Wednesday, 21 December 2011

Property Prices Keep Plunging...

THERE was further gloom for homeowners after property prices plunged again last month. Prices have been diving now for almost four years. And there is no let-up in sight, with economists predicting prices will keep going down next year. The average residential property has lost almost €150,000 in value since the peak and is now worth around €169,000, according to the latest gloomy figures. Around €232,000 has been wiped off the value of houses and apartments in Dublin as the capital continues to suffer much sharper price declines than the rest of the country. The new figures from the CSO also show that the annual rate of decline in prices jumped to 15.6pc in November. Prices fell by 1.5pc last month and are now down 46pc from the peak of the market in early 2007, the official figures show. The CSO only gives percentage changes, but analysts have calculated that the price of an average property is now just €169,000. This is down from €314,000 when the property bubble was at its most inflated in February 2007. Dublin property prices now average €199,325, down from €431,000 at the height of the boom. And outside Dublin the average property has crashed in value to around €154,000, down from a peak value of €268,000. Peak House prices in the capital are now 52pc lower than peak levels compared with the rest of Ireland at 42pc. Dublin prices fell by 2.4pc in the month of November and 18.1pc compared with a year earlier. But apartment prices in the capital are dropping at an even faster rate. They are down 16pc in the past 12 months, and are now down 58pc from the peak. It is estimated that half the almost 800,000 homeowners in the country now owe more on their mortgages than their homes are worth. Alan McQuaid of Bloxham Stockbrokers said: "According to the latest Reuters survey of Irish economists, house prices are likely to continue falling for some time yet. "The poll predicts that house prices will decline by a further 12.8pc on average in 2011, and 6.5pc in 2012. He added that the measures announced this month in the Budget will help the property market, but won't stop property values falling. "Even allowing for the Budget 2012 initiatives to boost the property market, as well as lower interest rates from the ECB, the short-term risks to house prices remain to the downside in our view. "We now think the average fall this year will be around 13pc followed by another 8pc decline next year, and it will be 2013 at the earliest before prices start to pick up." At the start of this month Finance Minister Michael Noonan offered an incentive of higher mortgage tax relief for first-time buyers who buy before the end of next year. And anyone who buys a property and keeps it for seven years will get a rebate on the capital- gains tax. David McNamara of Davy Stockbrokers said: "While these measures are encouraging, house prices should continue to fall into 2012." Report by Charlie Weston - Irish Independent

Saturday, 3 December 2011

92% Sold By Allsop...

92% of lots sold by Allsop...

THE BIDDING was brisk at the Allsop Space auction of mostly distressed property in Dublin’s Shelbourne Hotel yesterday, as 1,600 people packed into the auction room and spilled out into the bar and lobby of the hotel.

A total of 97 of the 108 properties sold under the hammer with a further two selling after auction, raising a total of €11.4 million. Around half were cash buyers – 30 per cent less than at previous auctions.

A small group of protesters from a group calling themselves the Anti-Eviction Taskforce held a low-key protest outside the hotel. However proceedings came to a brief halt when one protester stood up in front of the auctioneer and warned about the “ill will” that could affect buyers of distressed property in communities.

“Don’t bid then,” replied auctioneer Gary Murphy from UK-based Allsop, before thanking the protestor for his “kind words”.

Around a third of the lots are apartments, and one of the bargains of the auction was a four-bed apartment in Northwood, Santry which sold for €76,000 – €16,000 over its reserve.

A first floor two-bed apartment at The Cubes in Beacon South Quarter, Sandyford, D18, with parking, sold for €152,000.

A good bargain for someone in the room but not such good news for Jim Kelly who was waiting for the lot to come up. His daughter bought a similar apartment in Beacon South Quarter four years ago for €420,000. “She told me not to tell her what it got,” he said.

There are some big properties with low reserves to whet buyer appetite including a double-fronted period house at 13 Garville Road, Rathgar, Dublin 6 with a reserve of €420,000 – the most expensive house of the auction – which sold for €435,000 – and 28 Grove Park in Rathmines, also in Dublin 6 which sold for bang on the reserve price €380,000. Both were leasehold properties divided into flats. A two-bed apartment at Adelaide Square, Dublin 8 with a reserve of €145,00 sold for €201,000 and a mid-terrace three storey over basement house on the North Circular Road, Dublin 7 went for €277,000 – €72,000 over the catalogue price.

A former nursing home in Rathfarnham on 1.64 acres with planning permission for 32 townhouses with a reserve of €400,000 attracted a lot of bidders and went for €580,000.

“The bidding was very business-like, there was no waiting around,” says Robert Hoban, director of auctions at Space Allsop. “A lot were there to bid, there weren’t as many onlookers as before.” For those that failed to sell, “it was simply because they were priced too high”.

Commercial properties included 174 Pembroke Road, Dublin 4, a freehold mid-terrace building arranged in two restaurants, which sold for €630,000 – the most expensive lot in the auction overall . The smallest lot was a 0.5-acre landholding in Ennis, Co Clare, which sold after auction for €11,000.

In Donegal, five four-bed houses in Beechwood Park in Convoy had reserves of €21,000 each – the cheapest homes going under the hammer but actually sold for between €32,000 and €53,000. A lakeside log cabin-style house on the shores of Lough Sillan in Shercock, Co Cavan, with access to a private marina, went for €131,000 – over four times its reserve.

The next Allsop Space auction will be held on March 1, 2012.

Report by EDEL MORGAN - Irish Times

Wednesday, 30 November 2011

The Property Dilemma...

The property dilemma -- to sit tight or cut your losses?

It's a dilemma hitting thousands -- especially young couples living in apartments. What do they do -- sell now or hold on?

Many of them were frightened on to the bottom rung of the property ladder and now find themselves in a home which is too small for their needs.

They are asking themselves if they should take the hit on negative equity, and buy a house which can accommodate a growing family.

And even if they do, where will they get the money to buy another property?

A few years ago, many had held on in the hope of a soft landing, but now are wondering whether they should bite the bullet and jump.

Already price falls of 40pc to 50pc have made family houses much more affordable.

However, many couples who sell an apartment that they bought in the boom could find that the sale price is far less than the amount they owe to the bank.

Banks are slow to allow them to sell, trade up and carry over the negative equity.

However, with the ESRI predicting further price falls, and with apartments falling more sharply than houses, the longer a family delays the less return they are likely to achieve from the sale.

Furthermore, NAMA has about 8,000 homes around the country, including about 6,000 apartments, which it may offload at some stage.

While it has promised to hold on to about 6,000 of these for renting out, it has already been selling some of them, including apartments.

This makes the market even more challenging for private homeowners who want to sell.

NAMA will also make the market even more difficult for private sellers when it brings in the price guarantee. This will guarantee that buyers of NAMA properties will effectively get some of their money back if house prices are lower after five years.

How can private home sellers compete with such a guarantee?

Recently two citizens, Paddy Monaghan and Basil Good, put proposals to Government suggesting that such a guarantee should be available to all buyers.

The Government, the banks and the vendors would share the cost and risk of such a guarantee.

Such a deal would make it easier to compete with NAMA.

But the market may become even more difficult after the Budget as sellers may also have to compete with investors trying to offload rental properties.

Investors who bought in the boom are not alone in suffering negative equity but are also being lumbered with increased taxes and higher charges for a range of services.

In addition, the Government is expected to cut back on the rent it will pay landlords who accommodate social-welfare tenants.

At the same time, it will introduce a new household charge as well as other charges which the management companies in apartment complexes will have to pass on to apartment owners.

Buyers are also facing difficulties getting mortgage approval.

On the bright side, interest rates are on the way down.

So, for those who have saved a sizeable 10pc-plus deposit, the cost of a mortgage has fallen.

Falling house prices together with low-interest rates have meant that the cost of housing is now reckoned to be at its lowest level for more than 11 years.

Now an average first-time buyer working couple need devote only 12.4pc of their joint income towards paying an average mortgage.

Next month they will find it easier still, at only 12.1pc, according to the latest EBS / DKM Affordability Index.

In 2006, at the peak of the market it would have cost them more than double that -- or 26.4pc of their income.

Those buying in Dublin are benefiting from an even greater improvement in buying power as the amount such a couple need to devote has fallen from 32.5pc to only 14.7pc of their joint income.

Today's Allsop Space auction will provide a good gauge of house price trends.

For the third time they are selling properties in developments where they sold earlier this year, and it will be interesting to see how the prices compare.

They have already dropped their guide price for two-bedroom apartments in Castleforbes Square in Dublin's north docklands.

In April, four of these sold for between €161,000 and €190,000. In the July auction, two of them sold for €145,000 and €148,000.

Today they dropped their guide by €5,000 to €135,000.

When launched at the peak of the market these two-bedroom flats were selling for almost three times Allsop levels, with prices in 2005 starting at €370,000. So they have fallen by 60pc.

This is a sharper drop than the 55pc fall which ESRI is forecasting from peak.

So the market may already be close to the bottom -- and there are some commentators who believe that some segments, such as apartments in the more sought-after areas of Dublin, might go lower than the bottom average -- but bounce back quicker.

So the future in the housing market is not all doom and gloom, and could yet look brighter -- if the banks give out more mortgages.

Report - Irish Independent

Saturday, 19 November 2011

Irish Houses Bulldozed...

Bulldozers send boomtime buildings crashing down...

TWO unfinished houses that would have fetched €200,000 each during the boom have been bulldozed because of public safety fears.

The unoccupied houses -- and foundations for three more -- were levelled at Church View in Clongeen, Co Wexford, at a cost to the taxpayer of €28,000.

Other residents of the estate last night said they were relieved that Wexford County Council had taken action against the developers, Impulse Construction Ltd, by knocking down the houses.

They said the unfinished houses had attracted vandals and encouraged anti-social behaviour for some time, and were unsightly at the entrance to the estate. This was the first time houses had been demolished in a new estate in Wexford, but the Department of the Environment confirmed other houses had been demolished on a small number of occasions.

Wexford County Council confirmed it has more plans in the pipeline to carry out "public safety works which may involve some demolition". Chairman Oliver Walsh said the demolition was a "sign of the times".

Unfinished housing estates are a nationwide problem since the property bubble burst, particularly in the midlands and the north-west. The Department of the Environment assesses applications for demolitions on a "case-by-case basis".

In some cases, it is cheaper to bulldoze a house than to fence it off.

Report by Eimear Ni Bhraonain - Irish Independent

Sunday, 30 October 2011

Nama Perks For Developers...

Nama 'perks' for builders add to sense of injustice

Developers enjoying allowances on top of huge salaries -- and all at taxpayers' expense...

DEVELOPERS who work for Nama will be entitled to claim expenses and may even stay in their palatial homes as they draw salaries ranging from €70,000 to €200,000, the Sunday Independent can reveal.

Confirmation of the generous allowances being given by the State's so-called 'bad bank' is sure to provoke fresh anger from a public reeling from the revelation by Nama chief executive Brendan McDonagh last Wednesday that his agency has approved salaries of €200,000 for two of its biggest developers.

Appearing before the Dail's Public Accounts Committee (PAC), Mr McDonagh also confirmed Nama's intention to approve salaries ranging from €70,000 to €100,000 a year for between 110 and 120 developers on its books before the end of this year.

