How to navigate the property market during the pandemic
These are testing times. Covid-19 has reached into every sector, including the property market, and everyone is scrambling to adapt to the challenge. For those who are in the throes of buying or selling, or who have been saving to get on the ladder, what is the outlook? Fran Power finds out from some of the leading estate agents and market experts.
“The critical thing is that this is primarily about lives rather than livelihood, so people are suspending decisions about anything but the most pressing economic transactions. Their focus is on getting toilet paper rather than a three-bedroom property. And that focus is likely to be a key feature of the property market for the next several months.
“It means we will see something approaching a freeze in property transactions and that reduction means it will be difficult to move on either side. If you want to buy a property, it’s going to be hard to find the one you want. If you want to sell a property, it is going to be hard to find someone who wants to step in. It is an extension of what is happening in a lot of financial markets at the moment, though without the volatility.
“However, banks are continuing, agents are continuing, removal firms are still functioning. It’s not a case that anyone in the throes of a property purchase isn’t going to be able to complete that transaction.
“There may be behavioural changes that affect how and what we buy in different ways in the longer term. People will think, Do I want to travel long distances? Do I want a property where I have some space to myself.
“Working from home is emphasising some of the strains and stresses that have come out of the property market over the last 10 years. People are in houses that no longer suit their needs and this will make it very clear.
“I don’t think we’re seeing something like the financial crisis where the rules of the game have dramatically changed – that is a big, big difference.
“It seems to me this is the perfect opportunity for government to lay out very substantial plans in terms of housing to get new supply, new forms of supply, to actually deal with social housing on one side, to deal with infrastructure on the other. It would be a great shame – and it is a tragedy in so many ways – but one of the lasting impacts is the opportunity it affords to give government more capacity to make the property market more functional afterwards.”
Austin Hughes, chief economist at KBC Bank Ireland
THE MORTGAGE BROKER
“Banks are still lending [to those looking for mortgages]. All are working remotely but service levels are being maintained and there are no visible interruptions at this early stage.
“The challenge will be the significant numbers of people who are temporarily not working and what view banks will take of certain employment sectors, particularly, hospitality and retail sectors, in considering mortgage applications in the short term.
“I expect demand for mortgages to slow down for 2020 until we have the spread of the virus under control and see the fall-out on employment levels.
“Banks will have to move resources, in the short term, to deal with the number of requests for the three-month ‘payment freeze’. I believe this is only the first stage of what will be a large number of borrowers who will not be able to pay their mortgage beyond the three-month period being offered.
“Interest rates will be under review. There is scope to reduce interest rates and it will help. The banks must respond and reduce interest rates as we are in uncharted territory and they must play their part.
“With most estate agents offices closed, the process of buying and selling faces significant challenges. There will be a reduction in the number of sales while we are in the ‘containment’ phase of dealing with Covid-19. Prospective buyers, if taking out a mortgage, will need to know that their job is secure before they agree to buy and /or take out a mortgage. I believe prices will fall in the short term.”
Michael Dowling of Dowling Financial
“People are taking the long view, the phone is ringing and there is no panic that we have seen. There are still contracts coming in, transactions are still occurring and we’re closing sales. It’s just a little slower but it has not come to a stop. We’re checking with banks about funds and they say moneys are there and are ready to be released.
“In terms of the mechanics of sales and contracts, most solicitors are working remotely, and are emailing contract documents to clients and then meeting via Facetime to explain and go through it in detail. Contracts are now being signed via DocuSign rather than in person.
“All closings funds are being transferred by electronic transfer. All closings are now being completed by postal closing with the vendor providing executed closing documents and with the transfer deed to be signed by the purchaser thereafter.
“There is a hard-held view that this is going to come to an end and people will still want the house, and banks are still lending money, and they still have their jobs. Everything should come back to normal, but who knows. It’s unforeseen.”
Joe Ritchie of Donal M Gahan, Ritchie & Co, residential and commercial conveyancing
THE ESTATE AGENT
“We decided for the safety of our staff and the public, and in the spirit of cooperating with the national call from the Government, to close our network of 80 offices and cease all viewings last Monday morning.
“However, 25pc of DNG properties have full 3D virtual tours. These will replace viewings for the short term. A team of six agents is taking enquiries on any property matter through DNG Live Chat which is available Monday to Saturday on dng.ie.
