Despite movement in the property market in the first six months of this year, little has changed really.
Prices are still falling, the banks are continuing to enforce tougher lending criteria and discussion about the dreaded property tax has loomed its ugly head again instilling fear among most homeowners.
Bank sales of apartment blocks that have gone bust have gained interest from buyers as the banks try to recoup some of their loans. But what’s going to happen for the rest of the year?
Houses have started selling again, but are the volumes worth talking about and are bank sales going to become a common feature of the property market?
Some commentators consider successful sales of receivership properties a sign of a recovery starting, others view them as a negative influence on an already struggling market.
There has been considerable debate about a levelling-out of property prices or ‘‘a bottoming’’ of the market since the start of the year. Instead we’ve seen prices continue to fall.
The rate of decline in property prices has slowed, but prices are still falling. It has resulted in improved sales in the second-hand market.
Anecdotally, the seemingly unchangeable ‘‘for sale’’ boards outside houses are slowly beginning to turn into to ‘‘sale agreed’’ or ‘‘sold’’ signs, but only in well established areas in the capital. Estate agents concede that the market in the rest of the country remains dire and that the only interest being shown by buyers in the new homes sector is in receivership sales.
First-time buyers have snapped up properties at knockdown prices in the few ‘‘fire sales’’ that have taken place so far this year. Some investors have also been attracted by the dramatically low prices.
Although agents dislike the term, the banks don’t mind it if they bring in much needed publicity and sales - and it seems receivership sales are going to become an important part of the market for the foreseeable future.
This weekend the asking price of a Mulhuddart apartment block has been reduced from €3 million to €1.895 million.
The block of 30 apartments on Blakestown Road in west Dublin is located 500 metres from Mulhuddart village and convenient to Blanchardstown shopping centre.
The block comprises one, two, and three bedroom apartments and is being sold by Martin Ferris, receiver over some of the assets of developers Larry O’Mahony and Thomas McFeely.
Selling agent HT Meagher O’Reilly is seeking investors who are interested in purchasing the block in one lot rather than individual units.
The asking price equates to an average of €63,167 per apartment Earlier this month, Anglo Irish Bank sold almost 90 apartments in a receivership sale at Carrickmines Green, just off the M50 in Carrickmines, south Dublin.
Those who have been keeping a keen eye on the market pounced on the sale with crowds forming at the scheme to buy the units.
The one beds were priced at €135,000, the two-beds at €180,000, and three-beds were available from €300,000.These prices are dramatically less than similarly sized properties at other schemes in the area.
The purchasers were mainly first time buyers, accompanied in some cases by their parents who wrote the cheque for the deposit.
Some buyers have been chided by the public for capitalising on others’ misfortunes. The same properties were selling for between €299,950 and €740,000 in 2005; early buyers the scheme lost their deposits after Laragan Developments went into examinership.
Others argue the quicker the overhang of stock is sold, the quicker the chance of a recovery in the market. In Templeogue, south Dublin, Douglas Newman Good’s new homes division sold almost 25 units at discounted prices at the Cedar Grove scheme on Firhouse Road.
The two-bedroom apartments, which were originally priced at €525,000 were sold for between €275,000 and €325,000.
The three beds were discounted to starting prices of €340,000.
Gemma Lanigan, new homes manager at Douglas Newman Good, said receivership sales were now at the ‘‘forefront of every purchasers mind’’.
‘‘There’s a huge appetite for receivership sales. They are very good value whether in a development that needs to be finished or a scheme that is fully finished.
There’s an appetite for both. It just shows you that there are people willing to buy once the price is right.
‘’She said with Cedar Grove the units were so well finished and of such high specification that they attracted interest and sold immediately.
The new homes division also handled the sale of Butterfield in Rathfarnham, south Dublin earlier this year on behalf of receivers where four-bedroom semis were sold for between €600,000 and €640,000.
‘‘The prices are making people react." HT Meagher O’Reilly sales manager Andrew Long said interest has been growing in fire sales among first time buyers and investors and were likely to become amore frequent feature in the market.
‘‘Interest has been strong from investors in the [Mulhuddart] scheme because its complete vacant possession, the scheme doesn’t have problems with management companies or residents.
Long said the agency had also received offers against the Hampton Rise development in Navan, another bank sale of 31 apartments and four ground floor commercial units which has an asking price of €2 million.
‘‘We’re just waiting for proof of finance.
Five parties were interested in the development since the start of the year," he said.
Long described the market in the first six months of 2010 as ‘‘bad rather than awful’’ in comparison to last year. HT Meagher O’Reilly handled the successful sale at Carrickmines a fortnight ago.
Long anticipates further receivership sales in the autumn but only in small numbers. ‘‘There will be more sales but just in the volume of people think there will."
‘‘Carrickmines will give some confidence to the market.
