Thursday, 23 June 2011

Allsop's Auction July - what will it tell us about two-tier Ireland?

Sometimes it seems those dastardly Brits know the Irish better than the Irish do themselves.   Take Allsop, the auctioneers who sold off “distressed” Irish properties at the Shelbourne last April, for instance. 

Allsop seem to know that if you put enough cash-rich Paddies in one room – or preferably overflowing from one room out onto the street – you will create, in microcosm, the speculative mania of the boom.... among those with a bit of mattress money to spare.

Mark Keenan, writing in last weekend’s Sunday Times, reckoned that only 2 of 82 of the properties sold at the last auction were not cash purchases.  But were they well-considered?  Brendan Dillon, a solicitor, interviewed in an article in the same paper, opined that "there were as many bargains as there were homes sold for market prices", at the same event.

Another property commentator, Carol Tallon, author of “The Irish Property Buyer’s Handbook”,  said in Metro Herald of June 16th that “reserves at the last auction were exceeded by 30 to 80 per cent”.    She thought that it was difficult to gauge real present-day property values as  “there has only been one major auction and it was conducted in a frenzy”.

And there you have it again - "frenzy".   At a time when the Government is cutting the wages of poorly paid workers in the retail and catering sectors, the very consituency who got the country into a mess through lemming-like property speculation are continuing as though nothing has happened.  At least they are not taking out  loans to do it this time though, so Nama and the banks will be delighted.

So much so, that native auctioneers and estate agents plan to get in on the act by going the auction route with properties they cannot sell by private treaty – even as young potential buyers remain priced-out of mortgages  because asking prices are still too high by accepted lending multiples criteria.   There is something badly wrong.  Read on:

Two properties for sale in Glasnevin:   One  6-bedroom, asking price €445,000, through  private treaty sale with Sherry Fitz.  The other, a 3-bedroom on the same road, with a minimum RESERVE price of €360,000 with Allsop.

Given that private treaty sales are going for under vendors' asking prices, and that lots are likely to sell over the minimum reserve price at Allsop's (If Tallon's 30-80% figures for the last outing are replicated) it will be interesting to see what is actually “achieved” on the day.  

Are we heading for a scenario where the bulk property sales will be made only to the cash-rich at auction?  In a bankrupt country (but for the bailouts) that is maintaining artificially high prices thanks to  Nama and is, at the same time, enforcing austerity measures on its working population - the people who would normally buy houses to live in?

Are young people to be priced out of the market again, even given our rotten republic's dire economic straits?  If so, they had better just book their flights out of here - safe in the knowledge that the country is going down the pan anyway.

There are better, less corrupt places... and those auction-frequenting investors might regret their purchases yet. 

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Anonymous said...

wot a facinating race of people we are we never get anything right ever,we go bankrupt even when the euro taxpayers gives us so many billions in grants freemoney, now the english are getting a auction frenzy going for shure paddy will jump on the band wagon and flog it to death as usual,where is comical ken mcdonaLD the soft landing prognosticator and all the other professional valuers and auctioneers AKA DILDO salesmen and 24 carat assholes 5 levels below used car sales men, oh i forgot there is a severe housing shortage in oirland better get quick GM dont miss the boat cheerio tis a granday tangod BH

The Gombeen Man said...

Yes BH...I'm convinced its just a nation of thicks.

albert hall said...

Perhaps the people rushing to buy these huge, now discounted, properties should take a look at the UK market where council taxes and water taxes apply and see what they have to pay for the same each year. I have a three-bedroom flat on which I pay £3,000 a year council tax and £900 a year water charge. There are five and six bed houses in my area where £6,000 to £8,000 a year council taxes and £2,000 a year water charges apply. Did I not read in an Irish newspaper that property and water charges were soon to be sought for properties in RoI?

albert hall said...

For clarification: I am not against the Irish nation, nor will I criticise the people as I lived there for 30 plus years very happily, but I do feel that the Irish see the best side of life all the time and fail to see the consequences which we are well used to in the UK. Good luck.