Confirmation of the multimillion euro pay bill has unsurprisingly been met with a furious reaction from a public already carrying the massive cost of bailing out the banks that were broken through reckless speculation in the property market.

Asked if it was right that Nama should allow developers to be paid up to €200,000 a year, 89 per cent of those surveyed in the latest Sunday Independent/Quantum Research poll said that they did not. "I think it's totally unfair. Ordinary people are paying for their [developers] mistakes and they are now making huge wages to work in Nama," one female respondent to the poll said.

The news that the developers on Nama's books will also be entitled to claim expenses, and possibly even to stay in the palatial homes they acquired during the boom, is sure to add to this sense of injustice.

Referring to the entitlement of developers to claim expenses, a spokesman for Nama said: "The business plan for their [developers'] business will include resources from the income generated by the business to support the running costs of that business and this will include resources for payments for the key personnel that Nama judges to be necessary for the successful implementation of that plan and other costs including properly vouched for business-related expenses."

Asked if those developers working with Nama would be obliged to trade down from their present homes to more modest properties, the spokesman pointedly declined to say that this would be required in all cases.

"Typically their present homes will be brought into play as part of the business plan and the loan recovery process and trading down and sales of such homes has already begun," the spokesman said.

While such an assurance might go some way towards tempering the anger of hard-pressed taxpayers, Nama's decision to incentivise developers through the payment of a 10 per cent commission on future sales of the assets underpinning their loans will be a harder sell.

Outlining how the commissions will be paid, Mr McDonagh told the PAC that if developers recovered the acquisition price paid by Nama for the loan plus an additional 10 per cent, they would be allowed to keep 10 cent for every euro repaid above that "financial milestone".

The Nama chief again insisted there was no debt forgiveness for developers on the agency's books, saying they were obliged to repay the full €74.2bn owed. But Mr McDonagh readily conceded that achieving full repayment of this amount would not be possible in the current market where property values had fallen by 60 per cent.

He said there was "no pot of gold" beyond the properties securing the loans. "Gratuitous" court actions would be a waste of taxpayers' money if developers had no other money, Mr McDonagh added.

Report by Ronald Quinlan - Sunday Independent

Friday, 14 October 2011

Slowdown Stalls Completion Of Ghost Estates...

Building slowdown stalls attempt to complete 2,000 'ghost' estates...

WORK TO complete the State’s 2,000 unfinished housing developments has stalled due to a 40 per cent drop in on-site construction activity this year, according to the latest figures from the Department of the Environment.

However, the vacancy rate of completed houses on “ghost” estates has fallen by one-fifth since the department published its survey on the extent of the problem last year.

In addition, demolition has begun on estates were there is no prospect of completion, the department said.

Last October the department published its first national survey of the extent of the ghost estate problem, where developments are left unfinished and only a fraction of homes are occupied. It identified more than 2,800 unfinished or vacant housing estates.

A year on, some 700 estates have been completed and a further 100 on which no substantial work had started have been taken out of development, leaving a total of 2,066 “ghost” estates.

The 12-month period has seen a reduction in the vacancy rate of completed houses in these estates. Last year 23,250 houses were recorded as complete but vacant. This has now fallen to 18,638, a drop of about 20 per cent.

Carlow has the highest proportion of ghost estates, at 59 vacant units per 1,000 houses in the county, followed by 44 in Leitrim, 42 in Longford and 35 in Cavan. This compares with just three vacant houses for every 1,000 in Limerick city.

The highest number of vacant houses is in Cork with 2,363, or 19 for every 1,000 houses. Although there has been progress regarding selling or renting out properties, Minister of State for Housing Willie Penrose yesterday said he was concerned about the slowdown in construction. As a result, “many estates have been left in an incomplete and unsatisfactory state”, he said.

Of the 2,066 ghost estates, completion work was taking place on just 1,822.

Ensuring public safety on unfinished developments was a priority, Mr Penrose said. Some 247 estates were categorised as unsafe because of issues such as dangerous structures, uncovered manholes or unguarded building materials.

Of these, 20 are under the control of the National Asset Management Agency and a further 36 are being fixed by the developer or site owner.

Local authorities have applied to the department for funding to ensure the safety of 164 of these estates. A €5 million fund has been established for this work. To date, €2.10 million has been allocated to local authorities.

In a small number of cases, local authorities have decided to demolish estates where there is no hope of the developments being completed or where half-built structures have been exposed to the elements for so long that they would no longer be sound.

The department has granted Wexford County Council funding to demolish houses at the Coill na Giuise estate in Gorey, and has also approved funding to Laois County Council to demolish a three-storey apartment block at Corrig Glen, Portarlington.

Demolition work not funded by the department has also taken place in Westmeath, where three almost complete houses at Ballinagore were razed, and in Ballina, where six apartments at Quignalecka on the Sligo Road were torn down.

North Tipperary County Council is also planning to demolish the Terrace estate at Ardan, Nenagh Road, Borrisokane. Demolition would always be a “last resort”, Mr Penrose said, but it was likely that further estates would have to be razed on the guidance of local authorities.

Report by OLIVIA KELLY - Irish Times

Monday, 10 October 2011

Nama's Social Housing...

Nama may be forced to deliver on social housing...

THE GOVERNMENT is considering plans to amend legislation that would oblige the National Asset Management Agency (Nama) to deliver more social housing and public amenities.

Nama, created to purge banks of toxic property loans, has purchased some €31 billion of loans connected to thousands of residential properties – loans valued at over €72 billion at the height the property bubble.

There is frustration in some circles of Government that the agency is not under any formal obligation to provide a “social dividend”.

Minister for Housing Willie Penrose is understood to have written to the Attorney General in recent weeks seeking clarity on how Nama’s terms of reference could be changed to give it a broader remit that goes beyond securing the best achievable financial return for the State.

Officials fear the agency is too focused on its commercial remit to generate profits and feel the State is at risk of losing out on opportunities to maximise the social benefit of large landbanks and thousands of residential properties. However, a spokesman for Nama yesterday insisted the agency was mindful of meeting social needs where it made commercial sense.

He pointed out Nama had facilitated the purchase of almost 60 apartments in Sandyford recently by a voluntary housing association which are being made available for social and affordable housing.

In addition, Nama’s spokesman said the agency was reviewing its portfolio of residential units to identify others that may be suitable for social housing purposes.

Nama is linked to an estimated 10,000 residential units, the majority of which are apartments or duplex units.

Latest figures show the scale of the need for social housing has reached a record high of 98,000 households, as the Government says it does not have funds to buy or build local authority housing.

In addition, pressure is growing on homeless services, while demand for social housing is set to increase as the State moves to close outdated institutions which house thousands with disabilities or mental health problems.

The Act which established Nama requires the agency to obtain the “best achievable financial return for the State” having regard to the cost to the exchequer of acquiring and dealing with bank assets. While it is a listed functionto “contribute to the economic and social recovery of the State”, there is no reference in the legislation to a social dividend or supporting the planning and sustainable development of the State.

Any attempt to make Nama’s remit broader is likely to require legislative change. While the Minister for Finance is able to confer additional functions on the agency, he does not have the power to impose additional objectives, such as the delivery of social housing, education, public transport or public health dividends.

Government sources say that if its remit was changed, Nama could transfer land or housing developments to local authorities or other bodies who would be in better position to get the best long-term outcome for the State as a whole.

They say how Nama disposes of its properties will be crucial to the State’s long-term development.

Report by CARL O'BRIEN - Irish Times

Saturday, 8 October 2011

House Prices To Fall Until 2013...

HOUSE prices will keep falling for another two years and not bottom out until at least 2013, when the average price will have fallen by 60pc to €150,000.

The latest prediction comes as National Irish Bank said it would raise its variable rates by up to 0.95pc next month.

However, there are renewed hopes that the European Central Bank will signal a cut in eurozone interest rates when it meets tomorrow.

A cut in ECB rates may help the collapsing housing market.

Ireland is currently experiencing the most violent property crash in the western world.

Over the last four years, prices have fallen by 45pc to leave the average asking price at €194,000, according to the latest house-price index. The Central Statistics Office puts the fall from peak at 43pc.

Now it has been predicted that prices are set to fall for another two years with the average asking price to hit €150,000 before the market bottoms out, according to research by housing economist Ronan Lyons of Daft.

Mr Lyons bases his calculations on the assumption that banks will start lending again for mortgages.

If they do not, prices will go on falling by 4pc a quarter and continue to plummet until the end of 2014, when prices will have dropped by 70pc.

This would leave the average asking price at €115,000, down from €366,000 at the peak of the market in early 2007.

A survey last week indicated that up to eight out of 10 mortgage applications were being turned down by banks.

However, AIB is to run a pilot scheme, whereby it will ease off on its lending criteria for first-time buyers.

It has reduced the monthly amount of money it had said a single person and a couple should have left after paying bills for the purposes of calculating how much can be borrow.

Previously, couples had been required to have €2,500 a month left over after paying their bills. Now, the bank will accept €2,000.


Karl Deeter of Irish Mortgage Brokers said: "This is finally some good news for people who are looking to borrow. AIB's move is fairly pragmatic.

"The minimum left-over amounts were quite high and reducing them a little will free up a lot of lending because more people will qualify."

Meanwhile, National Irish Bank will increase its variable rates by between 0.2pc and 0.95pc from November 11. Its home-loan variable rate will be 4.25pc. The bank said this was the first rise in variable rates since June 2008.

Some 75pc of NIB's customers are on tracker rates and so are unaffected by yesterday's rises.

Savings rates are also set to decrease at the bank, with the popular eSaver rate to fall from 3pc to 2pc. Analysts are disagreeing over whether the European Central Bank will cut its key interest rates this week. The ECB may hold off cutting interest rates tomorrow as recent figures showed that inflation in the eurozone was rising.

However, they expect that the ECB will lower its key interest rate in the fourth quarter of 2011 and in the first quarter of next year, each time by 0.25pc to 1pc.

But the economic situation has deteriorated so dramatically since then that a poll of leading economists by the German business daily 'Handelsblatt' showed the majority of experts in favour of an immediate cut in rates in order to avert outright recession.

Report by Charlie Weston - Irish Independent

Friday, 7 October 2011

Home Selling Tip...

Here's a tip: if you want to make a sale - try harder...

Despite the sluggish market, some savvy sellers are finding buyers for their homes...

IT MAY BE a buyer’s market but some properties are shifting, with a few even garnering competitive bids. What are sellers doing to earn that coveted “sold” sign? Homeowners who have been liberated from the “for sale” trenches have some tips.

According to the CSO’s Residential Property Price Index, property prices are down 43 per cent nationally from Septembner 2007, but property manager Deirdre Walshe says there are buyers out there,.

The market is now is a bit like speed dating,” says Walshe, who once worked in advertising sales. “Your property is competing against thousands of other properties out there so you need to try harder.”

She manages her family’s portfolio of 34 properties. This year shesold a two-bedroom apartment and she has put her own family home up for sale.

“You need an agent with experience in your area and in your property type,” Walshe says. Research what properties have sold in the past, for what price, and who sold them. You can also look at the properties that are on the market at present and what their guide price is and again who is the sales agent. If an agent is getting results in your area then they have their ear the ground as to what buyers think of the area, what type of properties buyers are looking for and, more importantly, what kind of price you can expect.”

