Heuston South Quarter

How low? · 12-05-2009 4:52pm

I would say absolutely not. I was quoting what it's being valued at. Couldn't tell you how much it's worth on the open market and as Dannigar are holding back most of the stock on this buy2purchase thing we wont really know for three years.

Why do you have an opinion?

How low? · 12-05-2009 4:59pm

Thanks peter83.

Do you have anymore info. Do you know, where exactly superquinn will be situated. I've heard conflicting reports, I heard it's under Dargon building the other day. Before that though my understanding was it was under the building 9b. Can you shed any light on this?

The best of luck with your move.

ionapaul · 12-05-2009 5:07pm

Well, I am very bearish (negative) on Irish property prices so what I would say, you wouldn't want to hear - there is zero chance I would pay €300,000 for a 3-bed there on the open market, let alone via affordable housing. But aside from that, I honestly think you would be mad to agree to pay those management charges - over 10 years you'll pay €30,500....at least! That only makes sense to people who place no value on money; there are a lot of them out there of course!

How low? · 12-05-2009 5:24pm

ionapaul,

Thanks for the reply. I'm not happy or unhappy to hear that. Looking for serious advice.

Are you saying you wouldn't pay it because you don't like the area, don't have the money or are apathetic. Or are you saying you believe that property in that develoment will bottom out below 300,000 for a 3 bed?

If the latter what data are you basing this on?

markpb · 12-05-2009 5:42pm

How low? wrote: »

Are you saying you wouldn't pay it because you don't like the area, don't have the money or are apathetic. Or are you saying you believe that property in that develoment will bottom out below 300,000 for a 3 bed? If the latter what data are you basing this on?

Historical trends shows that in *every* recession, property drops by at least 40% from it's peak value. We're nowhere near that now so there's every reason to suspect the same will happen here.

The other reason is that unemployment is still rising and is predicted to rise for another while. With less money in the economy, the price of houses and apartments can only fall. It doesn't matter what you pay, what you think the value is or what it costs the developer to build, people can only pay what they can afford.

How low? · 12-05-2009 5:57pm

You're obviously no economist. That's a bit of a sweeping statement. There have been plenty of recessions where property hasn't fallen 40%. A qucik google search will tell you that.

peter83 · 12-05-2009 6:14pm

How low? wrote: »

Thanks peter83.

Do you have anymore info. Do you know, where exactly superquinn will be situated. I've heard conflicting reports, I heard it's under Dargon building the other day. Before that though my understanding was it was under the building 9b. Can you shed any light on this?

The best of luck with your move.

I don't know for sure but based on artists impressions of the finished complex and the floors plans that I have seen, I am pretty sure it will be under 9b or 9c.

ionapaul · 12-05-2009 8:59pm

How low? wrote: »

ionapaul,

Thanks for the reply. I'm not happy or unhappy to hear that. Looking for serious advice.

Are you saying you wouldn't pay it because you don't like the area, don't have the money or are apathetic. Or are you saying you believe that property in that develoment will bottom out below 300,000 for a 3 bed?

If the latter what data are you basing this on?

The only reasonable calculation to use regarding property values is the ol' investors' yield one - achievable annual rent x (12 - 16) = what I would pay. For most 3 bed apartments in Ireland going into what we all can agree will be a very severe recession and tough few years, I would put achievable rent at no more than 1350 euro per annum (let's be VERY generous and ignore fallow periods and - ahem - management fees), so 1350 x 12 = 16,200 x 14 = 226,800.

Any thoughts on this?

AARRRGH · 12-05-2009 9:28pm

How low? wrote: »

Or are you saying you believe that property in that develoment will bottom out below 300,000 for a 3 bed?

I would not be surprised if a 3 bed in that complex is 150k - 200k in a few years.

AARRRGH · 12-05-2009 9:34pm

ringleader wrote: »

Edit: what definitely would have been mad is paying the €510,000 for the apartment last November 2008, since they're €425,000ish now.
The developers cannot and will not sell below the actual cost of the apartment to them. I don't think prices will drop far too much lower.

They won't have a choice but to drop the prices... although from reading this thread I can (unfortunately) see there are still a lot of suckers out there.

