Latest property reports show that nationally house prices fell 3.2% in the fourth quarter of 2010, bringing the fall for the year to 13% and a total decline from the peak of the market in late 2006 to 34.6%. However, this overall decline in asking prices in 2010 was not as severe as in 2009 and rate of decline in asking prices has eased.
With house prices are back to 2002 levels and affordability back to mid-1990 levels it is now thought that people who were priced out of the market during the boom years may be enticed back into the market during 2011 as better value emerges across all property types. Agents also hope the changes to stamp duty may get the 2011 market moving as it would allow potential buyers who have been on the fence to avail of the very significant reduction in prices in recent years, “The reduction in stamp duty will afford people greater opportunities to trade up and down in the market and will offer people greater mobility”.
However, the changes in stamp duty now also mean that for the first time in years First Time Buyers will return to paying stamp duty. Rachael Doyle, director of PIBA Mortgage Services said the changes are not good news for First-First Buyers; “For First Time Buyers it will be an extra cost inhibiting those wishing to get on the property ladder particularly at a time when acquiring lending is extremely difficult… Taken the abolition of mortgage tax relief it is yet a further impediment for First-Time Buyers”.
That said, First Time Buyer or not, other issues that might deter potential buyers from taking that all important first step on the ladder include the interim property tax measure due to commence in 2012, the VAT increase from 2013 and the introduction of water charges in 2014. Not only that but the severe measures of Budget 2011 hit most households hard and left some in a precarious financial position and there is no doubt that be incomes will be squeezed further in 2011.
Nonetheless, while it is clear 2010 had been a very challenging year for the property market and the economy, better value is emerging across all property types and set to improve even more so during 2011. With house prices back to 2002 levels and affordability back to mid-1990 levels, for anyone contemplating buying a home, properties have never been as affordable.
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