Athlone property prices booming !

In the wind

There are quite a few riverside development in Athlone, custume pier, the one at the old aparallel premises and Shannon weir & jolly mariner.

On paper these look nice, Riverside view & all that. Does anyone here have experience of these developments from a maintenance, flooding, neighbourhood or anti social behaviour perspective?

stooge

Long Gone wrote: »

Property is too cheap at the moment - Some great value out there.

I dont think you can say 'too cheap', house prices sell for what people can and will pay based on demand. The current price trend for rural areas seems to be downward, partly due to lack of demand.

Long Gone wrote: »

The restoration of financial confidence and "feel good factor" is essential before we see a real rebound in the housing market.

While I dont disagree fully, it should be said that financial confidence and a feel good factor were contributing factors to the current mess. People thought nothing of borrowing ~10 times their yearly wages, sometimes on 100% mortgages purely because of the hysteria and hype. Had they been thinking rationally, the traditional 2-3 times a yearly wage at ~75% of value would have been adhered. So while more general spending would be good for the economy, it has to be reasoned.

Finally, I dont think (adjusted for inflation) we will ever see a price boom such as the recent one. And to be honest, thats not a bad thing. A strong economy should not be based on or indicated by, rising house prices.

veryangryman

stooge wrote: »

A strong economy should not be based on or indicated by, rising house prices.

Thats true, the rising house prices should be the result of a strong economy.

johnp001

Trend in rural areas and small towns will only continue downwards as there is no under supply like in Dublin.
The prices became inflated during the boom when, due to the fact that incomes were consistently increasing over a number of years, people borrowed more over longer terms than ever before. This was allowed due to complete lack of regulation of the banks and the wishful thinking that the increase in incomes would continue indefinitely.
Until a time when the tax increases needed to pay for the bailout are reversed, employment rises and wages increase leaving the average person with more money in their pocket the fundamentals for property price increases aren't there.
The number of property transactions in this area are still extremely low and if banks were to repossess and put up for sale any significant proportion of the properties where the mortgages aren't being paid there would be further price drops due to oversupply.
The end to CGT exemption at the end of this year will also continue to push prices downwards. In a market with an unprecedented number of cash buyers the CGT exemption applies to a large proportion of sales. Because any prospective investor will have a major advantage by buying before 31 December the prices will be pushed downwards due to around 1/3rd of purchasers being absent from the market next year while supply will remain steady or may increase due to the NAMA and the banks putting more distressed property up for sale.

Saruman

Yeah, I bought in Rochfortbridge and wish I had move to Mullingar as at least there's a decent town there. There's nothing in RFB.
I'm hoping prices get mental so people have to look at little towns like mine. I might be able to sell the house then.
The mad thing is, I bought in 2005 and in 2007 I still had people knocking on the door occasionally and asking if the house was for sale because they saw it on a random property site.
Had I just sold then.....

Freddiestar

A work colleague just bought in Athlone for a knock down price.

I don't think the Dublin madness is going to arrive any time soon.

Zubeneschamali

Freddiestar wrote: »

I don't think the Dublin madness is going to arrive any time soon.

No-one does, we are still wondering if we've hit the bottom.

But when we do hit the bottom, maybe next year, maybe the year after - the same exact thing will happen. Everyone who's been waiting 5 years for things to bottom out will pile in at the same time and prices will jump 20% in a year.

And don't say it's impossible - it's happening right now in Dublin, for the same reason. No new supply - 5 years+ of backed up buyers.

blast06

veryangryman wrote: »

I dont really see them going up significantly for some time soon.

I.T bubble ongoing in Dublin so a temporary hike there (maybe will last 2-3 more years). Hence demand for property in Dublin.

Rest of country (including Athlone) left in the lurch. However the local press (perhaps in need of filling column inches) quote local Property Agents, whose interest it is to big up the property market.

Anyways, cant see it happening here. Still could drop further IMO. Certainly wont be going back up to old levels.

