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Mixed messages from the property market (as taken from Manx Life Magazine Edition 4, 2011)

As the Isle of Man approaches the calendar year end it is perhaps a good time to reflect on the state of the Island's housing market.

Positive movement in property prices is often seen as a measure of confidence in economic conditions and the question I am most often asked, is what state the property market?

The picture is somewhat mixed with a steady flow of sales in the £160,000-£230,000 range. These buyers are either first timers entering the market often with financial assistance from parents or second time movers either coming out of rented accommodation or moving up as a result of a sale elsewhere. The majority of sales are subject to mortgage finance but approximately 1/3 of our sales in this price range are to cash buyers able to secure a purchase for owner occupation or as an investment with rental income.  For those reliant on a high percentage mortgage, funding has proved more difficult enforced by stricter lending parameters and 1,100 first time buyers,  have registered expressions of interest on the Isle of Man Government  scheme for new approved first time buyer dwellings rather than enter the open market.

Sales in the middle price- band have been more inconsistent. Our Port Erin office has this month concluded sales with prices ranging from £340,000 to £700,000 Location and presentation remain paramount in securing a sale, with new or “show home” finish, attracting buyers. Developers dress houses for sale because they can target those applicants yearning a ready- made lifestyle. Whilst we do not all live in show homes it is vital to present a property to its best advantage and to make it stand out above the competition.  Buyers are unlikely to be tempted by an untidy home, that immediately warrants freshening up. 

Rural property in need of renovation has seen keen interest with certain houses having various competitive bidders putting offers forward. A segment of the market relishes the opportunity to place their own stamp on a house, whether by way of renovation, improvement and extension/rebuild. Whist mortgage finance remains tighter on such schemes, the end result being a home with great views, acreage and privacy can prove to have been worth the time and effort of taking on such a project.

Chrystals have recently sold an imposing country house, with 18 acres in the South of the Island for just shy of £1.75m, the show house for Hartford Homes at the Links, Peel for £1.25m, a new house on the East coast for £2m and introduced the buyer to a substantial dormer bungalow at Port Soderick for £1.2m. Interestingly all the purchasers have been local residents, albeit we have started to see some fresh enquiries from abroad as well as the UK. At this end of the market new houses with the “turn-Key” package have proved to be a popular concept, where the interior has been designed and finished to a tasteful contemporary standard with state of the art technology incorporated within the living space. New sale property often makes a premium over and above resale property and is the way forward for developers to secure a sale to buyers in search of a ready-made home.

Market conditions are tougher now than 3 years ago when the credit crunch started. Supply levels in all price ranges have increased and the availability of mortgage funding is more fragile. Unfortunately many have failed to grasp the realities of the current climate and over-pricing from vendors and agents remains commonplace. In some instances unrealistic asking prices only serves to stall the market further and provide potential vendors with false hope that their home must be similarly valuable.

There is a market and sales are taking effect but buyers are clearly looking for quality and value for money. For those who recognise the state of play and price accordingly a sale will be achieved.

Conditions will improve as stability is regained in European economies and seasonal influences will buoy the market during spring. The speed of improvement will centre and be reliant on the state of mortgage lending where the majority of owners and buyers rely on income and borrowing facilities rather than cash.

Whilst the Manx economy has undoubtedly fared better than that of the UK or Ireland it is important that the Isle of Man continues to prosper by attracting new enterprise and business operations to our shores. An inflow of new residents not only bolsters local spending but stimulates confidence and employment. The private sector and  Government should now be focused on developing new opportunities to ensure there is a “welcome on the mat” for entrepreneurs who wish to invest in our Island.