Stamp duty reform ups enquiries

Estate agents are reporting a step up in activity following the reform of stamp duty announced in last week's Budget.

Stamp duty has been simplified with two rates replacing the old bands and substantial savings for buyers in the €650,000 to €1 million bracket. Buyers of a €650,000 property will save around €21,000 in tax while those purchasing a €1 million home will save around €28,000.

"There has been a definite lift since last week," says Michael Grehan, managing director of the country's largest estate agency chain Sherry FitzGerald. "Enquiries are up and offers have been increased allowing some sales to go through. The greatest saving in stamp duty is at €650,000, and that level of the market is very important. Sellers are often trading up to a more expensive home, so increased activity will help the higher priced houses too."

According to Goatstown auctioneer Martin O'Mahony, the tax saving has had a big psychological impact on would-be buyers. "We are seeing a big change since last week with enquiries up and viewings up. A lot of people - who had been sitting and waiting for several months - have seen prices drop by 15 to 20 per cent, the lowest level they have been in four or five years, and that coupled with the easing of stamp duty has led them to start making offers."

O'Mahony predicts a busy January with buyers looking to pick up bargains on houses that have come down in price. "It is the best thing that has happened to the market in years," he said.

Felicity Fox, who specialises in houses in Dublin 2, 4, 6 and 8, is not so sure that the change in stamp duty is enough to get the market going again. "It is not a huge amount of money so it is not going to make a big difference to spending power," she says. "There are a lot of people bidding, but they are bidding a long way off asking prices."

Vendors, says Fox, are still not taking a realistic view. "There is still a lot of property out there at 2006 prices and they are not selling. Properties that are 5 and 10 per cent overvalued are not moving. It needs to be something mighty special to get that premium."

In Dún Laoghaire, Lisney claims that business picked up before the Budget. "We began to see quite a bit more activity just before the Budget," says Charles Broadhead. "Sellers who had their homes on the market all year got to December 1st and decided that maybe it was time to drop their price, while some buyers who had been waiting around all year finally decided to move. We are seeing a lot more 'sale agreed' signs even in a few days."

According to Eimer O'Keeffe, chief executive officer of the Real Estate Alliance network, there is an "air of positivity since the stamp duty announcement".

"Vendors and buyers are happy with the change but it will take a few months for the market to recover from the battering it has taken over the past 15 months. However, enquiries have increased and traffic levels on the websites are up about 15 per cent from this time last month. It has certainly given everyone a settling effect," she said.