It was another successful auction for Allsop Space at the Shelbourne hotel today which was again packed to the rafters, leading to requests again that non-buyers might give up their space for serious punters. Outside there was a small protest, and inside a punter did a runner after offering the highest bid, but mainly it was business as usual as 93 were offered after seven had been withdrawn from the original line-up of 100. All but six were sold for a total of €12,416,500 which was 34.8% on average above the maximum reserves for those properties which totalled €9,209,500. The preliminary success rate was therefore 94% which is spectacularly successful for such a large auction. Only one property sold below its maximum reserve and of the six that remained unsold, three were within €2,500 of the maximum reserve.
Allsop’s Gary Murphy reprised his role as probably the best auctioneer in the world, though he did get a short break in the afternoon. The highlights of the day might have been the 55-bedroom hotel in Rossnowlagh, Donegal which was apparently bought by the hotel’s manager for its maximum reserve of €650,000 – just €12,000 per room; and the most valuable sale of the day was an apartment building on Dublin’s Upper Ormond Quay which sold for €1,020,000 against its maximum reserve of €610,000; the “cheapest home in Ireland”, the cottage in Leitrim which had a maximum reserve of €7,500 was withdrawn. There will be a more complete analysis tomorrow examining what these prices, which if past experience is anything to go by, will be mostly cash offers, tell us about declines in property prices in Ireland. Click the following to enlarge.
NAMA Wine Lake 
Welcome to the bottom. Here’s hoping it’s not a point of inflection.
I think the property sector has or will within six months finally bottom out. I don’t think prices will recover for at least a decade if not two, as we saw in Japan. However, the bottom appears to well and truly have been reached—for properties that are long term viable at least.
Unfortunately, the collapse of the property sector has toppled rest rest of the economy along with it. Property has reach bottom first but now sits atop the heap of rubble that once was the Celtic Tiger. No-one’s going anywhere fast until the rubble is clear or else is grown over by weeds after a decade or so.
Hopefully an earthquake won’t suddenly come along and bring the heap down on top of our heads again.
Careful now!
Estate agents have been calling the bottom for the last 36 months.
Brian Lenihan called it in September 2009:
@OMF, I’m not sure that it’s a bottom yet. Bank of Ireland has reserved against a 60% fall in residential prices. It has been doing this gradually over the past several quarters. The bank’s forecast of a bottom is a 68% fall from peak. In other words Bank of Ireland is still under-reserved and we have a further 15% to fall (from here).
That is just one crystal ball though. One that has been somewhat cracked and distorted to date.
My understanding is that we have reached that at this stage. Considering the write-offs of property in ghost estates, developments, etc, on aggregate we may have even passed it.
I appreciate that I am but the latest in a long line of bottom callers. However, my call comes in the impeding wake of ~10,000 people receiving rolls royce pensions and six figure lump sums.
That said, I could very well be wrong. We could even see a double dip in house prices if things really go to the wall.
In the interests of transparency anyone know anything about…
Item 51. Land/site, Dublin 1, “Not shown” address, 0 reserve, sold for €71,000?
the answer is but a google away.
http://www.auction.co.uk/irish/LotDetails.asp?A=790&MP=24&ID=790000051&S=L&O=A
@ Conan Drumm
Lot 51 Site bought 6 years ago for 550,000. Loan was with BoSI. Sold today for 71,000 exceeded its Allsop reserve of 20,000 or less by 34.8% on chart. It is easy to get figures to deceive.
@ Conan Drumm
The above fall in the value of lot 51 was 87% from peak to today which shows how desperate BoSI is to exit the market here. The site was advertised as D1 but I believe it is actually D7 which is a bit bizarre. Considering the site has no services. Whoever paid 71,00 for it paid about 50,000 too much. Also, may have developer contributions overhanging. There was infinitely better value at the auction.
@ Robert, yes Upper Dominic St is in Dublin 7 with Lr Dominic St in Dublin 1.
The site mentioned is of value to its neighbours and it’s owner is in a position to make redevelopment awkward. There used to be a factory at 25-29, which I think is vacant for a very long time. The ownership of this sliver of land would make redevelopment of that site easier and provide better access to the lane way, which links on to Palmerston Place
It is of course just a few metres away from Sartini Court http://www.daft.ie/searchnew_development.daft?id=14006, which I understand is fully let on the residential side, though the shops remain vacant. I have no doubt demand for quality accommodation close to town is still there.
Whenever building recommences in 10 or 15 years time, town maybe the place to live?
Whenever building recommences in 10 or 15 years time, town maybe the place to live?
I wonder what dizzy heights property tax + refuse collection + water charges + household TV/Media license + ESB network charge will have reached by then? :)
@ Conan – Everyone has to live somewhere. Maybe we will have stopped subsidising rural Ireland and ribbon development by charging appropriate cost based charges for waste, water etc.
Indeed.
Mind you (1) a very high % of urban dwellers is of rural origin and (2) many rural dwellers are urban retirees, and not just from this country.