Two months ago many people thought that you couldn’t sell an apartment at any price. But today, we now know where we are and that apartments will sell at the right price. There are buyers out there.
We’ve a 25-page cancellation list."
The purchasers were mainly first time buyers at Carrickmines, according to Long. ‘‘A lot of them were getting substantial help from their parents’’.
That help in some cases, Long said, was a financial gift in the region of €40,000 to €50,000 from parents to their children.
From autumn onwards receivership sales are likely to become more prevalent. Sources confirmed to the Sunday Business Post that Fleming Construction’s Rockford scheme in Sandyford, south Dublin will be sold by the banks in the autumn selling season.
So too will Liam Carroll’s scheme in Tallaght, Dublin 24. Between the two schemes it’s expected that a further 200 plus apartments are likely to come onto the market at knockdown prices.
Friends First economist Jim Power said the problem with receivership sales was that when houses are being sold off at incredibly big discounts, it sets the benchmark for house prices in that area.
‘‘Receivership sales certainly set a lower benchmark for prices and that affects the whole market negatively. But it is a process that has to be gone through, whether in a receivership sale, or not, those properties are going to have to be offloaded and there’s going to be an increase in supply over the next couple of years.
That will keep prices down.
‘‘We’ll definitely see receivership sales become a greater feature of the market."
Other developers have reacted to the prices on offer in these sales and have been quietly reducing prices over the last few months.
A further price reduction was made in the last few weeks at the Newcastle Lyons development in west Dublin. Onebeds are now priced from €119,950.
At the Mimosa development in Dublin 18 the asking prices were reduced to €180,000 for one-beds and two-beds are for sale from €230,000.
Ronan O’Driscoll, head of residential sales at Savills said Carrickmines was the first high profile fire sale. ‘‘We haven’t seen anything significant yet.
But it’s reasonable to assume that they are going to continue but it’s hard to gauge at what level."
‘‘I don’t see a tsunami of them coming to the market.
The ones associated with Nama aren’t likely to flood the market. But it will be a feature of the market over the coming years." O’Driscoll said Savills has sold 180 units at Clare Village in Dublin 17since the start of the year, purchased primarily by the first time buyers.
‘‘We sold 200 units in the first half of the year, which is way more than last year, but 90 per cent less than we sold in 2005," he said.
Sherry FitzGerald’s chief economist Marian Finnegan believes receivership sales are good for the overall market.
She said it was understandable that they were generating such interest and that they will ‘‘stimulate the market and create confidence’’.
‘‘There’s no doubt the market is still challenging but we are seeing some signs of emerging confidence in the secondhand market in Dublin," she said. ‘‘There has been an intensification of interest."
Sherry FitzGerald recorded 13,000 proper ty viewings through their offices in the first three months of this year, Finnegan said, compared to 8,000 viewings of property in the same period last year. ‘‘April was sluggish with the transfer of loans to Nama. In May and June, however, houses have been selling for over their asking prices [in some areas in Dublin] for the first time since 2006.
‘‘It’s a trend but a fragile trend in the second hand market. Prices are still correcting," she said.
An improvement in the market comes after 2009 being the worst year for the property market since the downturn began.
The Department of Finance’s exchequer figures show 2009 was the worst year for property sales since the downturn in the market began with just 1,958 first time buyers transactions exempted from stamp duty.
The figures are a good indicator of the marketplace, particularly one which is heavily dominated by first time buyers as it is currently.
That figure compares to 5,178 first time buyer transactions in 2008, and 3,093 transactions in 2007.
According to the latest permanent tsb/ESRI house price index, the national average house price fell by 4.8 per cent in the first three months of the year.
Economist Jim Power estimates prices will have fallen by about 7 per cent in the first six months.
‘‘A drop of another 5 per cent is likely in the second half of the year, so at the end of 2010, residential property prices will have fallen by around 12 per cent," he said.
‘‘I had predicted a fall of about 10 per cent, so it’s probably worse than I thought."
‘‘The rate of decline is going to gradually slow down. In established areas where there is a lack of supply properties are starting to turnover, albeit at low prices. There’s a bit of movement in the marketplace, reflecting the dramatic decline in prices.
‘‘Areas people might have desired three/four years ago, and couldn’t possibly contemplate affording, are becoming more affordable. But that’s the exception rather than the rule.
‘‘I think the market is still soft. Credit availability is still going to be a major issue [for the second half of the year].
Despite the palaver from the banking sector the moment, credit is just not available.
‘‘On the demand side, there is still a tremendous amount of uncertainty out there.
‘‘The labour market is still weak, economy is still very difficult, people will be facing into further spending cuts in the December Budget and wages are still under pressure."
Power believes it will be the end of 2011 before there is any significant change in the property market.
