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Northern Ireland house sellers urged to 'get real' over prices
Thursday, 25 December 2008
Householders in Northern Ireland trying to sell their homes were told today to "get real". Sellers must be more realistic about the asking price if they are to make a sale in 2009, according to a leading property expert.
Tom McClelland, Northern Ireland housing spokesman for the Royal Institution of Chartered Surveyors , said while the asking prices for new build homes had been cut significantly, expectations among many private vendors in the resale market regarding prices remained excessively high.
He said average prices had fallen around 30% so far from their peak and he predicted another 10% before they hit the bottom.
Mr McClelland said: "Where sellers have been realistic regarding asking prices, our experience is that they have been able to make sales.
"This has been very evident in the market for new build starter homes where developers have cut prices significantly and there has been demand from purchasers."
But he added: "In the resale market however vendors are less willing to accept that the value of their property is significantly lower than when it was at its peak."
There are large variations in the local housing market in terms of property type and geographical area, he said.
Some property types had therefore fallen in value more than others and some parts of Northern Ireland had experienced larger price corrections.
Some sectors and areas would reach a floor before others, he predicted - expressing the belief the price drop in the market for new build starter homes had by-and-large taken place.
Looking at the average house price Mr McClelland said: "The reality is that it has fallen around 30% to date and our view is that it will fall a total of around 40% from peak to trough.
"Vendors in the resale market must reflect the new realities in asking prices if they are to make sales."
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Comments
26 Comments
My house has been on the market for nearly 2 years. Its in reasonably good order 4 beds 3 rec , large conservatory
sold twice , fell down further down the chain I want to downsize to a semi but am finding although i have reduced considerably it's not the case with semis and this restricts my choice if i sell and means i can't reduce any more if i want to afford something myself.
I approached all the agents re a swap on certain properties they are definately not keen on this idea and at the minute I feel I am doing all the work myself and wonder just what they are doing
Several bangor agents have closed and i see many more going this way unless they get real and advise clients accordingly
to give an example when my house was priced at 320,000 the people buying it had owned a semi overpriced at 270,000 but they gained this price mine is now reduced to 265,000 - 40,000 cheaper than any others in the area with less accomodation -they have kept their price at 270,000 madness!!!
Posted by dgoldy | 04.01.09, 14:07 GMT
Houses can be sold without the need for an Estate Agent.
Cut out the middle man - I say.
Posted by Vlad the Impaler | 02.01.09, 10:20 GMT
All assetts behave differently - gold, stock and share, bonds, cash - behave differently in different economic contexts. The one commonality is that you can't expect any of them to increase in value in a straight line - forever and forever. That is a bit too much to expect. Assett value moves in cycles that have upswings and downswings. Property is now in a downswing and it will continue until some sort of fundamental value point - maybe measured by the old fashioned affordability index - is reached. Thats all well and good - but there is another side to this question. The carrying cost of property is increasing at a very fast clip - heat, electricity, insurance, and so on. Property is an assett but it is also a cost center. The hidden side of the property dilema, is the accelerating carrying cost of a declining assett. I hope it all works out.
Posted by Pat | 01.01.09, 13:38 GMT
soarer where did I say that you could put an exact value on a house?
Posted by Dave | 01.01.09, 09:28 GMT
Dave, sorry but you cant put an exact value on a house, only an estimate. at say 150-200k for bog standard semi it may only be a couple of k either side but if you are selling 400k+ it will vary by a much larger amount of money. Only bad agents would deliberately overprice it BUT it doesnt mean that a) they will sell them and b) the most important thing, if they do by a miracle sell them they wont pass the mortgage lenders valuation (based on previous recent house sales) and the sale wont go through. estate agents seem to be greatly revered over here as some sort of gods. They are just salesman. They could be selling a car or a kitchen, it makes no odds or difference. you dont need qualifications or governance to be just a middle man. They have no control over the market and as for running cartels that is just plain stupid.
Posted by soarer | 30.12.08, 18:24 GMT
soarer you are being too simplistic. You state that "vendors will tend to go with the agent who quotes highest". Therefore estate agents have to quote high to win business, and they seem more than happy to do so. I didn't hear them squealing about it and asking for the government to step in and regulate valuations during the boom. The fact is that if the power to market houses at valuations based on nothing more than heresay and blind faith was taken away from estate agents their role would be pretty much redundant. Let's hope it happens some day.
Posted by Dave | 29.12.08, 15:30 GMT
Wylie, I think it was fairly obvious I was referring to the comments by the posters as nonsense and whilst stating the obvious that no estate agent wants over priced property on the books as it goes absolutely nowhere. The point I was also making was that vendors are naturally greedy. If you have 3 agents around you will get three different valuations although they will, or should be, similar. You have to give an optimistic yet realistic price -not an unrealistic price. vendors will tend to go with the agent who quotes highest or more often than not they set the price themselves. afterall only a complete imbecile would not have a very good idea what their house is worth given it is generally the biggest investment. Anyone who thinks estate agents have fuelled either boom or bust are being rather dumb. economy, employment, security, taxation, national mind set and availability effect house prices not a lowly estate agent. I think you are endowing them with powers they do not possess.