Well if there is an IT bubble in Dublin then what do we call the situation in Athlone.
Think about it....
Ericsson - biggest software house in the country with ~1000 people working there (and work nearing completion for 60 additional office spaces). And given how long it has been there as a major employer then i don't think bubble is the right word
Also 5 to 6 other small to medium sized companies in Monksland and in Garrycastle industrial estate employing conservatively 300 people. There are more if start-ups in IT are counted.

So, taking 1300 people working in IT for a town of ~20,000 (6.5% of population) would mean that Dublin with a population of 1.25 million would need to have ~80,000 people working in IT. I can't find figures but i doubt there are 80K+


As an aisde, i notice planning permission was applied for (approved ... can't recall?) for ~90 houses in Cornamaddy recently. Developer must see something. Possibly that there is a very very small number of properties for rental in Athlone (check Daft... a mere 28 albeit some may be gone) compared to say 3 or 4 years ago. I rented out a house on east side of Athlone approx 4 months ago ..... i put the add on daft at 6pm and took 5 phone calls within 2 hours (took the add down at the stage.... and yes, i realise now i could have got more).
Now why property prices haven't picked up in Athlone even fractionally as much as Dublin .... well i'm not sure to be honest !

Banks and mortgages would be the main reason, it appears people are looking to rent rather than buy these days. I large percentage of the property buyers in Dublin are "investors" looking to rent out the properties.

tubos

blast06 wrote: »

As an aisde, i notice planning permission was applied for (approved ... can't recall?) for ~90 houses in Cornamaddy recently. Developer must see something.

Application is for houses in Drumaconn...

http://193.178.30.218/westmeatheplan/FileRefDetails.aspx?file_number=147103&LASiteID=0

veryangryman

They're taking a chance TBH. Ericsson been up and down quite alot the past decade or so. 25-35 year Mortgage being stuck out there if they did ever shut up shop is not something i'd like. The area has...

1) No nearby shops
2) No decent access to town centre
3) No bus service (not counting flagline Ericsson service which would stop if /// did)

Athlone in general would be fierce fkd if Ericsson ever upped and left. Dick Brutons visit the other day over a nothing contract which had VERY little to do with the Athlone office was nothing short of a joke.

Ericssons big problem is that they deal mainly in Networks (which is not booming) rather than general I.T (which IS booming). So i don't really think we can compare them with the Googles, Facebooks of Grand Canal Dock. Combined with the possibility of Corporate Tax harmonisation etc, I don't see them staying here forever.

blast06

Dolanbaker .... when i say i am "not sure ot be honest", i mean that if you take prices versus rents then Athlone looks to be broadly on a par with Dublin in terms of investment yield and thus i would have expected a similar level of investor interest in Athlone.
I can say this based on property i have .... value ~165K (rent at 850 ... should have been 900). So investment yield of over 6% which should be good enough to attract cash investors !

veryangryman ..... you are dismissing the Athlone pharmaceutical industy plus effect of Athlone IT plus dept education plus tourism industry plus barracks etc etc in saying that Athlone would be banjaxed if Ericsson pulled plant. If Ericsson ever did pull plant i think it could be looked at years later as tthe best thing that could have happened - like Digital leaving Galway in the early 90's..... It would result imo in a large amount of vastly experienced people going off setting up their own startups (as per Galway post Digital). Also, other companies would be attracted by the talent pool that would be available etc etc....
You are wrong to link Ericsson to corporate tax harmonisation as far as i am aware (Athlone is a R&D centre, i.e.: incurs a cost. No corporate profits chanelled through Ireland as far as i am aware).
As for networks not booming ... .last quarter results plus future impact of small cells as mobile broadband becomes truely global ?? Anyway, as no doubt you know its mgmt systems in Athlone anyway..... which is all software. Agreed re Dick Bruton

Bottom line .... while the papers were talking ****e in the sense that they weren't based on too many facts, i think it may be a half accruate prediction of what may well happen. Athlone is miles ahead in every regard of Mullingar, Tullamore, Roscommon, Ballinasloe.
Anyway, none of us really know !!