Ah well, it's your money.

1logical · 13-05-2009 10:15am

Once again some people have to be reminded that as far as im aware the developer isn’t going to be putting a gun to anyone’s head in 3 years making them buy the property
The rent to buy scheme is relatively low risk depending on your situation you are in in all fairness.
No one is going to be fooled into buying an over valued property in 3 years because the banks simple WONT give out the mortgage for them so if they are over priced in 3 years (not now) the developer will be getting a lot of second hand units back on thier books unless they are priced at current market value at the time.
I am going for this scheme though do agree they are over priced for the current market though i will be making my mind up in 3 years based on the values in that market, not now.All you’re really doing is renting the property, full stop. Does anyone have any idea what’s happening with the mass of empty properties that aren’t rent to buy?Also, is there a block dedicated to affordable housing or is it mixed throughout the development??I think a few of the rent 2 purchase residents should get together when were all in so we can make sure we are in control of what happens as residents. United front ! Just incase we need to get rents down or something like that that might crop up..

How low? · 13-05-2009 10:24am

@ionapaul

You're obviously a fan of Dave McWilliams Sunday Business post articles.
You forgot to mention that the p/e ratio has historically been nearer 25 in Ireland. The 14 you mentioned is an average across America over a number of decades.

I suppose if what you say will happen. Ie the price will bottom out around the mid 250,000 for a 3 bed then the question is how long will that take to happen? Will it be a Japan scenario where were bouncing around the bottom for a 'lost' decade. Anyone have any thoughts?

Because if the loss on your depreciating asset per year is lower than rent for a year then there's an agurement for buying at this stage. Ie when we're out of the steep decline and bouncing around the bottom.

How low? · 13-05-2009 10:31am

@1logical

Affordable housing is spread evenly throughout.By the way, do you know if there's space in the underground car park for my horse? Or will it be ok to tie him up outside.

ionapaul · 13-05-2009 11:21am

1logical, all empty apartments will be filled eventually - the developer or bank will just keep on reducing prices periodically until the market clearing price is reached and all units are sold. The complex is in too central a location to be unsellable at any price, despite the management fees!

1logical · 13-05-2009 12:40pm

is there a block dedicated to affordable housing or is it mixed throughout the development??

Why are social/affordable people so defensive. In no way did i suggest it should be a seperate block it was just a straight forward question. :rolleyes::rolleyes::rolleyes:
www.askaboutmoney.com is a good site regards location. they have a sub cat. on that site called location location location.Check it out

1logical · 13-05-2009 12:46pm

This post is more so about the rent2purchase scheme rather than its location and affordable housing as far as i can see. Though your more than welcome to park your horse in the basement carpark once it doesnt kick the window of my beemer in ! :rolleyes: joking ofcourse

How low? · 13-05-2009 1:19pm

@ 1logical

I'm only having the craic with you. Some people can have a narrow/uninformed view of what affordable housing is about, that's probably why we'd seem defensive.

that's for the link by the way.

peter83 · 13-05-2009 3:31pm

@1logical

I completely agree on two things, if in 3 years time the value of these places is much lower than the asking price from the developer, they will be getting a second hand unit back from me which they will find harder to sell than just selling to me at the reduced value. I'm renting at the moment and in no position to get a mortgage just yet so I won't really be losing out regardless.

I also agree that the rent 2 purchase tenants should stick together to make sure we don't get completely screwed over.

@ How low?

Never mind the horse, where are you going to put the caravan

How low? · 13-05-2009 4:00pm

Apparently there's a plaza outside the Brunel building, looks big enough to park a caravan.

If I'm honest I'm not sure the rent2purchase thing is a good deal. Let's face it they're over valued at the current prices quoted. So your basically renting a place, because even if they're at the bottom now, the're not going to be near the Dannigers current valuation in 3 years.

The rent is above the odds.

Although I think you have a point that you'll be in a stronger bargaining situation after living there for 3 years. More likely to give you a better price on your aparment in 3 years than Joe Public. Seen as it'd be a lot less hassle for them to do so.

All in all you don't have a great deal to lose I suppose.

