Latest Rental Statistics for Wicklow & Wexford

Is 10% inflation the new normal?

The most recent rental report from Daft.ie came out last week and deals with rental properties all around the country throughout the first three months of  2016.  Current rental prices are directly compared the prices of the same property type within the same period (January to March inclusive) last year.

The results will not surprise market watchers.  The average price of rented homes has increased for the fifteenth (yes, 15th!) consecutive quarter.  While Dublin remains the most expensive location, with average rentals costing €1,365 to €1,663 per month, Wicklow and Wexford have both seen significant increases.  

The average cost of a rented home in Wicklow has risen 7.4% to €1,029 per month.  While the increase in Wexford has been slightly more modest, at 6.3%, the average monthly rental is now €626, which is almost on par with Waterford City pricing.

The Daft.ie report brings up the thorny issue of examining whether renters would be financially better off purchasing (based on a 90% LTV or Loan-to-Value mortgage) or continuing to rent.  For two-bed apartments and three-bed houses, in many areas, tenants would be better off paying a mortgage, rather than ever-increasing monthly rent, but of course this only applies to would be first-time buyers who can afford the 10% deposit and whose jobs and credit rating are considered suitable by the lenders.  

One observation that we have seen in recent years is that would-be buyers are slow to apply for their first mortgage if they feel that they are likely to be turned down.  In many instances, they would make ideal mortgage candidates but media-watching has led them to believe that banks are not lending.  In our experience, this is simply not the case at the moment.  Mortgage lenders are fighting to attract the best buyers and have started to consider Irish applicants living abroad who are planning to return in the near future.

A few points became very clear from this latest industry report, specifically, stock of housing is at an all time low.  This applies not only to the rental market but to the sales market too.  This creates an ideal opportunity for investors to enter the marketplace, knowing that upward trends in the rental market are likely to continue for another few years.  

It is less ideal for current tenants, who are facing ever-decreasing choice and likely rising prices.  This scenario makes for interesting opportunities for our recent emigrants who are currently living overseas but hoping to return to Ireland at some point.  Ought they compete for what housing stock is left and rent it out to produce an income until they are ready to move back?  By doing so, not only are they creating an income but they are essentially 'hedging' their bets by investing in  property that can be used or sold (at market price) when they return.

One thing is for sure, now is definitely the time for sellers to bring their properties to the market.  With more buyers than available properties in most locations, properties that are reasonably priced will certainly attract attention in the marketplace.  This will be very relevant for owners of derelict buildings that might have struggled on the market over the past few years.  Here at Kinsellla Estates, we are dealing with queries from self-builders and would-be developers who have a interest in derelict buildings with and without lands attached, give us a call to discuss this further and we can advise on current supply and demand trends in your locality.  

To view the full Daft.ie Rental Report, click here: http://www.daft.ie

For specific queries or to speak with a local property expert about your buying and selling needs in Wexford, Wicklow and surrounding areas, contact Michael, Alan or Eileen Kinsella at www.KinsellaEstates.ie .  

Email me directly on michael@kinsellaestates.ie or telephone : +353 53 94 21718 

How to Speed up the Sale of your Home

Michael Kinsella's top ten tips for sellers:

1.  Commit to selling - Make decision, know your bottom price

    This might sound strange but often times people bring their home to the market, not really sure if they want to sell or whether now is, in fact, the right time.  This is always a recipe for disaster. Uncommitted sellers tend to value their own home disproportionately high, they are generally not accommodating when it comes to viewings and not flexible when negotiations start.  There can be no winners in this scenario so the best advice that I can give would-be sellers to to do their research, then make a decision and stick to that decision unless circumstances change.  The main challenge of being an uncommitted seller is that if when you finally make the decision to accept any offers, the buyers might be gone.  Second changes are rare in a recovering market.

