Richard Delevan

So, I have this friend who’s a first time buyer. After two weeks of negotiations with an out-of-town seller via an estate agent, my friend finally looked to have agreed a sale. On Friday. And what a week for it. What with all of the love we potential buyers have been feeling from the politicians, you’d have thought the auction of stamp duty relief would be good news. Let me tell you something. This business about “stabilising the market” with stamp duty relief to help buyers isn’t worth the vote-buying brown envelope it’s written on.
During the month of April, around RTE screened its Property Crash programme, it looked like buyers might actually get the upper hand in a housing market that’s been all about sellers for yonks. Intuitively, you’d think that sellers would become more flexible to make a sale.
On the ground, however, exactly the opposite was happening. In early April an email circulated around the offices of estate agents, banks and mortgage brokers, quoting a post to a property website. Under the handle “Mr Anderson”, someone claiming to be an estate agent in South County Dublin posted a 900-word missive on Daft.ie. Properties had built up on his book, sitting there, not attracting buyers. Of 12 properties where he had agreed a sale, 10 of those “sale agreed” deals had fallen through. Other bids that had come in were for lower amounts.
The net result, he wrote, was that prices in South County Dublin had already fallen around 20%. The reason being that the prices that sellers ask for are not what determines prices. The market price is determined by actual transactions. Less deals were going through, but the ones that were reflected prices that were down on prices for similar properties last year.

Other properties weren’t moving, he wrote. Particularly apartments, which Mr Anderson claims to have refused to even attempt to sell, “because the owners have an over-inflated opinion of their price.”

So a standoff was developing. Couples who bought apartments, perhaps had a child and now want to move to a house with a garden find that they can’t get the price they expected. So these “first time sellers” are having trouble. They can’t buy the new place til they sell the old one. So that part of the conveyor belt of property transactions has stalled.

It wasn’t just the apartment-dwellers. My friend’s first viewing was of a former council house in Bray that had been turned into a wild-west-themed pet shop. The enormous-looking “front and side garden” with flower beds and grass so lush you could actually feel the summer morning dew on the feet of your toddler turned out to be a patch the size of a Fiat. The first words out of the mouth of the estate agent showing were, “just so you know, the owner turned down a bid just 5,000 less than the asking price last week. They won’t sell for less.” This didn’t seem like a sales tactic to my friend - the agent’s sigh and half-rolled eyes made it clear she wasn’t expecting a sale, and was tired of showing it. It’s hard to blame the buyers. Who wants to be the first person in 20 years to sell a property and get less than the asking price? You’re clearly a mug.

After a few similar unhappy viewings my friend found one that caught his eye. An offer, less than the selling price, was made. The estate agent even pronounced it “a fair offer”. But the seller was not for price-taking. It was the asking price or nothing. The panicked estate agent rung back, begging the prospective buyer to hold on just another day while the owner thought about it. Then the stamp duty relief announcement from Fianna Fail, the back-dated bribe.

The effect was instant. Politicians meddle in markets and have the opposite effect they intend. Price-makers became price-takers and vice-versa. The haughty tone of the agent. A seller supremely confident that all downward pressure had been removed on prices - now that the likelihood was that stamp duty would be substantially reduced by the time the actual transaction was stamped.

My friend decided not to wait and to take the price. He won’t be thanking Fianna Fail, who have managed once again to find a way to put more money into the pockets of their property pals.

rdelevan@tribune.ie