She employed Owen Reilly to sell her two-bedroom apartment in Temple Bar. It had an asking price of €195,000 and recently sold for €189,000. Her family home in Sandymount, which has just come onto the market, is with agents Sherry Fitzgerald.

Pricing the property to sell is crucial to clinching a deal, she says. “Sellers have to be realistic. The market will tell you what your property is worth. You have to listen to the market. And in this market you should be willing to accept an offer of between five and 10 per cent less than the asking price.”

She also recommends that you are flexible about viewings. “You don’t know when your buyer might appear and in this market you need to be as amenable as possible.”

Prionsais O’Neirigh has sold two properties in the past 18 months. A three-bedroom investment property in Rathfarnham went to the market last August at €395,000 and sold 14 weeks later for €230,000.

The family home in Carrickmines went to market in August of last year at €495,000. A three-bedroom semi starter home, it was purchased in 2002 for €360,000.

The house took eight months to sell. For five of those months he increased the number of viewings from Saturdays only to viewings every Tuesday, Thursday and Saturday.

“It’s a falling market,” says O’Neirigh, “so reduce your price to sell”. He lowered his Carrickmines house price four times to catch the market. He also changed agents.

Even with all this effort he thinks that the buyer actually first saw the house at a family party. The house sold for €340,000, 31 per cent below the original asking price, yet O’Neirigh is delighted with the result “because property prices in the area are still falling in value”.

He didn’t get back the €70,000 he had spent installing a new kitchen, new bathroom and new windows, but he was able to pay off the mortgage.

Retired quantity surveyor George Walsh, who sold his house in Tudor Lawns in Leopardstown in July, agrees with the recommendation to reduce the asking price.

“Purchasers need to feel theyre getting something off the price,” he explains. He discounted his home by €50,000 – that’s 10per cent – and it sold within two months.

He also recommends sellers get a surveyor’s report done on their property before they put it on the market because “some buyers are using the findings of their surveyors report to try and further reduce the property price. If you already have a survey of your own you can allay their concerns”.

Reports of horse trading are rife. One Dublin barrister who sold his three-bedroom house in Sandymount last July had three bidders within its asking price of €525,000.

He went with the highest bidder who then delayed closing contracts. The buyer’s solicitor came back weeks later saying that there was an issue with the title. The barrister didn’t believe the issue raised was genuine and felt that this was confirmed when the purchaser sought a reduction in the price. The house was eventually to one of the under-bidders.

Under-bidders who are cash buyers are not beholden to the bank and are able to move quickly – something to bear in mind in this market, says Tom McLoughlin who sold a large period county house outside Kilcock in Co Kildare.

The house, 511sq mts (5,500sq ft) in size was put up for sale in June 2009 with an asking price of €1.4 million. The price was reduced to €1.1 million and after almost two years on the market sold to a cash buyer for €845,000. “We had several offers but most couldn’t come up with the money.”

If you are lucky enough to find yourself with a number of buyers bidding close to your asking price, one recommendation is to issue contracts to each bidder and tell them that whoever comes back first with signed contracts gets the house.

Emer and Julian Pollard built a three-bedroom bungalow to the rear of their property in Greystones seven years ago. The house was originally built for their daughter. It was rented out but the non principal residence tax and looming property taxes prompted them to put it up for sale. It went to market in March this year with an asking price of €450,000. They instructed their solicitor to start working on the documentation as soon as the house had been valued by their agent. Several parties were interested in the property and competitive bidding saw her get in excess of the asking price. The sale closed within two months.

Communication is crucial if you want to keep all parties happy, says Anne Marie Lynam, who only put her house up for sale because she fell in love with another, a country property in Co Westmeath that she saw advertised in this paper. “I will buy this house if you can sell mine,” she recalls telling the estate agent after viewing it.

One valuation later, her four-bedroom detached town house in Athlone went to market with an asking price of €295,000. That was in September 2010. By November 3rd the sale was agreed for 25 per cent less than the asking price.

The house she bought had tenants that needed to be given notice to quit. She had to wait until March of this year to move in. This slowed down the sale proceedings on her own house as she didn’t want to move out and rent in the interim. This wasn’t a problem because she kept in constant communication with her agent to update her and the vendor.

“Don’t think you’ll close in six weeks,” says Deirdre. “Set your sights on the process taking six months. And get your paperwork in order before you go to sale. That will speed up the process from your side.”

When you go to market you have five or six weeks and then you will lose momentum, she says. “If it doesn’t work, go back to the drawing board. Ask yourself the following questions: Is it the price? Is it clean enough? Most buyers can’t see past a mess.”

Buyers these days are more discerning, agrees O’Neirigh. “They’re even taking the house- hunting search beyond the property pages and websites and driving around areas, noting boards as they go up. A lot of houses are selling very quietly this way.”

Keep your tenants

Do not leave an investment property sitting vacant while it is up for sale, cautions Deirdre Walshe. “The sale may take up to a year to go through so explain the situation to the tenants and reduce their rent to keep them in situ. A property with tenants is not going to be kept in spotless show house condition but an investor will see past this.”

Four properties that have recently sold

Number 16 St Kevin’s Park, Dartry, Dublin 6, sold recently for a figure substantially over the quoting price, according to Keith Lowe of agent DNG. It had been seeking €1.35 million for the bay-windowed Edwardian house on this popular road. It is a 265sq m (2,850sq ft) five-bedroom house with good period details and well-cared for gardens.

Cuanog, Deansgrange Road, Blackrock, Co Dublin is a detached 400sq m (4,500sq ft) property divided into three apartments. It sold in September for close to the asking price of €925,000 says agent Lisney. It has a separate mews and courtyard and one of its main attractions is the large, secluded back garden.

Savills recently sold this 222sq m (2,400sq ft) semi-detached family home at 38 Trees Road, Mount Merrion, Co Dublin, for under the asking price of €995,000 say the agents. Extended and refurbished, it has a large conservatory/sunroom, a 130ft long back garden, and is close to the N11 in Stillorgan.

A 78sq m (840sq ft) two-bed apartment on the seventh floor of Hanover Riverside at Grand Canal Square, Dublin 2, was sold recently for just below the asking price of €330,000 says agent Owen Reilly. The apartment has a balcony with river views, parking, and an annual service charge of €1,850.

Report by ALANNA GALLAGHER - Irish Times

Saturday, 1 October 2011

How Low Can House Prices Go?

Ireland’s property boom was the biggest, and our crash the most violent. In a week that brought news of a further drop in house prices, Economics Editor DAN O’BRIEN explains why the market won’t recover any time soon...

‘THE FUNDAMENTALS of the property market are sound, going forward.” This mantra was repeated constantly during the boom by those who believed that no risks were attached to soaring property prices.

If any reminder was needed of how badly wrong this view was, it came this week with new official figures showing yet another fall in residential property prices in August. This, according to statisticians, brought the total decline since the property-price peak, in late 2007, to more than 43 per cent, one of the biggest drops in the world.

The latest figures from the auctioneer Sherry FitzGerald, also published this week, are worse still, suggesting that average prices are down by a huge 58 per cent since the bubble burst.

The belief that property was a one-way bet became ingrained during the Tiger era. Perhaps this was understandable: the longer any phenomenon continues, the more normal it looks. Such is the psychology that generates price bubbles. And Ireland led the world in the size and duration of its bubble.

According to the Economist’s property-price index, no other European or North American country experienced price rises of the same magnitude over such a long period. In the decade from the index’s start date, in early 1997, Irish property prices quadrupled. The only two peer countries to see a rise of remotely similar proportions were Britain and Spain, where prices trebled. The US saw a much more modest rise over the same period, of about 130 per cent, which was not unusual internationally.

Ireland experienced the largest property bubble and the most violent property crash. That crash, alas, is not over yet, and prices are unlikely to stabilise until next year at the earliest. If the 2011 rate of decline in residential property prices continues for another 12 months, prices will fall by about 15 per cent from their current level. Given the headwinds facing the market, that is more likely than not.

But the highly paid consultants who arrived in Ireland to stress-test the banks after last December’s EU-IMF bailout are working on an even gloomier set of assumptions. Their baseline view is that prices will fall by a further 20 per cent before the market hits bottom. In their worst-case scenario, the decline would be almost 30 per cent. That would bring the fall from the 2007 peak to 59 per cent.

Although there are benefits to lower prices in the longer term, the weak property market feeds through to the wider economy in many ways. One of these is the wealth effect. When prices are rising, people feel better off as the value of their home – usually their biggest asset – grows in value. On average, they save less and spend more.

When prices are on the way down, all this goes into reverse to create a negative wealth effect. Now people are salting away far higher proportions of their already shrunken incomes. The result is to reduce further the level of activity in the domestic economy.

So how far will prices fall and for how much longer will the economy be afflicted by the resulting negative wealth effect?

It is not necessarily the size of a bubble that determines how low prices will go when they fall. More important in the Tiger bubble was the extent to which it was inflated by unsustainable drivers, such as risk-blind bankers hosing money at anyone taking a punt on property.

Looking at other countries helps in assessing where Irish prices are likely to end up. Consider our nearest neighbour, where prices have fallen by a relatively small 11 per cent since 2007, a fact that has provided one of the few positives for Nama, which offloaded some of its London trophy properties this week at no cost to beleaguered Irish taxpayers. Among the most important reasons for Britain’s house-price stability are its tight planning laws, which mean that few new houses are built across the water.

It was different here during the property frenzy, when building permits were extraordinarily easy to obtain. The result was that, in 2007, 90,000 homes were built here while 180,000 were built in Britain, wildly disproportionate figures given that the population of our neighbouring island is more than 13 times greater than that of the Republic.

If there is an undersupply of houses in Britain, the building mania here between 1997 and 2007 has led to a huge oversupply. While the extent of that oversupply is contested, nobody doubts the existence of a large stock of unsold homes. According to the property website, the number of unsold properties on its books up to the second quarter of this year had remained stubbornly high, with hardly any reduction over the past three years. This glut will weigh on the market for some time to come, putting continued downward pressure on prices.

IF BUILDING TOO MANY houses can end in tears, so can bad lending by banks. Although the US did not look out of the ordinary in the property-price rises it experienced from 1997 to 2006 (130 per cent compared with Ireland’s 400 per cent), it has suffered the second-worst rich-world crash (after Ireland), and the residential property-price drops from coast to coast are now greater than those during the Great Depression in the 1930s.

One of the main reasons for the US economy’s woes was the quality of bank lending. American financiers gave the world subprime mortgages. The idea behind these was simple and seemingly good: lend to people who, traditionally, would not be entertained by a bank manager, but charge a higher rate of interest to cover higher default rates.

If the theory had its attractions, the practice was a disaster. The proportion of subprime-mortgage holders who defaulted was many multiples higher than what had been projected. The repercussions of these defaults triggered the worst global financial and economic crisis since the 1930s.

While subprime-mortgage lending made a mercifully late appearance in Ireland, sparing us an even more painful crash, Irish bankers dished out mortgages on the rosy assumption that nothing could go wrong with the property market. At worst, they believed that prices would plateau, unemployment would remain low and economic growth would continue, if at a more modest pace.

