Bank of Ireland and Permanent TSB  have confirmed that they will make available, albeit in limited circumstances, special mortgages that will enable borrowers to effectively carry over negative equity from their existing home and add it onto a new home loan.  This will come a great news to families who need to trade-up but could not find a solution to date.

The Central Bank have not publicly approved this product but rather, has commented that  banks intending to provide these negative equity mortgages consult  with them.

The qualifying criterion have not yet been made available, however, it is likely that this type of mortgage will only be made available to prime applicants who can demonstrate strong repayment ability  for the entire amount i.e. loan and carried over negative equity together with the necessary charges and interest.  It is unclear whether an increased interest rate will apply.

More information will be posted as soon as it is available.

The Morning Show on East Coast fm

The first major multi-lot auction of the year will be held on 1st March at The Shelbourne Hotel by Allsop Space – catalogue available on our auctions blog.

Yesterday was a busy day, we started with Declan Meehan and the Morning Show team on East Coast FM to discuss the east coast properties, commercial and residential.

Irish Daily Star, 7th February 2012, discussing properties to go under the hammer

Yesterday evening, I joined the enigmatic John Purcell in the KCLR96FM Kilkenny studios for his business show, The Bottom Line. Here we discussed properties under the hammer in the Carlow/Kilkenny areas.

The Bottom Line business show with John Purcell, KCLR96fm

Allsop Space have now issued the catalogue for their March 1st auction. With one hundred lots offered, volume is down 12 from their previous auction in November last year, and the quality definitely varies.

Regular locations like Castleforbes, Dublin 1 and Grallow Wood, Abbeyleix re-appear this time around and are assured to sell, although I am not expecting the reserves on these particular properties to be exceeded by as much as usual. In the past, maximum reserve prices have been exceeded by an average of 33%, however, the market has fallen in most areas since Allsop Space ran their first auction in Spring 2011 so it would seem reasonable that prices achieved from investment properties would remain constant or drop slightly.

The Spire, former Church turned restaurant in Duleek, County Meath

Back to this latest offering from Allsop space…

Sample maximum reserves include:

• A two-bed cottage in Leitrim on 0.3 acres from €7,500
• Studio apartment in Rathgar from €35,000 (bidding on that should be interesting!)
• Three-bed houses in Cabra from €100,000
• Apartments/retail mix in Harold’s Cross, Dublin from €595,000
• 55-bed hotel in Donegal from €650,000
• Stunning residential watermill in Rathvilly, Co. Carlow on 3 acres from €150,000
• Four-bed terraced period house at Seville Place, Dublin 1 from €35,000
• The former Church turned restaurant in Duleek from €60,000
• Two-bed apartment in Limerick City from €25,000 (although that might not turn out to be a bargain – The rental market in Limerick has its own problems at the moment, which I will cover in a later blog)

As already mentioned, the lead-in for this auction is less than three weeks so it is imperative that interested bidders start preparing immediately.   Log onto our auction services for buyers to get started.

Click to download in PDF

Click to download in PDF

 

WHILE THE PRIVATE treaty market is continuing to languish in the doldrums, 2012 is likely to see another wave of distressed property auctions, as receivers look to extract value and the National Asset Management Agency encourages developers to off-load their stock. Moreover, private individuals looking to offload their properties might go down the public auction route this year, rather than rely on the vagaries of the market.

Over the next 12 months, new names such as Wilsons Auctions will be hoping to repeat the success of established players such as Allsop Space, which set the standard when it began running successful auctions last year. Its four auctions reported a 92 per cent success rate, with 314 properties sold, and it is planning on continuing this level of success in 2012, with five auctions scheduled this year featuring a “broad mix” of properties each time.

Allsop Space Distressed Property Auction November 2011

According to Robert Hoban, auction director at Allsop Space, the secret of its success is down to two factors: setting the right price, “we insist they (sellers) go into the auctions with very sensible, realistic prices”; and the exposure Allsop, which is a UK outfit, has managed to generate internationally. Indeed some 12 per cent of its auction properties were sold to foreign buyers last year.

Also looking to repeat its success this year will be Galway based agency O’Donnellan Joyce, which sold 73 out of 79 houses it put up for public auction in 2011. According to managing director Colm O’Donnellan, properties for sale came from a variety of sources, including receivers, banks and estate sales, and he hopes to double the volume of properties sold in 2012, expanding its auctions to include properties west of the Shannon. He puts the firm’s success down to its previous experience in auctions, having been involved with high profile auctions during the boom.