Do you pay management fees by the way?

Wildela · 13-05-2009 5:10pm

The rent to buy tenants dont pay the management fee... phew, its a hefty amount p/a. The developer / contractor is Rhatigans, not Danniger, innit? I am pleased to hear about a possible residents group, should include everyone, rent 2 buy, owner occupiers, etc. This could be a great oppurtunity to get a real community spirit going. Everyone has a vested interested in ensuring this will be a quality place to live.

peter83 · 13-05-2009 6:56pm

Wildela wrote: »

The developer / contractor is Rhatigans, not Danniger, innit?

Yeah, I've been dealing with Rhatigans anyway!

Wiledela wrote: »

I am pleased to hear about a possible residents group, should include everyone, rent 2 buy, owner occupiers, etc. This could be a great oppurtunity to get a real community spirit going. Everyone has a vested interested in ensuring this will be a quality place to live.

Definitely!!

How low? wrote: »

If I'm honest I'm not sure the rent2purchase thing is a good deal. Let's face it they're over valued at the current prices quoted. So your basically renting a place, because even if they're at the bottom now, the're not going to be near the Dannigers current valuation in 3 years.

The rent is above the odds.

At the moment we're basically renting a place and have no chance of ever seeing the money again. At least with this we're renting with the chance to put the rent money to good use.
I'm perfectly happy with the rent that I will be paying.

How low? wrote: »

Do you pay management fees by the way?

As Wildela said, no, but I would like to point out that this is only while we rent, which would be the case with the majority of rental properties. We would be fully responsible for our management fees if we decide to purchase though.

How low? · 14-05-2009 2:05am

@peter83

So is it fair to say that you are more likely to buy this property in 3 years than any other?

Also can you give me a breakdown of the management fees, the agent I'm dealing with has been slow getting them to me. Considering in the event that you buy you'll be liable I assume you solicitor has quizzed them. They just seem crazy to me.

In my case the property is 300,000. Servicing that mortgage with those fees would be akin to me servicing a mortgage of around 340,00 on a house with no management fees.

peter83 · 14-05-2009 11:33am

How low? wrote: »

@peter83

So is it fair to say that you are more likely to buy this property in 3 years than any other?

Also can you give me a breakdown of the management fees, the agent I'm dealing with has been slow getting them to me. Considering in the event that you buy you'll be liable I assume you solicitor has quizzed them. They just seem crazy to me.

In my case the property is 300,000. Servicing that mortgage with those fees would be akin to me servicing a mortgage of around 340,00 on a house with no management fees.

I fully intend to buy it in 3 years unless things get significantly worse in the world.
I don't have a breakdown of the fees because they do not apply to me, all my solicitor was interested in was making sure our contracts state that we are not responsible for them. There is no point in us discussing fees with them now becuase the fees won't be the same in three years time, they could go up or down, the estate agent even admitted to that.
As I said, discuss the fees with them. They want to sell these places and if you make it quite clear that you are very interested in the property and really want to buy but the fees are making it extremely difficult for you to do that then I am sure they will try to do something for you.

How low? · 14-05-2009 1:18pm

peter83 wrote: »

I fully intend to buy it in 3 years unless things get significantly worse in the world.
I don't have a breakdown of the fees because they do not apply to me, all my solicitor was interested in was making sure our contracts state that we are not responsible for them. There is no point in us discussing fees with them now becuase the fees won't be the same in three years time, they could go up or down, the estate agent even admitted to that.
As I said, discuss the fees with them. They want to sell these places and if you make it quite clear that you are very interested in the property and really want to buy but the fees are making it extremely difficult for you to do that then I am sure they will try to do something for you.

Hi Peter83,

So if I understand it you're not responsible for the management fees while renting but you are once you've purchased.

Considering you fully intend on buying, I think you'd be making a huge mistake to commit to this buy2purchase thing until you get a very detailed breakdown of the management fees you will be liable for in the event of you buying. Thay are NOT as you suggest, negoitable. All that maintenance and insurance need to be paid for some how. There are an incredible amount of bad stories out there about management fees. Also, consdering there's zero legislation in this area you don't have a leg to stand on.