“Our sales have been strong this week but this is likely to reduce significantly as people are unlikely to make firm buying decisions without viewing properties. The number of properties coming for sale has reduced significantly in the last week and will reduce further for the rest of this month.
“In terms of valuations, we are offering sellers free valuations by Eircode. They submit their Eircode through dng.ie, live chat or by calling our Freephone number. Our agents check the property via Google Street view and overhead maps and then call back with an estimate. The owner can send through images for a more accurate figure. Our agent will then explain the sales process in detail and can make arrangements for the property to go for sale in due course.
“It is too difficult to predict any impact on the property market until we know the real effect of Covid-19 and how long it affect the ability to work and carry out normal life. With fewer properties coming for sale in the short term, it is unlikely that there will be any change at all in property prices. In a normal market a reduction in the amount of housing stock normally leads to an increase in value, but Covid-19 makes everything far from normal. We’re hoping that house viewings will recommence sometime in April and that the market may return to some normality in the months following.”
Keith Lowe, chief executive DNG
THE ESTATE AGENT
“All traditional viewings have been cancelled and replaced with virtual viewings [see sherryfitz.ie]. Basically using the video conferencing software Zoom, we invite buyers to attend a virtual viewing using previously shot walk-through footage. We send the buyer a link and a simple guide in advance to show them how to log in but it’s very simple. They can use their phone or a PC.
“Once the buyer has joined the virtual viewing, they can hear the agent talking them through the property walk-through. They can also ask questions in real time through a live chat box.
“It’s early days, but last Thursday and Friday traffic to our website from social media channels increased by 31pc, and we had 35 online offers over the weekend and last Monday, slightly above our average numbers. Last Monday alone, 18 live chats took place, higher than any other Monday in the past month, and the average browsing time on the website has increased by 16pc over the week before.
“It is really too early to ascertain the impact of these exceptional events on the market. There will inevitably be a time of uncertainty but once the virus is under control, then hopefully normal activity will re-emerge. Ireland’s economy is incredibly resilient and will re-emerge as a driving force in the Eurozone, a factor which will underpin the future of the property market.”
Marian Finnegan, managing director, Sherry FitzGerald
THE NEW HOMES ESTAGE AGENT
“Our offices are closed. All open views were cancelled last Sunday and now all viewsings are cancelled. It’s not worth the risk. We are moving everything online. We are developing a new bespoke virtual website which will be up and running next week. All our new homes launches are postponed indefinitely.
“Obviously enquiries are down, people have other things to be thinking about. However, we’ve had 14 new sales this week, two cancellations on sales agreed, four contracts signed, and five closings.
“We are gearing up for launches in the summer. There were launches in the next month that we’re going to bring out to market. We’re not going to have a launch, we will sell online. For a lot of our schemes, people have seen the show house, they’re waiting for us to release more, so they know what they are buying. There is comfort in that.
“We are working on a system for next week whereby the vendors and purchasers’ solicitors all work and sign digitally so no one needs to meet in person and everything can be done on our system. It will be legally binding.
“Ironically, after Brexit this year was shaping up to be a really good year in terms of sentiment, rents are pushing a lot of people into wanting to buy. Will that change? Will rents soften? None of us know.
“While not for one moment under-estimating the devastation caused, we’re trying to keep business running in this climate.”
David Browne, director and head of new homes, Savills
Photo by Joseph Barrientos on Unsplash
News by independent.ie, edited by Dowling Financial.
Things worth noting
Is it time for the Central Bank to change its rules so house hunters have a shot?