But if banks lent too much during the boom, they are not lending enough now. The latest figures, released yesterday, show that bank lending for property purchases continued its long decline in August. The lack of new mortgage financing is yet another factor weighing on the market, as is the rising cost of financing mortgages for those who have been able to secure them.

At a time when almost all of the drivers of demand are weak, the psychology of buyers in a market where prices are falling has a further negative effect. When prices rose, seemingly inexorably, it was all about getting a foot on the property ladder, at almost any cost. But now that prices are falling, also seemingly inexorably, most rational people want nothing to do with the property ladder.

This is part and parcel of any deflationary dynamic: potential buyers postpone their purchases in anticipation of even lower prices, sucking even more demand out of the market and adding momentum to the downward spiral.

Can any good come from all of this? Certainly, even if the potential benefits may not be glaringly obvious at this juncture.

Too-high property prices impact on everything from the quality of people’s lives to national competitiveness. Although the collapse in prices has left many people in dire straits and brought down the banks, more affordable housing and cheaper commercial property serve the wider interest.

Even if those looking to buy homes have not benefited much from lower prices (because of the mortgage famine), the huge falls in prices of commercial property, such as offices and factories, have already made Ireland much more attractive to companies looking to set up shop or expand existing operations.

Economists do not agree on much, but there is a consensus that new businesses, be they foreign or home-grown, will create the jobs and wealth to generate sustainable recovery, however long that takes.

Why our banking crisis was so costly

As the chart above shows, Irish residential property prices have fallen by more than in peer countries, but this does not explain why the Irish banking crash has been many times more costly than elsewhere. Last week, for example, the IMF estimated that the direct budgetary costs of Ireland’s crisis had reached almost 40 per cent of all income generated in the economy in a single year. In the US, which has suffered the second-largest house-price crash, the net cost to taxpayers was just 3 per cent.

The reason for the size of Irish banking losses lies in horrifyingly bad lending to property developers. If there was a bubble in the residential market, there was a superbubble in commercial property. Prices of offices, shops and factories rose higher and have fallen far more sharply than those of homes, and some development land is worth just 5 per cent of the amount paid for it.

Property developers have gone bust en masse, bringing down the banks that fought to lend to them. In this respect, Ireland is depressingly unique.

DAN O’BRIEN - Irish Times

Thursday, 29 September 2011

Catastrophic House Price Figures!

FIRST, some good news. The fall in house prices might be accelerating, but vacancy rates in Dublin are falling.

Estate agents Savills have published figures claiming that the number of unoccupied houses in the capital had fallen from 11,000 in March 2010 to just 5,400. According to Savills, people who are unable to sell their houses are successfully renting them instead.

The Savills' figures support the findings of last April's census which showed that the proportion of vacant houses in Dublin and the surrounding counties, at 10pc or less, is much lower than elsewhere in the country -- for example over 30pc in Co Leitrim.

Despite this chink of positive news, it's back to business as usual for our stricken property market.

The latest house-price figures from the CSO weren't bad, they were catastrophic.

After a few months during which it seemed as if the worst might be over, house prices plunged by 1.6pc in August and by 13.9pc over the past 12 month.

The situation is even worse in Dublin, where house prices fell 3.8pc last month and by 14.9pc over the past 12 months. Owners of Dublin apartments have been worst hit, with prices falling by 6pc last month and by 17.4pc over the past 12 months.

With house prices having now fallen for more than four years, the cumulative falls are horrific.

The average Dublin house price has dropped by 48pc from the 2007 peak while apartment prices are down by a truly scary 57pc.

Translate these percentages into actual numbers and someone who bought a Dublin house for €500,000 in early 2007 would now have an asset worth just €260,000 while the person who paid €400,000 for an apartment in the capital at the same time now finds themselves with a property worth just €172,000.

And the bad news is that things will almost certainly get even worse before they get better.

This year's census confirmed previous academic research showing that there were several hundred thousand unoccupied dwellings in the country, with the census putting the number at over 294,000.

That's more than one in seven of all houses and apartments in the country.

Estimates on the underlying demand for new houses vary, but most economists put it at somewhere between 20,000 and 30,000 a year.

In other words, the overhang of unoccupied houses is equal to somewhere between 10 and 15 years' demand.

And that's not the only pointer to a further fall in house prices.

Even after the price-falls of the past four-and-a-half years, the average house price in Dublin is still about €225,000, while the average house price in the rest of the country is still approximately €180,000.

This means that the average Dublin house price is still the equivalent of seven-and-a-half times average earnings, while outside of Dublin the average house price is the equivalent of six times' earnings.

That's way, way too high.

The other factor pointing to further house-price falls is the likelihood that even when the banks do start lending again, they will apply very strict criteria.

That means that house prices could still fall by as much 50pc nationwide from their current depressed levels.

But perhaps not in Dublin. And here's another small crumb of comfort for the capital's homeowners.

House prices have fallen furthest in Dublin and the surrounding counties.

While it may be little consolation to homeowners in the capital, most, if not all, of the bad news is probably already out of the way.

What this means is that when prices do bottom out and the banks start lending again, house prices in the greater Dublin area and the surrounding commuter counties will recover much more quickly than those in other parts of the country.

Report - Evening Herald

Wednesday, 28 September 2011

Alarm At Nama Property Scheme...

Coalition alarm at Nama property scheme...

THERE IS concern within the Government that plans by the National Asset Management Agency to encourage the purchase of thousands of residential properties could artificially inflate the property market.

The agency wants to introduce a scheme where it would waive 20 per cent of the purchase price of a home on its books if values were to fall further over the next five years.

Nama has suggested the scheme could eventually apply to 5,000 houses and apartments.

However, internal briefing material reveals fears within the Department of the Environment that the move would artificially inflate the market before it has hit bottom.

It could also prevent homebuyers from realising their homeownership aspirations by preventing prices falling further.

Nama is hoping to launch its "deferred purchase" scheme on a trial basis later this year by arranging the sale of about 750 homes.

The agency does not need Government approval for the scheme to proceed, but says it "wants to bring all relevant stakeholders into the process".

In a letter to Minister for Finance Michael Noonan last month, Minister for Housing Willie Penrose warned that "activating the market through incentives . . . appears to run counter" to Government policy.

A Nama spokesman said its plans were "not an attempt to call the bottom of the market".

"Indeed it is quite the opposite, as it enables transactions to take place now which can be flexible enough to accommodate price falls in the future," the spokesman added.

Report by CARL O'BRIEN - Irish Times

Tuesday, 27 September 2011

House Prices Take Another Dive...

House prices take another dive bringing annual collapse to 14pc...

House prices took another nosedive towards the end of the summer, official figures have revealed.

The cost of residential property fell 1.6pc in August taking the total collapse over the previous 12 months to 13.9pc.

The Central Statistics Office (CSO) said homes have fallen in value by 43pc since the peak of the market in early 2007.

Over the last four years house prices in Dublin are down 48pc and apartments 57pc, while the fall in residential property prices outside the capital is about 40pc since the bubble burst.

According to Conall Mac Coille, chief economist at Davy Stockbrokers, the prices are based on very low level transactions because mortgage lending remains weak.

“So falling prices reflect distressed vendors being forced to sell despite weak market conditions,” he said.

“Hence residential property prices are likely to continue falling through 2011.”

Report by Ed Carty - Irish Independent

Friday, 23 September 2011

Allsop Space September Auction Results...

Lot Type Location Reserve Price will not exceed this figure
1 Investment Flat Dublin 1 Sold €160,000
2 Leasehold Flat Dublin 4 Sold €130,000
3 Vacant Flat Blackrock €185,000
4 Vacant Flat Howth Sold €183,000
5 Vacant Flat Galway City Sold €144,000
6 Leasehold Flat Dublin 1 Sold €167,500
7 Leasehold Flat Dublin 8 Sold €92,000
8 Vacant Freehold House Clara Sold €72,000
9 Vacant Leasehold House Renvyle Sold €110,000
10 Vacant Flat Blackrock Sold After
11 Investment Freehold House Loughrea Sold €127,000
12 Vacant Freehold House Lackaghmore Sold €164,000
13 Vacant Freehold Building Fermoy Withdrawn
14 Vacant Freehold House Ballyjamesduff Sold €79,000
15 Leasehold Flat Dublin 1 Withdrawn
16 Investment Flat Dublin 8 Sold €116,000
17 Vacant Freehold Building Gorey Sold €120,000
18 Investment Freehold Building Rathgar Sold €320,000
19 Investment Freehold Building Rathgar Sold €459,000
20 Investment Flat Salthill Sold €158,000
21 Investment Freehold Building Dublin 12 Sold €190,000
22 Vacant Flat Dublin 7 Sold €108,000
23 Vacant Freehold Building Dublin 9 €230,000
24 Investment Freehold Building Wexford Town Sold €470,000
25 Investment Freehold House Abbeyleix €75,000
26 Investment Flat Limerick City Sold €88,000
27 Investment Flat Dublin 8 Sold €120,000
28 Vacant Freehold House Rooskey Sold €107,500
29 Investment Freehold Building Dublin 7 Sold €1.15M
30 Leasehold Flat Dublin 1 Sold €121,000
31 Industrial Athlone Withdrawn
32 Vacant Freehold House Oranmore Sold €80,000
33 Vacant Flat Bundoran Sold €42,000
34 Leasehold Flat Blackrock Sold €470,000
35 Vacant Flat Dublin 3 Sold €68,000
36 Investment Freehold Building Rathgar Sold €485,000
37 Investment Freehold House Ballinasloe Sold €88,000
38 Investment Flat Dublin 4 Sold €137,000
39 Vacant Freehold House Limerick City Sold After
40 Vacant Freehold House Mitchelstown €170,000
41 Investment Freehold House Dublin 15 Sold €151,000
42 Investment Freehold Building Gorey Sold €30,000
43 Investment Freehold House Abbeyleix Sold €100,000
44 Leasehold Flat Limerick Sold €37,000
45 Vacant Freehold House Craughwell €130,000
46 Investment Freehold House Portumna Sold €58,000
47 Investment Freehold House Dromod €100,000
48 Investment Flat Dublin 2 Sold €127,500
49 Vacant Freehold House Athlone €50,000
50 Investment Flat Dublin 8 Sold €128,000
51 Investment Flat Monkstown Sold €137,500
52 Investment Freehold House Gorey Sold €55,000
53 Investment Freehold House Abbeyleix Sold €81,000
54 Investment Dublin 1 Sold €275,000
55 Investment Freehold Building Dublin 7 €265,000
56 Investment Flat Dublin 8 Sold €135,000
57 Leasehold Flat Cratloe Sold €112,000
58 Business Kildare Sold €560,000
59 Investment Flat Dublin 15 Sold €98,000
60 Investment Freehold House Gorey Sold €70,000
61 Investment Freehold Building Dublin 8 Withdrawn
62 Investment Flat Dublin 8 Sold €123,000
63 Land/Site Bullaun Sold €63,000
64 Investment Freehold House Blackrock Sold €275,000
65 Vacant Freehold House Dublin 9 €295,000
66 Investment Freehold Building Dublin 7 Sold €157,500
67 Leasehold Flat Dublin 1 Withdrawn
68 Investment Freehold Building Bray €375,000
69 Investment Freehold House Blackrock Sold €430,000
70 Leasehold Flat Dublin 2 Withdrawn
71 Investment Flat Dublin 8 Sold €124,000
72 Investment Freehold House Dublin 8 Sold €110,000
73 Investment Freehold House Dublin 15 Sold €127,000
74 Investment Flat Dublin 15 Sold €104,000
74 Lots sorted by Lot Number Lots: 1-74

Thursday, 22 September 2011

Allsop Space Auction Tomorrow...