2. Know your buyer

   Once the decision to sell has been made, it's important to figure out who your buyer is likely to be as this will help to determine pricing and targeted marketing.  In most areas outside of Dublin, there is very little overlap between the types of property that a home-buyer (first-time buyer or those trading up) or and investor will consider.  Budget plays a part in this but the other considerations are property type i.e. house or apartment, or location i.e. town, country or outskirts of town.  Knowing who your buyer is likely to be makes marketing the property more straightforward and increases relevant enquiries quickly.
   

3. Price it right

   Property valuation is actually quite different to pricing a property to bring to market.  There has to be some element of strategic thinking involved.  Depending upon the local supply and demand, it might make sense to start at a lower price to garner as much interest as possible from as many different buyers as possible.  The higher the number of bidders, the better chance of achieving a strong price.  On the flip side of that, it is important not to price too low so that prospect buyers are put off by some perceived 'flaw' or reason for the cheap price.  This is particularly true when it comes to home buyers, who often equate price with value i.e. a higher price means better quality, but this is not always true.   
   

4. Present it well

    I mentioned earlier that there are no second chances and this is always true for first impressions.  It can be tempting just to bring your home to the market as is just to 'test the marketplace', with the intention to carrying out any upgrading works if and when they are needed.  My best advice here is to resist this temptation. As a general rule, home buyers will not revisit a property they have already viewed and ruled out due to lack of appeal.  The one exception to this is a substantial price drop but this is a very costly mistake to make.  You really do only have one chance for your home to make a good first impression, don't blow it for lack of a coat of paint!
   

5. Carry out necessary work 

   Following on  from my point above, if a property needs clearing (most do) and a fresh lick of paint, do it prior to coming to the market.   Similarly, small fixes like cupboard doors with loose hinges or dripping taps should be rectified before starting viewings.  It is amazing the tiny details that house-hunters focus on when viewing a property.  Quality fittings, like new door handles and freshly varnished door/doorstops will generate a positive feeling with potential buyers.  I am not suggesting that you need to rip out your bathroom but a new set of mats might just help.
   

6. Neutralise the decor

   Too many home-owners are confused about the difference between a property with character and a property with the owns personality stamped all over it.  Character is good, excessive personality - usually demonstrated by shocking pink bedrooms or nude art painted in the bathroom - will rarely help home buyers imagine their own future lives in the home. There is a time and a place for tasteful minimalism and selling your home is both the time and the place.
   

7. Get the best photos

   Now that you have your home looking great and de-personalised, it's time to capture it in its best light.  Even great properties need great photographs to make them stand out on-line. The trick here is not to try photograph the entire room in one shot but rather showcase beautiful features that would be lost in a wide room shot.  Help potential buyers find the beauty in your home. 
   

8. Timing isn't everything, but it helps!

   In the past, property was relatively seasonal in that there were quiet times and busy times; however, since the property crash and as the market recovers, seasons have gone completely out of the window.  It is true that investors and ready buyers will buy at any time.  Having said that, home-buyers, particularly those with school-going children will generally start looking to the market in March/April time for a summer move.  This is a great time to launch a family home on the market to a captive audience.
   

9. Be flexible

   The most frustrating part of selling your home is that you can do everything right and still the right buyer hasn't come along.  If you find yourself in this position, it is worth re-evaluating the price, presentation and marketing of the property.  While it is a cliche to say that you only need one buyer (provided that it is the right buyer!) this is true.  Remaining flexible gives your property the best chance of sale.
   

10. Eliminate legal delays

    Finally, have title deeds taken up (if with your mortgage lender) and have them delivered to your conveyancing solicitor prior to sale agreeing your home so that contracts can be prepared and ready for when the right buyer (and the right offer) comes along. This will give your solicitor the opportunity to spot and resolve any legal issues, and essentially to pre-empt any queries that the purchaser's solicitor is likely to raise, before they become a cause for delay.