Nama is also likely to play a key role in the distressed property market this year. While the agency has ruled out holding a public auction of properties associated with its loans, it is likely many of its 10,000 or so properties will come to the market via auction in an indirect way in 2012.

According to a spokesman for Nama, it may “encourage” developers to sell their stock by holding auctions under their own name, or by rolling their properties into existing auctions.

This year may also see an increase in private individuals looking to offload their non-distressed properties at auction. Hoban says he is receiving a “huge amount of calls” from interested individuals, and notes the “vast majority” of properties sold at auction last year were previously available on the private treaty market but didn’t sell.

However, key to this will be sellers who are prepared to accept the low advised minimum values (AMVs) required for auctions.

But while supply might be out there, will demand hold up in 2012?

“There is a massive appetite for below market value properties, both inside and outside of Ireland,” says buyers agent Carol Tallon, author of the Irish Property Buyers Handbook 2012, noting that September’s auction marked the first time a first-time buyer (FTB) with mortgage approval bought at auction. However, this remains an exception, with buyers typically buying with cash.

“The practicality is that an auction by its nature allows a three-four week lead in. That time frame means that getting approved for finance before an auction isn’t the easiest,” notes Robert Ganly, head of residential and country with Knight Frank. According to O’Donnellan, about 60-70 per cent of purchasers at his firm’s auctions have been cash buyers, with a similar rate recorded at the Allsop Space auctions.

In the absence of the much-vaunted property register, auctions are providing some needed price transparency.

“The key thing is the fact that they’re allowing the open market to set the sale price,” notes Hoban, adding, “we’re allowing the market to find its own level.”

But are the prices being achieved truly indicative of the wider market? After all, some property experts suggest that not all banks are willing to accept the prices that receivers have achieved through sales at last year’s auction. For example, Bank of Scotland intends to exit the Irish market. So it may instruct its receivers differently to the domestic banks, who have a long-term commitment to the Irish market, and who may have a preference for taking longer to work through their distressed properties.

It is this that is probably acting as a dampener on other property auctions and curtailing other local agencies from getting involved. Last year for example, Savills had planned to stage “Ireland ’s biggest ever property auction” in the autumn, but it was postponed. According to the company, it currently has “no formal plans” to hold the event in 2012.

Similarly, last year Knight Frank also considered holding a group auction, but has no plans yet for 2012.

“We are looking at all options at the moment. If we had a group of properties that are priced realistically we would consider it,” says Ganly. In the meantime, it will go ahead with its other auctions as normal, with a sale of land in Enfield, Co Meath, scheduled for early February.

Nonetheless, there will be some new names in the group public auctions market next year – no surprise given the levels of inactivity in the overall property market. Indeed according to O’Donnellan, auctions now account for the biggest part of his firm’s business. They will be hoping for a better result than some of the much publicised less successful auctions last year – in Donegal for example, agent Easy Let held an auction at which just one of 40 properties sold.

Wilsons Auctions, which is known more for auctioning cars and office furniture, is set to bring a distressed land and property auction to Dublin.

It has had some success in this market in both Northern Ireland and Scotland, and according to Rebecca Wilson, head of corporate services with the company, it will set the date for the auction in early 2012. She expects between 40 and 60 properties to be up for sale on the day, noting the event has support from the company’s clients, including insolvency practitioners and finance houses.

It will be hoping for a better result than Merlin Property. The company, which has also made its name in car auctions, held an auction for privately owned properties last November. However, it only managed to sell two out of the 10 properties listed. It will hold its next auction in March.

Merlins first property auction, November 2011 at the Burlington Hotel

Gunne will also be back in action in 2012. According to Marian MacQuillan, it has plans for between six and eight auctions this year, including a number of regional auctions covering the north east of the country.

But while investors might be keen to pick up a well-priced property, there is another side to rock-bottom sales, as protests at several auctions last year demonstrated.

While in Galway, O’Donnellan reported no protests at his firm’s auctions, in Dublin, the Allsop Space events in the Shelbourne Hotel attracted some protesters.