Apartments and swish redbricks on offer in third mass auction.

The latest sale of distressed property by Allsop Space takes place in Dublin tomorrow and interest is high...

THE RESERVE prices are tantalisingly low but the line-up of property in the third Allsop/Space distressed auction tomorrow at Dublin’s Shelbourne hotel isn’t quite as stellar as for their previous sales.

This time there are fewer headline-grabbing period houses on sought-after Dublin roads and more apartments and commercial buildings – at the last Allsop/Space auction in July two of the biggest sellers were a large period house on Ailesbury Road in Dublin 4 and a redbrick on Iona Road in Glasnevin, Dublin 9 .

“Every auction is different but we do try to balance the types of property,” says Robert Hoban, associate director of Space, who says there are “some nice redbricks in Dublin 6” in the auction.

Of the 74 lots, more than half are in Dublin, with reserves low enough to entice investors out of the woodwork. Space says its online auction catalogue has had over 65,000 hits from prospective buyers in 122 countries, so they are expecting overseas buyers. “There’s been a similar pattern to the previous auctions in terms of the numbers looking at the catalogue but there seem to be more serious buyers this time as opposed to curious onlookers,”says Hoban,

“You can tell from the calls coming in that many of the people already know about the auction process. Around 900 legal packs have been downloaded and there have been 1,500 viewings of the properties.”

Hoban says there are more private than distressed sales this time around. It’s probably no coincidence that Allsop/Space start the catalogue with an attention- grabbing inner-city apartment. Lot 1 is a two-bed apartment on the third floor of Custom House Harbour in the IFSC on Dublin’s north quays with a parking space and a maximum reserve of €90,000. It comes with a sitting tenant and an annual rental income of €11,700.

Lot 4 is also sure to attract attention. A vacant ground floor two-bed apartment in the stylish St Lawrence development on Harbour Road in Howth, it comes with a parking space and has a reserve of €150,000; Lot 2 is a ground floor two-bed unit at Shelbourne Park, South Lotts Road, in Ringsend, Dublin 4 with a reserve of €130,000.

One of the lowest maximum reserves set in the capital is €65,000 for Lot 67, a first floor one-bedroom apartment at Bolton Court, Dublin 1 with a tenant and an annual rent of €8,400.

Not one but two freehold buildings arranged into 14 self-contained apartments and four commercial units on Prussia Street, Stoneybatter, D7 will go under the hammer with maximum reserve of €850,000 as part of Lot 29.

There are some period houses in the mix too. Number 67 Rathgar Road, in Dublin 6 is divided into 10 residential units has a maximum reserve of €330,000 while number 28 St Alphonsus Road, Drumcondra, Dublin 9 has a reserve of €250,000 and an annual rental income of €48,480 .

Outside Dublin, in Wexford town, two apartment buildings called Tuskar House, on St John’s Gate Street, with six two-bed apartments, have a reserve of €290,000. Nine of the apartments come with tenants.

In Bray, Co Wicklow, Rosslea on Adelaide Road, a freehold mid- terrace period house is internally arranged to provide five self-contained apartments and has a reserve of €375,000.

A two-bed apartment at Pointe Boise in Salthill, Co Galway, with a €9,000-a-year rental income, has a reserve of €90,000. A two-bed, second-floor apartment, 8 Sea Spray Road, Bundoran, Co Donegal, has a reserve of just €20,000 – the lowest reserve of the auction.

Hoban is expecting a similar mix of attendees to previous auctions. “In addition to investors last time around, there were also owner occupiers, some of whom had sold before the downturn and were renting and financially in a position to buy. A number of properties were bought by ex-pats, and by parents buying places for their children at college.”

Report by EDEL MORGAN - Irish Times

View the Allsop Space September 23rd Auction Catalogue

Wednesday, 21 September 2011

Record 70,000 Behind On mortgage...

Record 70,000 now behind on mortgage payments...

MORE borrowers will be pushed into arrears on their mortgage payments because of rising unemployment, a ratings agency predicted yesterday as new figures show the number in trouble surged to 68,248 in July.

That figure represents an increase of 12,485 in the numbers who are behind by three months or more on their mortgage payments when compared with last April.

Overall, almost 9pc of homeowners are now in arrears. Ratings agency Moody's said it expected more borrowers to be pushed into arrears as jobless numbers increase.

Moody's figures tend to be more up to date that those of the Central Bank which last month said arrears had risen to 7.2pc in June, leaving 55,763 homeowners three months or more in arrears.

The Moody's figures imply that 22,231 have not paid their mortgage for a year or more, calculations based on their statistics show. These homeowners are at serious risk of losing their homes, home-loan experts said.

Higher arrears figures will increase the debate around the need for long-term solutions for indebted borrowers.

Social Protection Minister Joan Burton is expected to outline tomorrow a proposal from her department for a mortgage review office, similar to John Trethowan's credit review office that probes refusals of bank credit for small firms.

Such an office would review how banks handle mortgage arrears cases.

Critically, it is not expected to recommend any broad debt forgiveness for struggling householders.

Central Bank governor Professor Patrick Honohan suggested at a recent Oireachtas hearing that a mortgage debt office to review decisions by banks on their handling of arrears cases may be needed.

The Department of Finance committee, headed by accountant Declan Keane, is set to report its findings by the end of this month.

Prof Honohan ruled out a blanket debt forgiveness scheme but said that banks were looking at temporary shared ownership arrangements with borrowers.


AIB said last week it was writing off mortgage debts in a few cases but only where houses had been repossessed.

Bank of Ireland said it did not have a policy of writing off debt for borrowers who could not meet mortgage repayments.

Moody's said it expected the level of arrears to continue rising.

The ratings agency said the number of people out of work would rise to 14.3pc, from 13.6pc last year.

Falling house prices will increase the size of losses on defaulted mortgages, Moody's said, adding that house prices had already fallen 43pc from the peak of the housing boom in 2007 to July this year.

There are about 777,000 residential mortgages in the State amounting to €115bn in debt.

Report by Charlie Weston - Irish Independent

Sunday, 18 September 2011

Ireland Needs More Homes...

Ireland 'needs 30,000 new homes per year'...

Ireland will need to build over 30,000 new homes per year over the next 15 years, an economist has claimed.

Marian Finnegan of property auctioneer Sherry Fitzgerald told the National Housing Conference today that Ireland’s growing population would require substantial additional housing between now and 2026.

“The latest census figures show that Ireland’s population has risen to 4.58 million and it is expected to increase to 5.1 million people by 2026,” Ms Finnegan said.

“Based on this population growth we can anticipate that there will be a need for an average of 30,200 new homes to be built per year over the next 15 years.”

The conference, organised by the Department of the Environment, Community and Local Government and the Royal Institute of the Architects of Ireland (RIAI), is taking place in Dublin Castle’s Conference Centre.

The comments come despite figures which show that there are more than 30,000 properties in the country which are either incomplete or vacant.

However RIAI President Paul Keogh said that the supply of empty units – many in so-called ‘ghost estates’ countrywide - would not meet future demand, as many were not located in growing centres of population.

“There is a perception that there are plenty of unoccupied housing units to meet the demand for new homes but that is not actually the case,” said Mr Keogh.

“It is projected that we will build around 10,000 units in 2012 – most of which are one-off houses in the countryside – yet the need for new homes is almost three times that and is concentrated in the Greater Dublin area where supply is expected to become quite limited from next year.

“So we need to start planning now to address the needs of our growing population for homes, schools, local shops and community infrastructure if we are not to face the type of major problems we have been facing over the last few years.”

Report -

Wednesday, 14 September 2011

Eviction Row Traveller Owns Ghost Estate!

Traveller in eviction row owns Limerick ghost estate...

THIS is the 33-unit housing estate in Co Limerick owned by one of the Irish Travellers living on the controversial and illegal Dale Farm camp in England.

The substantial detatched houses, which could sell for over €400,000 each, have been under construction since 2004.

Irish Travellers living on England’s largest illegal halting site at Dale Farm in Essex face eviction next week.

The Traveller, who can’t be identified because he shares the same name with five other Travellers on the Dale Farm site, became the title holder of the ‘ghost’ estate in Rathkeale, Co Limerick last year.

It is one of the few estates in the country where construction has continued -- albeit at a slow pace -- since the collapse of the Celtic Tiger.

A prior applicant successfully lodged planning permission with the local authority for the houses in Rathkeale, where there is a large Traveller population.

Work is still continuing at the housing estate at Ballywilliam North on the outskirts of Rathkeale after Limerick County Council granted the Traveller permission to extend the planning application when he applied through a separate agent last year.

More than half of the Rathkeale houses have been completed but it is unknown if any have yet been sold.

Under the original plans submitted in 2004, a planning application was made for 33 dwellings and permission was granted by the council in April 2005.

Last year, an application was made to the local authority to extend the application to allow construction work on the multi-million-euro site to continue.

The request was granted and substantial works have been carried out since.

In Rathkeale few people are prepared to speak on the record about the well known Traveller.

The Irish Independent understands that he is being backed by other members of the travelling community in Rathkeale in the development of the homes. The silent investors are said to be based across Europe.

Up to 400 people face eviction from an illegal part of the land bank at Dale Farm in Basildon in Essex next week.

Despite claims by Travellers that 86 families at the Dale Farm site in Essex, England, will be left homeless if evictions proceed, locals in Rathkeale say that a large number of the travelling community based in Essex have previously lived in the town and regularly return there.


President of the UK Gypsy Council Richard Sheridan said the families would not be returning to Limerick should the eviction proceed.

Illegal plots began appearing at Dale Farm, which is built on green belt land near Basildon, Essex, about 10 years ago.

Up to 400 people occupy the six-acre site and the community has built roads and connections to electricity.

Neighbouring residents, who want to see the site vacated, said it had been transformed into the biggest halting site in Europe.

Basildon Council said it would push ahead with plans next Monday to restore the site. The eviction -- which will cost up to €20m -- is being backed by British Prime Minister David Cameron.

It also emerged yesterday that Basildon Borough Council had paid housing benefits for some of the Dale Farm travellers directly to a landlord based in Rathkeale.

John Flynn, 55, bought the former scrapyard at Dale Farm for £120,000 ten years ago and owns about five caravan pitches on the site.

Money was paid to Mr Flynn at an address in Rathkeale to cover the rent of his tenants, who were allowed to claim housing benefits, despite living on an illegal site, the council admitted to the Daily Mail today.

Cllr John Doran of Basildon Council today called for an urgent investigation: “I have long called for an inquiry into the funding of the site.

“This new information needs to be looked at by the council to compare it with any homeless applications and housing benefits claims.

“I do not want to prejudice any investigation, but if any of the same people are involved, it would have huge implications,” he said.

Barry Duggan and reporters (Photo - Irish Independent)

Tuesday, 13 September 2011

Number Of Ghost Estates Grows!

