Rock bottom: Prices of apartments slashed as market starts to bottom out

Is the property market finally starting to level off? One local estate agent says her office is certainly seeing signs of it in the past three months.

Is the property market finally starting to level off? One local estate agent says her office is certainly seeing signs of it in the past three months.

“The amount of transactions and activity at the moment is unbelievable,” said Ella Dunphy of Douglas Newman Good (DNG). “Even though November and December are always the quieter months, they have been extremely busy.”

A case in point is a portfolio of seven apartments and duplexes in Kilkenny’s MacDonagh Junction that her office put up for sale last week. Priced as high as €385,000 each during the boom, the seven two- and three-bedroom units now have a total asking price of €850,000.

The price of units in MacDonagh Junction had already been marked down by 40% from their peak back in November 2008. Now, with an asking price averaging just over €121,000 each for these seven units, the values are about a third of what they were at the peak of the market.

And the response, Ms Dunphy said, has been “huge.”

All of the potential buyers enquiring about the MacDonagh Junction units have been from Ireland, and all are paying in cash. “The people who have money still have money,” Ms Dunphy said.

The price mark-down and the spark in activity seem to indicate that at least some buyers feel the market is levelling off.

“We are getting closer to the bottom, but the bottom is still not reached,” Ms Dunphy said, predicting that “it may not happen until the end of this year but it doesn’t have too much more to go.”

And despite having “a lot of sales agreed over the last two months,” she said that doesn’t necessarily mean banks are freely lending again.

“That is debatable,” she said. “If you put that to the banks, they will tell you yes, they are lending, but my guess is as good as yours.”

Those looking to buy at the moment are mostly cash buyers and people who have sold their homes and have been renting over the last three years, Ms Dunphy said.

Would-be buyers may have been keeping their eye on a desired property and are deciding to buy now rather than miss the opportunity, she said.

For houses that are not selling, particularly in more rural areas, she said prices would probably have to come down even further.