Report by Michelle Devane - Sunday Business Post.
Prices are still falling, the banks are continuing to enforce tougher lending criteria and discussion about the dreaded property tax has loomed its ugly head again instilling fear among most homeowners.
Bank sales of apartment blocks that have gone bust have gained interest from buyers as the banks try to recoup some of their loans. But what’s going to happen for the rest of the year?
Houses have started selling again, but are the volumes worth talking about and are bank sales going to become a common feature of the property market?
Some commentators consider successful sales of receivership properties a sign of a recovery starting, others view them as a negative influence on an already struggling market.
There has been considerable debate about a levelling-out of property prices or ‘‘a bottoming’’ of the market since the start of the year. Instead we’ve seen prices continue to fall.
The rate of decline in property prices has slowed, but prices are still falling. It has resulted in improved sales in the second-hand market.
Anecdotally, the seemingly unchangeable ‘‘for sale’’ boards outside houses are slowly beginning to turn into to ‘‘sale agreed’’ or ‘‘sold’’ signs, but only in well established areas in the capital. Estate agents concede that the market in the rest of the country remains dire and that the only interest being shown by buyers in the new homes sector is in receivership sales.
First-time buyers have snapped up properties at knockdown prices in the few ‘‘fire sales’’ that have taken place so far this year. Some investors have also been attracted by the dramatically low prices.
Although agents dislike the term, the banks don’t mind it if they bring in much needed publicity and sales - and it seems receivership sales are going to become an important part of the market for the foreseeable future.
This weekend the asking price of a Mulhuddart apartment block has been reduced from €3 million to €1.895 million.
The block of 30 apartments on Blakestown Road in west Dublin is located 500 metres from Mulhuddart village and convenient to Blanchardstown shopping centre.
The block comprises one, two, and three bedroom apartments and is being sold by Martin Ferris, receiver over some of the assets of developers Larry O’Mahony and Thomas McFeely.
Selling agent HT Meagher O’Reilly is seeking investors who are interested in purchasing the block in one lot rather than individual units.
The asking price equates to an average of €63,167 per apartment Earlier this month, Anglo Irish Bank sold almost 90 apartments in a receivership sale at Carrickmines Green, just off the M50 in Carrickmines, south Dublin.
Those who have been keeping a keen eye on the market pounced on the sale with crowds forming at the scheme to buy the units.
The one beds were priced at €135,000, the two-beds at €180,000, and three-beds were available from €300,000.These prices are dramatically less than similarly sized properties at other schemes in the area.
The purchasers were mainly first time buyers, accompanied in some cases by their parents who wrote the cheque for the deposit.
Some buyers have been chided by the public for capitalising on others’ misfortunes. The same properties were selling for between €299,950 and €740,000 in 2005; early buyers the scheme lost their deposits after Laragan Developments went into examinership.
Others argue the quicker the overhang of stock is sold, the quicker the chance of a recovery in the market. In Templeogue, south Dublin, Douglas Newman Good’s new homes division sold almost 25 units at discounted prices at the Cedar Grove scheme on Firhouse Road.
The two-bedroom apartments, which were originally priced at €525,000 were sold for between €275,000 and €325,000.
The three beds were discounted to starting prices of €340,000.
Gemma Lanigan, new homes manager at Douglas Newman Good, said receivership sales were now at the ‘‘forefront of every purchasers mind’’.
‘‘There’s a huge appetite for receivership sales. They are very good value whether in a development that needs to be finished or a scheme that is fully finished.
There’s an appetite for both. It just shows you that there are people willing to buy once the price is right.
‘’She said with Cedar Grove the units were so well finished and of such high specification that they attracted interest and sold immediately.
The new homes division also handled the sale of Butterfield in Rathfarnham, south Dublin earlier this year on behalf of receivers where four-bedroom semis were sold for between €600,000 and €640,000.
‘‘The prices are making people react." HT Meagher O’Reilly sales manager Andrew Long said interest has been growing in fire sales among first time buyers and investors and were likely to become amore frequent feature in the market.
‘‘Interest has been strong from investors in the [Mulhuddart] scheme because its complete vacant possession, the scheme doesn’t have problems with management companies or residents.
Long said the agency had also received offers against the Hampton Rise development in Navan, another bank sale of 31 apartments and four ground floor commercial units which has an asking price of €2 million.
‘‘We’re just waiting for proof of finance.
Five parties were interested in the development since the start of the year," he said.
Long described the market in the first six months of 2010 as ‘‘bad rather than awful’’ in comparison to last year. HT Meagher O’Reilly handled the successful sale at Carrickmines a fortnight ago.
Long anticipates further receivership sales in the autumn but only in small numbers. ‘‘There will be more sales but just in the volume of people think there will."
‘‘Carrickmines will give some confidence to the market.
