To buy or not to buy…

We are constantly asked ‘is now a good time to buy’ and the answer as always is ‘that depends’. It depends on what you are hoping for, if you want to invest in an asset that will never lose value then no, it’s a terrible time to buy a house. If you want to buy a home because you are at a point in your life where that is what you want to do then it’s a decent time.

We were telling people from 07′ until this year to stay away from property, and now we believe that the time has come where you can make decisions rationally. It doesn’t sway it either way but you can at least get a good idea of some of the pros and cons involved.

Firstly, there is the property price register, there are issues with it – we have pointed this out before. While knowing what something sold for in the past gives no indication of the future selling price (and property is particularly heterogeneous) it …

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Bubble bubble toil and trouble in Germany

Any time property prices rise rapidly it can make the property market subject to an unjustified surge in confidence, that is why I am surprised to see Germany’s housing market has risen 10% in the last 12 months. Germany has long been lauded as an example of how to maintain a ‘steady’ market, but it seems that the last year has disproved this rule.

I can’t help but think that their market is undergoing a dynamic similar to the one our own had in 2003 up to the boom. During that time the German and French economies were not performing as well as ours and credit became cheap and available, their banks currently don’t have the funding constraints ours do and this means that they are able to lend at a time when rates are very low making carry cost very cheap.

The non-synchronized nature of central and peripheral Europe is showing, in 2003 our economy was doing well and this cheap credit environment aided in helping prices shoot up. Now the …

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What about those multipliers?

What do prices look like when considered from a GDP per capita point of view? (in advance I’ll let the GNP crew know that we’ll include that too).

A report from Savills in the UK looked at property prices there and asked if they were becoming more ‘standardized’ versus Europe. The graph below is from the report.

When viewed from this perspective you might think that property prices here are undervalued (implied by the lower multiplier), of course this doesn’t factor in the supply, demand or anything else, it is merely using a reference point. The implications of this might hold in other countries, but from our perspective Ireland is a little different.

In Ireland the multiplier is far higher because of that GDP/GNP divide which is demonstrated in the following graph.

What this shows is that our multiplier is closer to 5.3 than 3.71 when you look at it from a GNP point of view. The …

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The Morning Show: Distressed property auction

We were featured on TV3’s ‘The Morning Show with Sybil & Martin’ in a piece they did on the recent Allsops auction. Angela Keegan of MyHome.ie and Karl Deeter of our own company took part.

The general view we have is that if you mark down prices enough then people are willing to buy what they see as value, that means that either prices remain too high or sentiment is such that appetite is not there at the current price level (we suspect the former weighs heavier than the latter!).

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TV3 Morning Show featureing Irish Mortgage Brokers and MyHome.ie

TV3 The Morning Show with Sybil and Martin from Irish Mortgage Brokers on Vimeo.

We were delighted to feature on TV3’s ‘Morning Show with Sybil and Martin’ on their monthly property slot alongside Angela Keegan from MyHome.ie

In the piece we discussed the property market as well as the financial side of it and how changes to both interest rates and taxation changes could affect buyers in the future.

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Newstalk Business Breakfast with Conor Brophy, 6th July 2010

Today we were delighted to do the first of what will hopefully be a regular slot on the Business section of the Breakfast Show on Newstalk 106 with Conor Brophy. The topic today was that of Site Value Taxation (we had an article in the Sunday Times about it this week), property prices and then a mention of our Investment Property Profile which was done in association with PropertyWeek.ie and ODKM Architects in Terenure.

We looked at some properties in the Dublin market that might obtain a 7% yield, they require some work (sweat equity!) and although they all didn’t come out at 7% some were above 6%. This is helping to reinforce the believe that the market in general has not rationalised but that in particular you can find good value if you look for it.

Aidan McLoughlin of of the Independent Trustee Company was also there with …

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