08 April 2013
A Brighter Outlook on the cards for Commercial Property Sector in N.Ireland.
“Markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria”
The property market experienced plenty of optimism and euphoria in the period up to the credit crunch of 2007 and in the years that have followed has experienced endless pessimism.
The question is are we yet at a stage where the pessimistic birth of a new market will soon turn into sceptic growth?
Although gloom continues to surround the wider marketplace there are initial signs that for the first time in years here may be some cause for a degree of scepticism with a range of interesting factors coming to light which could provide some foundation for more optimistic views going forward.
Following the Bank of England’s Funding for Lending Scheme which provided £70 billion to lenders to provide cheap mortgages and low cost business loans there now appears to be competition between mortgage providers offering the lowest rates for years, the best of which available from Chelsea Building Society at 1.89%.
This competition appears to have sparked the return of first time buyers to the residential marketplace with purchases in the market sub £125,000 at their highest monthly figures since February 2008.
The RICS have gone on record to say that they could expect the best spring bounce in the market since 2008 with lenders offering better loans and smaller deposits.
Locally this experience appears to have been replicated by residential agents who are reporting increased levels of interest and sales together with competitive bidding in some hotspots.
All things being equal these factors will eventually feed their way through to the commercial property market in time however the big concern locally is the availability of finance particularly from Irish banks. Even here the announcement of the liquidation of IBRC may provide an additional spark of confidence that banks are finally moving away from their property bad debt issues into a normalised market with more proactive yet responsible lending practices.
How this all plays out remains to be seen and what is certain is that there is no quick fix, however the start of 2013 would appear to have a number of more positive signs than in recent years and some cause for optimism.
We remain hopeful for signs of sceptic growth.