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

Sunday, 4 September 2011

Massive Slump In Value Of Houses...

Massive €1m slump in value of D6 houses should attract canny buyers

There is strong anecdotal evidence that the decline is worse than official figures suggest...

IN May 2008, blue-chip auctioneering firm Douglas Newman Good confidently sought offers in excess of €1.55m for a "well-proportioned, mid-terrace Victorian home" on Waverly Terrace at the end of Kenilworth Square North on Dublin's southside.

Later this month two properties on the same leafy Rathgar street, both currently split into flats, will go under the hammer in a distressed properties sale.

One of the houses will have a reserve which will not exceed €240,000, while a neighbouring house has had its maximum reserve set at €380,000.

It's a price drop of €1m in a little more than three years on properties that boast a revenue stream which should, on the face of it, attract canny investors who have cash.

Rathgar remains a sought-after locale for young professionals who want to rent not far from the city centre.

The sale in the Shelbourne Hotel on the 23rd of this month is the third disposal of distressed properties in the capital since spring. In all, 74 residential and commercial properties from all over Ireland will be on offer at knockdown prices.

The sale may give a better assessment of the real state of the property market than the official figures released last week by the Central Statistics Office. They showed that prices throughout Ireland fell by 12.5 per cent in the year to July 2011, down slightly from a decline of 12.9 per cent recorded in June.

"This means the peak-to-trough decline in property prices is now 42.5 per cent," said Davy chief economist Conall MacCoille.

"Prices have fallen 9.2 per cent in the first seven months of the year."

Overall, residential property prices in Dublin have lost almost 49 per cent of their value since the peak reached in February 2007. House prices have fallen by just under 47 per cent over the same period, and apartments are just over 54 per cent lower, according to the official figures.

But there is strong anecdotal evidence and "real-life" figures reflected in the rock-bottom bids accepted for distressed properties which suggest the decline is actually worse than the official figures in some sectors of the market.

According to a new report compiled by Frank Conway of personal finance website, homeowners who bought at the peak of the boom could be paying off their mortgages for another 14 years before they reach a point where they have repaid enough to take them out of negative equity.

It is estimated that up to 350,000 mortgage-holders are in negative equity, where the value of the loan is greater than the property's value.

Mr Conway suggests it could be 2025 before many of those who bought during the property boom escape negative equity and many of the major lenders are upping their variable rate mortgages, with KBC the latest to hike their rate by 0.25 per cent.

The decline in Irish property prices is now nearly a worldbeater. Only Bulgaria suffered a bigger decline in property values in the first three months of this year.

Last week Alan McQuaid, chief economist with Bloxham Stockbrokers, gave a gloomy prognosis for the immediate future suggesting that, given weak labour market conditions and the continuing lack of available bank credit, it was hard to be optimistic about the property market.

However, Mr McQuaid did find room for optimism in the medium term.

"The bottom line is that the property market remains very 'soft' at the moment, and is likely to remain that way for some months to come. But looking further ahead, we think house prices should increase on a five-year view as the labour market improves.

"That said, the level of any rise over the next few years is only likely to be in low single digits as banks adopt a more cautious stance to lending than in the Celtic Tiger era, interest rates return to 'normal' and the introduction of a property tax for 'principal' homes of residence all weigh negatively on the market."

And there are other factors that will also stymie a recovery in house prices. High unemployment looks like being a feature of the Irish economy in the medium term at least. Higher emigration means the pool of buyers is smaller while tens of thousands of properties in every county in Ireland are built but vacant.

Confidence, a key driver of the property market, remains at rock bottom.

It's hard to see a recovery anytime soon.

Report by Jerome Reilly - Sunday Independent

Saturday, 3 September 2011

Nama On Wikileaks!

Nama might prove 'laboratory' for EU, leaked cable said...

THE FIANNA Fáil-Green government considered the National Asset Management Agency (Nama) “might prove to be a laboratory” for other European Union states faced with banks on the brink of collapse, according to the latest batch of diplomatic communications published by Wikileaks.

Ireland’s permanent Ambassador to the EU, Rory Montgomery, made the comment to the US ambassador to Ireland, Dan Rooney, at a meeting in Brussels in September 2009.

Mr Montgomery revealed the EU “was watching closely” the establishment of Nama.

At the same meeting he said that year’s budget would focus on cuts in public sector pay. The cable reports Mr Montgomery’s view was that “Ireland [was] paying too many civil servants too much to provide public services that could be provided for much less.”