Two months ago many people thought that you couldn’t sell an apartment at any price. But today, we now know where we are and that apartments will sell at the right price. There are buyers out there.
We’ve a 25-page cancellation list."
The purchasers were mainly first time buyers at Carrickmines, according to Long. ‘‘A lot of them were getting substantial help from their parents’’.
That help in some cases, Long said, was a financial gift in the region of €40,000 to €50,000 from parents to their children.
From autumn onwards receivership sales are likely to become more prevalent. Sources confirmed to the Sunday Business Post that Fleming Construction’s Rockford scheme in Sandyford, south Dublin will be sold by the banks in the autumn selling season.
So too will Liam Carroll’s scheme in Tallaght, Dublin 24. Between the two schemes it’s expected that a further 200 plus apartments are likely to come onto the market at knockdown prices.
Friends First economist Jim Power said the problem with receivership sales was that when houses are being sold off at incredibly big discounts, it sets the benchmark for house prices in that area.
‘‘Receivership sales certainly set a lower benchmark for prices and that affects the whole market negatively. But it is a process that has to be gone through, whether in a receivership sale, or not, those properties are going to have to be offloaded and there’s going to be an increase in supply over the next couple of years.
That will keep prices down.
‘‘We’ll definitely see receivership sales become a greater feature of the market."
Other developers have reacted to the prices on offer in these sales and have been quietly reducing prices over the last few months.
A further price reduction was made in the last few weeks at the Newcastle Lyons development in west Dublin. Onebeds are now priced from €119,950.
At the Mimosa development in Dublin 18 the asking prices were reduced to €180,000 for one-beds and two-beds are for sale from €230,000.
Ronan O’Driscoll, head of residential sales at Savills said Carrickmines was the first high profile fire sale. ‘‘We haven’t seen anything significant yet.
But it’s reasonable to assume that they are going to continue but it’s hard to gauge at what level."
‘‘I don’t see a tsunami of them coming to the market.
The ones associated with Nama aren’t likely to flood the market. But it will be a feature of the market over the coming years." O’Driscoll said Savills has sold 180 units at Clare Village in Dublin 17since the start of the year, purchased primarily by the first time buyers.
‘‘We sold 200 units in the first half of the year, which is way more than last year, but 90 per cent less than we sold in 2005," he said.
Sherry FitzGerald’s chief economist Marian Finnegan believes receivership sales are good for the overall market.
She said it was understandable that they were generating such interest and that they will ‘‘stimulate the market and create confidence’’.
‘‘There’s no doubt the market is still challenging but we are seeing some signs of emerging confidence in the secondhand market in Dublin," she said. ‘‘There has been an intensification of interest."
Sherry FitzGerald recorded 13,000 proper ty viewings through their offices in the first three months of this year, Finnegan said, compared to 8,000 viewings of property in the same period last year. ‘‘April was sluggish with the transfer of loans to Nama. In May and June, however, houses have been selling for over their asking prices [in some areas in Dublin] for the first time since 2006.
‘‘It’s a trend but a fragile trend in the second hand market. Prices are still correcting," she said.
An improvement in the market comes after 2009 being the worst year for the property market since the downturn began.
The Department of Finance’s exchequer figures show 2009 was the worst year for property sales since the downturn in the market began with just 1,958 first time buyers transactions exempted from stamp duty.
The figures are a good indicator of the marketplace, particularly one which is heavily dominated by first time buyers as it is currently.
That figure compares to 5,178 first time buyer transactions in 2008, and 3,093 transactions in 2007.
According to the latest permanent tsb/ESRI house price index, the national average house price fell by 4.8 per cent in the first three months of the year.
Economist Jim Power estimates prices will have fallen by about 7 per cent in the first six months.
‘‘A drop of another 5 per cent is likely in the second half of the year, so at the end of 2010, residential property prices will have fallen by around 12 per cent," he said.
‘‘I had predicted a fall of about 10 per cent, so it’s probably worse than I thought."
‘‘The rate of decline is going to gradually slow down. In established areas where there is a lack of supply properties are starting to turnover, albeit at low prices. There’s a bit of movement in the marketplace, reflecting the dramatic decline in prices.
‘‘Areas people might have desired three/four years ago, and couldn’t possibly contemplate affording, are becoming more affordable. But that’s the exception rather than the rule.
‘‘I think the market is still soft. Credit availability is still going to be a major issue [for the second half of the year].
Despite the palaver from the banking sector the moment, credit is just not available.
‘‘On the demand side, there is still a tremendous amount of uncertainty out there.
‘‘The labour market is still weak, economy is still very difficult, people will be facing into further spending cuts in the December Budget and wages are still under pressure."
Power believes it will be the end of 2011 before there is any significant change in the property market.
Report by Michelle Devane - Sunday Business Post.