COULD A CHANGE TO RULES PUSH UP HOUSE PRICES? The Central Bank’s lending rules – which prevent first-time buyers from borrowing more than three-and-a-half times […]
Michael Dowling: Benefits of fixing your mortgage for the very long term
My advice for first-time buyers is to take out long-term fixed rates for 20 years or more. There is something of a revolution going on […]
Mark Keenan: Spare a thought this Father’s Day for the separated dads trapped in a soul-destroying housing limbo
A joke I’ve heard more than once from separated dads goes as follows: If two gay men get divorced in Ireland, who gets the house? […]
Spanish bank to shake up mortgage market here with 30-year fixed-rate loans
Spanish-owned mortgage provider Avant Money has upped the ante on its rivals by offering a range of new long-term fixed rates. The provider is the […]
The real problem is ministers don’t actually believe there is a housing crisis
If the Government can’t come up with a radical housing solution, the Coalition parties will find themselves redundant. It is telling that what lit a […]
Calls for cashback mortgages probe before State uses money to back Ulster Bank loans sale
The Government has placed its State-owned Permanent TSB as well as AIB, which owns the EBS mortgage lender, in the lead positions to buy large […]
Irish banking sinks deeper into crisis as KBC follows Ulster out the door
Commentators sound alarm bells as the ‘two big boys’ look set to control 70% of the Irish mortgage market The shock decision by KBC Bank, […]
Michael Dowling: Banks are misleading customers with costly cashback mortgage incentives
Irish mortgage interest rates have gone back to being the dearest in the eurozone and we need to focus on immediate changes that can be […]
Broker says lenders are using wage subsidy scheme to refuse mortgages
Lenders have been accused of using the State wage subsidy scheme to “blackball” mortgage applicants. It comes after it emerged that lenders are now turning […]
Calls for cashback mortgages probe before State uses money to back Ulster Bank loans sale
The Government will need to launch an investigation into “the exploitation” of first-time homebuyers lured by cashback incentives before it commits taxpayers’ money into State-owned […]
“We nearly lost dream home because bank got jitters over wage subsidy”
A leading bank was set to deny a couple a mortgage to buy their dream home, just as they were about to draw down the […]
Mortgage lenders push back against automatic payment breaks during lockdown
Mortgage lenders have pushed back against a call by a leading broker to re-introduce automatic payment breaks for people who will be unable to work […]
Demand for mortgage exemptions expected to surge this year
APPLICATIONS for mortgage exceptions are expected to surge to record levels in January as lenders respond to pent-up demand from borrowers. Exemptions to the strict […]
Controversial equity release loans for older people are back
An equity release provider is reopening in this market years after the banking crash closed off the availability of these loans. Equity release involves older […]
Experts cautious about 2021 property market
Property prices are predicted to take a minor dip in 2021 before recovering to current levels by the end of next year, according to two […]
Borrowers here paying €2,000 more a year than European counterparts
This was down 14 basis points on the same month last year. But the average across the euro area is less than half of this […]
Ulster Bank ‘self-inflicted review will mean Irish mortgages will remain costliest in Europe’
The uncertainty over the future of Ulster Bank is already helping the big two mortgage lenders, AIB and Bank of Ireland tighten further their grip […]
Home loan limbo – the growing number of buyers struggling to get their mortgages
Many housebuyers who’ve been directly or indirectly affected by the Covid crisis are experiencing issues with banks and accessing mortgages. Those who will struggle to […]
Average Irish person now ‘worth’ €166k
The impact of Covid-19 has been to make households wealthier while the State sunk €14bn deeper into debt, according to the Central Bank’s Quarterly Financial […]
Lenders told to be upfront with mortgage applicants on impact of wage supports
BANKS and other lenders have been told to be upfront with mortgage applicants whose employers are using the State wage subsidy scheme. It comes after […]
Mortgage holders leaving thousands of euro on the table by failing to switch home loan providers – CBI research
Some mortgages could save more than €1000 in the first year and more than €10,000 over the remaining term of the loan. Mortgage holders are […]
What the loss of Ulster Bank would mean for consumers
When news broke on Friday that NatWest, parent of Ulster Bank was considering the winding down of the Bank, the market was surprised. It had […]
Your money: Seven things you must know on the new mortgage playing field
Cheaper home loans will be up for grabs for house hunters and homeowners in the coming weeks and months following the entry of a new […]
Spanish giant to rattle the cages of big firms who have Irish market cornered
