it out. For curvy lawns or meandering borders put down a garden hose or rope and adjust to your desire. If you want a more formal lawn or geometrical beds, then string and stakes Spring Issue | page 20
will help create suitable outlines. With your outlines ready, some marker paint, sand or the blade of your shovel will imprint where you want to dig out. If you are interested in self sufficiency then we recommend you invest in raised beds.
Step Five: Amending Soil Remember that plants get their nutritional needs from the soil. So if the soil is healthy and nutritionally balanced, the plants growing in it will be likewise. No matter what type of soil you have, it is a wise decision to alter and build up your soil as it will save time, money and heartache in the future. Sandy soils need manure and organic compost to bind and nutritionally balance them; while clay could do with the input of sand/grit to improve texture and drainage and also some manure/compost to improve its worm content and beneficial bacteria. Different plants have different requirements, so you may give more attention to edible and ornamental locations and simply rake level a lawn area.
Step Six: Plant Selection and Planting If you buy all your plants in one single month you will not have succession flowering. Think more along the lines of a visit or two to a garden centre in each season, that way your garden will have colour all year round. The Bord Bia website – www.bordbia.ie – holds a list of quality assured and award winning garden centres.
Step Seven: Planting Prior to planting it is a good practice to water your new plants to avoid the plant going into transpiration shock when taken from the pot and placed into a planting hole. The planting hole should be as deep as the rootball and a bit wider. After you place the plant in the hole, backfill it with the soil you earlier removed, using the palm of your hand or the heel of your foot to firm it in. Finally, and once again, water it thoroughly to help roots make contact with new surroundings.
Step Eight: Enjoy! (Part 2 will follow in Summer edition of the Property Professional)
In the Dáil...
In the Dáil: The following is a selection of recent written Dáil replies to TDs on topics of interest to auctioneers and estate agents:
NPPR Totals – to 15 January 2010 Total received€ Net amount to local authority €Dublin City Council 10,636,080 10,541,338
House Prices Deputy Willie Penrose (Lab. Longford/Westmeath): asked the Minister for the Environment, Heritage and Local Government when the new house price database will be available; if it is intended that the necessary legislative changes will have been made to enable the publication of house selling prices when the house price database is available; and if he will make a statement on the matter. Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): The relevant Government Departments and agencies will be working in the coming months with a view to the development, as soon as possible, of the new house price database.
Deputy Pat Rabbitte (Lab. Dublin South West) asked the Minister for the Environment, Heritage and Local Government the amount collected to date by each local authority under the non-principal private residence tax; the way the amount collected by each local authority compares with the amount estimated; the amount of the moneys collected that has been reissued to each local authority and town council respectively; and if he will make a statement on the matter. Minister for the Environment, Heritage and Local Government (Deputy John Gormley): The amounts collected to date under the non-principal private residence charge and the net amounts pertaining to each local authority as at 15 January 2010 are detailed in the following table. The net figures incorporate a reduction of approximately 1% on average to cover administration and transaction charges. My Department does not have figures relating to amounts received by town councils, as under section 15 of the Local Government (Charges) Act 2009, the distribution of moneys in this regard is a matter for the relevant county council.
Cork County Council
Fingal County Council
Kerry County Council
Dun Laoghaire Rathdown County Council
Donegal County Council
Wexford County Council
Cork City Council
South Dublin County Council
Galway City Council 1,972,240 1,952,720 Galway County Council 1,883,120 1,867,284 Clare County Council 1,788,500 1,773,944 Kildare County Council 1,775,980 1,756,650 Mayo County Council 1,774,940 1,752,606 Wicklow County Council 1,342,340 1,330,382 Limerick County Council 1,286,580 1,272,693 Meath County Council 1,221,580 1,206,603 Limerick City Council 1,183,420 1,173,320 Louth County Council 1,040,460 1,027,901 Sligo County Council 1,000,880
Westmeath County Council
Waterford City Council
South Tipperary County Council
Waterford County Council
Roscommon County Council 733,420
Kilkenny County Council
Cavan County Council
North Tipperary County Council
Laois County Council
Carlow County Council
Leitrim County Council
Offaly County Council
Longford County Council
Monaghan County Council
Spring Issue | page 21
In the Dáil...
