The Irish Independent this morning reported that asking prices at the Devlin Bank development in Naul village, north county Dublin have just been reduced by around 30%. This is a development on which NAMA made available its deferred mortgage product in its pilot launch in May 2012. The deferred mortgage, or as NAMA calls it, the 80:20 Deferred Payment Initiative gives buyers protection against future price falls of up to 20% of the original purchase price after five years. Today we learn that after six months, the asking prices have dropped at Devlin Bank by between 27-31%. “Wawawiwa!” as Borat might say.
Luckily for buyers, no properties at the development have been sold in the past six months, this despite NAMA originally offering 29 of the units but the Property Price Register revealed in October 2012 that none had been sold.
So if you go along today, you will have a 30% reduction on the May 2012 asking prices and be able to benefit from NAMA’s 80:20 product. Whew! But if you had bought in May, you might already be nursing a 30% loss on your purchase and given the properties had asking prices of €175-390,000 and the reductions now offered range from €50-105,000, that would have been a pretty hefty loss in just six months. And it might call into question whether NAMA is building a premium into the prices of property subject to its deferred mortgage scheme which was last month expanded from the original 115 properties to a further 180 properties.
Maybe time for NAMA to offer a 60:40 deferred payment scheme!
On a more general note, the feeling on here is that the Property Price Register will have a major short-term negative impact on property prices as buyers and sellers can see actual transaction prices and in a buyers’ market, transaction prices should rationally come down to the lowest transacted level or even lower. So the price reduction at Devlin Bank is not surprising.
I wouldn’t be so sure that none have sold yet just because they haven’t shown up yet in the price database. After all, the Killeen Castle ones aren’t there either, and I’d guess that some of those DID sell.
The problem with the Delvin Banks ones were that they were clearly overpriced, which is why I thought the NAMA scheme actually put the risk on the buyer, rather than protect the buyer.
NAMA will have a difficult time both shifting properties AND holding up prices.
I see the Independent report does say none sold, so I guess they know.
Although, they also say “as many as 50 of the 67 in the estate had sold prior to that.” I checked, and there are 80 houses.
They should just hand the lot to Allsop and get it over with.
This may not be the last price reduction here!
Went to the viewing last Saturday and today. Only 10 are released for sale (I counted 25 unoccupied houses, and suspect many more are rented).
One was marked as sold before the viewing last Saturday. That house is now back on the market, and just one other is marked as sold today.
A trickle of viewers last Saturday, more today. I strongly suspect none sold today either.
Still GREATLY puzzled that none of these 80:20 scheme houses have shown up on the price database. There must be a story (probably legal difficulties?) to be found here.
Veiwed these properties last week, and have to say I was very impressed with the houses themselves. I think they are now at a realistic price given the location, but maybe the top end houses have a bit more to come down. What were your thoughts on it value wise KOR? Still very hard to commit to purchase on these given their price history. Anyone know is their negotiation on NAMA these 80/20 properties or are the estate angencies authorised to do so
Does anyone konw why Delvin Banks only have 10 released when there are 29 on the Nama site? Is it the estate agent controlling which ones are released?