Knockdown Irish property . . . .

Lyn256

http://www.thejournal.ie/knock-down-irish-property-auction-drawing-foreign-buyers-2011-02/


This looks very interesting. Will it set the benchmark for irish property for the coming years?

I heard the guy being interviewed about the auction on the lunchtime news and one point that he made was that the properties with sitting tenants will be priced in accordance to the rent generated.

Kosseegan

Lyn256 wrote: »

http://www.thejournal.ie/knock-down-irish-property-auction-drawing-foreign-buyers-2011-02/


This looks very interesting. Will it set the benchmark for irish property for the coming years?

I heard the guy being interviewed about the auction on the lunchtime news and one point that he made was that the properties with sitting tenants will be priced in accordance to the rent generated.

It is an auction. There is no pricing other than what buyers will pay. How does he know that every randome purchaser who turns up will bid based on rental yield? He is trying the age old trick of getting as many bidders in as possible by saying there will be bargains galore.

subway

dead cats will be bouncing out of that auction house

Victor

If you are considering taking part, be very careful as, once you have a winning bid on a property, you can't back out - the auctioneer becomes your agent and can sign if you don't. You will also be expected to have a deposit (probably 10%, bank transfer) on the day.

the groutch

Lyn256 wrote: »

This looks very interesting. Will it set the benchmark for irish property for the coming years?

I think you may be onto something, this is one of the few true measures of the state of the property market.
on a bigger scale, but a bit like on ebay, where you use the completed listings option to get an idea of what price to list at.

Idbatterim

Id be very very cautious if I was a foreign buyer who didn't know the market, if there is any sort of bargain, Im sure someone who knows the market here will be onto it! The crap hasn't really even hit the fan here yet!

OMD

Kosseegan wrote: »

It is an auction. There is no pricing other than what buyers will pay. How does he know that every randome purchaser who turns up will bid based on rental yield? He is trying the age old trick of getting as many bidders in as possible by saying there will be bargains galore.

The vendor simply sets a reserve price based on rental yield. Pretty standard for any auction. The bidder does not set the minimum price.

myflipflops

I didn't see this posted previously....

According to the below, the first auction of distressed property will happen on April 15th. As you can see below, reserve prices have been set at much lower than what current sellers are asking for similar properties.

Does anyone know any more about this? Will it be a standard auction open to all? It is a British auctioneers (www.allsop.co.uk/) running the auction so is it them who have valued the propeerties?

the auction would benefit the property trade by establishing a floor from which people could build

This line is very interesting. Will the value of these properties make EA and sellers realise the true market value of property?

http://www.irishtimes.com/newspaper/frontpage/2011/0304/1224291283180.html

irish Times wrote: »

ORNA MULCAHY and FRANCES O’ROURKE

PROPERTY OWNERS and auctioneers alike may well choke on their porridge this morning when they see that house prices have dropped even further overnight.

The news comes with the publication of the catalogue of Ireland’s first sale of distressed property to be held by British auctioneer Allsops, which specialises in selling properties held by banks, receivers and homeowners needing to sell quickly.

The cheapest property being put on the block is a two-bedroom tenanted apartment in Portlaoise with a top reserve of €35,000. A similar apartment in the same development, Bridle Walk, is listed for sale elsewhere at €170,000.

In Rathfarnham, a two-bedroom penthouse has a maximum reserve of €145,000 in the Allsops auction. A two-bedroom ground-floor unit in the same scheme is listed on myhome.ie for €275,000.

More than 80 properties in Dublin, Cork, Limerick and Galway will be offered at the auction in the Shelbourne Hotel on April 15th, which is being organised by Dublin estate agent Stephen McCarthy of Space, in alliance with Allsop, one of the largest auction houses in Britain.

Details will be available from both companies’ websites tomorrow morning.

Each property carries a maximum reserve price. However, according to McCarthy, the actual reserve prices may well be less on the day, depending on demand. However, the reserve set nearer or on the day will not exceed the published maximum reserves.