Number of 'ghost estates' hits 2,881...

THE NUMBER of “ghost estates” has increased, figures to be published next month will show.

Colm Ó Ruanaidh, senior adviser on social housing at the Department of the Environment, told the housing policy conference that the count for this year was not yet complete, but semi or unoccupied housing developments showed there had been an increase from 2,846 last year to 2,881 this year.

A departmental spokesman said Mr Ó Ruanaidh was working from “raw data” that would be finalised and published next month.

“The additional 35 developments constitute an increase in the number of dwellings in ghost estates from 179,230 last year to 179,900,” Mr Ó Ruanaidh said.

Some 230 unfinished developments have met the criteria to benefit from a €5 million fund to address immediate safety concerns. A guidebook for residents in unfinished estates is to be published in coming weeks.

Marian Finnegan, chief economist with Sherry FitzGerald, said the collapse in housing prices singled Ireland out as having had the worst crash in house prices in the world since the second World War.

The bottom had not yet been reached, she warned, adding the peak-to-trough fall in prices would be of the order of 65 to 70 per cent, with one-bedroom apartments in badly serviced areas suffering the worst collapse.

She predicted there would be an average per annum demand for 30,000 homes between now and 2026, given a projected population growth to 5.1 million. “There will be a recovery in the housing market. There is still some way to go in prices falling.”

Report by KITTY HOLLAND - Irish Times

NAMA Not Housing Poor People...

NAMA under fire for failing to help house poor people.

ENVIRONMENT Minister Phil Hogan is embroiled in a row with NAMA over whether the agency is doing enough to house poor people.

The minister said he was unhappy with the toxic assets agency for not selling properties under its control at a discount to his department.

These could then be used to house those on council housing waiting lists.

But the department was unable yesterday to identify specific areas in need of social housing where NAMA had a stockpile of suitable properties.

And NAMA has no specific legal obligation to help to resolve the social housing problem.

The law setting up the agency says that one of its purposes is "to contribute to the social and economic development of the State".

But there is no mention about handing over specific numbers of properties for social housing.

So far just 58 apartments in the Beacon South Quarter, Sandyford, which had been in NAMA, have been purchased by a voluntary housing group at a discounted rate for social and affordable housing.

Mr Hogan said NAMA was more interested in making a profit on large-scale developments rather than fulfilling the "social dividend" set down in its business plan.

"We have spoken to them but with very little success," said Mr Hogan, who was speaking at the National Housing Conference in Dublin Castle yesterday.

"The Minister for Finance and the Government generally will have to engage with the view to getting a better outcome.

"We are finding it very difficult to get sufficient properties for people on the housing list."


Mr Hogan said that " thousands and thousands" of extra people had joined this list.

But last night a NAMA spokesman told the Irish Independent that promoting social housing was a key priority for the agency and that it was working "very closely" with the department in this regard.

There are about 100,000 households on the local authority housing waiting list, up from 58,000 in 2008.

Those who get social housing pay a fixed rent to a local authority -- which then takes responsibility for the maintenance of the property.

Report by Treacy Hogan - Irish Independent

Monday, 12 September 2011

Celtic Tiger Madness...

PLANNING AND THE RING OF KERRY: YOU CAN almost hear Jackie Healy-Rae saying it – “the plannin’ is terrible round here”...

What some Kerry people mean by this, of course, is not that the landscape has been chewed up by haphazard housing, but that it can be damned difficult to get permission to build in certain areas.

The stark statistics do not bear this out. Altogether, there are at least 34,000 one-off houses in the countryside, accounting for more than half of Kerry’s housing stock or seven per kilometre of public road. That’s an awful lot of houses strewn around the landscape of a county that was recently voted the “most scenic” in Ireland.

Kerry’s senior planner Paul Stack has been outspoken about the “incredible damage” done by the proliferation of housing. After an absence of 14 years, he “couldn’t believe what I came back to, planning went out of control”.

“It’s like the Celtic Tiger – we knew we were wrong and we kept going,” he told councillors in July. “Eighty per cent of the visitors to Co Kerry come here for the quality of the landscape and the unspoilt scenery,” he said. “I drove around areas such as the Cotswolds [in England] and to see the tourism product they have in comparison to what we have done to our tourism product is embarrassing and upsetting.”

A recent tour of the Dingle and Iveragh peninsulas confirmed that very few places have been left unspoilt by the intrusion of housing – not just one-offs, frequently built to capture splendid views, but also clusters of neo-traditional holiday homes on the outskirts of towns and villages and forlorn, unfinished housing estates.

It’s all evidence that the pro-development lobby generally got its way during the boom, despite the efforts of An Taisce, local planners and others to stop the worst excesses. In Kerry, as elsewhere on the western seaboard, there was, and still is, a visceral resentment of “outsiders” putting their oar in.

The Kerryman recently reprinted an archive report from 1981 in which “an angry Mr Healy-Rae” railed against An Taisce for objecting to planning approvals for one-off houses. “I don’t know what their function is or who set them up, but if I had the power I’d break them up . . . An Taisce has no role to play,” he said.

“I dont give a damn about the law of the land. We are quite open to criticise the law if we think it’s unreasonable,” said the man who later served as an Independent TD for South Kerry. “What the hell does An Taisce know about an application where a man wants to build a house for himself on his own land and why they should interfere?”

In Healy-Rae’s home village of Kilgarvan, where the senior citizens’ sheltered housing scheme is called Healy-Rae Park, there’s a small vacant cluster of holiday homes that was finished too late to cash in on the property bubble. Much larger schemes on the outskirts of Dingle, Killorglin and Waterville are also empty and fenced off.

Healy-Rae’s son Danny, who is a councillor for Killarney, has been one of Kerry County Council’s biggest plant-hire contractors over the years, mainly for road schemes. These schemes were high on the list of his father’s confidential deals to support Fianna Fáil-led coalitions since he was first elected to the Dáil in 1997.

Bends in roads have been straightened, bridges and roads widened to cater for tourist traffic around the Ring of Kerry and elsewhere in the county; these works are ongoing. Worst of all, long stretches of stone parapet walls have been replaced with pre-cast concrete sections in highly-scenic areas such as Coomakista and Moll’s Gap.

The road leading down to Dingle from the Connor Pass was not only widened, but the new gulley running alongside has ugly corrugated heavy-duty black PVC drains protruding above the surface every 50 metres or so. And because the road is now wider, motorists are prone to accelerate – making it more dangerous rather than safer.

Part of the charm of travelling around Kerry is that you have to negotiate your passage with other motorists travelling in the opposite direction on narrow country roads; if the oncoming driver is from the area, he or she will usually know where to pull in, allowing you to pass and it’s all done with understanding.

The ditches were ablaze with fuschia and montbretia; earlier, it would have been gorse. And because this summer has been so wet, the fields are greener than usual. In sheltered areas, such as Kells Bay and Parknasilla, tropical plants still thrive – although cordyline australis took a battering from last winter’s prolonged icy weather.

More alien in the context of Kerry’s landscapes are the suburban-style gardens in front of nearly every bungalow, with lawns and shrubbery but rarely trees that would provide screening and shelter. At the Blasket Islands visitor centre in Dún Chaoin, natural meadows have been sacrificed for the suburban fetish of neatly-mowed grass.

A disjointed mansion, built by singer Dolores O’Riordan, and topped by a tower, can be seen from almost everywhere. Other new houses are less ostentatious, but all stand out in the almost tree-less landscape – because they’re mainly painted white. Had they been built of stone or painted light green for example, they would be less obtrusive.

In Ballinskelligs, three barracks-style terraces of holiday homes occupy a prime site next to the village’s only hotel. Built on the seaward side of the road, and fronted by nothing more than a tarmac car park, they have blotted out scenic views cherished for decades. Here again, as elsewhere in Ireland, greed triumphed over the public good.

But for rip-roaring Wild West sprawl, the townlands of Faha and Firies – some 10km from Killarney – can’t be beaten. As I noted in 2004, whole fields where there used to be sheep or cattle are now colonised by houses, with hedgerows replaced by concrete block walls, post-and-rail fences, elaborate stone walls and neo- classical balustrades.

There is an extraordinary contrast between the raw blanket bog of the uplands and the heavily wooded areas on the approach roads to Kenmare and Parknasilla; it must have something to do with the Kenmare Estate. Other relics of the past include the tunnels and decaying viaducts of the old railway line to Cahersiveen.

In general, Kerry’s towns are far too decorative, with a profusion of hanging baskets and projecting signs; there are so many on Henry Street, in Kenmare, that you can barely see anything. “The towns are like overdressed salads,” an architect friend observed. Some buildings have also been ill- advisedly stripped to reveal rubble stone.

But even in posh Kenmare, the recession is evident from a “for sale” sign on a prime site in the town centre with planning permission for 13,000sq ft (1,208 sq m) of retail. Plans to redevelop the almost post-nuclear derelict hulk of the former Waterville Beach Hotel at Reenroe also came too late to be a runner in the current climate.

The former Great Southern hotel in Parknasilla was refurbished and extended at enormous expense by Bernard McNamara at the end of the boom period. Once favoured as a holiday retreat by Bertie Ahern, it has been rebranded as the Parknasilla Resort and Spa but retains its elegance

Paul Stack believes that the penny has dropped about unsustainable development. Starting in 2009, the Kerry County Council was the first to dezone land designated for housing – under local area plans (Laps) for Castleisland, Kenmare and Killorglin. So far, 1,000 acres has been dezoned, and there’s more to come in Dingle and Cahersiveen.

“Our members bought into the ‘core strategy’ principle before anyone else. They had to vote for dezoning of those lands, and that took a lot of guts,” he says. “We’re singing from the same hymn sheet now, not just because there’s less pressure for housing, but there’s also an awareness now that maybe we need to stop and think.”

The latest draft of Kerry’s “core strategy”, which identifies housing in the county and the land needed to accommodate it, will be put to councillors next Monday. It estimates that land zoned in excess of what’s actually needed amounts to 1,700 hectares, or just over 4,000 acres. How the councillors deal with that will be the real test.

“We have a very strong county manager and team of officials, and the members do listen to us,” Stack says. “We’re spelling out where we’re at now. And in this scenario, we must learn from what we’ve done and don’t continue doing it. We don’t want to continue to perpetrate damage to this county where tourism is the biggest employer.”

Report by FRANK McDONALD - Irish Times

Sunday, 11 September 2011

Mortgage Interest Relief Supplement Facts...

Mortgage misery index shows commuters' pain...

DURING the Celtic Tiger era, the most high-profile example of how the country was finally wealthy was the booming numbers who constituted Ireland's 'rich list'.

However, the new realities of post-boom Ireland are epitomised by a county-by-country breakdown of the numbers receiving Mortgage Interest Relief Supplement (MIRS), that has just been compiled by the Department of Social Protection.

MIRS is a scheme whereby the Department of Social Protection pays the interest part of a mortgage when householders become unemployed and can no longer meet their payments.

Such payments are supposed to be short term -- although in practice this is no longer the case -- and are meant only to cover the interest element of the mortgage.

After a modest start to the scheme, the numbers availing of it -- and therefore its cost -- have almost quadrupled.

Unsurprisingly, the department's figures indicate that the two counties with the largest numbers of citizens in receipt of the relief were Dublin and Cork.