At the Autumn IPAV Seminar in Portlaoise were (l – r): John Fitzgerald, Property Partners Brady Fitzgerald, Clonee & Ratoath, Co. Meath; John Buggy, Buggy Auctioneers, Parliament Street, Kilkenny and Michael McWey, McWey Auctioneers, Dublin Road, Kildare
Michael Regan, Loughrea, Thomas Collins, Castlebar and John Earley, Roscommon were at the Galway IPAV Seminar.
The non-principal private residence charge was originally estimated to bring in approximately €40 million in 2009, based on a conservative estimate of 200,000 liable properties in the State. This figure was drawn from the 2006 Census and information supplied by the Private Residential Tenancies Board (PRTB). I do not have a detailed breakdown of these estimates by local authority areas.
The requirement for applicants to provide evidence of two refusals or inadequate loan offers from private financial institutions is in place to ensure that those credit worthy households who are in a position to have their loan finance requirements met by a private financial institution do so.
Home Loan Scheme.
Deputy Terence Flanagan (FG. Dublin North-East): asked the Minister for the Environment, Heritage and Local Government the changes he has planned to taking in charge legislation for estates following problems that exist with burst water pipes in estates not yet in control of local authorities; and if he will make a statement on the matter.
Deputy Willie Penrose (Lab. Longford/Westmeath) asked the Minister for the Environment, Heritage and Local Government if applicants are still required to have been refused a mortgage by two banks before being adjudged credit worthy for the purposes of the home choice loan scheme in view of the fact that the scheme is currently targeted at creditworthy first-time buyers; and if he will make a statement on the matter. Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): The Home Choice Loan is intended not to provide an incentive for households to enter the housing market, but to provide access to mortgage finance to facilitate certain first-time buyers who have themselves decided to purchase a home at this time. The scheme is therefore designed to respond, in a very targeted way, to a specific set of circumstances in the housing market whereby prospective middle income first-time buyers, who would previously have been in a position to access mortgage finance from one of the financial institutions, are not currently in a position to do so, due to the impacts of the credit crunch and the general global curtailment of lending to households and businesses arising from it. It is important to clarify that applicants under the Home Choice Loan Scheme are not deemed to be credit worthy by having been refused loan finance elsewhere. All applications are rigorously assessed having regard to an applicant’s ability to pay, credit history and rating and all other aspects of a strict formal lending policy. An applicant’s ability to pay is also stress-tested to assess their capacity to meet their repayments in the event of significant interest rate rises. It is only after all of these requirements have been met that an applicant can be deemed to be credit worthy for the purposes of the scheme.
Spring Issue | page 22
Minister for the Environment, Heritage and Local My Department’s Government (Deputy John Gormley): policy guidance in relation to Taking in Charge of Residential Estates states that planning authorities must adopt construction standards for residential developments that are acceptable to the planning authority for taking in charge and long-term maintenance and that it should be a condition of planning permission that such standards be adhered to. The guidance also states that the construction standards adopted by planning authorities should at a minimum comply with those set out in my Department’s Recommendations for Site Development Works for Housing Areas, which recommend standards for the diameter of pipes and the amount of cover, and make other relevant recommendations including a recommendation that watermain pipe size and layout should be designed in consultation with the local authority. Technical Guidance Document G of the Building Regulations (Hygiene) provides that, in regard to bathrooms and kitchens in dwellings, the cisterns, service pipe and fittings and any associated cold water pipes should be adequately protected against damage by frost. My Department’s Taking in Charge Guidance also states that it is necessary for the planning authority to satisfy itself, when the developer of a residential estate has ceased construction or notified the planning authority that construction is complete, or after the planning permission has expired, that the development is properly completed in line with the planning permission and,
In the Dáil...
where it is not properly completed, to take early and effective enforcement action. Where an estate has yet to be taken in charge, the repair of a burst water main is a matter for the developer. The decision as to whether any particular estates should be taken in charge is ultimately one for the elected members of the planning authority. There are no proposals to change the taking in charge policy or the underpinning legislation at this stage.