Posted by soarer | 29.12.08, 14:46 GMT
Why is 'Soarer' (former Estate Agent) calling another Estate Agent's Report "A load of nonsense"?
Soarer (former Estate-Agent) has also confirmed that values are driven by:
a)optomistic pricing strategies,
and
b)competition between agents to value the highest.
- Little wonder house prices are so artificially inflated! It's all based on conjecture and whimsical fantasy. Shouldn't the Estate Agency Industry have some sort of regulatory body to protect the consumer from price-fixing?
Posted by Y. Lee. Coyote | 29.12.08, 11:54 GMT
soarer of course estate agents have to shoulder some of the blame. Not all of it. In order of culpability we had: government, banks, TV property shows, surveyors, estate agents, house sellers, house buyers. At the end of the day the government should have stepped in with punitive taxes on multiple home ownership and higher central bank rates to cool the bubble. Estate agents should have to have qualifications and be heavily regulated in future.
Posted by Dave | 29.12.08, 09:54 GMT
What a load of nonsense. I swear some people do not have a clue. Blaming estate agents is well off the mark. I was an estate agent years ago and this is what happens. You are called to value a house, usually along with 2 or 3 of your competitors. You have to give a guide to a realitsic value for the property. There is no interest to dramatically over value as it will a) sit on your books wasting your time and money b) the vendor will just nag and get annoyed you bring no one around and give it to another agent at a reduced price after the contract expires and c) even if someone buys an over priced house just because it is 'perfect' for them it will, unless it is a cash purchase, get devalued by a surveyor and the mortgage company wont lend on it. You have to give it an optimistic price because you are competing with other agencies. It is the seller at fault as they will often set the price themselves or go with the agent who values highest. Greed? or human nature?
Posted by soarer | 28.12.08, 10:41 GMT
Remember- a 40 % fall wipes out a 67 % rise:
ie- £200,000 down to £120,000 is a 40 % fall.
£120,000 up to £200,000 is a 67 % rise.
Magnitude of percentages on the way down are greater that they were on the way up. It's an important point.
Posted by Dave | 27.12.08, 19:26 GMT
Estate 'Agents' also have to get real - it is generally they who are guiding the seller and misleading them into believing they can still get outrageous sums for their grossly overvalued properties.
And they all group together to control local pricing levels.
Rather like a Cartel, in fact. Or a local Stock-Market.
Roll on Regularisation - That'll sort a lot of them.
Posted by Daffyd | 27.12.08, 10:20 GMT
Poor James - the days of the perfect world you describe, are gone!
Posted by Marjorie Daws | 27.12.08, 10:06 GMT
When house prices reach the level that people can afford then they will start to sell. I seem to remember the 2.5 time your salary was a good indicator.
Until then the market will dictate the price, which is downward for a long as it takes.
Posted by Sam Farrell | 27.12.08, 10:00 GMT
Has the penny finally dropped!!!
Posted by Andy Pipkin | 27.12.08, 08:54 GMT
greedy greedy people, we brought it on themselves, i include myself in that comment, happy new year
Posted by colette | 26.12.08, 22:34 GMT
First of this was put on here on Christmas day i take it there is no printed copies of the telegraph on xmas day? makes me wonder why this was done?
secondly mr McClleland is an estate agent he has a vested interest he says the bottom is 40% off peak yet his own estate agencey does not reflect this
This in my view is trying too create an artificial bottom i predict a 60% drop from peak, as the pendulum always swings further as it did at the peak "whos going too grab a falling knife"
a lot of people have been confusing debt as wealth!
Posted by Boudicca | 26.12.08, 10:42 GMT
Why bury this story on Christmas day when there are no paper copies of the newspaper? Does the Belfast Telegraph not realise that if they are to survive as a newspaper they have to be honest and upfront with their readers?
Young people do not deserve to have a millstone mortgage round their necks pulling them down. If this economy is to get going again we need a 50% crash from peak and then FTBs can re-enter the market at house prices 3 - 4 times their salary and start buying goods and services again. If your mortgage uses up all of your salary then you can't afford to buy anything else.
Posted by charlie | 26.12.08, 10:03 GMT
try -60%
Posted by mr m | 26.12.08, 00:37 GMT
There was talk back in early 2008 of estate agents starting a 'sellers strike' to keep the market high.
All the comments about 'missing the boat' etc..
Estate Agents should not be allowed to comment on the market as they are a main vested interest and have led so many people to buy that are now in negative equity.
Never buy a house over the rateable value folks, they will continue to fall for years!
Posted by rolo | 25.12.08, 21:41 GMT
26 Comments