Let's review,

The hotel build: The Merriott have pulled out, so the hotel build has stopped. It could be anything up to FIVE years before this hotel is finished.
Starbucks have pulled out.
Eircoms not to healthy.
If you go to the site there are simply finishing what's there i.e. the Brunel building and the shop fronts. The rest isn't being touched.
That is a hell of a lot of uncertainty and considering half occupied/built sites have less people living there, that's more money for those that will be living there to pay via management fees. In conclusion I would be shocked if management fees come down at all.

3,000 a year on management fees is akin to 40,000 extra on a mortgage (very approx) meaning that buying your apartment is akin to buying a house in the region of 500,000. Granted you'll have to pay refuse and house insurance but Jesus you would get a hell of a house in that area for half a million in three years, a hell of a house.

As you say you're only renting but I am shocked you have yet to get a breakdown of the management fees, but rent is also falling fast. In 2 years the rent your paying could be double the market rate, it most definitely wont be below the market rate. It's certainly above the odds for the area now.

Sorry for being so negative but I think as a country we have bought too much in to this property thing. Time for placing a bit more value on money. Christ from 1996-2006 the country was basically involved in a big pyramid scheme. I hope this post doesn't piss you off, feel free to agree any/all points, I'm just trying to establish as much facts as I can.

peter83 · 14-05-2009 2:09pm

How low? wrote: »

Considering you fully intend on buying, I think you'd be making a huge mistake to commit to this buy2purchase thing until you get a very detailed breakdown of the management fees you will be liable for in the event of you buying. Thay are NOT as you suggest, negoitable. All that maintenance and insurance need to be paid for some how. There are an incredible amount of bad stories out there about management fees. Also, consdering there's zero legislation in this area you don't have a leg to stand on.

Everything is negotiable, and whats to stop the residents getting together and pushing for a different, better valued management company?

How low? wrote: »

Let's review,

The hotel build: The Merriott have pulled out, so the hotel build has stopped. It could be anything up to FIVE years before this hotel is finished.
Starbucks have pulled out.
Eircoms not to healthy.
If you go to the site there are simply finishing what's there i.e. the Brunel building and the shop fronts. The rest isn't being touched.
That is a hell of a lot of uncertainty and considering half occupied/built sites have less people living there, that's more money for those that will be living there to pay via management fees.

There are other hotels interested in the development and already in discussions.
Starbucks pulled out... oh no the world as we know it is over!!
They are about to begin the construction on building 6 which hasn't already been started so they are not just finishing what is already there.

How low? wrote: »

As you say you're only renting but I am shocked you have yet to get a breakdown of the management fees, but rent is also falling fast. In 2 years the rent your paying could be double the market rate, it most definitely wont be below the market rate. It's certainly above the odds for the area now.

It could be less, it could be more, no one knows for sure and I'm taking a chance. As I said before I am perfectly happy with the rent that I will be paying for my property. There is nothing forcing me to buy, I can walk away and if things are the way I want them to be I will most certainly be walking away. No one is going to tie me up and make me live there!!

How low? wrote: »

Sorry for being so negative but I think as a country we have bought too much in to this property thing. Time for placing a bit more value on money. Christ from 1996-2006 the country was basically involved in a big pyramid scheme. I hope this post doesn't piss you off, feel free to agree any/all points, I'm just trying to establish as much facts as I can.

I can fully understand people's concerns, believe me it took us a long time to weigh up the good and bad points for us and in the end we decided this is right for us at the moment.
Maybe HSQ isn't right for you? There are lots of other properties out there and there will certainly be many more in the coming months.
The people getting involved in the rent to purchase scheme aren't comitting to a mortgage now. They have plenty of time to decide if things are working out as they had hoped and can walk away if they are not.

markpb · 14-05-2009 2:24pm

peter83 wrote: »

Everything is negotiable, and whats to stop the residents getting together and pushing for a different, better valued management company?

I have close to zero opinion on whether you should buy or not but before you do, you absolutely must educate yourself about apartments and management companies. If you fail to do so, you could end up in a world of pain. When you purchase an apartment, you become a member of the management company. You can't replace the management company, it's an integral part of owning an apartment. Being a rent-to-buy purchaser doesn't affect this btw.