You would be forgiven for thinking that competition in the mortgage market had gone by the wayside, like many things during the pandemic. Banks are […]
Interest rate war brews as new bank joins market
A Spanish banking giant is to enter the Irish mortgage market in a move sure to put massive pressure on existing lenders to slash their […]
Banks block drawdowns until end of pay subsidy
Builders and brokers say hundreds of agreed home sales are being placed in jeopardy because of an unintended consequence of the State’s emergency wage subsidies. […]
Banks have yet to heal the €60bn bailout wounds of a decade ago
A decade after a €60bn taxpayer bailout of the country’s main banks, we still have a problem with trust when it comes to how they […]
Ireland faces second mortgage arrears crisis when payment breaks end this autumn, leading financial advisers warn
A leading debt adviser has warned that 30,000 households — or around half of the 62,480 currently on home loan payment breaks — will fail […]
House prices due to fall sharply in wake of pandemic
House prices are likely to fall sharply over the next year, a leading think tank has predicted. The Economic and Social Research Institute (ESRI) has […]
Central Bank boss defends banks withdrawing mortgage offers
Central Bank Governor Gabriel Makhlouf has defended banks that are withdrawing mortgage offers to people whose incomes are hit by the fall-out from the pandemic. […]
Irish Banks Again Europe’s Worst Performer as Crashes Add Up
Once again, Irish banks are at the sharp edge of a global crisis. In 2008, it was the melting away of liquidity. Just over a […]
Mortgage borrowers hit by Covid-19 jobs slump ‘facing problems securing mortgage breaks’
Mortgage borrowers previously in arrears but who are now up to date with their monthly payments have had difficulties in automatically accessing the three-month mortgage […]
Banks add Covid-19 income conditions to mortgage offers
Raft of assurances are sought over bonuses, overtime and future job security Several Irish banks and lenders are adding new conditions to mortgage loan offers, […]
Self-employed may feel chill from Covid-19 for some time
The self-employed face mortgage struggles. All business owners are weighing up the effect of the Covid-19 closures on their trade at present, with many trying […]
House valuations are being reduced by 10pc during the mortgage process due to Covid 19 according to brokers
Some bank valuations are lower than agreed sale prices due to Covid-19 “The valuations are coming in at less than what the agreed purchase prices […]
Family with €1m house would be ‘better off trading down’ as judge rejects personal insolvency deal
A High Court judge has refused to approve proposed personal insolvency arrangements for a couple aimed at allowing their family to remain in a five-bedroom […]
Home truths: Covid’s duration will determine its impact on values
Speculation about where house prices and the property market will end up in the aftermath of Covid-19 has already started, with the publication during the […]
Doubts raised over Covid-19 wage subsidy scheme after lawyers warn the initiative is unworkable
The crucial wage subsidy scheme aimed at keeping hundreds of thousands of people in jobs has been thrown into doubt after lawyers warned it was […]
Those who test positive likely to struggle to get life and mortgage protection cover
Concerns: Michael Dowling fears some people will be unable to take out life cover People who test positive for Covid-19 may struggle to get life […]
State may need to ramp up spending to €34bn
Employers’ group Ibec and trade unions have called on the Government to step up payments for workers and companies in response to the economic damage […]
No hit to credit record for those who get mortgage break off bank
A deal is being hammered out between the Central Bank and main lenders so people who avail of a Covid-19 mortgage payment break will not […]
Temporary ban on all evictions is to be introduced for duration of coronavirus crisis
The Government has confirmed that a temporary ban on evictions and rent increases will be introduced for the duration of the Coronavirus crisis. Housing Minister […]
€32m debts written off by court in three days
More than €32m in personal debt has been written off this week under insolvency arrangements approved by the High Court. The huge sum relates to […]
€2m debt write-off for publican approved
The High Court has rejected objections raised by a vulture fund to a personal insolvency arrangement (PIA) writing off €2m in debts owed by a […]
Chasm between values of new and second-hand houses
A growing chasm between the values of new and second hand homes has been highlighted by the banking sector which says loans issued to first-time […]
Dublin’s cool Northside moves ahead of stuffy Southside to hold the housing hotspots
Q Two northsiders are travelling in a car. The music is turned off and the windows are up. Who’s driving? A: The Garda. Q: How […]
AIB drops fee for mortgage customers breaking out of fixed rate
AIB is allowing some customers to break out of fixed mortgages and lock into lower ones at no cost, in a move that is likely […]
Ulster Bank fined €4.6m over data on mortgages
