British auction giant Allsop and its local partner Space really changed the face of property auctioning in Irelandwith their inaugural auction in the Shelbourne Hotel in April. An announcement on 19th February, online catalogues, professionally arranged viewings, extensive pre-marketing (both paid and PR) which built up the sense of anticipation into such a frenzy that by the time the day of the auction actually arrived, folks were at risk of losing control of their bladders. And on the day itself, a well-staffed room, monitors showing properties and bids, online simulcast. If there was one deficiency it was not booking a venue with sufficient space and the excess of punters and gawkers overflowed onto the pavement outside and into the local pub, which also had a simulcast. We didn’t even have the cop on to keep quiet and look natural when IMF chief Ajai Chopra walked by en route to the Department of Finance; no, we had returned to our natural property desiring and owning selves. Allsop/Space will have regarded the auction as a stunning success, not least because they sold 82 of the 84 lots and raised over €14m in the space of five hours. Allsop in particular is a class operation and it seems to be well-served locally by its Space partner; the “class” assessment is based on seeing Allsop operate in theUK.
Subsequent to the Allsop auction, a number of other estate agents launched large-scale auctions which were sometimes described as “distressed” auctions but that might have been a mixture of media eagerness and estate agents jumping on the frenzy bandwagon generated by the Allsop auction. The auction today in Cork, run by GMAC was billed as a “low cost” auction. It didn’t receive anything like the national (and international) visibility of Allsop’s auction but the properties were dutifully entered onto DAFT.ie and there may well have been other marketing. In the end there were some 65 properties for sale on the day and the “maximum reserves” totaled €9,920,000. So slightly smaller than Allsop but not by much. Most of the property was residential in the Munster area, though there were a few exceptions; there doesn’t appear to have been a downloadable auction catalogue but the attached spreadsheet here shows the addresses, a brief description and the maximum reserve. Reporting from the venue of the auction, the Radisson Hotel in Little Island,Cork suggested there were about 200 punters and gawkers. And the results on the day:
2 lots – both sites – sold for a total of €95,000
Carol Tallon of Buyers Broker Limited attended the auction and described her experiences of the day here. She also took a photograph of the auction room later on in the day, and that is here. Carol’s assessment was that the properties on offer were suitable for owner-occupiers but that the audience seemed to comprise mostly investors. And an emerging view, which also came from from NAMA this week, is that banks are just not lending and are too cautious. So the auction today seemed to be a mismatch of properties with punters, and that’s a problem as Carol notes because owner-occupiers need to be able to get mortgages for a major segment of the market to get moving again. Pat Quirke of PF Quirke estate agents also attended and provided helpful commentary on the day.
The next Allsop/Space auction is on 7th July 2011, again at the Shelbourne Hotel on St Stephen’s Green in Dublin. There is a 12-lot Gunne auction on 30th June, 2011 and there will be a major Savills auction in September.
As for GMAC and Mac Estate Agents, they say their next auction will be in September but the experience of today should probably be carefully considered.
NAMA Wine Lake 
When will the public wake up and come to their senses and realise that rock bottom in the property market will only be reached when a 3 bed semi reaches a national average price of 2 and a half times the average National Industrial wage 30,000 x 2.5 = €75,000.
I thought it sounded like the public has woken up ? Only 2 sales and both of them sites ?
Its the sellers that should wake up….
A total disaster for the auctioneering community. A 10 acre “site” in Skibbereen sells for €69,000 when at the height of the boom 3 acres of agricultural land would have sold for the same price as it was fetching over €20,000 an acre. How exactly, is the government going to get it’s pillar banks, one of whom has has been judged to have already defaulted, to start lending for mortgages? The same banks under the MOU have to deleverage by a further €72bn by the end of 2013. This on top of the distressed assets they have already dumped into NAMA and which NAMA must get rid of. Anyone with cash or access to money should hold on until the auctions are clearly advertised as “distressed assets at fire sale prices” coming to a street near you today, shop local.
These results are not just a mismatch between buyers and sellers they are a reflection of present reality in the country. There is lockdown. I heard so many people today being outright angry at Mr, Noonans suggestion to spend, one woman told me does he mind if I don’t have the money for the water charges and property taxes he is brining in? This lesson in consumer psychology is a little bit late, in fact, it sounds more like pleading and desperation rather than anything else and may well have the opposite effect of making people even more afraid.