If perhaps you mean you could replace the agent or nominate yourself to the board of the management company, you hit an immediate pitfall - developers almost always give themselves an absolute majority vote until they resign and most large developers never resign or take over twenty years to do so. You could end up with zero say in the running of the company, the services provided or the cost of providing those services.

I'm not saying this will happen in HSQ, I'm saying it could and you need to learn what questions to ask your solicitor before you sign any lease agreement.

The_Conductor · 14-05-2009 2:28pm

peter83 wrote: »

Everything is negotiable, and whats to stop the residents getting together and pushing for a different, better valued management company?

Normally not possible (or very very difficult to do) until such time as the developer has divested him/herself of their units. A good example would be to look at other developments Rhattigan have been involved in. In any case- residents have no say in the Management Charge- its members of the management company who dictate it, and votes are normally apportioned per living unit. Were the hotel to remain in the developer's possession- it might be impossible to remove him from the Management Company.

peter83 wrote: »

There are other hotels interested in the development and already in discussions.
Starbucks pulled out... oh no the world as we know it is over!!

I agree with you re: Starbucks. A new tenant for the hotel is unfortunately a different story entirely. Hotels are closing all over Ireland, including in prime locations- for lack of occupancy. It will be an incredibly difficult proposition to sell to any reputable international hotel chain......

peter83 wrote: »

They are about to begin the construction on building 6 which hasn't already been started so they are not just finishing what is already there.

Confirm this with the developer. This is at odds with statements from Ellier Developments (another Rhattigan vehicle).

peter83 wrote: »

It could be less, it could be more, no one knows for sure and I'm taking a chance. As I said before I am perfectly happy with the rent that I will be paying for my property. There is nothing forcing me to buy, I can walk away and if things are the way I want them to be I will most certainly be walking away. No one is going to tie me up and make me live there!!

Re: the management charge being more or less- its actually not a million miles from that which they're charging just over the river on Cunningham Road- and that is an owner managed company. Its a safe bet unfortunately that its not going to come down by any significant amount.

If you're perfectly happy to pay the rent you are paying- fine. Renting should not be 'taking a chance' though. When you rent you are paying for the provision of a service (accommodation). You are paying over the odds for simply 'renting' the property. There is nothing stopping you from walking away- human nature though and experience, show that most people will feel they have sunk 'x' into their property- and that this 'investment' is 'lost' were they to walk away. Psychologically the majority of people are not willing to countenance this......

peter83 wrote: »

I can fully understand people's concerns, believe me it took us a long time to weigh up the good and bad points for us and in the end we decided this is right for us at the moment.
Maybe HSQ isn't right for you? There are lots of other properties out there and there will certainly be many more in the coming months.

The property has to be right for you long term- not just 'at the moment'. If you cannot see yourself living there in the medium to longer term- its not right for you. There certainly will be many more properties out there in the coming months.

peter83 wrote: »

The people getting involved in the rent to purchase scheme aren't comitting to a mortgage now. They have plenty of time to decide if things are working out as they had hoped and can walk away if they are not.

They are paying a price for this though- higher rent than they would otherwise be paying, an illiquid market in the units- which makes determining a fair market value impossible, and the psychological factor involved in the whole episode where people are told their rent is no longer 'dead money'- they are 'renting-to-buy'- there is a whole different expectation in their minds. Of course its not up to me, or anyone else, to practice psychiatry or even psychology on them- but if you've seen the blanket advertising they have done on TV3 and elsewhere- its so obvious what they're doing.........

peter83 · 14-05-2009 3:11pm

Oh god I am really sick of arguing this. Let me just point out that I am not completely niave in all of this and have done a lot of homework on this particular agreement and have maintained a lot of contact with the developers. Building 6 is going ahead according to Rhatigans, I know that from contact I have had with them myself in the last week. My statement of other hotels in talks is from that same conversation.
I think a lot of my statements are being taken in completely the wrong context. I do see myself in HSQ long term, what I am trying to say is that the rent to purchase is perfect for our current situation. We 100% want this to be long term but we are also fully aware that if in three years the price is not right then we will have to look at it as any private rental and walk away.