Mr Rooney met EU commissioner Charlie McCreevy on the same trip. Mr McCreevy had advised the Fianna Fáil-Green coalition to act quickly in establishing Nama and moving the 2009 budget. “McCreevy, an ex-finance minister, said simply that his experience taught him that the government needed to act quickly to keep the public and press from dwelling on the negative. ‘If you wait,’ he said, ‘it’ll only get worse’,” the cable to the US State Department said. The batch of cables was published for the first time yesterday but was made available to some newspapers last year by Wikileaks.

They confirm Central Bank officials believed there was just 0.5 to 0.8 per cent of “impaired assets” in the Irish banking system when the Government’s blanket bank guarantee was introduced on September 29th, 2008.

In a meeting with US diplomats, Central Bank executive Billy Clarke said the guarantee had to be introduced because a “perfect storm” of external events related to the credit crisis had dried up traditional sources of financing for Irish banks. Another Central Bank official, Gordon Barham, said impaired assets were mostly confined to loans to commercial property developers. When pressed, Mr Barham said the media had exaggerated the problem assets.

A comment from a US official at the end of the cable accused the Irish of “being a bit optimistic in their assessment of the level of impaired assets”.

Report by JOHN COLLINS - Irish Times

Friday, 2 September 2011

No Lottery Style Payouts For Mortgages...

Noonan: no lottery style payout for mortgage debt crisis...

FINANCE Minister Michael Noonan yesterday promised that the Government will act swiftly to deal with the mortgage-debt crisis -- but insisted the solution will not be a "big pool of money in substitute for the lottery".

The comments came as Mr Noonan insisted it was "not realistic" to expect the Government to sanction universal "debt forgiveness" for borrowers who bought at the peak of the market or have run into trouble with their mortgages.

At a meeting of the Finance Committee yesterday, Mr Noonan repeatedly stressed that he would not second-guess the work of an interdepartmental group due to report on solutions to the mortgage crisis at the end of September.

But he categorically ruled out any role for universal debt forgiveness, insisting it was "not possible" and that "nobody should think there's going to be some big pool of money to be handed out as a substitute for the lottery".

"You don't want to open the floodgates for people who don't need assistance, who see this as an opportunity to have their debt written off," he said, pointing to the need for carefully targeted solutions.

Mr Noonan also used the appearance to reject claims that the Government would not act on the mortgage crisis until after the December Budget.

The minister will consider the new report at the end of September and bring it to Government the "next week", he said.

He refused to be drawn into speculating on when exactly any new measures could come into action, but insisted that the Government "recognises the urgency of the situation".


"This is a huge burden on people who bought at the top of the market and they were seduced and coaxed to take out mortgages they now can't afford, or they can afford but leaves them in negative equity," he said. "It's not fair."

But he insisted Ireland was mainly to blame for the plight of these homeowners.

"It's not fair to be saying that there are some kind of evil geniuses out there somewhere in Europe who induced Irish people to get into the property market," he said. "Most of this was done by ourselves."

Report by Laura Noonan - Irish Independent

Costly Pyrite Damaged Homes...

Insurer refuses to pay for pyrite damage in buildings...

HomeBond leaves owners facing bills of €70,000.

Thousands face bills of up to €70,000 to repair pyrite damage to their homes after a leading building insurer refused to meet claims.

HomeBond, the building insurance agent, has contacted the owners of affected properties to tell them they will not accept liability or pay out on claims.

Some homeowners who had already been offered compensation have now been told that these offers no longer stand. Junior Minister and Meath East TD Shane McEntee, who has represented many of the affected families, described the move as "shameful".

It follows a High Court case in which it was ruled that a quarry from which pyrite-infected material was sourced was culpable for the condition of the buildings it supplied.

Last year it was estimated that around 20,000 claims had been made to HomeBond in relation to pyrite -- a mineral that expands in the presence of moisture and oxygen, leading to severe cracking and structural problems.


The company has disputed that figure, but last night declined to comment on how many people it had contacted or on the number of homeowners who had received settlement offers only to have them withdrawn at the 11th hour.

The cost of repairing affected buildings is estimated at between €50,000 and €70,000.

HomeBond referenced the High Court case between James Elliott Construction Ltd and Irish Asphalt Ltd last May as a factor in reaching its decision to refuse claims.

In that case, Mr Justice Charleton ruled that the supplier of the material was responsible for damage caused and not the developer.

"It is the view of HomeBond that the quarry suppliers of the defective hardcore infill in question acted negligently in supplying material that was not of merchantable quality and fit for purpose, and supplied a defective product," it said in a statement last night.

"Under the terms and conditions of the HomeBond agreement, HomeBond's liability for major defects is specifically excluded and accordingly, HomeBond does not propose to take any further action."

Before writing to customers, the company contacted the Department of the Environment to brief them on their position.

