Dublin buyers fed up with pent-up demand

Sunshine marks the first real day of spring and viewing is brisk in Dublin 4. The house-selling season is only warming up but pent-up demand is driving larger than usual numbers to open views.

Number 155 Upper Leeson Street is a seven-bed house with no garden beside Leeson St bridge. Formerly a student rental, it’s for sale by a bank and has been dickied up with a paint job for auction in a fortnight’s time. Nearly 40 parties have been through the property since it came on the market two days ago guiding €650,000 through Savills.

Further up the street 30 parties turn out to view 67 Upper Leeson Street, a stylish three bed guiding €1.3 million through Lisney. Seventy parties passed through its door at the first viewing two weeks ago.

At number 155, Conor sums up his house-hunting experience over the last two years in one word: “frustrating”. A cash buyer, he has looked at about 60 houses in Dublin 4 and 6, and describes “horrible supply and crazy demand. I reckon prices around here are up about 30 per cent.” Overall, Dublin house prices rose by about 15 per cent last year.

He moved back to Ireland from New York in 2011 with the goal of investing in property. A couple of days before we met he was the underbidder for Boylesports headquarters in Dundalk, which sold to the tenant, John Boyle of Boylesports, for €1.875 million.

He “picked up” four apartments two years ago and reckons they’re up about 40 per cent. Now he wants a home. “It’s a different decision. Investing is just working out the rental income, homes are more emotional. There’s lots of pent-up demand, but I’m curious to see what the market is like by June or July, the cash buyers have to run out at some point.”

Clean transactions
He feels messed around by sellers, and has been forced to go to "best and final" blind bids on some houses (where bidders submit the best price they are prepared to pay, and the highest bid secures the property).

“I prefer the auction process, it’s cleaner. The transaction is done there and then. ” He cites the recent experience of a friend who went sale agreed on a property, but can’t close the deal because shortly afterwards the seller’s business went into receivership and banks and lawyers became involved.

Another man in his 40s has been looking in Dublin 2, 3 and 4 for six months. Recently he agreed an off-market price of €880,000 with a developer owner for a house in Dublin 3 but shortly afterwards the owner called to say the bank wanted him to put the house on the market for a couple of weeks. “I got stuck in a bidding war on the phone one Friday night, and it closed at €1 million. I didn’t buy it. It wasn’t worth that.” Nor is he convinced that vendors are doing all they can to sell their properties. “The viewing times are inflexible and it’s hard to get an appointment.”

The woman with him believes there’s far too high a premium being paid for houses with gardens in Dublin 3. “The price doesn’t always reflect the quality of the property.”

David is in his 30s and works in banking. Searching for a year, he has cash to spend and wants an investment property for about five years that will work as a family home later. He has seen very little. “There tend to be issues with properties that you don’t read about in the brochures, such as no parking, or being overlooked.”

"If the banks were to act there'd be more supply but they're dragging their feet. Permanent TSB won't crystallise its losses, Ulster Bank is talking about winding up bad loans, but they won't. I'm prepared to wait."

There are currently about 3,000 houses for sale in Dublin, about 30 per cent fewer than there were a year ago. Normal house buying and selling activity has slowed completely with many stuck in negative equity and on tracker mortgages unable to move, and an inadequate supply of new homes coming on stream.

Surprising competition
A woman in her 30s living in Dublin 3 is angry. "I paid too much for a house that's too small. I'm in negative equity, but do they expect people to stay where they are for the rest of their lives? They bailed out the builders – why can't they bail us out now? People are trapped in an artificial market, the crux is getting the banks to make a commercial decision about the losses and let everyone move on."

Over on Mount Merrion Avenue, 81A is a smart new build on a tenth of an acre with a small, north-facing garden asking €1.25 million.

Here, 70 people turned up for the view. One viewer who returned from the UK with his wife and young family has been looking in the €800,000-€1.2 million price range for more than a year.

"It's surprisingly competitive where houses are in great condition," he says. "We looked at a house in Avoca Park over a month ago asking €1.22 million. There were 86 people at the first view and the asking price was offered that first day. It seems people are prepared to pay more to move in straight away because they have been looking for so long and need to move."

They have been outbid on a number of occasions, usually by cash buyers like themselves. “But they were further down the line and more fed up than we were.”

Now they’ve reached their limit, and have gone sale agreed on an off-market sale. It’s a creative approach, and they will pay a 10 per cent premium to avoid bidding for it on the open market. “Fingers crossed it goes through now,” he says.