Saturday, 16 April 2011

Allsop's auction... a fable for the Irish property market?

"So many people turned up for an auction of distressed properties in the Shelbourne Hotel today in Dublin that it had to be suspended amid Garda concerns for safety.  Some 80 lots, ranging from a Ballsbridge mews to a collection of cut price flats in Portlaoise, were offered to the highest bidders.....    Such was the interest in today's sale that crowds spilled out of the hotel and onto the street."  (Irish Times).

"So, is the time finally right to buy property?...........  The success of the Allsop Space auction at the Shelbourne Hotel in Dublin yesterday suggests that the housing market could be at -- or close to -- bottom, with the prices achieved averaging approximately 55pc of what similar properties sold for at the peak of the market." (Irish Independent)

"Almost €14.5 million of repossessed properties were sold over five hours at the packed auction yesterday where bidding occasionally became frenzied — with one successful bid even coming from the street outside.........  Over 1,000 people packed into the ballroom of the Shelbourne Hotel in Dublin .... "   (Irish Examiner).

Reading yesterday's  reports you might think newspaper property editors thought the bad old days of the property boom had done a Lazarus.  

Rather than debating rich men and their chances of passing through the eyes of needles, however, the big question at Allsop's auction seemed to be how many cash-rich bumpkins you could fit into the hall of the Shelbourne Hotel.  It seems the organisers underestimated.

Properties went for more than 20%+  above their reserve prices, but still about 50% below those asked at the peak of the bubble.  Looking at some of the Dublin ones however -  which I would be familiar with -  it is hard to see if there were any real bargains.    A €550,000 mews on Raglan Lane might be considered "cheap" by some, but there was a detached mews in the same spot on MyHome with an asking price of €620,000 last year.  OK, it's cheaper... but, what isn't?

Likewise, two Churchtown properties are thought to have sold for near, or thereabouts, the current asking prices in the area.  Some apartments were sold in the city centre, but nobody - nobody - is buying apartments in town at all these days, due to oversupply. 

So what did Friday's auction tell us?

It told us that there are still plenty of individuals with spare cash in their pockets, despite the austerity imposed on the rest of us.  It told us if you cram enough of them into an enclosed space, in response to a hyped event, they will recreate the bidding frenzies of the property boom in microcosm. 

But as a barometer of the Irish economy, the current postions of prospective purchasers on the ground, and the property market in general?

I don't think it told us anything.

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Ella said...

Hi GM, agreed, the auction tells us nothing of the state of the property market for your normal josephine/jo soap. It does tell us that there are people in the country with cash. I understand those who needed to secure a mortgage were not out in force yesterday.
Attached is a list of what the properties sold for.

Lot 67, billed as Leisure is a pub and I've pulled the following quote from the indo

"Stephen McCarthy of auctioneers Allsop Space was happy that the Rascal's Pub in Arklow, Co Wicklow, sold for €400,000 or €140,000 more than its guide price.

The same property had sold for €3m in 2005, and Bank of Scotland (Ireland) was offering it at €1.2m last autumn, he said"

Sounds like it might have been a good buy yesterday, or perhaps a very bad buy in 2005.

Anonymous said...

THANKS BE TO GOD THE CRISIS IS OVER gm, as you say this was a minor event accompanied with hype of agrand magnitude just what you would expect from the chimps behind it, the govt, banks, and realtors fiction writers all,low reseves just to say how much tthey were
surpassed,now it is time for the puffers at the oirish toimes to write long windy articles how this was just the rebirth of celtic tiger2,this is just beans 81 lots 14 mil in light of the scale of the horror,as its certain a restructering or default is on the way and either going back the punt or ,to a pig euro either way fixed assets in irl will be still worth very little in terms of todays hard euro i expect the banks and govt want to sell as much assets as possible beforehand, and to anybody with euros in irish banks they will get pig euros or punts in exhange, get your cash out now UP DEV -BH


Paesopboy said...

Allsop's Fables - very good GM
How about "The Goose that laid the Golden Egg" and the moral being that greed often over-reaches itself.
Oh btw seein' and all as you were a mod back in the day - don't bother with Brighton Rock - it's woe-gious

The Gombeen Man said...

That's right BH. It's still something of an anomaly that this place is in the mess it's in, yet house prices are still dearer than many healthy EU countries. These people are like property lemmings.

True, what happens with a default? If there is a two-tier Euro, Irish currency will be worth less than that in Britain, France, Germany and the rest.

Nice one PB - "The Goose" story is very apt indeed.

Thanks for the tip re Brighton Rock... I saw a couple of ads featuring lots of moddy types on scoots (I actually thought they were from Quadrophenia at first) and wondered.

Yes, it's something I still have an interest in, though it's a long way back. I still have a look whenever I see a Vespa or a Lammer... though I like motorbikes too.

Even when in the mod days I hankered after a bit more poke (the fastest my scoot ever did was an indicated 67mph, downhill, on the Stillorgan dueller... but I think just over 60 mph would have been it's normal, post-rebore speed. Even then, you had to mix lots of two-stroke each fill-up, otherwise the back wheel would just lock.

This is all back in the 80s, and when I went to live in London for a few years I jumped from a Vespa 125 (bored out to a 180) to a Kawasaki GT750. The bike, tax, and insurance were cheaper than in Ireland, not surprisingly.

