Where have all the houses gone?

Our weekends over the past six weeks or so have been remarkably free. After months and months criss-crossing the city to pack in multiple house viewings every Saturday morning, it’s strange to find ourselves without routes and priorities to plan out as the weekend begins.

The tally of brochures we’ve collected (I’ve kept them all) is now approaching 60, but the folder has been expanding at a much slower rate since late summer.

Early autumn is traditionally one of the busiest times of year for the property market, while the days are still reasonably long and bright, without school holidays to interrupt viewings. After losing a bidding war in early August we had our hopes pinned on an upswing in the market come September. So why are we so idle?

"Stock levels are down quite substantially," says Martin Doyle, director of Sherry FitzGerald Drumcondra, who sells properties in Dublin 7, 9 and 11. "People would have expected a lot of properties to come to the market in September or October, but that doesn't seem to have materialised this year. [Sellers] might be waiting until spring, so there may be more choice then. But the levels are certainly lower than we would have expected, and lower than last year."

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While market stats for this autumn are not yet available, analysis by Sherry FitzGerald shows the stock of properties advertised for sale fell 9 per cent nationwide in the 12 months to July. That month, 25,100 units were available, just 1.3 per cent of the total private housing stock. This is roughly half the number on sale in July 2010.

People who are trading up need 20 per cent of the purchase price, which is a lot of money

The shortage is particularly acute in Dublin, where just 3,900 units are advertised, 0.8 per cent of Dublin’s private housing stock, and a reduction of 13 per cent in the last year. The largest fall has been in Dublin city, where supply dropped 19 per cent.

“People are holding on to properties, perhaps thinking prices are going to go up further next year, especially in the case of executor sales or ex-rentals,” Doyle says. “People who are trading up need 20 per cent of the purchase price, which is a lot of money. Some are still carrying negative equity from boom-time. A lot of people with tracker mortgages are reluctant to give them up.”

Terrible time

Eunan Doherty of DNG, who specialises in the Dublin 8 area, is seeing similar trends on the south side of the city. "It is a terrible time to be a buyer. There is not enough supply, and huge demand," he says.

We are scared to death to go out into the market and upsize, because I know how much competition there is

“Some people in starter homes may have been in negative equity, but are starting to come out of that, and that helps to bring movement into the market. But because prices are rising 11 or 12 per cent at the moment, if you are in a starter home worth €400,000, and you are looking to upgrade to a property worth €600,000, that is suddenly going to cost you about €25,000 more. It can be more difficult to make that jump. I have come across people taking the cash they have, or remortgaging, to build an extension on their current home instead of moving.”

He cites his personal circumstances as an example. He bought his own home three years ago, and he and his wife would now like to move.

“There will be loads of interest in my house, because it is in that price bracket of around €350,000 and they are selling all around us. But we are scared to death to go out into the market and upsize, because I know how much competition there is. If there are a lot of people like me, and I know there are, that’s keeping supply from coming to the market.”

He takes a look at the figures for September, and is surprised at the results. A total of 106 new properties were brought to market by all agents in Dublin 8 in the month, more than double the number from September 2016.

Going from bidding war to bidding war, you are going to have the feeling that there just aren't enough options out there

“Why does it feel so undersupplied? I think it is because every property is so in demand,” he says. “But 106 is still not a huge number. Half the properties were apartments in Dublin 8, and in the sub-€500,000 bracket, there is less coming up in terms of houses... Going from bidding war to bidding war, you are going to have the feeling that there just aren’t enough options out there.”

The ones that do go on sale at a reasonable price are being jumped on by hungry househunters, leading to frantic bidding wars and spiralling prices, he says. A two-bed house currently on sale in the Liberties with DNG, asking €295,000, has nine bidders fighting for it, and has already gone €60,000 above the asking price.

With demand so high for so few houses, it’s hard to imagine how we are ever going to reach that sweet spot – a house we really want, for which we are willing and able to pay a bit more than the mob.