It wasn't until Lot 15 that a property finally sold at the heavily anticipated Real Estate Alliance (REA) public auction of 61 properties last Friday. If the government was watching events in the Shelbourne Hotel and hoping to get a realistic picture of valuations nationwide, there wasn't much to suggest there are plentiful buyers to snap up properties promoted as being up to 60% below early 2007 prices.
By 11am, the Great Room was filled with plentiful REA staff, rival auctioneers, media, curious onlookers, anxious vendors and not enough purchasers.
Before the start, Michael Boyd, chairman of REA, had high hopes the auction, the first of its kind nationally, he said, would relieve sellers under pressure, and encourage beleaguered banks to lend a little. Around all of the reserves set "are pretty much the same as, or slightly less, than the guide", he said, and it would only be when bidding reached that reserve that the property would realistically be on the market. "But it's a bit like the half hour before going on to play for Ireland, and there is a lot riding on this." When things got underway, properties were systematically withdrawn, many without getting a single bid, with others falling a long way off the AMV.
"Does anybody in the room have €350,000?" asked auctioneer Thomas Potterton several times over only to be met with stony silence. His good humour lightened the sombre mood at times, but when he asked, "are there any developers in the room?" there were snorts of derision, as there was virtually no take-up of land valued at up to 70% below peak prices. But when bidding got underway on Lot 15, one of the nicer-looking properties in the catalogue, the apathy in the room changed. As Mill House, Mill Road, Gowran, Co Kilkenny – a renovated Queen Anne house on 12 acres – finally went under the hammer for its exact AMV of €500,000, there was applause from the crowd and a huge sigh of relief from its anxious owner. Paula Moriarty originally bought the property in 2002 at auction, and after fully renovating it, put it on the market two years ago guiding €950,000. She is "delighted" at finally selling it, even if for nearly half that price. "The bidding was very slow at first, but I'm very relieved," she told the Sunday Tribune. "Now I'm ready to move on and find a new home for myself and my daughters." The buyers were a young couple who had been living abroad and had viewed the four-bedroom house several times prior to Friday's auction.
Eighty-one acres of farmland at Coralstown, Kinnegad, Co Westmeath, was another of the rare sales of the day. Buyer Denis Tierney paid €440,000, just €60,000 under the AMV, and declared himself "happy with the price as it reflected the current market". Back in Kilkenny, a derelict riverside mill at Kells Village sold under the hammer for €240,000, just €10,000 shy of the AMV. But there was disappointment for the Department of Defence on failing to shift €800,000 Firmount, Clane, Co Kildare, a three-storey Victorian residence on five acres, with the nearest bid only reaching €540,000. That, like a lot of others failing to sell, came with a rider that the bidder "have a talk with us later" – something of a mantra for the event.
Prior to Friday, five properties were sold pre-auction, including one of the cheapest, an end-of-terrace house in Navan at €90,000 and a four-bedroom residence in Leitrim for just below its AMV of €200,000. One of the very few properties in the capital, a three-bedroom apartment at the Ha'penny Bridge, was withdrawn having failed to reach its asking price of €250,000.
Overall, 16 properties sold, raising €3.9m.The organisers has been hoping for around 50% of sales, but on the day, 27% was as good as it got.
"It is evident that the market does remain challenged due to the prevailing economic conditions, with finance and consumer confidence being key issues," said auction manager Phillip Farrell.
Among the onlookers was Eileen Collins, a seasoned auction-goer interested in the small number of commercial sites for sale. What did she make of the organisers' bid to kickstart the property market? "I thought it was a reality check for everyone concerned. The few who bought have probably got value for their money. But the huge level of withdrawals shows property remains over-priced." The auction was on the same day permanentTSB published their house-price index for the first quarter of this year, showing average national prices are now back at 2002 levels. It looks like we may have to go back to the last century before that much-talked-about bottom is reached.
This is a well executed article and I concur with the Ms. Shanley in her reporting. I also attended the auction last Friday. When I arrived at 11.30am the Great Room at Dublin’s Shelbourne Hotel was packed to capacity together with an overflow of people into the hallway and ancillary rooms adjacent.
However, Maire (the previous commentator) I suggest is completely out of tune with the market. A successful auction campaign does not have to effect 100% sales. The auction was not a “wash out” neither was there an attempt to “fool” anybody. What aren’t reported in the article (and in fairness the editor wouldn’t have this information to hand) are the post-auction sales and the whole positive attention and publicity that this campaign has brought not only to Real Estate Alliance (REA) but the entire property sector. What about spin-off sales that were conducted by some of the REA agencies on alternative properties as a result of the attention drawn by the Auction campaign? What about the sales conducted by other agencies (non REA) as a result of the REA campaign?