Details of properties seen by The Irish Times show these maximum reserves are well below current asking prices for similar homes.

A detached four-bedroom house on a large site in Churchtown, close to Milltown Golf Course, has a maximum reserve of €400,000 – less than three-bedroom homes are making nearby.

A large mews house on a laneway in Ballsbridge has a maximum reserve of €600,000. While there is no similar home for sale nearby, refurbished homes of a similar size in the neighbourhood have been trading around the €1 million mark.

In Temple Bar, a studio apartment on Essex Street has a maximum reserve of €80,000, a price likely to strike fear into the heart of investors with property in the area where slightly larger units trade for upwards of €140,000.

The prices are likely to shock estate agents trying to shift property in a dormant market. However, Mr McCarthy said the auction would benefit the property trade by establishing a floor from which people could build.

gurramok

"Studio apartment on Essex st with maximum reserve of 80k". Thats nothing special, most builds down there are tiny.

chicken fingers

A PR excercise, nothing more.

The artificial floor on the housing market is still being maintained. A test auction of some lowish-priced houses will do nothing.
When people start getting evicted and homes start being repossessed wholesale, and when banks finally realise that they need to sell those homes for whatever people will pay for them... THEN, then we will see the true "floor".

gonedrinking

gurramok wrote: »

"Studio apartment on Essex st with maximum reserve of 80k". Thats nothing special, most builds down there are tiny.

but thats the max, it will most likely go for a lot less than that

Mr Teb

I have worked for 25 years in the mortgage sector, All the replies that you see on this thread that will reflect this auction as a bad thing will be mainly from Auctioneers who have basically set the price they like over the last 10 years to the housing market. What is coming is going to surprise even them. Prices are going to drop lower than any economist has predicted so far.
To add some clarity on it as people have done above. Banks repossess properties. They will need to sell them and will drop there prices. Banks are generally willing to take a hit on a property as they know that prices are due to go further. This will reduce prices eventually in surrounding area's. If anyone would like to argue this I would love to hear there arguement.

Victor

gonedrinking wrote: »

but thats the max, it will most likely go for a lot less than that

No, its a maximum reserve. A reserve is the price below which a seller won't (or is unlikely to) sell.

The concept of a maximum reserve is novel, certainly in the Irish market.

WalterMitty

Dont beleive the yields they quote. Rents have a lot further to fall across the country.

subway

Victor wrote: »

No, its a maximum reserve. A reserve is the price below which a seller won't (or is unlikely to) sell.

The concept of a maximum reserve is novel, certainly in the Irish market.

its the maximum the reserve will be.
its a normal reserve but will be announced on the day at a price <= to the max

jetski

Mr Teb wrote: »

I have worked for 25 years in the mortgage sector, All the replies that you see on this thread that will reflect this auction as a bad thing will be mainly from Auctioneers who have basically set the price they like over the last 10 years to the housing market. What is coming is going to surprise even them. Prices are going to drop lower than any economist has predicted so far.
To add some clarity on it as people have done above. Banks repossess properties. They will need to sell them and will drop there prices. Banks are generally willing to take a hit on a property as they know that prices are due to go further. This will reduce prices eventually in surrounding area's. If anyone would like to argue this I would love to hear there arguement.

So working as a mortgage broker or what ever you do, you know more than every single economist in Ireland.... LOL

Obviously, its in the banks interest to get as high a price as possible for a property in every situation. lowering property prices exposes banks to risk as the house value is a security against the loan. One on the reasons banks have minimum mortgages.

@ WalterMitty (appropriate name btw) - I suggest you read this.

Mr. Loverman

jetski, aren't you the guy who has been consistently wrong about the housing market?

