More homes being sold as prices fall - IAVI

HOUSE sales are on the increase across the country according to a new survey that suggests sellers have become far more realistic about the value of their home.

The latest quarterly report from the Irish Auctioneers Valuers Institute (IAVI) shows that the number of completed sales increased by 27 per cent in the second quarter of the year. However the vast majority of estate agents surveyed reported that house prices continue to fall in their areas.

Three-quarters of IAVI members who responded to the survey felt that prices had decreased in the second quarter of the year, albeit at a slower rate than in Q1.

The survey was sent out to the IAVI’s 1,850 members but in fact only 15 per cent responded. The 272 auctioneers who replied noted increases in the number of enquiries (39 per cent); viewings (38 per cent); offers (34 per cent) and sales agreed (32 per cent) although these were at a more moderate pace than the traditionally busier first quarter.

Sellers’ expectations have fallen in line with the market according to the survey with 86 per cent of agents reporting that sellers have become more realistic.

IAVI members also reported an increase in the volume of transactions with the net balance of “sales closed” increasing to 27 per cent in Q2 compared to 17 per cent in Q1.

It is likely that this reflects the increases in “sales agreed” from the first quarter.

The survey results suggest that the national average decrease in property values from the peak of the market in 2006 is 42 per cent, with respondents reporting average declines of 45 per cent in Dublin, 38 per cent in Munster, 44 per cent in Leinster and 41 per cent in Connaught/Donegal. However there is a considerable variation across property type and location.

When it comes to the length of time it takes to complete a transaction the findings suggest that the national average is 24 weeks. In Dublin, the average is 15 weeks, in Munster it is 28 weeks, in Leinster 21 weeks and in Connaught/Donegal it is reported as 34 weeks.

According to Simon Ensor of the IAVI Residential Panel and National Council “It is encouraging that the volume of transactions has increased and that activity levels continue to improve.

“This is particularly evident in Dublin, which often serves as an earlier indicator for the national market. However, any recovery in the property market continues to depend on economic conditions including employment levels, the availability of mortgage finance and the short to medium term effects of NAMA,” he said.

Mr Ensor said that the IAVI was concerned that the lack of clarity on property tax would result in a national house price register not being introduced or being postponed, despite being part of the Programme for Government.

“House price transparency is essential for the sustainable operation of our housing market and it is within the Government’s remit to provide with a simple change to the data protection legislation.”