How's Business? What about Brexit? And can Warrenpoint beat Kilcoo?
3rd October 2019
This is probably the most frequent question any business owner, including myself, gets asked in any one day.
In my instance and being an Estate Agent & Surveyor, such a question in fairness, is not always necessarily asked to determine the health of my enterprise, but instead the interrogator will be hoping to gather some insider knowledge on the current state of the property market and how it affects them.
As a nation of home, property and landowners we are continually curious as to the performance of the property market and I do not mind in the least, sharing my experiences with those who are interested enough to enquire (and interested enough to listen to me).
So, in deciding to put my thoughts in script, it was not for the purpose of avoiding repetitively answering the initial question, but to give some insight into where I see the property market at present.
After an exciting and successful first years trading in our Newry, Warrenpoint & Rostrevor offices, it is apparent that there continues to be a strong demand from homebuyers to settle in the South Down and South Armagh areas.
This continued demand, combined with a limited supply of new homes, has had the effect of creating an increase in market values across the full range of residential properties within the locality. No more so has this demand been reflected than in the starter home market, where there has been a marked increase in the bidding on second hand homes. We are finding that the first-time buyers are once again struggling to get their feet on the property ladder, as they are competing with multiple bidders on many of these properties and they are finding themselves on occasions having to be prepared to bid up to 10% more than the advertised guide price.
Also, the increase in the range of suitable mortgage products has eventually given an outlet to those who have been wishing to buy over the previous decade but were prevented doing so due to the lack of finance products being available to suit their needs.
Demand from the investment market for residential property also remains strong especially at the lower price range and this is despite the introduction of a new regime covering the manner in which rental income is treated for tax. In a volatile investment world “bricks and mortar” continue to be seen as a safe long-term bet and immediate returns are on a par, if not better, than many other investment vehicles.
This increased in fluidity in the lower price range houses is now permeating up through the residential sector, with detached family homes, after being in the doldrums for so long, again finding buyers. These buyers tend to be upgrading from their first-time homes, but in recent years we are also finding an influx of ex-pats returning to their native soil, influenced primarily by affordability and quality of life.
The greater Newry, Mourne & South Armagh Areas has a lot going for it geographically, economically and environmentally and it personally gives me great satisfaction to welcome and find a home for someone from afar, whilst extolling the virtues and many positives that we have in this part of the country.
If “How’s Business?” is the most frequent question asked, a close second must currently be “What about Brexit ?”. Now, I do not have a crystal ball and as such my opinions are just that… my opinions. I believe that with a Brexit or No Brexit, the population is not going to disappear on 31st October (or whenever Brexit takes place) and that there will continue to be a demand for housing in the area. Whether this demand is fulfilled by the new build or second hand purchases, or private or public sector rental, remains to be seen and will be dependent on the economic climate in the aftermath of Brexit. Whilst a demand remains, you can be sure that someone will take the opportunity to satisfy it and the property cycle will continue.
If the demand and confidence to purchase lessens, then rental demand increases, which leads to an increase in rental values. More investors will be looking to get a slice of this pie and will be looking to purchase. Tenants, in the meantime, will be trying to avoid these increasing rents and will also be looking to purchase. This creates a demand to buy and this in turn leads to a rise in purchase prices.
The speed of this cycle will depend upon the economic market forces, but so long as the banks continue to have an appetite to lend, this property cycle will certainly continue.
And finally, the next question I usually get asked is “can Warrenpoint beat Kilcoo in this year’s championship final?” And at that point I walk away. Some opinions are just best kept to yourself.
Martin Bradley is a Chartered Surveyor and director at Bradley Estates (NI) Ltd, which is multi-branch Estate Agency based in Monaghan St., Newry; Duke St., Warrenpoint and Bridge St. Rostrevor and he has been working within the South Down and South Armagh Property market since 1982.