The worst of the property crash is over, a leading Donegal estate agent forecast yesterday.
Reacting to a report in the ‘Sunday Times’ at the weekend which claimed that most regions throughout the country were not predicted to see price falls of any significance in the coming twelve months, Paul Franklin of Franklins Estate Agents, which has offices in Letterkenny and Buncrana, said most agents had experienced a marked increase in activity since the start of 2011.
“In real terms Irish property is now at its most affordable since 1980,” he maintained.
The Sunday Times Price Guide for 2011 revealed that prices in Donegal had fallen by 11% last year which compared with a 19% drop in 2009. It described the price fall as “still fairly grim.”
Falls across the country ranged from 5% in parts of Cork to 21% in Dublin, the report added.
“The news that the property crash is coming to an end makes for very good reading,” said Mr. Franklin yesterday.
“It certainly has to be good news for the market which had been terribly depressed. We have had four very challenging years and it has been very difficult.”
Pointing out that there was a significant number of cash buyers waiting to purchase, he voiced the hope that the intake of funding from the IMF and other sources would help get the market moving positively again. “If that doesn’t get the banks lending again, nothing will,” Mr. Franklin maintained.
Favourable stamp duty changes had contributed to the marked increase in activity since the start of the year, he added.
“If you have been waiting, the wait is over. With the current exchange rate 82p to a euro, now is the time to buy. Some economists are predicting the rate could be 70p-75p to €1 imminently.”
With property prices at historically low levels - a recent report by a group of American economists stating that Irish property prices were now undervalued by 12% - he said there was “extraordinary value” in the market.
“The report is certainly good news. You’d have to be fairly confident that the worst of the crash is over. The news is very much welcomed and hopefully we can start get the ball rolling again.”
A strong property market was also instrumental in aiding the economy, he pointed out.
The ‘Sunday Times’ report, which indicated it wasn’t all positive news, predicted no change in the price falls from last year through to January 2012.
“Prices fell by 11% last year, an improvement on the 19% drop in 2009, but still fairly grim. Our estate agent reports that a large number of homeowners have been forced to sell as they cannot meet their mortgage repayments. Many have had to let out their homes - a trend that has led to rental supply outstripping demand, which has caused values to fall even further.”
New two-bedroom apartments and second-hand three-bedroom town houses had shouldered the biggest losses, the property guide supplement revealed. The former was down 15% to 102,000 euro and the latter was down 12% to 110,000 euro with rural properties also seeing a slump. Three bedroom bungalows were down 11% to 155,000 euro, the report added.
The strength of sterling had led to a successful year in the holiday-home market, however, the Sunday Times guide added.