As reported in last weeks Irish Examiner headlined “CONFIDENCE RISES AS CONSUMERS START TO SPEND AGAIN” by “Niamh Hennessy” the article read “The rate of consumer confidence doubled in March compared with a year earlier, according to the UCD Smurfit School and the Marketing Institute of Ireland market monitor.” It went on to say “Car sales have been a major factor in the increase in consumer sales following the introduction of the car scrappage scheme. Car sales in March were up 77% on the same month last year.”
This article reflects a 329% INCREASE IN PROPERTY SALES FOR THE MONTH OF JANUARY ALONE compared with the same month last year. To my mind the stats suggest that we have hit the bottom and are turning the corner. People cannot put off property purchases indefinitely particularly now that prices are running at about 50% of that of the peak of the boom.
There are some people who thrive on “doom and gloom” and enjoy negativity, not me or the other 99.9% of decent working people. I say well done to Real Estate Alliance for staging this great event and well done to all those who attended this public auction. And it’s great to see that Real Estate Alliance have planned another similar event in September – last Fridays auction must have been a success!
The above piece by Chris Smith is what people should be aware of, I can not help but think that Chris has a vested interest, so take what he says with a big pinch of salt. There are a lot of people in this Country Chris who have no other choice but to feel doom and gloom as you put it, I have spoken with some of these people, they have no home, they were put out on the street with no where to go and all because they were fooled into thinking they would never get on the property ladder if they did not buy at the hight of the market at crazy overvalued prices, so you see Chris, there are a great many people in this Country in the same position. Auctioneers, lets face it Chris, want to start another boom and they will say anything that they think might encourage you to buy. I presume you are the same Chris Smith that I saw at the auction, if so you are an auctioneer yourself and you would of course disagree with what I said.
Chris as I said above, I spoke to the "very few" perspective purchasers who attended and they concure with all the experts i.e. Mr Lucy UCD, David McWilliams, Morgan Kelly and myself who knows what they are talking about when they say that the property market has much further to fall, prices are unrealistic and the people of this country are not going to be fooled by auctioneers or overenthusiastic reporters who want to create another boom. As you pointed out in the last few lines of your comment it was nothing more than a staged event from Real Estate Alliance (that did not pay off). Let's do some sum's here Chris, lets say you sold "1" house in December and then sold "3" houses in January this would be an increase of 300% so let's not get blown away here Chris and blow this all out of proportion. I research the property market from 9am-5pm 6 days a week, this is my job. I speak with auctioneers every day and as I stated above the majority of them have had little or no sales for the past two years and the majority of them agree that house prices are still grossly over valued and will not sell unless they are reduced by 50% "at least".
May I say, a great piece. I also attended the REA auction and I have to agree with Maire when she says it was a wash out. In my opinion the time is not right for auctions, as a matter of fact far from it. My own personal and profesional opinion is that the property market has to fall for at least another two years. I have dealt with both sides, the people who want to sell and can not and the people who bought and are now without a home through no fault of their own. I would like to say to Chris that there are hundreds of "decent hard working people" without a home tonight, that bought in the boom and struggled for years to keep but could not. It is no secret that these people were, shall we say "encouraged" to buy at over inflated prices and are now paying a heavy price for it. There are decent hard working people across the country that have lost their jobs through no fault of their own and they are wondering how long it will be before they will loose their home because the repayments are so extravagant and they can not sell up to find work in another area because they are in negative equity. Auctioneers must hold their hands up and admit that they played the biggest part in creating the boom after all they were the ones that put such extravagant overvalued prices on property and continue to do so until the present day. I agree whole heartedly with the last sentence of this article when it states that we will have to go back to the last century to reach the bottom of the market and I think that the failure of this auction proves that completely.
