Property News

Neil Taggart comments upon price and marketing trends for the year....

2008 was an unprecedented year in recent property history. Whilst capital values in the UK plummeted the Manx residential market remained remarkably intact. Even the most optimistic thought 2009 too early for recovery - How has the market fared?

The Island economy has not been immune to UK problems and the residential market appears to follow this trend. The Chrystals Island Average Property Price decreased slightly in 2009 from £281,000 to £275,000 (-1.75% year on year). If apartments are excluded from the study the Average House price has increased marginally to £296,000 (+ 1.25% year on year). For continuity purposes our report has historically excluded sales over £1M as these were considered exceptional; current trends have seen a considerable volume of these sales and, if included, would see an Average House price of £370,000.

In these turbulent times the residential market has been extremely hard to predict. Certain properties have sold at full price within days of marketing whilst others have spent many months (or longer) with few viewers. One demand trend observed by our offices is a division of three clear transactional markets – “Local”, “High Net Worth” and “Ultra High Net Worth”.

The “Local” market (£175K - £500K) has seen good supply, reasonable demand and sustained capital values. We have successfully sold a flurry of detached family houses in the £400K - £500K bracket, ditto well presented semi detached houses and bungalows in the £250K - £300K bracket. Most first time buyers (up to £175K) appear to be waiting for government registered schemes to come “on-line”, leaving this bracket predominantly for the investor wishing to move funds back to property from poorly performing deposit accounts.

Sales in the £500K to £1M “Executive” sector have been scarce with low demand. Certain quality properties that have been correctly priced have sold very quickly but on the whole buyers have been typically cautious to upgrade or enter the market during the year. Keen sellers may have to reduce prices in 2010 or consider negotiation to achieve a sale. There is strong demand from those seeking building plots or sites for country homes however these opportunities prove to be very rare.

The “High Net Worth” sector (£1M to £1.5M) has seen a several quality sales this year. Buyers are typically new residents moving their business to gain greater tax efficiency and their relocations are hastened by increasingly tougher fiscal regimes in the UK. New build houses with excellent specifications are the buyers favourite choice.

Past £2M (and beyond) is the realm of the “Ultra High Net Worth”; very substantial current or new residents with exacting specifications to buy or build. Farms, estates and country houses have been high on their agenda with several notable sales of first class flagship property. The tax cap continues to be the driving influence but the Island must do all it can to rapidly improve its infrastructure, attract these individuals, their businesses and the inevitable employment opportunities that they will bring to the economy. “Joined up” Government on an accelerated scale is essential to achieve this.

Transactional activity in all areas of the market has improved throughout the year and we view this positively moving into 2010. The market for homes should remain in balance but we would predict only marginal growth in capital value in the established “Local” market until underlying economic concerns in the wider world subside. Values in the upper sectors may increase rapidly if UK fiscal policy continues to tighten and Manx policy remains attractive. We look forward to 2010 with cautious optimism.

+ You can also download the report here.

13th January, 2010

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