Social Housing Leasing Initiative. Deputy Ciarán Lynch (Lab. Cork North Central) asked the Minister for the Environment, Heritage and Local Government the number of leasing initiative properties in respect of which full funding approval has been issued that are unsold affordable dwellings; the number of same that are privately owned leased properties; if the title in relation to unsold leased affordable dwellings rests with the local authorities or with another entity; the average leasing cost of affordable homes; the person who has to pay and the location of payment; the average lease cost per month per unit size excluding unsold affordable dwellings; the number of affordable homes and privately leased properties obtained by individual local authorities as part of the leasing initiative that are now occupied; if the utilisation of unsold affordable dwellings in this manner indicates the end of the affordable housing scheme in its current format; the amount of the €20 million allocated for the leasing initiative in 2009 that has been drawn down; and if he will make a statement on the matter. Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): At the end of 2009, 1,933 units had been sourced and approved under the social housing leasing initiative. Some 1,413 units - 1,331 unsold affordable units and 82 units sourced from the private sector - had received full approval by that date. A further 520 private units had been given provisional approval. Some 437 of the fully approved units are considered to be operational, as signed lease agreements are in place. They are either occupied or are in the course of occupation. Given
that I did not introduce the initiative until February 2009, this represents significant progress. It shows that the initiative, even at this early stage, is starting to deliver. Under current arrangements, unsold affordable units are leased to approved housing bodies for a period of five years. During this period, the properties are used to accommodate households that are eligible for social housing support. The local authority retains ownership of the units throughout the lease period. The Department of the Environment, Heritage and Local Government recoups to each local authority the interest payments liable in respect of the loans taken by the authority to fund affordable properties in the first instance. The average monthly cost for each affordable unit is €365. This compares to an average monthly cost of €456 for all other lease projects. A breakdown of the cost by unit size is not available. A total of €642,000 was spent under the leasing initiative in 2009. The full-year cost of the fully approved units is approximately €12 million. We will not set targets for additional delivery, in so far as affordable housing in general is concerned, this year. We will have regard to developments in the housing market. The emphasis will be on continuing to make progress with measures to ensure the most effective deployment of already delivered but unsold affordable homes. I refer to their use for social housing purposes, for example. The ultimate intention is that the bulk of the affordable units transferred to the social housing leasing initiative will be offered for sale in due course, either to social tenants or under affordable housing arrangements. The last time this issue was raised on Question Time, Deputy Ciarán Lynch asked for a breakdown of the cost of affordable units, as opposed to private units. I apologise for the failure to send that information on to him. It is included in today’s response.
Social and Affordable Housing. Deputy Tom Hayes (FG. Tipperary South ) asked the Minister for the Environment, Heritage and Local Government the number of local authorities that have reduced affordable housing prices in line with the market fall; the way he will instruct other local authorities who have not reduced prices; and if he will make a statement on the matter.
Spring Issue | page 23
In the Dáil..
Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): The provision of affordable housing, including the setting of the sale price, is primarily a matter for individual housing authorities. The sale price of an affordable home is determined largely by its cost. Where authorities consider it appropriate in the context of reduced open market prices and the continuing need to ensure value for money outcomes, they have the option to reduce the sale price of any affordable house by further subsidisation utilising Part V moneys, clawback or other internal capital receipts on hand. My Department issued comprehensive guidance to local authorities in April 2009 outlining a range of measures that could be considered in dealing with the build-up of unsold affordable homes. Local authorities were advised that in cases where they believe price is the main factor inhibiting sale and where there would be a prospect of achieving a sale if additional discount was provided, they should consider the option of further discounting. My Department does not collect information on the number of cases in which local authorities chose this option because it is for local authorities themselves to decide, given their unique position to make judgments on market conditions in their respective functional areas, the most appropriate option to be pursued in individual cases.
Planning Issues. Deputy Phil Hogan (FG. Carlow/Kilkenny) asked the Minister for the Environment, Heritage and Local Government the proposals or planned timeframe for a review of the retail planning guidelines 2005; and if he will make a statement on the matter. [2819/10] Minister for the Environment, Heritage and Local Government (Deputy John Gormley): Since the Department’s Retail Planning Guidelines came into force in 2001, Ireland has undergone considerable change in terms of economic and social development, particularly in relation to population expansion and settlement patterns. In this period, there has been a considerable expansion of retail infrastructure and services which has been positive in facilitating greater competition in the retail sector. In addition, retail strategies have been prepared by all planning authorities as part of their development plan functions. Given changed economic circumstances, it is important that the forward planning context for future retail development remains robust and realistic. My Department is currently drafting a consultation paper to inform the scope of a focused review of the Retail Planning Guidelines. This will allow stakeholders and interested parties to assist in identifying key issues for inclusion in draft revised guidelines, which will issue for public consultation before their finalisation at the end of this year.
