Archive for July 7th, 2011

This is the full-time flash report of the Allsop/Space auction held in the Shelbourne Hotel in Dublin today. The half-time report is shown below at the bottom of this entry. Out of 87 lots advertised in the auction catalogue, five were withdrawn and of the remainder, 77 were sold and five did not reach their reserves in the auction but are likely to have been sold on the day because the final bids were so close to the maximum reserves shown.

The auction will be considered another triumph by Allsop/Space. The auction started at 11am and finished just after 4.30pm with a 15-minute break at 2pm. In just over five hours, some €15,814,500 of property was sold, all on a day when the ECB again raised its main interest rate by 0.25% to 1.5%, and as Ireland’s notional borrowing costs soared to record highs on fears of a looming downgrade of our credit-rating to junk status. The maximum reserves on the properties sold today totalled €11,616,500 meaning the average price achieved was 36.1% above the maximum reserve. There were four properties which stood out

48, Iona Road in Glasnevin which sold for €710,000 against a maximum reserve of €360,000.

61, Haddington Road in Ballsbrige which sold for €635,000 against a maximum reserve of €395,000

The Mill House in Schull in Cork which sold for €560,000 against a maximum reserve of €270,000

And the star of the day’s auction 35, Ailesbury Road which sold for €2,325,000 against a maximum reserve of €1,450,000.

Below are the final results. There will be an analysis piece tomorrow of what today’s sales mean for property prices generally, but the headline appears to be that prices are down some 50-70% from peak generally, there is still pent-up demand and property will sell at a realistic price.

(Click to enlarge, the catalogue  is here which you can see full property descriptions, corresponding to the lot numbers above)

This is the half-time report of the Allsop/Space auction being held in the Shelbourne Hotel inDublintoday. So far we are up to lot number 51 out of 87. There will be a full-time report later today and an analysis piece tomorrow.

Of the 51 lots, four were withdrawn, two didn’t sell because they didn’t reach their reserves, five sold below their maximum reserves and of the 45 that did sell, the maximum reserves totalled €6,202,000 and the sale prices achieved totalled €8,141,000 an average of 31% above the maximum reserves. These figures are skewed by the most expensive lot,35 Ailesbury Roadwhich had a maximum reserve of €1.45m and sold for 60% more or €2.325m. Excluding that one lot, the other lots sold for 22% more than the average maximum reserve. The two properties that did not sell were withdrawn very close to the maximum reserves – a shop in Drogheda with a maximum reserve of €290,000 and withdrawn at €282,500 and a pub on the quays in Dublin with a maximum reserve of €485,000 withdrawn at €475,000. The betting is that both of these will be sold later today because the final bids are so close to the maximum reserves.

Overall, there is less of the frenzy present today that characterised the first auction in April 2011. All punters and gawkers have been accommodated in the venue, and bidding is brisk and businesslike. The auction should finish up around 4-4.30pm. For details of the auction including live streaming see here. The lot details below correspond to the lots in the catalogue here.

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On Tuesday evening this week, ratings agency Moody’s downgraded Portugese sovereign debt by four notches to a junk bond rating, with a negative outlook meaning further downgrades may be in the offing. Yesterday, the cost of borrowing for Portugal rocketed, as did Ireland’s. Moody’s emailed Bloomberg yesterday who reported “Moody’s Investors Service said today that it continues to “differentiate significantly in terms of the credit profile” in the ratings assigned to peripheral European countries. The rating company commented in an e-mailed response to Bloomberg News request for comment.” So although the theoretical cost of borrowing for Ireland is now at the same level as Greece’s costs in April 2011, there is hope that Ireland can avoid a downgrade  – Ireland is presently one notch above junk with a negative outlook on Moody’s scale, so any downgrade would place our bonds in junk territory which would be a step change to our prospects of returning to the bond markets in 2013, as presently planned. You can get an overview of all PIGS (Portugal-Ireland-Greece-Spain) bond prices and ratings on this page. Here has been the reaction in Europe to Moody’s latest action withPortugal.

“Oligopoly” – German finance minister Wolfgang Shaeuble describing the three ratings agencies, Moody’s, Standard and Poor’s and Fitch. Paradoxically forgetting the narrower duopoly of France and Germany in the EuroZone that arguably forced Ireland out of the bond market in October 2010 at the Deauville meeting by suggesting a future EU bailout fund would have precedence in repayment hierarchies, that steels the ECB position on burden-sharing of senior bondholders at Irish banks and of course is exploiting the opportunity of Ireland’s woes to demand changes to corporate tax rates

“So-called clairvoyance” – European Commissioner, Olli Rehn’s office describing Moody’s prognostications for the Portugese economy; as opposed to the forecasting by the EC which has been so robustly on the nose in recent years. At least he didn’t call them amnesiacs who forget things, like Olli Rehn forgetting the second pillar of the Stability and Growth Pact 60% cap on debt:GDP when he threw Ireland to the wolves last year, remembering only the other pillar, the 3% deficit:GDP. And as for the European Commission’s ability to forecast? Isn’t it Olli Rehn that should don a turban, cape and get out a crystal ball? After all, he sees Ireland managing a 1.9% growth in GDP in 2012 when struggling with close to 120% debt:GDP.

“Not immune to mistakes and exaggerations” – European Commission president, Portugese Manuel Barroso. Of course this sounds reasonable enough – after all every one makes mistakes. But the Portugese social democrat could hardly suppress his displeasure towards Moody’s saying “but, of course, to me it seems strange that there is not a single rating agency coming from Europe. It shows that there may be some bias in the markets when it comes to the evaluation of the specific issues of Europe” Indignant, quite. But remember this is the same Manuel Barroso that angrily told Irish MEP and now TD, Joe Higgins in January 2011 “The problems ofIreland were created by irresponsible financial behaviour of some Irish institutions and by the lack of supervision in the Irish market.” AndPortugal’s problems? Well plainly they’re a result of evil rating agencies.

The Great Mystery in Europe at present is why Spain continues to enjoy an almost unblemished Aa2 rating, just two notches below the top ranking. Spain with a 21% unemployment rate, miniscule 0.8% forecast GDP growth in 2011 (and that forecast is from Olli “Gypsy Rose Lee” Rehn), a deficit:GDP of 6.3% and debt:GDP of 68% (but if Spanish banks were to record the same degree of property loan losses as Ireland and Spain bailout them out, that 68% would nicely rise to over 110%). If Moody’s touches Spain in the present climate, it might expect more than yesterday’s hissy fit, but how long can it refrain from stating the obvious?

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