How low? · 14-05-2009 3:13pm

@ Peter83

Starbucks

Starbucks

I take your point, it obviously isn't the end of the world. I just meant to outline the underlying trend of un-occupation. It makes sense that they wouldn't take up residence. Considering they'd be mainly targeting the on site workers. Which as of now only comprise of eircom. Eircom have an absolutely stunning subsidised canteen on the top floor of their building. So I can't imagine too many of their pay frozen (for the next 3 years) employees will want over priced coffee anythime soon.

SupeQuinn on the other hand is really needed in the area.

I second the guys points on the management fees, I think they've said what needs to be said on that.

Rent

As for the rent issue, I make the assumption that you're renting at €1400 a month for three years.

Now lets look at this, there are nearly exactly 100 2 bed propertys on daft.ie at or below 1000 euro a month. Given the fact that there is an incredible over supply of rental propertys at the moment. Coupled with anecdotal evidence on site like propertypin and askaboutmoney, I think it's safe to assume on any one of these properties you could negotiate a reduction of between 10 and 20 %. Note many of these propertys are nearer the city center.

Here's one very average one for 800 a month. Which I'm sure you could get for 6-700 a month.

http://www.daft.ie/searchrental.daft?search=Search+%BB&s[cc_id]=ct1&s[a_id]=pc9&s[mnp]=&s[mxp]=&s[bd_no]=2&s[pt_id]=&s[move_in_date]=0&s[lease]=&s[furn]=0&s[search_type]=rental&s[transport]=&s[advanced]=&s[price_per_room]=&s[refreshmap]=1&s[sort_by]=price&s[sort_type]=a&offset=10&limit=10&id=700007

Although even if you love SHQ why not try and negotiate the 1200 for this property down?
www.daft.ie/2646053
As you've mentioned you've no deposit. Why not move to a 700 a month property and save 700 a month. For 3 years that's 25,200. Enough for a deposit of a 300,000 plus property.

It short the rent your paying there is somewhere between 1 and half times and twice the average rent for the area.

Given I don't think anyone would agree that they're overpriced at 450,000. I think they themselves are allowing for 10% on this, in affect suggesting they're worth 400,000.

Given the amount and precentage of reductions in the area (again property pin). It doesn't appear likely to be that they'll be anywhere near 400,000 in three years. How many V shaped housing crashes have you heard of? If, in the very unlikely event the housing market is at the bottom, going on past crashes (UK 80s, Japan, Finland) we should expect to be bouncing along it for a while before we see a rise.

Am I missing Something?

Maybe I'm missing something, but considering:

They're overvalued.
The rent is 50 to 100% more expensive than the area around it.
The management fees are bordering on criminal.
It is in affect half a (stalled) building site.

It just doesn't add up for me.

P.S If you heard that other hotels are in discussions from anyone but the hotel in those discussions. It is marketing speak for 'we don't have a bloody clue who's going to take it on'.

P.P.S While I'm on a negative rant, anyone else think the proposed 'finished' development, appears overly developed i.e. everything squashed together.

peter83 · 14-05-2009 4:04pm

I'm just going to say a few last things on this and then I'm done with this thread because I am absolutely sick to death of all of this recession doom and gloom. I'm going to have a positive outlook rather than sit back and constantly complain about how we're all doomed.

Assumptions are a bad thing. I am happy with my rent. Enough said.

Myself and my partner want to buy a good standard 2 bed apartment close to the city centre for long term occupation. We do not want a house and we fully intend on buying an apartment in the long term regardless of whether HSQ works out or not.

Our apartment is not valued at 450,000. Also, in three years, if we intend buying, we will be having the place valued by an independent valuer. If its worth much less, I doubt very much that the developer will tell us there is no room for negotiation on the purchase price and then have to go through the hassle of putting it on the market at a lower purchase price anyway.

To anyone moving to HSQ, the best of luck. I hope it works out well for all us; rent2purchase, affordable housing and private buyers alike.

Heuston South Quarter

Comments