I do wonder when the ‘Tiger’ baby boom will come to home buying age (20+ years?), and how many of them will choose or be able to choose to stay in Ireland? Education spend on primary and secondary education is likely to be significantly shifted to urban centres because of the demographics, creating a real opportunity cost in rural education and exacerbating the existing cost at third level.
In the meantime, beefore new housing development takes place, the surplus housing stock will have to be filled. There may also be a lot of renovation to be done on older stock before new housing is required.
There is one teaching hospital for aapproximately 1million people in the West of Ireland with a full range of health care. There are at least four such hospitals in the greater Dublin area, with extensive public transport access, for approximately 1.5million people.
If the cost of service provision in a small country is to be worked out per person per place of residence then be sure to calculate the cost in terms of access to services. The rhetoric around job seekers allowance follows the same facile set of propositions. A minimum wage job in Dundalk, or an internship in Athlone is useless to an unemployed parent with children in school in Mayo.
Unless one takes the view that no one should live where there is no work… which is a sure way to ridding an area of any form of public service provision. It is also a propostion that might as easily be applied to the country as a whole.
@ Niall
I wonder about the asking price of the Sartina Court development €3,750,000
which is not a whole lot higher than the price that Mick Wallace TD paid for the site originally. In effect, they may end up, selling the development for little more than the cost of the site.
So, he purchased a site a few hundred meters from O’Connell Street, five minute walk to the Illac Centre, spend two and a half years developing it. Paid probably 1.5 million in labor costs alone, not counting the cost of any materials. A Tower crane moved onto the site straight after demolition phase and remained there for the duration. Then, he is forced to sell because the market topples over. Wallace made mistakes. If you like, his main mistake was to reinvest and try to “plan” ahead and not to get out. The lenders completely and utterly failed to do any risk analysis. I think Wallace was one of the most conservative of builders but someone who really got caught up in the maelstrom of sky rocketing site acquisitions and fevered expansion of bank loan books. This development along with the one on Jones Road were not “pre sold” which was indicative of the fact that he did not realise how quickly the end was coming. In reality, they were loosing value everyday that it was taking to complete them. They had to be finished because not finishing them would have spelt immediate insolvency, Fair play to him for finishing out, to a good standard and not walking away into insolvency. Ironically, he is now at the mercy once again of his lenders who may just want to pick the carcass clean. Unless a substantial amount of his loans are written off and he gets “debt forgiveness” he is going to end up there anyway.
@ who_shot_the_tiger
“The bank’s forecast of a bottom is a 68% fall from peak.”
Can you tell us the source of that quote please? At their Q4 results Richie Boucher said the bank thought that conditions were now worse than the PCAR base case but had not yet hit the advrse scenario. So that would put expected house price falls in the 55%-60% range.
If house prices fall by 68%, BOI would probably need to be further recapitalised and may in fact end up with the government as a majority shareholder. I certainly wouldn’t want to be holding BOI shares if I thought house prices would ultimately fall by 68% because that certainly is not priced in at the moment.
@RB regarding the cost of materials,its claimed that his bro was a major supplier of his ‘materials’ and was ‘paid’ with a vineyard for them.But it will be very interesting if ‘foreign’ banks/lenders force him into BK and the loss of his seat.His construction quality was good,decent design aesthetic too in fairness.
http://www.wexfordecho.ie/news/eykfgbqlgb/
@ john gallagher
Well, at least he will have a bolt hole and can busy himself making a few bottles of Vino. If he was in NAMA would he have the same problems?
@Robert Browne and a few bob to spend too!
Good question,he has AIB borrowings but assume below the threshold for NAMA.Appears,to be a favorite of VB,as comic relief.
“Company accounts show that Mick Wallace and fellow director Sasha Wallace shared €289,605 in directors’ pay in 2008, even though M&J Wallace suffered a loss of €2.7m that year. Pay for the two directors had nearly doubled in 2008, from €184,141 in 2007”
http://www.independent.ie/national-news/wallace-i-face-ruin-2656616.html
“Mick Wallace: The Minister is dead right to say that much of the behaviour of companies that leaves a lot to be desired is not illegal. However, I wish to raise a different point, that much of the behaviour should be illegal. Too often what companies do is legal but it should not be.”
http://www.kildarestreet.com/search/?pid=299&pop=1#n4
Indeed Mick,could not agree with you more!
“You can also ask someone like the affable Mick Wallace, what we get in return for a €92,692 salary, a gold-plated pension, a personal representative allowance of €15,000 (unvouched) to €27,000 (vouched), a travel allowance of €32,966 (Mick being 130 km from Leinster House), an independent’s allowance of €41,152, a secretarial allowance of €41,092 an €8,000 grant for a constituency office, termination payments, free facilities at Leinster House etc. And let’s not forget Mick’s well-publicised distractions in dealing with his own extracurricular businesses. And you might ask if the €250,000-plus potential annual cost of Mick, as unconventional and decent a man as he no doubt is, is good value for money.”
https://namawinelake.wordpress.com/2012/02/25/how-much-do-irish-politicians-get-paid-part-2-of-3/