I'd never ridden a bigger bike before (even the gearchange was totally different)... that was some shock I'll tell you. The sheer weight and speed of the thing - though it was a shaft driven tourer, it went like a hot snot.

I was in London at the time and picked the thing up in Farnborough - somewhere in the south west home counties) and rode it back to Finsbury Park via the M25, with the other half on the back. How we made it, I will never know.

Anonymous said...

The greed !the frenzied crazed greed ,its back ,nothing has been learned ,everyone wants the crazy "good " times back .

PonyZ1boy said...

Not meaning to turn the blog into nostalgia alley but I used to ride a clapped out honda 175 in ireland before going to london in the mid 70's where for the price of its insurance and tax (well almost) i got myself a brand new Norton Commando 850 (It's liquid acceleration and effortless capacity to cruise at speeds of up to 110 mph classify it as a motorcycle limousine") which i had to ride from Neasden to Maida Vale. Jesus I must have lost about 5 kilos in sweat and fear alone so I hear you brother on that "getting the beast back home" front. Hit a dog on the way - at Cricklewood - little yappetype furball thought he'd take down the flagship of british motorcycle engineering (well in my mind anyway till the oil leaks and the rattles and the not starting etc kicked in - which all came later) He almost succeeded too. Dog lovers - don't worry he didn't suffer any long term damage. The little "man's best friend" chased me again a couple of months later when I was far more proficient at the craft of motorcycling and learned his lesson. Sorry dog lovers but sometimes a gentle boot up the arse is all there is left to a biker. Next time i saw him after that he was running round a tree by the road chasing his tail instead and just stopped and looked at me for a moment as i went by. It was like as if he'd just remembered something from his past and couldn't quite put his paw on it -so continued on with his tail chasing. Dogs!! Apologies again for straying so far off topic. PB

Anonymous said...

yes indeedSENIOR GM one monday morning soon you will wake up and find that over the weekend mr noonan has decided to offer you 2 pig euros for one old and ancient euros used by constantine so long ago GREAT SO FAR by 11am the lads in london will have theX rate down to pig euro at 30 cents an dropping , by noon mr noonan will have a press conference decrying those working class spivs in london who didnt make it as soccer players or rock singers ruining the aspirations of the great oirish people just a hunch GM BTW howis berty BH

The Gombeen Man said...

@PB. Yes, the very last thing you need when trying to keep an 850 in check is a yappy little dog snapping at your footrests. And I take it you've an affinity for Kwackers too, with the Z1 appendage?

Yes, one of my motivations for going to London back then was to get the GT750. Was wondering about a new Kawasaki or a nearly new BMW RT100. The Kwacker won in the end, and I got a big FLF fairing with double headlights and a radio fitted. When I was getting used to it (the fairing made it even heavier), I nearly dropped it (while at standstill) at the Old Street roundabout. Embarrassing.

@BH. Yep... be interesting to see what happens. The last I heard of B-B-B-Bertie he was giving economic advice to the Nigerians. I kid you not. Maybe it was to do with online scams?

Dakota said...

Oh yes only in the septic isle........I'll say this Allsop did its homework and marketed it perfectly. Cram as many punters into the right small venue with little or no parking - have them spilling out onto the STREET and bobs your aunties boyfriend. Basic psychology. Bravo.

I have been in many a country but nowhere trives on such a potent background of psychological motivations. Bottom line person A only motivates in response to person B, here. A perfect demonstration on April 15th. I'm sure Allsops saw the potential, they had 15 years to study it....I'm even sure they drove the roads, I'm convinced they understood the motivational factors.

ADDITIONAL REALITY CHECK......Now apart from the traditional international spring uptake in property sales, Oireland has serious problems. Lets set aside the now obvious, deficit, the physical reality of ghost estates, near on half a million unemployed, forced emmigration, etc, etc and concentrate on the phenomenons present during the sooooo called boom, shall we? Namely 3rd world infrastructure (loony public transport, traffic, water (50% lost), refuse, broadband the list is endless. Whether or not the property ground floor has been reached is academic, the unpleasant reality is - most notably - the poor fools who bought during the peak of the boom and workers are screwed, either way.

Oh yes reality, hey, what about the fact that no capitalist economy which concentrated on property growth over a sustained period of time, ever recoverd to any sizable extent, without a recovery in this property sector?
Question: how long do you think an other bubble would last, when it's still based on a dystopian reality? Answer: less time than the last one.
Oh cripes what about no economy ever recoverd by taxing their way out of it (a reality well in motion here). Ah sure the craic will see us through....

Nothing has been learned, it's the same old story there's still as many quangos and the English understand the Irish. History repeats itself, don't you know.

student houses for rent in newcastle said...

Greed! Hardcore mindless greed, the back, nothing has been learned, everyone wants to deceive the "good" time back.

Anonymous said...

Do an Icelander.We will owe 250 Billion by 2015.The debt and interest will pile up.We still have time to withdraw from the Euro and default on our bonds investors in Bank bonds will have to do with 10 Cents on the Euro. We then devalue the Punt by 40-60% like the Icelandic Kroner and get back into the bond markets at 4-5%.Twenty years of emigration and penal taxes await us if we continue on our current path to economic ruin. Zulu

The Gombeen Man said...

I think Morgan Kelly might have touched on this last Saturday. Should be a bit more about it in Monday's papers, I should imagine.