Spring Issue | page 24
Social Welfare Code. Deputy Olwyn Enright (FG, Laois/Offaly) asked the Minister for Social and Family Affairs the number of persons in receipt of mortgage interest supplement for each of the past four years; the cost of same; and if she will make a statement on the matter. Minister for Social and Family Affairs (Deputy Mary Hanafin): The mortgage interest supplement scheme provides support for people who have difficulty meeting their mortgage repayments and whose means are insufficient to meet their needs. The scheme provides a short-term income safety net within the overall social welfare system to ensure that people do not suffer hardship due to loss of employment. A supplement in respect of mortgage interest only may be paid to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. The number of persons in receipt of and the cost of the mortgage interest supplement scheme for the last four years is as follows: at the end of 2006 there were 3,420 recipients of mortgage interest supplement and the cost of the scheme was €7.87 million; at the end of 2007 there were 4,110 recipients of mortgage interest supplement and the cost of the scheme was €12.19 million; at the end of 2008 there were 8,090 recipients of mortgage interest supplement and the cost of the scheme was €27.67 million; and at the end of 2009 there were 15,120 recipients of mortgage interest supplement and the cost of the scheme was €60.69 million. There are currently just over 15,400 people in receipt of mortgage interest supplement, compared to 8,091 recipients in 2008, an increase of 91% in just over 12 months. Expenditure for the years ending December 2009 and December 2008 was €60.7million and €27.7 million, respectively, a 119% increase year on year in terms of outturn. A review of the administration of the mortgage interest scheme is in progress. The main purpose of the review is to examine how the scheme can best meet its objective of catering for those who require assistance on a short-term basis, where they are unable to meet mortgage interest repayments on their sole place of residence. The review group includes representatives from my Department, the community welfare service, the Departments of Finance, Environment, Heritage and Local Government, together with a representative from the office of the Financial Regulator. The group is examining trends in programme and administrative costs, the impact of the Financial Regulator’s statutory code of practice on mortgage arrears on the mortgage interest supplement scheme and legislative and operational issues arising, including the cap on hours of employment.
IPAV Lettings Course
IPAV Lettings Course for Property Professionals
Former Clare hurling star and IPAV member Brian Lohan who received a Certificate for completing the IPAV course for property professionals
John Buckley, High St Killarney receiving a Certificate for the course for property professionals from IPAV President John Shaw
Chartered building surveyor Pat McGovern, Merrion Square, Dublin, one of the lecturers at the IPAV course for property professionals pictured with IPAV President John Shaw and CEO Fintan McNamara.
Collette Moore, Ard Na Sidhe, Clonmel who completed the IPAV course for property professionals
Laura Murphy, Ryefield East, Whitechurch, Cork who completed the IPAV course for property professionals
Theodora Ogunjimi, Termonfeckin Road, Drogheda who completed the IPAV course for property professionals
Spring Issue | page 25
Some of the participants at the recent weekend course organised by IPAV for property professionals pictured with IPAV President John Shaw and CEO Fintan McNamara.
Recipients of IPAVâ€™s Certificate in Auctioneering & Estate Agency who received their parchments at a ceremony in the Institute of Technology, Tallaght.
Spring Issue | page 26
Des Quigley, Ednagreena, Inniskeen, Dundalk Drogheda, who received the Student of the Year award in the Certificate in Auctioneering & Estate Agency class from Dr Damien Roche, Head of the School of Business & Humanities, Institute of Technology, Tallaght and John Shaw, President of the Institute of Professional Auctioneers & Valuers at a ceremony recently in ITT.
Matthew Keegan, Mountrath Road, Portlaoise, who received a Certificate in Auctioneering & Estate Agency from Dr Damien Roche, Head of the School of Business & Humanities, Institute of Technology, Tallaght and John Shaw, President of the Institute of Professional Auctioneers & Valuers at a ceremony in ITT recently.
Peter Delaney, Yellowbatter, Drogheda, who received a Certificate in Auctioneering & Estate Agency from Dr Damien Roche, Head of the School of Business & Humanities, Institute of Technology, Tallaght and John Shaw, President of the Institute of Professional Auctioneers & Valuers at a ceremony recently in ITT.