Long Gone

I agree with the post above. The only way is up for property prices in Athlone and all the fundamentals are sound. We just need a bit more upturn in the local economy, a bit more easing of credit availability and the grovelment to stop taxing and stealth taxing productive workers to within an inch of their lives - Once that happens property prices will rise rapidly - The demand is there.

One thing that always amazes me is the number of properties now advertised locally as " POA ". What's that all about ? - It's like "so you want me to buy your house, but you're not prepared to let me know the selling price ? " Madness....

veryangryman

Long Gone wrote: »

One thing that always amazes me is the number of properties now advertised locally as " POA ". What's that all about ? - It's like "so you want me to buy your house, but you're not prepared to let me know the selling price ? " Madness....

Many reasons. One being the following...

An advertised price may be lower than it used to be, making people assume a race to the bottom and thus to bid even lower. If you give a POA, this price is only given to people who pick up the phone, so "browsers" will not see that the place has been dropping prices from previously listed prices. Thus the seller may be able to get the higher price from a novice who comes in with an offer.

As with life in general, It helps to look at things from other points of view than your own.

In the wind

Long Gone wrote: »

I agree with the post above. The only way is up for property prices in Athlone and all the fundamentals are sound. We just need a bit more upturn in the local economy, a bit more easing of credit availability and the grovelment to stop taxing and stealth taxing productive workers to within an inch of their lives - Once that happens property prices will rise rapidly - The demand is there.

One thing that always amazes me is the number of properties now advertised locally as " POA ". What's that all about ? - It's like "so you want me to buy your house, but you're not prepared to let me know the selling price ? " Madness....

it looks like easing of credit availability is heading south with the Central Bank proposal to implement 20% Loan to Value ratios from January 2015.

In short this means that a property bought today with a 10% LTV ratio may well drop in price as soon as January 2015 because demand will be reduced by the in-availability of 90% credit to mortgage buyers.

so by extension , it would be a bad move to purchase this side of the implementation of the new central bank rules, right?

Zubeneschamali

In the wind wrote: »

In short this means that a property bought today with a 10% LTV ratio may well drop in price as soon as January 2015 because demand will be reduced by the in-availability of 90% credit to mortgage buyers.

No-one is getting 90% mortgages right now. The banks are already applying stiffer conditions than the Central Bank is proposing.

The CB rules are intended to stop lenders losing the run of themselves in the next boom, not to make things tougher right now.

In the wind

My work Colleague just secured a 90% mortgage around August time.
Single man engaged to be married.

ghogie91

Houses have definately went up in price I was having a gander on daft before i even seen this thread and they have gone up.

Even the prices to rent places have gone up aswell, putting half decent places out of my price range in the town tbh

Slightly annoying me that

gladrags

Zubeneschamali wrote: »

No-one does, we are still wondering if we've hit the bottom.

But when we do hit the bottom, maybe next year, maybe the year after - the same exact thing will happen. Everyone who's been waiting 5 years for things to bottom out will pile in at the same time and prices will jump 20% in a year.


And don't say it's impossible - it's happening right now in Dublin, for the same reason. No new supply - 5 years+ of backed up buyers.

"The same exact thing will happen"

That is nonsense,and also misleading.

The "ballsy guys" are back I see.

Zubeneschamali

gladrags wrote: »

"The same exact thing will happen"

That is nonsense,and also misleading.

It seems to me that once the market starts to rise, the pent up demand (from all the people who passed on buying for the last 6 years) means prices will jump, before supply can come up to speed.

In what way is this nonsense and misleading?

Zubeneschamali

Zubeneschamali wrote: »

It seems to me that once the market starts to rise, the pent up demand (from all the people who passed on buying for the last 6 years) means prices will jump, before supply can come up to speed.

In what way is this nonsense and misleading?

If the new mortgage guidelines are strictly enforced, the price ceiling will very quickly appear and overpriced houses will not sell!

johnp001

ghogie91 wrote: »

Houses have definately went up in price I was having a gander on daft before i even seen this thread and they have gone up.