Snakeblood

jetski wrote: »

So working as a mortgage broker or what ever you do, you know more than every single economist in Ireland.... LOL

Obviously, its in the banks interest to get as high a price as possible for a property in every situation. lowering property prices exposes banks to risk as the house value is a security against the loan. One on the reasons banks have minimum mortgages.

@ WalterMitty (appropriate name btw) - I suggest you read this.

The market for rent is being artificially propped up by rent allowance. as soon as the new government decide to chop that and stop subsidising landlords. (and they will) rent will have to find a new floor.

beertons

I'm going to head up to the auction too see what it's like. Seen as it's the first of 4 such auctions, there may be more value at a later date. Although there are 2/3 houses we're interested in.

jimmyjim11

you can see what on offer here

gonedrinking

there doesn't seem to be any bargains there, unless the minimum reserve happens to be a lot lower than the max reserve stated, but given the hype around this auction closing bids are almost guaranteed to be at or very close to the max reserve price

WalterMitty

jetski wrote: »

So working as a mortgage broker or what ever you do, you know more than every single economist in Ireland.... LOL

Obviously, its in the banks interest to get as high a price as possible for a property in every situation. lowering property prices exposes banks to risk as the house value is a security against the loan. One on the reasons banks have minimum mortgages.

@ WalterMitty (appropriate name btw) - I suggest you read this.

So what , one months rise . Once rent supplement /allowence is cut a lot more by fiscal necessity and when all the empty homes around the country are finally inhabited, the amount of rent landlords will get, and the resultant price of proeties using investment metrics, will be much lower than the prices stated for this auction. SOunds to me like this estate agent is trying to flog apparently "fire sale " priced properties to a gullible UK market where they havent had as much house price falls as here and where property is still very expensive relative to average wages.

Less rent allowance from government = rents falling
More emmigration= less demand for rented properties =rents falling
More people buying currently empty houses in live in =less demand for rented properties=rents falling
More new investors buying cheap properties at low prices in coming years(not this auction IMO)= greater supply rentable properties=falling rents.

jetski

Mr. Loverman wrote: »

jetski, aren't you the guy who has been consistently wrong about the housing market?

can you give me a link to what your talking about?

Mr. Loverman

jetski wrote: »

can you give me a link to what your talking about?

Couldn't be bothered going through your old posts, but I'm pretty sure the regulars on this forum agree with me.

jetski

@ waltermitty + snakeblood I personally think the rent fluctuations are tied to the interest rates.

Treehouse72

jetski wrote: »

So working as a mortgage broker or what ever you do, you know more than every single economist in Ireland.... LOL

Why don't you tell us what "every single economist in Ireland" is saying?

WalterMitty

jetski wrote: »

@ waltermitty + snakeblood I personally think the rent fluctuations are tied to the interest rates.

What ? Are you saying landlords raise rents as interest rates are rising? If so you dont understand how markets function.

Chris_5339762

A lot of those properties are Investment Properties. I presume that means that there is a tenant in there and that you're just owning the property and becoming the landlord, essentially.

Graces7

Snakeblood wrote: »

The market for rent is being artificially propped up by rent allowance. as soon as the new government decide to chop that and stop subsidising landlords. (and they will) rent will have to find a new floor.

In the meantime what happens to the tenants living in rented accommodation who are already in poverty?

jetski

WalterMitty wrote: »

What ? Are you saying landlords raise rents as interest rates are rising? If so you dont understand how markets function.

LOL..... good man

liger

gonedrinking wrote: »

there doesn't seem to be any bargains there, unless the minimum reserve happens to be a lot lower than the max reserve stated, but given the hype around this auction closing bids are almost guaranteed to be at or very close to the max reserve price

The Bar in Arklow was listed at 1.2m in Sept 2010 in the indo. Max reserve now at 265k

The penthouse apt in Rathfarnham are listed max reserve of 145k. ( 2bed) There is one listed on My home at the moment for 285k ( 3 Bed ).


Depending on the interest in the room on the day i'd say people might get a good deal.