Pointing out that directly repossessed houses weren’t being sold at the auctions, with three quarters of properties for sale coming from receivers, Hoban says the protests were aimed at the Government.

In any case, the protests evidently did not put off buyers but if the domestic government-supported banks start to move on their distressed property portfolios this year, it is likely that protests at auctions may increase.

Coming soon

Allsop Space

Where : The Shelbourne Hotel, Dublin

When : March 1st

O’Donnellan Joyce

Where : Galway

When : February 24th

Merlin Property

Where : Burlington Hotel, Dublin

When : March 20th

Real Estate Alliance

Where : TBC

When : Spring (date TBC)

Gunne

Where : TBC

When : March (date TBC)

Wilsons Auctions

Where : Citywest, Dublin

When : Date TBC

Click on the image above to watch the TV3 Midweek special on Irish house prices, with Carol Tallon (Author of the Irish Property Buyers Handbook), Derek Brawn (Author of Ireland’s House Party) and Keith Lowe of DNG Estate Agents, hosted by Nora Owen.

- Extract from the Minister for Justice and Equality appearance at the Dáil
Select Committee on Justice, Defence and Equality on amendments to the
Property Services (Regulation) Bill 2009 (full debate available here =>
http://debates.oireachtas.ie/JUS/2011/10/19/00003.asp).

“To address this issue, amendment No. 19 gives the PSRA the statutory
function of publishing residential property sales prices and amendment No.
17 inserts a new section 86, which will contain more detailed provisions.
Section 86(1) will provide for the maintenance and publication by the
authority of the particulars of residential property sales prices,
including addresses, prices paid and dates of sale. The published data will
not contain the vendors’ names. Section 86(2) will provide that the data
may relate to sales that have taken place prior to the enactment of this
legislation. Section 86(3) will require the authority to make the data
available to the public free of charge on its website.”

Section 86 of the Property Services (Regulation) Act 2011, which, subject
to commencement, provides the legal basis on which this Authority will
produce the property price register.

86.—(1) The Authority shall, as soon as is practicable after the
commencement of this section, maintain and publish particulars of
residential property sales prices in the State, including—
(a) the address of the property,
(b) the price at which the property was sold, and
(c) the date of the sale of the property.

(2) The particulars referred to in subsection (1) may, at the Authority’s
discretion, relate, whether in respect of all residential properties in the
State or a class of such properties, to sales of properties over a period
of time, including a period of time which has elapsed before the
commencement of this section.

(3) The Authority shall make the particulars referred to in subsection (1)
available for inspection free of charge by any person on its Internet
website in such a manner that the section of the website which contains the
particulars is readily accessible by members of the public.

Note: (not part of the Act) Address will include full details including
house/apartment number or name, where available, to identify to the
greatest extent possible the property in question.

To recap, Daft.ie suggests that the asking prices for houses are now 52% below the peak, showing 18% fall in 2011 alone, whereas,  Myhome.ie, is suggesting that asking prices are only 43% down.  This will no doubt confuse buyers, who read about 50% decreases back in 2010 or apartment owners who are reducing their offering by 70% and are still failing to find a buyer.  So what is going on? In addition to looking at the rental market (which is a key indicator of property values) several leading economists have also examined current levels of employment, income, and inflation.  All of these findings lean towards further declines of property generally throughout 2012 and some, most notably Ronan Lyons, have been criticized for saying that  falling house prices are not necessarily a bad thing as they get house prices back to where they should be based on fundamental economic conditions.  The Daft.ie report is definitely the most comprehensive in terms of area and property type breakdowns, however, I always caution buyers that this report, however comprehensive, is based on ‘asking prices’ of Daft.ie users i.e. it does not and can it be used as a definitive database of prices – it is an indicator, at best.

In relation to mortgage information, we can see by the latest CSO report that a mere 13,000 mortgages issued in 2011, this is down almost 95% from peak figures.  2012 is already shaping up to be a better year for mortgaged homebuyers (investors, you may need to wait a little longer or raid the mattress) with €1.5bn  of mortgage credit pledged by Bank of Ireland, the laws of competition mean that AIB and PTSB are likely to follow suit if they can.  ECB interest rates are currently at 1% levels and the general feeling is that they will remain low for the first half of the year at least.