Selling prices have not gone up, as described in the data referenced by the Athlone Advertiser article linked in the OP.
Asking prices also have not gone up based on comparison of price increases vs price decreases from e.g. daftdrop/collapso.

blast06 wrote: »

veryangryman ..... you are dismissing the Athlone pharmaceutical industy plus effect of Athlone IT plus dept education plus tourism industry plus barracks etc etc in saying that Athlone would be banjaxed if Ericsson pulled plant.

It is great to have pharmaceuticalas jobs, Ericsson, barracks etc in Athlone but the jobs provided are not as suitable for supporting property buying as previously from these employers.
e.g. latest DF contract pays less than previous, Ericsson jobs mainly from graduate program and are lower paid

Long Gone

johnp001 wrote: »

Selling prices have not gone up, as described in the data referenced by the Athlone Advertiser article linked in the OP.
Asking prices also have not gone up based on comparison of price increases vs price decreases from e.g. daftdrop/collapso.

Link relevant specifically to the Athlone property market from either of those two websites please ? (or are you just looking at reported regional trends). Athlone property selling prices have definitely increased recently.

johnp001 wrote: »

It is great to have pharmaceuticalas jobs, Ericsson, barracks etc in Athlone but the jobs provided are not as suitable for supporting property buying as previously from these employers.
e.g. latest DF contract pays less than previous, Ericsson jobs mainly from graduate program and are lower paid

Not sure what point you're trying to make here. There are already plenty of jobs locally that pay more than enough to support property selling prices far in excess of what property is currently available for in Athlone.

johnp001

Long Gone wrote: »

Link relevant specifically to the Athlone property market from either of those two websites please ? (or are you just looking at reported regional trends). Athlone property selling prices have definitely increased recently.

For selling prices my post was (as stated) based on the same Co. Westmeath data from PPR as was used in the Athlone Advertiser article
For asking prices see www.myhome.ie/pricechanges?RegionID=3969&LocalityIDs=3971
which is 17 decreases vs 4 increases (specifically for Athlone East)
and http://www.myhome.ie/pricechanges?RegionID=3969&LocalityIDs=3090 (for Athlone West) 8 decreases vs 0 increases

Long Gone wrote: »

Not sure what point you're trying to make here. There are already plenty of jobs locally that pay more than enough to support property selling prices far in excess of what property is currently available for in Athlone.

Point is that the jobs being created in Athlone are not driving property buying as much as previously for some of the employers mentioned earlier in the thread.
DF new entrants had pay reduced by 10% from 2011, Athlone is no longer Brigade HQ so for a member of DF buying home in Athlone makes less sense as they are more likely to spend significant part of their contract in other barracks and it is more possible that Athlone barracks numbers could fall. ( or even close like Mullingar, Clonmel, Cavan and Castlebar)

Ericsson had redundancies in 2012 followed by large ongoing graduate recruitment. New graduate positions are on lower wages than those positions made redundant. Those on graduate program are less likely to be at a stage in their career to want permanent homes in the area.

I agree that there is property available in Athlone for prices that would support paying back a mortgage on average wage. (Although new mortgage rules proposed yesterday would tighten up on bank lending for these to those without significant deposits)
This underlines the fact that there is no shortage of supply in the area, which is the main reason why there will be no upward pressure on Athlone/Westmeath prices while the macro-economic downward pressures will apply.

Long Gone

johnp001 wrote: »

For selling prices my post was (as stated) based on the same Co. Westmeath data from PPR as was used in the Athlone Advertiser article
For asking prices see www.myhome.ie/pricechanges?RegionID=3969&LocalityIDs=3971
which is 17 decreases vs 4 increases (specifically for Athlone East)
and http://www.myhome.ie/pricechanges?RegionID=3969&LocalityIDs=3090 (for Athlone West) 8 decreases vs 0 increases



Point is that the jobs being created in Athlone are not driving property buying as much as previously for some of the employers mentioned earlier in the thread.
DF new entrants had pay reduced by 10% from 2011, Athlone is no longer Brigade HQ so for a member of DF buying home in Athlone makes less sense as they are more likely to spend significant part of their contract in other barracks and it is more possible that Athlone barracks numbers could fall. ( or even close like Mullingar, Clonmel, Cavan and Castlebar)

Ericsson had redundancies in 2012 followed by large ongoing graduate recruitment. New graduate positions are on lower wages than those positions made redundant. Those on graduate program are less likely to be at a stage in their career to want permanent homes in the area.