Robert, Irish household debt is the highest in Europe as a percentage of Gross National Income. It is over double the size of the Eurozone average (excluding PI & S of the PIGS) and will take many years at the current rate of deleveraging to reach that average. Remember we are in the Eurozone and if we intend to stay in it, we should learn to behave like the core members!
It is neither sensible nor possible for the Irish economy to bear more household debt. It is feasible that there may be some room for lending from repayments however it is important that we reduce the overall level of personal debt to reasonable levels.
The measurement of Saving used by the CSO and other Statistical offices is an abstract measurement which reflects movements in the value of pension funds, life assurance funds etc., apart from actual real deposits which can be easily accessed. It also includes cash assets held in the bank accounts of unincorporated businesses and certain voluntary organisations. It is not a measurement of readily available savings Household cash deposits continue to fall and I would argue are far too low in the vast majority of households. Very few are in a position to handle a short term financial hit without the need to borrow.
Robert
Agreed. A total disaster. I would not not blame GMAC. They have my sympathy. The list of properties was too diverse but it would not have made any difference had they been concentrated in any part of Munster.
The whole NAMA / Government thinking needs to be reversed and start from the ground up.
Use whatever funds that are in the kitty and whatever funds that can be got from sales of foreigh assets to restart a building program.
It is only jobs that will start to get the country out of this hole.
If this leads to a further significant fall in house prices that will be good for the country. It might finally bring some sanity into economic and financial policies being pursued.
Having lived in Cork for almost all of the last decade, the reserve prices looked more like a wishlist from late 2008, not 2011. The reserves and seller expectations were simply too high.
The additional problem with the south west is 1. Considerably higher regional unemployment (about 17% as opposed to 12.5% in Dublin) and 2. the legacy of price distortion caused by section 23 and holiday homes. The latter will be particularly difficult to untangle. Ideally most of those properties only real hope is to be bought at a discount rate by local authorities and leased to those on the housing list.
I had looked at some of the West Cork houses and found a few of them interesting, however with the minimum acceptable prices unknown let alone the state of the West Cork market, it didn’t seem sensible to buy at this stage. The houses for sale there were aimed at the holiday home market, which I think will be very slow to recover. Indeed with mass emigration, fringe areas such as West Cork will be particularly badly hit. The largest local employer was Murnane & O’Shea, who have only a fraction of their former workforce. There may be a lot more houses for sale as families move to or back to the UK.
Few if any of the houses for sale today are bank re-possessions and therefore the “has to sell on the day” pressure was not there.
We will have to wait until the big three Irish banks, AIB, PTSB & Bank of Ireland get into the act of selling large number of properties as the mortgagee in possession before we know the real bottom.
I also don’t think that the first Allsop Space auction was reflective of the market as a whole. The second sale should give a far better indication as there are a number of interesting family homes (see lots 10,11,62,79) in Dublin.
However the most interesting in some ways seems to be lot 43, a 1,792 sq ft house in Abbeyleix with a reserve of €100,000. Assume a site cost of €25,000 would give you a cost of just €41.85 per sq ft., very far below replacement cost
Well, well, well. This from the same Irish auctioneers who were only too happy to let people bid up a house then withdraw it from auction at the top of a hat. It’s clear that the Irish auctioneering class is systemically incapable of adequately performing even the most basic functions of its profession. If the show was as poor as buyersbr claims, then GMAC should not be paid. It’s as simple as that.
The critical lesson here is that NAMA property auctions should not under any circumstances be run by Irish Auctioneers. Foreign auctioneers like Allsop should be be given charge of all NAMA property auctions at home an abroad. And NAMA should be considering going abroad for some of its other service needs as well.
I note also this part of the buyersbr post
Did GMAC break the law here? Is this behaviour typical of Irish Auctioneers?
@OMF
I don’t agree. The blog comment you refer is not fair. If a buyer emerges for a property in current environment, you take it. Before, during or after the auction.
This sale is devasting for GMAC, a small company in Castletownbere.
A sit with full planning permission for 12 houses in the village of Emly for €45,000 is literally for nothing.
I know Emly well. Fifty years ago the council would have snapped this up. They still should. And they should start to build houses for the many people that are looking for them.
Osborne KIng in Belfast are promising an auction in September with a mixture of residential, commercial and development. They are on the NAMA panel in Northern Ireland.
Details on the Osborne King website (can’t post link for technical reasons but someone else could try.)
@JP, thanks the Osborne King auction link is
http://www.osborneking.com/auction.asp
But it doesn’t seem to yet have any properties and is indeed advertising for properties.