Edel Sinnott, Balybrophy, Portlaoise, who received a Certificate in Auctioneering & Estate Agency from Dr Damien Roche, Head of the School of Business & Humanities, Institute of Technology, Tallaght and John Shaw, President of the Institute of Professional Auctioneers & Valuers at a ceremony recently in ITT.
Minister of State for Children Barry Andrews was Guest of Honour at the presentation of Certificates in Auctioneering & Estate Agency at the Senior College, Dún Laoghaire recently. Front row (l – r): Aoife Buckley (Graduate of the Year), Barry O’Callaghan (Principal), Minister of State Barry Andrews TD, Paul Reynolds, (IPAV Senior Vice-President), Suzy Taylor. Back row (l – r): Séan Catterson, Sebastian Conway, Arkadicy Magdych, Cecilia Munro (Head of Department), Mike Fitzgibbon and James Whitney. Spring Issue | page 27
Daring Damnation By Peter Brady, Chair, IPAV Education Advisory Committee
You will understand, dear reader, that what follows is an entirely personal musing and, in this respect, I beg your indulgence and pardon, if necessary. Philip of Macedon the father of Alexander the Great, is reported to have sent the following message to the Spartans at a time when all other Greek states had come under his jurisdiction: “You are advised to submit without further delay, for if I bring my army into your land, I will destroy your farms, slay your people, and raze your city.” The Spartans sent back a one word reply: “IF”. Needless to say, Philip stayed far away from Sparta as did his son, Alexander. Now why on earth do I mention this? Well I think it reflects a very simple truth. The Spartans were a warlike lot, they knew their strengths and had the courage of their convictions to see them through the hardest of times. They did not scare easily. They perfected their own form of expression which was brief and to the point, they developed a laconic way of speaking – so called after the region in which they lived. Needless to say, it contained little emotion, as witnessed by their reply to Philip. I mention this because I am struck by the fickleness of our own times. Perhaps it is this ‘instant age’ that is to blame where there is no tomorrow, only today and next week is an eternity not to be contemplated. Witness the decline in admissions to property courses throughout the country.
Fall-of in applications It is difficult to imagine the fall off in applications to colleges – and it is massive, by any standards. In some cases property courses have failed to attract sufficient numbers to form a single class. Nothing to be unduly worried about as there is no activity in the market at any rate. Or should we worry? The tendency to follow market trends when deciding on ones future career is not always ideal. I am particularly aware of a similar trend in the field of computer education when the market collapsed a number of years ago giving rise to a corresponding collapse in applications for computer courses in colleges. We are currently playing catch up with the rest of the world in this vital area. Courses which contain an element of maths fail to attract students as do many science programmes. Guided by what is perceived as rewarding – i.e. courses that offer immediate employment prospects – students flock to the so-called good courses, irrespective of the fact that they (the students) may not be suited to the programme in the first place. Hence increased drop-out and failure rates become the norm. More worrying is the desire to retain students on courses and this, of course, leads to the thorny issue of standards. How many times have I gone there???
Spring Issue | page 28
When the market was buoyant, the numbers applying for property courses reflected the confidence and vigour of the market place. Job opportunities abounded and the prospects for any student entering the profession were excellent by any standards. This is the era of adjustment and we should be worried about the collapse of interest in a vital sector of our economy. Just as it is difficult to get people to understand that the decline in the price of property marks a return to pre-Celtic tiger normality, it is equally difficult to penetrate the minds of those charged with guiding students, that there is a future in property. The bloated market of the Celtic tiger era looms large in everyone’s mind. It will never be repeated and hence there is no value in studying property – this appears to be the prevailing wisdom. And just like Philip of Macedon, the purveyors of advice tell students: “You are advised not to apply for a course in property, for if you do, you will destroy your chances of employment and happiness”. While we may never see a return to that Celtic Tiger period, let us be sure about one thing: the new market will be utterly changed; qualifications and standards will be the great imperative as will the need to conform to regulation.
Time to prepare In this new market, an educated, professionally competent workforce will be vital. The question is not IF but WHEN. Now is the time to prepare and, contrary to the perceived wisdom, realise there is a future in property. If you are already in employment, if you have the misfortune to be an unemployed property professional, or if you are about to set out on your career, take heart. Be assured that this cycle will end and fortune favours those who dare to think beyond the present. The benefits of education and training are well documented. Use your time wisely and as the Spartans might say – IF, indeed.
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Published on Jul 9, 2013