But when it came to the Misery Index, which traces the top sufferers from the collapse of the property boom, other high population centres, such as Galway and Limerick, area lowly seventh and eighth on the department's mortgage map.

Instead, recipients of MIRS are overwhelmingly concentrated in the 'commuter constituencies' of Kildare, Meath and Wexford, while the figures are also surprisingly high in counties such as Tipperary and the Taoiseach's own constituency of Mayo.

The political consequences of the collapse of the housing market are illustrated by the fact that Fianna Fail does not currently have any Dail seats in Dublin, Kildare or Meath and has just one in Wexford.

The statistics reveal that, astonishingly, five counties have more than a thousand households that are in receipt of the supplement.

In a grim illustration of the extent of the housing collapse, the list reveals that an estimated 19,720 houses will be in receipt of the supplement in 2011 at an estimated cost to the Exchequer of €77.2m.

It should be noted that whilst households technically receive the supplement, the money actually goes to the banks, in what amounts to another taxpayer-funded subsidy.

The figures supplied by the department also reveal that when the numbers receiving MIRS are combined with those who are in receipt of rent supplement, almost 120,000 households are receiving housing support from the State at a cost of more than €520m.

When it comes to mortgage interest relief, the latest statistics also reveal that during the boom years of 2002 to 2005 the numbers availing of the scheme fell by 10pc, 16pc and 3pc respectively.

However, this was more than counterbalanced by increases of 97pc in 2008 and 87pc in 2009 -- although the rate of increase has subsequently flattened out.

Nevertheless, increases of 19pc in 2010 and an estimated increase of 10pc this year means the numbers availing of the scheme over the previous three years have almost quadrupled.

Report by JOHN DRENNAN - Sunday Independent

Saturday, 10 September 2011

Buy A House & Get One Free!

Beat the recession: get two houses for price of one...

THERE was a time when you had to queue around the block to ensure you could buy a house in a new housing estate.

But now you can 'Buy One and Get One Free'.

An estate agent yesterday launched the novel offer on houses in Co Donegal -- with a price tag for both of €100,000.

Two sets of properties went on the market in Letterkenny and Milford at that price with a third set of semi-detached homes being offered for €120,000.

The house at No 28 Coopers Crest in Milford is a three-bedroom semi-detached home with a fitted kitchen, fireplace and a garden.

And anyone prepared to fork out €100,000 for the home will get No 29 absolutely free.

The same deal is on offer for four-bedroom semis No 41 and No 42 Gleann Rua in Letterkenny, with No 37 and No 38 slightly more expensive at €120,000.

Unlike other bargain sales of properties around the country in recent times, this sale comes with a good news story.

Estate agent Brendan McGlynn from said: "This isn't a ghost estate sale. In all cases, these are the last properties on these estates and the developer wants to get them sold so that the estates are finished."

Report by Greg Harkin - Irish Independent

Thursday, 8 September 2011

Testing Out The Nama Factor...

The Nama factor is about to be tested this Saturday with the launch of 13 apartments in Belarmine, Stepaside on Dublin’s southside. This will be the first of Castlethorn Construction’s housing developments to be sold by Nama and the first significant Nama disposal of new homes on Dublin’s southside.

The new homes are in Belarmine Hall (below) and Belarmine Plaza. Sherry FitzGerald has been appointed the selling agent and is quoting minimum reserves from €119,950 for the four one-bed apartments, reserves from €159,950 for a pair of three-bed apartments and from €189,950 for six three-bed units. By “minimum reserve” they mean don’t bother trying to haggle the prices downwards at the launch.

About 30 of the units were sold in early 2009 when prices for two beds were €200,000-€250,000.

The apartments are fully finished with appliances and BER certs and come with a designated parking space per apartment.

Ivan Gaine of Sherry FitzGerald says the launch will be a good test of the market now that Nama is expected to put more new homes stock on the market. Another Nama launch at Beacon South Quarter is imminent.

He is expecting a good response to the Belarmine launch on Saturday. “We have a good product and the prices are extremely competitive. It is below-cost selling.”

Report - Irish Times

Wednesday, 7 September 2011

ESRI Keeps Getting It Wrong!

ESRI has been getting its forecasts wrong for years...

In Irish economic circles, you tend to take much more stick from having been right than having been wrong. Those economists who got it wrong in the boom and believed the hype about the soft landing, such as the ESRI, still manage to grab front-page headlines. In contrast, those who called it right are put under constant scrutiny and are still being dismissed by the establishment as cranks, celebrities or, at best, lucky opportunists.

The "insiders" rally round each other even when they are wrong and the "outsiders" are denigrated. In the economics world, for what it's worth, the outsiders' crime -- the crime of being right -- is particularly dangerous precisely because it exposes the limitations of the insiders. This type of insider/outsider prototype is commonplace in Ireland.

Yesterday, we saw more of this type of behaviour where the establishment insiders carry on with their forecasts despite their appalling records.

I woke up yesterday to hear the ESRI on the radio telling us that things would be grand in the next three years provided we just keep ploughing the same austerity furrow. Someone very clever, not sure if it was Albert Einstein or Roy Keane, once said the definition of stupidity was doing the same thing over and over again and expecting different results. This is what is happening right now.

Unemployment and emigration are rising, mortgage arrears are up all over the country and yet we are supposed to believe that after three more years of this, all will be hunky dory.

The interesting thing about the ESRI is that it has been getting things wrong for years, with apparent impunity.

For example, back in the boom, as late as 2007, one of the chief bottle-washers at the ESRI dismissed the chances of a property crash. This was picked up by a property editor who said: "If he believed there was a crash coming then he would sell his house and rent it back. Tellingly, he is not doing this because he believes, as I do, that if (and that is a big 'if') the market is going to crash, it will do so in a patchy, selective way which will not impact to any great degree on many of the existing homes in Ireland."

What drivel!

Yesterday, the ESRI published its medium-term forecast and it was taken as gospel. But why is this? Why does no one take the ESRI up on its record? Look at some of the other forecasts it has made in the past.

For example, in December 2005 -- when the odd non-establishment maverick was saying the economy would crash -- the ESRI produced a long-range forecast (similar to the one it produced this week), which was supposed to tell us where we would be by 2010.

According to its "worst-case scenario", Irish GDP would be €196,876m; in fact, it is €166,345m. At worst, according to the ESRI, our debt-to-GDP ratio would be 16pc; by 2010 it was actually 66pc and rising rapidly.

It forecast that the 2010 Budget deficit would be, at worst, 0.3pc GDP; it was, in fact, 14.3pc of GDP.

So, to use the vernacular, the ESRI, writing in December 2005, hadn't really got its eye on the ball.

Remember, I've used their "worst-case" scenarios here.

The "high-growth scenario" in 2005 said that GDP would be at €208,718m, the debt/GDP ratio would be 15pc and unemployment in 2010 would be 123,000. Unemployment was three times that.

Even by 2008, when fellas in pubs could feel the heat, you would expect the dozens of well-paid economists in the ESRI to be twigging that something was going pear-shaped, but no, the ESRI released a forecast for the Irish economy, predicting that for the next seven years Ireland would "grow by 3.75pc on average per annum".

It went on to say that, after a blip in 2009, "the economy would continue to outperform its EU neighbours". Consistently since 2005, it said that a "soft landing" in the property market was the most likely outcome, with a collapse a "possibility" . . . but just that.

The point here is not to have a go at the ESRI -- we all make mistakes -- but to show that trusting an institution like that, which hasn't exactly covered itself in glory, might not be the cleverest thing to do.

If this recession has told us anything, it is that the experts know nothing. Yet some sections of the Irish media are still respectful of institutions that are not up to the job. Why is this? Why do we pay for people like this? After all, they are on the public payroll, which means your taxes pay for these guys who call themselves professors, even though they don't have any students to profess to.

It is time for an audit of these types of outfits to see what they do, whether they should be on the public payroll and maybe ask Colm Mc Carthy to have a gander at them to see where the value is to the taxpayer. If these types of public organisations -- where the salary scales are close to the top range given the amount of professors working there -- are not up to the job, it undermines other public services that are.

It is easy to lump all public-sector employees into one heap, the well-paid ones and the not so well-paid ones because of the conspicuous failure of those at the top.

A similar argument goes for the retirement package of the head of the civil service, who trousered more than €700,000 yesterday as part of his golden handshake. Anyone who knows about how this country works, will know that the real power lies in the "permanent government" -- the head bucks of the civil service.

Yet, in terms of economic management, the Department of Finance and Central Bank, for example, have been worse than useless in the past 10 years.

Contrary to popular belief, the Irish banking and housing crisis did not start in 2008; it started in 2000 when the banks were allowed to go mad and the government used this credit windfall to fatten itself up and fuel the nonsense. All the while, the establishment bleated the "soft or softish landing" mantra while paying themselves fortunes.

The slump in the economy should lead to a clearout of those in positions of power who didn't do their job. This is what is meant by getting value for money. The more prominent the person, the more responsibility they should take.

Politicians have been humiliated, so too have bankers -- and some of them should go to jail. In Iceland, they put their politicians on trial; here we put them on TV3. But they are taking flak.

Yet, all the while, behind the scenes, secure with their bullet-proof contracts and their gold-plated pensions, the real establishment continues to draw huge salaries in the shadows.

They answer to no one, are threatened by no one and continue to operate with impunity while they tell the rest of us to tighten our belts.

Report by David McWilliams - Irish Independent

Tuesday, 6 September 2011

Ireland's Property Boom Hangover!

The hangover of Ireland's property boom: Abandoned ghost estates and lifeless houses stripped of their worth...

Anyone against debt forgiveness should read this dispatch from a ghost estate... and thank God it's them instead of you...

Rhoda Brogan stands at the front door of her three-bed semi, quietly surveying the abandoned, lifeless houses that surround her.

In the centre of the estate there is a green area, wildly overgrown with weeds and nettles and circled by a cracked road and street lights that don't work. It is eerily calm; there are no cars driving around, no children playing - the only sound is the wind.

All of a sudden, Rhoda’s eyes narrow and focus on an abandoned home directly across the road and she considers something for a moment before noticing the open windows.

‘Oh my God! Someone has got into that house since I left this morning,’ she says, quickly crossing the street with her four-year-old daughter, Saoirse, in tow.

Around the back of the empty home, she finds a sliding door forced open and inside, the radiators torn from the walls. ‘I reckon they’ll be back,’ she says calmly of the looters – a fate that she and a handful of neighbours are resigned to.

Stripping unsold houses of anything valuable – flooring, carpet, bathroom suites – is a common occurrence in the estate and, these days, nobody seems surprised, let alone troubled.

‘I’m just glad there are no sleeping bags in there,’ she says, mumbling something about a fear of squatters before casually walking back across the street.

The Glenall development in Borris-in-Ossory, Co. Laois, is just one of ­Ireland’s 1,655 ghost estates. If they were entirely empty, they would be simple monuments to a building boom that went too far.

But many, including Glenall, are unkempt and dangerous – and home to a trickle of unlucky buyers caught smack in the middle of the property crash.

Planning permission at Glenall for a total of 91 houses was initially granted in 2005 to the Athlone-based development company Vernotico. Construction began later that year. The original plans included five different types of idyllic family home, from three-bed semis priced at €195,000 to four-bed detached homes selling for up to €335,000.