A departmental spokesman said that while Environment Minister Phil Hogan was aware of the problem facing homeowners it was essentially a civil matter between private parties.

Reacting angrily to the news last night, Mr McEntee said: "To go in and just hand it over (to the Government) and walk away, no they have not done the right thing.

"It's a shameful thing for them to do, shameful. The pressure this (issue) puts on marriages and then you take negative equity and mortgages."

The news will come as a blow to those who had been relying on the agency -- which provides bonds for new homes in case of structural defects -- to help meet the financial cost of righting defective homes.

It is understood that about 20 building firms had sourced materials containing pyrite from at least four quarries in Dublin and Meath.

HomeBond, which was established in 1978, describes itself as the leading provider of structural defect cover for new homes, with more than 600,000 on its books.

Report by Mark Hilliard - Irish Independent

Thursday, 1 September 2011

Banks Doing Secret Deals...

Write-offs and negative-equity loans already on offer -- just don't tell everyone

The debate about debt forgiveness has raged across the nation, polarising public opinion. Laura Noonan investigates what banks are really doing to help struggling homeowners.

It might surprise people to know that some banks have been embarking on forms of mortgage write-offs for quite some time.

And that's not all that's been going on -- some of the other new-fangled "solutions" expected to be recommended by the Government's latest mortgage expert group, like negative-equity mortgages, are already in action, too.

The reason the public don't know about these developments is simple -- the banks don't want the masses to know.

Because as soon as you admit things like this are happening, you run the risk that everyone will want a piece of the action.

The action so far has largely been limited to borrowers who've actually left their home by way of "voluntary surrenders".

One senior banking source revealed how the system works. "We say to them, we'll handle the sale, it's more efficient that way anyway because we know the market better, and we'll get a better price.

"When the home is sold, there's a shortfall between what we get and what the mortgage is worth. So we have to work out a way of dealing with that shortfall."

The first option is for borrowers to pay off the remaining amount over an extended period of time, typically at the same rate as their original mortgage. But that's not always a runner.

"Sometimes people won't pay, then you go and get a judgment," says one banking source. "But there's no point enforcing that -- you can't get blood from a stone and it just adds legal costs -- so the judgment just sits there."

From the banks' point of view, the key consideration is that people don't want to have judgments against them.

While a number of banks are either already writing off debts and taking judgments, or preparing to do it in the future, it's not something that banks are united on.

But banks are more united on their position around so-called "negative-equity mortgages". These allow homeowners to carry negative equity they've already built up to new properties.

The Irish Independent understands that Permanent TSB has already facilitated a small numbers of borrowers, as have AIB and Bank of Ireland, while Ulster Bank has dealt with a small number of enquiries.

KBC and National Irish Bank haven't experienced any demand yet but are open to the idea, as are EBS, who don't currently facilitate such arrangements. The thing most bankers are keen to stress is that negative-equity mortgages aren't a "product", they're a "service" offered to customers in particular circumstances.

"Sometimes you could have someone come into you who has a €500,000 mortgage and a house worth €400,000," said one source.

"They've just got a big promotion and they want to buy an €800,000 house.

"If they're in a position where they can handle the repayments on that €800,000 mortgage, that's something we could probably work with.

"If they can pay, and if the loan to value isn't worse, then it can work."

The limited demand that's been seen so far has largely been from Dublin, reflecting the traditional pattern of buying a small city centre apartment and moving out to something larger in the suburbs once couples start families.
The Central Bank has banned any advertising -- banks can respond to customer enquiries, but they can't actively make customers aware that the service is out there.

They're also restricted to dealing with their existing customers -- those in the negative-equity market can't shop around for the best deal.

Bankers also point out that negative-equity mortgages are available only in a limited number of situations and won't be given to everyone who's in an unsuitable house.

Aside from this, there's the arena where debt forgiveness and negative-equity mortgages collide.
Borrowers might agree to trade down, take an element of their negative equity with them, and an element can be written off.

There's no evidence that that's already going on, but it's something many banks seem open to in theory.
"There's a serious issue of debt overhanging the economy," says one banker. "We've got to find some solutions."

The other likely solution is a kind of "shared-equity" situation, where banks take a stake in the home and repayments are cut, or where banks write down the debt and share the upside if the property ends up selling for a decent price.

Bankers and other well-placed sources are united in their belief that the Government's next mortgage strategy is likely to revolve around these kinds of solutions rather than anything new.
But hopefully it will at least encourage the bailed-out banks to embrace the full range of solutions and engage energetically with customers.

Solutions would be equally available to everyone -- not just those who haggle with their banks or ask for something that's not officially on offer.

Report by Laura Noonan - Irish Independent