Despite many false starts, it looks likely that we will have some form of a property price register by June/July 2012.  The current government appears to be more responsive to the various groups lobbying for this bill.  The bad news is that the register is only going to deal with price ranges for any given address (or possibly averages per area).  This is due to a conflict with existing data protection legislation.  The most frustrating aspect is that the government has all of the relevant information, it just cannot be shared legally.  You would imagine that this is a surmountable problem but it is still on-going.  My understanding is that this register will be a work in progress.  The initial publication will start at 2009/2010 prices.

Now, for  the head-on-the-chopping-block part…

Looking at income, employment, taxes, economic outlooks for Ireland, Europe and the world has economists running scared of property and it continually stumps them that purchases continue.  Stale stock leads to off-market buying, lack of credit leads to cash purchases, poor consumer sentiment leads to unexpected buyer trends but surprising interest in distressed property – why is this?  Why are Irish buyers not behaving in an expected way?  It could be historical or cultural, opportunistic or patriotic, stupidity or genius… you decide.  One thing is for sure, the economists cannot understand buyer behaviour in this erratic market.  Well done Daft.ie for conducting a survey on the attitudes of buyers, I have recommended that all buyers take part and I look forward to the findings later this month.

In my opinion, quality properties in desirable areas are well into their recovery.  For some properties, so-called recovery will not come.  As a nation, we built some rubbish and the only way recovery nationwide will happen is when bulldozers take the places of our nation’s repossessed cranes.

Buyers are sick of hearing me say the following mantra but I will continue saying it until we  learn – there is an opportunity to buy well in any market.  A cheap property can be bought cheaply at any time.  The key to buying well is to seek value at prices that are well below market values.

Buyers in 2012 will need to be sure of their requirements, do not get taken in by gimmicks (yes Nama, I am referring to your negative equity mortgage ) and do not get tempted by short-term apartments.  The concept of a start home is no more – if you buy it, you must be prepared to live in it for another seven to ten years.

~ Carol

Emigration has always been a bittersweet subject for our tiny island with many songs, poems and laments idolising and imortalising home.  It is an especially apt topic for the times we face today with a new generation spreading their wings, often times for pleasure but increasingly for economic survival.

Those left behind groan and complain – our inept government, bleak weather, nosey neighbors and yet our diaspora celebrates – lush countryside, caring communities, enchanting music & culture and a longing to be here.  Sometimes it seems the famous Irish pride is most personified by those living abroad and of Irish descent.  We forget that the saying ‘far away fields are greener’ is quite ironic when uttered here, surrounded as we are by every shade of the hue in its most natural form.  The really funny thing, is that most of us have experienced this pride of home – when we are abroad – any Irish pub on All Ireland Final day, doing the jump two, threes really badly to Riverdance and tracking down Barrys tea and Curly Wurly’s as if there was no other sustinance available to man.

The influence of the Irish worldwide is phenomenal and never more so than on the 17th of March every year when the festival of our humble St. Patrick closes down the most influential city in the world – New York.  American Irish in particular are wonderfully unashamed of their Irish heritage, embracing fragments of their ancestory to claim ‘I’m Irish!’ often despite never having set foot on Irish soil.  Where would we be without our wonderful diaspora to remind us that – despite current relative hardships – just how lucky we are, to be where we are.

Orla

% Irish Descendants USA - Photographed at the Dunbrody Famine Ship Visitor Center, Co. Wexford

Daniel McConnell’s leap onto the property ladder was fraught with dilemmas like when and where to buy as prices continued to fall

Sunday Independent, Sunday January 08 2012

About 18 months ago, I was standing in the middle of a massive media scrum on the plinth in Leinster House as Enda Kenny addressed us, moments after he defeated Richard Bruton for the leadership of Fine Gael.

My phone rang.

“The offer has been accepted, the house is yours,” I was told.

“Holy shit,” I yelled loudly in disbelief, drawing a few disgruntled stares from those around me, politicians and media colleagues alike. I couldn’t believe it as I thought our offer, which was significantly below the then asking price, would be rejected. But after a bit of haggling and a threat to withdraw the offer — the deal was done.

Our search was over. We would now have a place to call home. We bought our house for about 60 per cent less than what houses on our road were selling for at the peak in 2006 and 2007.

For over three years, the thought of becoming homeowners had weighed heavily on us. Like thousands of other people our age, we were concerned about the state of the country, the never-ending fall in house prices and the fear of not being given a mortgage.