The picture-perfect life presented in advertising notices offered a residential utopia within 25km of Portlaoise yet nestled snugly in rural Ireland, against a backdrop of the Slieve Bloom Mountains.

One newspaper article announced, in 2008: ‘The development includes ornate street lighting, landscaped and planted areas... A large on-site crèche is being provided to facilitate the modern working family.’ None of this would ever be built.

It doesn’t take long to drive through Borris-in-Ossory, with its staple quota of pubs, a hotel, a chipper and four modern housing developments. In Glenall, just six of the 26 houses are occupied, by a total of 15 people. Each resident has a story of broken dreams and each a view of their own nightmare.

‘We are stuck here. There is nothing we can do. We can’t move, we can’t sell, we are stuck,’ says Rhoda, sitting in her kitchen, which overlooks a manicured garden, out of place in a row of overgrown wastelands. They sold us a dream and now it’s gone.’

The Brogans – Rhoda, 36, her husband John, 50, and their four-year-old daughter – paid €215,000 for their home three-and-a-half years ago.

Rhoda is a native of Borris-in-Ossory, while John comes from Tyrone. They used to live in a thatched cottage on the fringe of the village but when they could see the inevitable end of the property bubble, they decided to sell up to fund a mortgage-free life in Glenall.

‘The houses were built at the time and there were two showhouses,’ Rhoda recalls. ‘There was the cheaper one and the more expensive one. We had a small child so we went for the cheaper one.

‘We were really excited – it was a brand new shiny house. It’s like a new car – you can’t wait to get into it and show it off. While we were waiting, we were living with my parents. The house we had picked wasn’t ready yet and I was there every night looking at it. I couldn’t wait to move in. Now I’m sorry we did.’

The family moved in in March 2008 and shortly afterwards began to fear the worst when there was no sign of more work being done or new neighbours arriving. About three months later, Rhoda hit rock bottom.

‘There was no one moving in and it was a wilderness,’ she says.

‘If I sold this in the morning, I would have to give the bank €63,000 because the developer didn’t pay them for the land.’

It costs a lot to heat their property because most of it is lost through the walls to the vacant shell of a house next door.

But they do what they can. Recently, John bought a second-hand ride-on mower for €600 so he could cut the grass in the estate but now it’s back to a familiar, daunting height.

The houses at Glenall – with their dazzling white walls, wooden floors and well-finished rooms – are attractive and seem well-built. The ones that were completed are lined up in three rows, surrounded on all sides by derelict sites where the rest of the scheme was due to be located.

The various house types were to be labelled with birds’ names such as ‘The Sparrow’ or ‘The Robin’ and were sold as they were built. According to residents, nobody bought off the plans.

Old signs with arrows leading prospective buyers to showhouses flap in the wind; driveways appear both aged and unused at the same time.

In almost every corner there are concrete chunks, metal pipes, building blocks and rubble; back gardens that resemble something from a post-apocalyptic film can be viewed directly through empty hallways from the front windows.

Then, in one corner, a showhouse that for some reason managed to avoid the looters (probably due to its close proximity to two occupied homes) gives a glimpse of how things were supposed to be: a smartly decorated interior with couches and fireplaces, a kitchen table and chairs – everything but life.

The occupied properties are scattered around the development but the front row – which is visible from the main road and features what were supposed to be the ‘prize houses’ – lies idle.

Allowing children out to play here is not easy. There is raw sewage that was only recently fenced off. Bricks and rubble clutter the road and strangers often drive in to steal.
‘It used to bother me more but you can’t let it get to you. You could but what’s the point?’ asks Rhoda.

‘We tried to get answers from the developers first. I contacted them but we got no emails or phone calls back. We tried the Health and Safety Authority because of the state of the place and they said that because the builder wasn’t gone three years, they couldn’t do anything.

‘Then I went to the council and they basically said the same thing. You might as well be beating your head off the wall trying to get to the developers – the cat would have more answers. I tried many times.

‘The developers used to answer back in the beginning when they were still selling the houses but we didn’t realise at that time that we were in such hot water.’

Rhoda says that every weekend, cars constantly drive in just to look around at the ghost estate. ‘Maybe they are locals who have heard about it and want to see what’s being done,’ she suggests.

Local councillor John King, who has been vocal on the subject, has asked how permission for such a development in such a small town was given.

‘They should have developed industry here first and then housing,’ he said, walking around the weed-laden footpaths.

Laois County Council, praised for its efforts to help this small community, filed an enforcement order against the developer, Vernotico, and its directors last November –claiming they were in breach of planning permission because the place had been left in such a state.

With the help of €32,900 in Government funding, the council carried out some essential safety works, including raising a fence to block access to the collecting sewage pools. It also covered up dangerous pipe holes in the ground, 10ft deep concrete pits where children would commonly play and which locals had tried their best to seal off.

But the street lights don’t work, the roads are destroyed and the empty houses, many of them unlocked, are routinely raided by strangers who arrive in vans.

In the past few weeks, according to 28-year-old resident Adrian Moore, an Irish Rail employee who shares his house with a friend, somebody stripped one row of houses of oil tanks and burners. He says: ‘There are people driving round in the middle of the night just taking stuff. In that house over there, all the baths and sinks have been taken. You see them but what can you do? It’s a free-for-all.’

Adrian bought his house when the estate was charming and full of promise but now he is paying a heavy mortgage on a property that will never recoup its value.

‘At the time, it was newly built and it looked really nice. Then when I bought, little else seemed to happen,’ he says, echoing a common story here.

In the good old days, many of the homes proudly displayed ‘sold’ stickers in the windows, an indication that all was well in Glenall. But when a trickle of residents arrived with their possessions in 2007, they quickly began to notice things going sour.

The following summer, work on the site stopped as usual for the builders’ holidays, leaving about four unfinished homes and 10 sets of foundations behind them. And they never came back.

‘I was one of the first in, in about 2007. It was a busy building site with “sold” written on nearly every window in the estate, which turned out not to be true,’ says 58-year-old Carmel Hollywood, a retired dressmaker who lives alone.

Originally from Ballyfermot in Dublin, she moved to Borris-in-Ossory from Athy, Co. Kildare, for a mortgage-free life.

‘You were promised so much and I bought into it,’ she says. ‘Gradually, one or two more people moved in. Then everything just stopped in their tracks. It’s almost a feeling of being abandoned: that you live in a ghost town.’

Pointing towards the field with the raw sewage, she explains: ‘We have seen kids in there playing. I wouldn’t let my dogs over there because they came back once and they were stinking – I had to scrub them. You could actually go over and see it running.’

Dismissing the government’s recent announcement that those in ghost estates would be exempt from the €100 property tax, she says: ‘It’s an insult really. Do they really think that €2 a week is going to pay us for this?’

The few homeowners that live in Glenall have sought reassurances from the developer but their pleas have fallen on deaf ears.

Vernotico Developments Ltd was registered in 1999 and is based in Athlone, Co. Westmeath. The company – which lists its directors as Mary and Patrick Collins, both from Swords, Co. Dublin – is still active and continues to file accounts, though its exact involvement in other projects, if any, is not clear. Neither Patrick nor Mary Collins could be reached for comment.

Angela Farrell, of Dublin-based Farrell Solicitors, was involved in selling the houses. Miss Farrell did not respond when asked to comment by the Irish Mail on Sunday.

Two of Glenall’s occupied houses are now on the market, although there is little chance of them being sold. They are the only two houses that appear to be available to buy. Nobody is sure whether the unoccupied houses are still for sale but appears that anybody who wants to buy one will have a hard time contacting the developer.

A woman answering a mobile-phone number listed on the sales sheets for the original broker, AC Bertles, said she did not wish to be contacted again, that she had worked briefly for Miss Farrell but that it was a long time ago. An online phone listing for the company reached a residential house in Swords, Co. Dublin.

Another listed number rang straight through to Farrell Solicitors. When asked about the Glenall estate, a woman said: ‘I don’t know [about AC Bertles] to be honest; it could be going back a few years.’

Mystery continues to surround what happened at Glenall and what may happen next. It is believed that Vernotico – a classic speculative developer – simply borrowed too much, built too much, ran out of money and could not meet its debts.

Then came the crash. Sinn Féin TD Brian Stanley, who has been fighting on behalf of the residents, explains: ‘The legal owner is the development company. In my opinion it is in financial difficulty and is in default of the planning permission [due to incomplete works].

‘The situation is that it was playing the game of borrowing, building and selling and trying to keep ahead of the posse. The probability is that three or four years ago, things started slowing down and it couldn’t sell [the houses].’

Mr Stanley has raised the issue in the Dáil. Meanwhile, Laois County Council hopes that it can facilitate a resolution. A spokesman says: ‘The next step is the resolution of the long-term problem. Everyone involved – the home owners, the developers, the authorities and the financiers – need to engage and come up with a plan to resolve the problems on site.

‘There is action at Department of the Environment level on this and another project team has been set up to use the good resolutions in other cases as a template. If it is found that a certain approach has worked, they will look at that.’

It is clearly uncharted water – Ireland has never had to deal with such a problem before on such a large scale.

According to a report issued by the Department of the Environment last June, entitled Resolving Ireland’s Unfinished Housing Developments, many of the 1,655 incomplete developments have ‘serious completion issues where residents are significantly affected’. To be resolved, these developments ‘may require some level of intervention by the State’ it says.

Government funding seems unlikely however, given that the State has already taken on so much of the developers’ debt. As was revealed last month when Nama’s 2010 report was published, the country’s top 12 indebted developers owe more than €22.3bn. The top three borrowers alone owe €8.4bn.

In the same report, Nama announced plans to encourage buyers to invest in 12,000 houses and apartments on its books – it will offer buyers a deferral on 20% of the value should it drop over the next five years.

Meanwhile, the Government believes that co-operation between stakeholders is imperative to solve the issues in unfinished estates.

‘Local authorities should explore all reasonable avenues to compel those responsible to address the problems,’ the department report continues.

‘Where those avenues have been exhausted, the local authority may step in to develop and implement an initial site response for developments that have effectively become abandoned.

'The use of financial securities/bonds provided under planning permission may give some financial assistance to local authorities.’

In that regard, Laois County Council has begun the process of calling in a €350,000 insurance bond on the development, which could pay for substantial improvements – although there are many who believe this could be a drawn-out process.

Sources close to the dispute have suggested that the insurers may fight the claim, given the confusion over the estate’s status. How much the council can access, and when, no one can say. The process has only recently got under way.

The local authority has also initiated contact with the developers but it is not believed that discussions have proved constructive to date.

A national co-ordination committee will now oversee progress on all the ghost estates and other incomplete housing developments in Ireland.

In the meantime, residents can only wait. It is likely to be some time before the view outside their windows changes or a reasonable quality of life returns.

At Glenall, bare flagpoles still stand outside a row of unsold showhouses but they no longer fly banners advertising a brighter future.

‘Some days, you’re okay but other days you look out and it’s bleak,’ says Carmel Hollywood, gazing out from her sitting room window.

‘It’s bleaker in the winter. You ask yourself, “What have I got myself into?” I am 58 and I came here to retire but now it may never be finished.’

Report by Mark Hilliard - The Daily Mail