One way to stimulate demand in the housing market is to slash prices, which is exactly what developers in Ireland are doing to lure buyers. However, this may not be enough with a tight loan market and talk of new taxes on investment properties. For more on Ireland real estate, see the following article from Property Wire.
Residential property price discounts in Ireland may be luring buyers back into the market, according to the latest analysis from real estate consultants.
A number of price cuts have been made in new homes schemes around the country in recent weeks as developers attempt to secure sales in advance of the traditional summer lull, says the research report from CB Richard Ellis.
Its also says that a number of real estate agents around the country are tentatively reporting signs of increased activity in recent weeks although not unsurprisingly the market continues to be very price sensitive.
However, the fact that more than 80 people queued overnight to purchase apartments in Dublin Docklands in recent weeks proves that there is latent demand for appropriately priced units in good locations.
But obtaining loans is still a major hindrance to a property market recovery. ‘Anecdotally, potential purchasers claim that finance is still proving very difficult to obtain in the current climate despite the fact that financial institutions claim to have funding available for potential homeowners,’ the report says.
Approximately 10,000 new housing units were completed in Ireland during the first four months of 2009 and the report predicts that there will around 23,000 housing completions nationally in 2009 with approximately 15,000 new houses likely to be built in Ireland next year. But this is a far cry from the 93,000 housing units built in 2007.
Although a number of UK and US indices are beginning to indicate some stabilisation in house price trends, the lag effect inherent in the Irish data means it will be some time before there is any real evidence of the improvement in activity in the new homes market that is now starting to emerge.
The report hits out at the recent decision by the Irish Government to introduce new taxes on holiday homes and investment properties.
‘While the rationale for introducing legislation to tax holiday homes and investment properties is understandable in the context of broadening the national tax base, it is difficult to understand why the Irish Government are introducing this new tax now until such time as the Commission for Taxation have made their recommendations regarding property taxation,’ it says.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news website.