ULSTER Bank has been fined €4.6m by the Central Bank for failings around mortgage data it supplied to the regulator. The fine would have been […]
Pressure now on more banks to cut their rates in mortgage price war
More banks are coming under pressure to reduce their mortgage rates after market leader AIB announced a number of reductions. The focus is now on […]
Mortgage holders here still paying double Euro average
MORTGAGE rates in this country have fallen below 3pc for the first time in years. But there is scope for much deeper cuts, mortgage experts […]
Revolution in fintech keeps the bankers awake at night
Shake-up: Revolut and other fintech firms are forcing banks to increase their tech focus I was more than a little surprised at the response I […]
AIB was always going to lose battle – it’s just a pity it waited so long to concede
AIB was always on to a loser trying to defend its actions in denying 6,000 customers tracker mortgages. The bank tripped itself up and was […]
The changes still needed to tackle the banks’ bad management cultures
Regulation: Unlike the UK authority, the Central Bank of Ireland does not have competitional law enforcement powers, an issue which deserves to be reconsidered Banking […]
Paul Joyce: Mortgage arrears have been ignored but not solved
Housing, homelessness, and healthcare have justifiably dominated the election so far. But one aspect of the housing crisis, however, that has received little attention is […]
Home truths: The story of Eoghan and the home hoovers
The big view on Ireland’s property market Whenever Eoghan Murphy is asked about his unforgettable term as Minister for Housing, one of the first things […]
Typical household wealth has risen to €184,900 – but renters are losing out
The wealth of households has shot up due to rising property values. But renters have very little wealth, according to figures from the Central Statistics […]
Most people unaware about credit card interest rate they are charged
The majority of Irish credit card users are unaware of the interest rate they pay, or how it is applied. And even those who say […]
Fianna Fáil may have just pressed the pause button on the property market
The party’s new SSIA may cause a significant number of housebuyers to put their plans on hold for an unspecified period The man who is […]
Court approves debt for equity swap insolvency arrangement
Decision is first to be approved by High Court involving a debt for equity swap The High Court has approved a personal insolvency arrangement (PIA) for a […]
Record €60m debt write-off for former quarry operator gets High Court approval
A former quarry operator has had a €60m debt write-off approved by the High Court – the largest ever under personal insolvency legislation. Enda Patrick […]
State-backed mortgage scheme hikes interest rates steeply despite bank cuts
The interest rate on the Government’s Rebuilding Ireland Home Loan product has been increased massively. Rates have shot up by up to 0.75pc at a […]
Home truths: Big time housing promises without taxes are hollow
What can you get for €16bn these days? Well €16bn is the total amount estimated that Irish people will spend online this year. The Consumer […]
One in 10 mortgage arrears cases involve separated borrowers – BPFI
Banking lobby group calls for State to introduce measures to help separated borrowers. About one in 10 mortgage arrears cases involve borrowers who are separated, […]
In your pocket: Switching mortgage can bring major savings
Rates are falling and lenders are keen to offer better deals – it’s easier than you think. Up to 160,000 Irish families are out of […]
Mortgage interest rates dip but remain more than double euro-zone average
Central Bank statistics show weighted average interest rates on new mortgages was 2.9% in November. Interest rates on mortgages taken by Irish consumers were lower […]
New buyers pay €2,000 a year more than rest of eurozone
RIP-OFF mortgage rates in this country are costing new home buyers €2,000 a year more than our European neighbours. New figures from the Central Bank […]
Pensions deliver decade-best growth of 20.6% in 2019
Zurich Life tops peers as funds recover from calamitous end to 2018. Irish pension funds delivered bumper returns in 2019, making it the best year for investment returns in […]
Another year of dysfunction ahead for Ireland’s property market
Looming general election and UK-EU trade talks add to uncertainty for developers. With the new year now a week old and a raft of predictions […]
Responsible Homeowners Betrayed
Thousands of responsible homeowners have been betrayed by the sale of their mortgages by PTSB into a bond fund which will be serviced by […]
Revealed: Ireland’s most expensive streets and their €2m plus homes
Daily growth of €15m in value of housing stock fuelled by new supply rather than increasing prices, writes Wayne O’Connor A leafy Dublin street sandwiched […]
Value of residential property in Ireland up by 5.3bn euro in last 12 months
SEVEN HUNDRED AND fifteen properties worth €1 million or more have been sold in Ireland so far this year, according to the latest Wealth Report from […]
Want to start the process?
Let us guide you through the mortgage process