A revival in prices is evident but supply of good family homes remains a problem, writes FIONA REDDAN

When you’re looking to buy a home, it’s easy to get swayed by pronouncements on the property market: Quick, buy now before mortgage interest relief runs out; there’s no need to rush, prices are still falling; or, if you haven’t bought by now you’ve missed the boat.” And these are just from people you know.

On top of this there's the constant stream of reports and statistics which attract so much media attention, much of which is conflicting. Over Christmas for example, the CSO revealed that in November, prices rose by 1.1 per cent, the third month that this happened in 2012. Then we heard from property listings websites myhome.ieand Daft.ie, both of whom pointed to signs of price stabilisation at the end of 2012, particularly in the Dublin area.

Since then however, ratings agency Fitch has said prices might fall by a further 20 per cent, a forecast driven by constrained bank lending and rising arrears. Fellow ratings agency Standard Poor’s argued this month that prices will fall by 1 per cent this year and will be flat next year.

Level of transactions

So who to believe? Well, that I can’t answer but I think that so much focus on prices is not the most insightful given how choppy the market is at present. Perhaps a better gauge of the health of the property market is the level of transactions – the more the transactions, the steadier the prices and the more you can infer from any price-based statistics. And when you look at sales volume, there is a definite sign that things are starting to improve.

In 2010, for example, there were a little over 20,000 properties sold in Ireland, according to the property price register.

Two years later and the figure had risen to almost 24,000, pointing to a 14.6 per cent increase in the number of properties sold. While this may still be a far cry from the heady days of the boom (in 2006 for example there were a little more than 200,000 mortgages drawn down) it is, nonetheless, a small sign of improvement.

So where is this recovery starting? Well, Blackrock in south Dublin has been one of the busiest suburbs in Ireland for transactions, with 203 properties sold in 2012 – an increase of a third on 2010. Transactions in Galway have also risen, up from 935 in 2010 to 1,124 last year, as has Cork, up by 15 per cent to 2,590 in 2012.

But in many other areas transaction levels have remained static or declined, even in popular areas of Dublin. In Castleknock, Dublin 15, for example, there were 159 sales in 2012, down from 162 in 2010, while in Stilllorgan, in 2012 there were 58 sales, down from 73 in 2012.

Outside of the capital, falling transaction levels suggest areas where the property market is still a long way off stabilising.

In the Castletroy area of Limerick city for example, there were just 35 sales in 2012, a decline of 37 per cent from 2010.

While inadequate supply may be a problem in certain areas, low transaction levels indicate other problems – negative equity, lack of mortgage finance and economic uncertainty – that have yet to be resolved.

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Regarding the inadequate supply of family homes in certain areas, if you are in the market to sell one, prepare to be very popular with estate agents. One friend ready to sell her house in a sought-after area – having already bought a new home – got a note in her door last week.

The agent had heard “a whisper” that they were looking to sell and was touting for business. It may not quite be a seller’s market, but with agents desperate for new listings, negotiating agents’ commission is one area where sellers should have the upper hand.

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According to recent figures from the ESRI, estate agents’ incomes slumped the most since the boom economy imploded. And those based in counties like Cavan must have felt the pinch more than most. Last year, some 300 properties were sold in the county – more than half of which went for €100,000 or less. With typical agency fees of between 1 to 2 per cent of the sale price, that’s a tough market by anyone’s standard.