We kept asking ourselves the same questions. Is it the right time to buy a house? Has the market hit the bottom yet? Will the banks red-card us like they had so many others we had heard of?

Certainly, the massive over-inflation in prices, particularly in Dublin during 2006, meant buying where we wanted to live wasn’t an option. At the time we were renters living close to the city centre. For us, living in town was good, we never bought into the idea that renting was dead money. It suited our needs and we weren’t willing to buy into the madness that was the property binge, despite massive peer pressure to do so.

It wasn’t until the second half of 2008, when the country went into a tailspin, that we stepped up our search for a home. All the time, prices were falling. All the time, the country was sinking deeper into depression. And while such falls in house prices meant hardship and real pain for many mainly older homeowners, in our case it meant opportunity.

Having been approved for a mortgage, we knew our level and not having any strong preference for an area, we cast our net far and wide. We looked at places in Blackrock, Ranelagh, Terenure, Rathmines, Sandymount on the southside and Drumcondra, Phibsboro, Marino, Howth, Clontarf, on the northside. The falling house prices meant homes that only two or three years previously would have been well beyond us, were now up for consideration.

Then in late 2009, we came across this house in Glasnevin. It was in a raw state but that suited. It would give us a blank canvas with which we could start again.

We again asked ourselves: is it the right time? Are we mad buying with prices still falling?

But we had our minds made up. We were ready. We had done our time renting and we wanted to buy a home for the next 20 to 30 years. Given prices had fallen by over 50 per cent in some areas by that stage, we felt there couldn’t be much more to go. We were not looking to flip the house in three years as an investment. We were looking for a home.

But then we hit a roadblock. Our mortgage approval had expired and when we went back asking did it still apply, we were refused even for the amount of our rent per month. We were stunned. We had no personal debt, we had two salaries which were not in immediate danger and we had a deposit.

After being mortgage-approved by a second bank, and just before we signed the deal, our original bank came back and asked us to reconsider dealing with them.

I wanted nothing to do with them. However, they asked us to meet them, ensured us things were different and absolutely we would be offered a mortgage.

I can only surmise that the withdrawal had more to do with the bank’s wider problems than our own failings. We decided to accept their offer in good faith and went with them. Since then the bank has been a pleasure to deal with and been brilliant to us.

Given the house was a probate sale, we waited several months to close. Indeed, it was only as the country fell victim to the German-led Troika Anschluss in November 2010, that we took ownership of our new home. The contrast could not have been starker. The country was going into bankruptcy and here we were taking one of the most exciting and dramatic steps anyone takes during their lives.

On the one hand you are seeing your country humiliated internationally but yet personally we were thrilled.

With six months’ work needed on the house, it wasn’t until June of last year that we moved in. Prices have continued to fall in certain areas. A small number of houses in a similar condition to ours on our road are up for sale for prices below what ours waspriced at, and for what it sold.

Officially you could say, given how much we paid and what we put into the house by way of rennovations, given the continued fall in prices we are now part of the negative equity generation. If we were to sell now we would take a hit. Not a huge one but a loss nonetheless.

We certainly hope that the bottom is here, or near at least.

But the time was right for us to buy. We have no regrets, we are happy and have been lucky.

Originally published in the Sunday Independent, 8 January 2012

The two rivals, Notre Dame and Navy will play at the Aviva Stadium in Dublin, Ireland on Saturday 1st September 2012.

Notre Dame are based at the Catholic Notre Dame College in Indiana and Navy are based at the US Naval Academy in Annapolis, Maryland.

Property: It's not game

We have experienced a huge growth in residential and commercial enquiries from U.S. residents over the past two years and our aim with this initiative is to provide greater access to interested buyers.

So all you American football fans coming to Dublin to see this game, why not include a property inspection trip in your travel plans? We will make it fun, stress-free and most importantly, profitable for you. Local agents are ready to source the right property for you – either as an investment or holiday home!

There are certainly great buying opportunites in todays ‘buyers’ market’ so let us help you find that ideal property while you worry about the game.

Please note that references for Buyers Broker services are available from past U.S. clients.

Interested buyers can contact Ms. Ger Gilbride, exclusive buyers agent via email: gergilbride@buyersbroker.ie or telephone: +35387 270 1 270