I agree that there is property available in Athlone for prices that would support paying back a mortgage on average wage. (Although new mortgage rules proposed yesterday would tighten up on bank lending for these to those without significant deposits)
This underlines the fact that there is no shortage of supply in the area, which is the main reason why there will be no upward pressure on Athlone/Westmeath prices while the macro-economic downward pressures will apply.

I don't agree with your doom and gloom analysis. Property prices locally are now at an extremely affordable level - Prices are at levels buyers could only have dreamed about a few years ago. There is plenty of demand for housing locally and your point regarding the DF is a red herring - The DF members were never a significant percentage of those buying properties in Athlone. There is also much greater critical mass in the local economy than you suggest by claiming that it can be swayed one way or the other purely on the basis of one local employer allegedly now employing more graduate level employees than in previous years.

The reality is that all the demand for quality housing exists locally. All that is needed is a slight easing in credit availability and the current punitive levels of taxation and stealth taxation to result in increased home buyer confidence ( "feel good factor" ). A significant rebound of house prices will then inevitably occur. I forecast that in 18 months time property prices locally will be at least 10% higher than the current level.

blast06

Good analysis Johnp001.
There is one point i raised earlier though that i feel you are missing.
In my case i have a property with an estimated (imo from keeping tabs on recent selling prices in the estate) selling price of 165K and a renal income of 900 per month meaning investment yield of ~6%.
With this level of yield, then it is, i feel, inevitable that cash investors will start getting on the game now given that Dublin prices have bounced to the level where investment yields for new buyers have reduced significantly over last 12-18 months (hard to find data on Daft to say what average yield is now in Dublin but rental on this 3 bed semi in Lucan would need to be €1575 per month to have annual yield of 6% ... http://www.daft.ie/sales/14-esker-meadow-close-lucan-dublin/1003598/ would it really get that much rental ? (note of course i am presuming the prices is secured)).

I should add that i don't really care what awy the prices go for next 10 years!

Long Gone

blast06 wrote: »

Good analysis Johnp001.
In my case i have a property with an estimated (imo from keeping tabs on recent selling prices in the estate) selling price of 165K and a rental income of 900 per month meaning investment yield of ~6%.

Which is another indicator that local property prices have overshot the bottom of the market and it's therefore only a matter of time before a significant upward correction occurs....

Frank Lee Midere

Long Gone wrote: »

Which is another indicator that local property prices have overshot the bottom of the market and it's therefore only a matter of time before a significant upward correction occurs....

6% is fairly standard for a rental yield. Don't assume that cash bubbles can go on for ever.

blast06

Frank Lee Midere wrote: »

6% is fairly standard for a rental yield. Don't assume that cash bubbles can go on for ever.

I assume you mean 6% is fairly standard in Dublin Frank? Any examples in Daft to back that up.... I'm not doubting - just can't find any.
Also, bubble is not the right word when yields are at 6% imo.... if it was like in 2007 when yields in Dublin were more like 3-4%, then I'd agree with the use of the word bubble. The real question for Dublin and other areas is how high the rental market prices can increase to - this will to a large degree dictate how high the property prices go imo


Long Gone.... are you an auctioneer ;-)

gladrags

blast06 wrote: »

I assume you mean 6% is fairly standard in Dublin Frank? Any examples in Daft to back that up.... I'm not doubting - just can't find any.
Also, bubble is not the right word when yields are at 6% imo.... if it was like in 2007 when yields in Dublin were more like 3-4%, then I'd agree with the use of the word bubble. The real question for Dublin and other areas is how high the rental market prices can increase to - this will to a large degree dictate how high the property prices go imo


Long Gone.... are you an auctioneer ;-)

LG is definitely involved in property.

Read all lg posts.