    

    Remember that all-important 'curb appeal' to tempt buyers in

     

Why Knowing the Value of Your Home is Important

It has never been more important to know the value ofyour home or investment property in Ireland. But this is quite difficult to do when every quarter brings with it different - and often times conflicting - reports from media surveys, the Central Statistics Office (CSO) and property portals like Daft.ie and MyHome.ie. An accurate idea of value is necessary for the following reasons 

(1) Financial Planning 

The first step to personal financial planning is to list all current assets andliabilities. Properties owned are assets but any mortgage or charges secured against them are liabilities.In order to analyse and understand your current financial position, you must know the up-to-date value of the property minus the total outstanding loans and changes secured against it.

(2) When selling 

This is the main time and reason for people enquiring about the value of their home or investment property. Having an accurate market valuation and likely achievable sale price early on will help you make the right decision about whether or not to bring your property to market and, if so, what is the most strategic price to come to market at. Understanding local property market supply and demand from buyers will play a huge role in determining the asking price.

(3) Insurance 

This can be a tricky area of valuation for homeowners as despite what most people think, the market value of the property is not, in fact, the correct valuation for insurance purposes. Insurance works on the reinstatement value, that is, the cost of rebuilding the property, in the event of fire or other insurable event.While this might not vary much from one year to the next, there can be a big variation over the course of a few years, depending upon construction rates and cost of materials.

(4) Property Tax

Our Local Property Tax, or LPT, was introduced in 2013 and values submitted at that time remain in place for the remainder of this year. However, new valuations will be required in order for 2017 self-assessment. Home-owners are reminded that the next LPT valuation date is the 1st November 2016. 

(5)Succession Planning 

Similar to personal financial planning, for property owners who are thinking about how to provide for family and loved ones after their passing, it is necessary to know the value of their property holdings to understand their financial worth. This will help owners to make decisions about the best time and method of passing or disposing of their property

Factors that determine the value of your home 

(1) General Factors 

Recent achieved sales price of comparable properties.This information comes from the National Property Price Register. In order to be relevant, it must be recent. Comparable properties currently on the market. This is of lesser importance than Price Register data as it relies on asking prices only, which might be strategically high or low. Current local market tends, supply and demand. Remember, your home will be competing against similar homes for the attentions of the same buyers locally.

(2) Property-specific Factors

• The age and overall condition of your property might make it above or below the average market value for your area. 
•  Similarly, presentation of the property can affect market values by up to 10 per cent. A well presented home has neutral decor and has been de-cluttered, with well-maintained gardens. More importantly, well-presented homes tend to spend shorter time on the market. 
• Extra features like a converted garage or attic space or a kitchen extension will add to the value of your home.For example, according to a report by Daft.ie last year "every additional bathroom is associated with a 10 per cent higher price" 
• Landscaped gardens or outdoor rooms will always enhance the market value of your home. It is worth noting here that some so-called improvements can actually reduce the value of your home, for example, turning spare bedrooms into walk-in wardrobe in a small house or an ill-designed extension that takes over the garden.

Consequences of getting it wrong 

(1) Insurance 

Undervaluing your home, or the reinstatement value of your home, may result in your taking out inadequate insurance cover. In such instances, where a claim arises, you may be penalised under your policy by having to pay the proportion of the reinstatement costs that is undervalued. For this reason, it is crucial to have the property sufficiently insured.

(2) Over or under paying Local Property Tax (LPT)

 LPT returns are self-assessed but if you knowingly or recklessly undervalue your home in order to keep your tax bill low, you could be hit with a penalty of up to €3,000. The penalty is set at the amount of the property tax bill of the corrected valuation. In addition to this penalty, you will have to pay back the tax underpaid together with 8 per cent interest per year on the amount of underpaid tax. It is important to understand that reliance on the Revenue Commissioners' own online guide to value your home is no defence as this is intended to be a guide only. Valuations submitted back in 2013 are valid (only if correct) until 2016 but a new valuation will be necessary in time for 2017 LPT return.

 If you have any queries or concerns about the valuation of your home or investment property in Wexford, Wicklow and surrounding areas, speak with local property experts Michael, Alan or Eileen Kinsella at www.KinsellaEstates.ie www.KinsellaEstates.ie or email me directly on valuations@kinsellaestates.ievaluations@kinsellaestates.ie or telephone : +353 53 94 21718