So NO 2 above spent 6 hrs in the head shop 1 hour snorthing COKE in the bathroom a half hour doing crack and then went straght to the bar at the Shelbourne and drank [leave the bottle] until he /she was trown out for gross exageration. 27% total sales is a complete and utter loss for any Auction House and just proves that paddygobackwards is finished but its still a great breeding ground for the deluded. Anyone that was involved in the financal rape of the idiot house buyers over the last 10 to 15 years had better come up with a new CON or go out and get a proper job where you earn a living instead of stealing lying and cheating your way to the next crooked deal. Yes hard facts [doom ] and real figures [gloom] are hard to ignore and also is an ill advised way of thinking, unless of course you want to put it on the card [ VISA or MASTERCARD ] Maire is of course 100% correct and any paddy or biddy who is dumb enough to buy anything off those snake oil sales jerks deserves to get screwed. Poor thick stay at home paddy now has to pay 1,3 BILLION TO BAIL OUT THE RICH GREEKS. Anybody in the room with 350000euro/? WHAT A FECKEN insult,?? Turn out the flipping lights there paddy. Chicago Chicago, aaah freedom and real value for money, Lets go puppy walkies. OBAMA ROCKS
thank you for your comments. Despite the market conditions we are very pleased with the results we achieved on the day and since. REA wanted to try and stimulate the market in a transparent and open way, and keep people in their jobs and get the economy moving. We are looking foward to our next auction on the 29th of September and we hope you will attend. Warmest regards Maggie
Maggie, thanks...but no thanks...I would rather watch paint dry twice on my stress exercise wall...& then paint it all over again to repeat the exercise. 27% of sales in any profession is a washout...& also a downpour...& also a storm...& also an ash volcano. So, like I said, thanks...but no thanks!
@Chris @Maggie, I think the situation we are in at the moment proves that a property boom has not and will not keep people in their jobs. I mean what do you want to happen? Another property boom, so that in a year we can have an even bigger bust? The fact that we have almost 500,000 unemployed at the moment is a testament to the fact that houses became a currency in this country where people (auctioneers mainly) were too greedy and artificially increased the prices over the years. The only people that could ever afford a home were the wealthy and the not so wealthy could only afford a semi or an apartment in an estate that is in the middle of nowhere, no facilities, schools, hospitals ect to cater for the new residents, that has now basically fallen apart due to bad workmanship. Now when the bubble has well and truly bust you come on to an article that gives us a snap shot of behind the scenes "panic mode" that the auctioneers are in at the moment and tell the citizens of this country that we need to buy again as we need to "stimulate the economy". There are people all across the country in negative equity, they have lost their jobs and in some cases homes but now the next generation such as myself should pave the way to do it all over again so as auctioneers can keep their jobs. Ireland at the moment is not somewhere that I can see myself being able to get a job or afford a home as houses in this country are still way, way, over valued. So to Chris and Maggie, thank you for your years of greed, you have learned nothing from your mistakes of the boom, I now have to say goodbye to my beloved country in search of a better life. Who would think it? An auctioneer can truly shape the future and determine what goes into the history books as I am not the only one in this boat.
The auction house is the way forward for
shifting some property in a stagnant market. Buying with cash does make you think twice before you put your hand up in the air. The reality is for most pundits is that the property market is a long way off bottom so perhaps some of the AMVs were a bit too optomistic. Still 27% cash sales at 3.9 Million Euro is not a bad result for REA and no doubt it's done wonders for raising the company's profile..
Maire, there were hundreds in the room, how could you say conclusively that you spoke to the "very few" perspective purchasers who attended & they concure with all the experts i.e. Mr Lucy UCD, David McWilliams, Morgan Kelly & yourself “who knows what they are talking about”. Did you speak with everybody in that room? How did the campaign suggest the creation of another “boom”? How do “all the expects” comprise four people. Scaremongering may I suggest?
I meant to include a piece from Niamh Hennessey’s article: “It showed that in January, 658 second-hand residential properties were at "sale agreed" stage compared with just over 200 in the same month last year.” That’s fact! This represents a 3.29 SURGE. It’s obvious that buyers have the confidence to buy at today’s new levels whereas they hadn’t the same confidence a year previous at the then price levels. For various reasons some buyers needed to do the transaction a year ago (lifestyle, etc.) & I think most are delighted with their purchased properties & do not regret their decision (put simply some people simply just need a home right now regardless of the market). The “doom & gloomers” could cost a property buyer the opportunity of buying at the bottom of the market because it’s not until economists report positively that they might admit to where the bottom actually lay (which will be reported in the media months afterwards – too late to buy at the very bottom). cont’d…..
[David Duffy, the Economic & Social Research Institute (ESRI) economist who puts the Permanent TSB/ESRI house price index together, admits that there is a time lag in the house price figures. "There is a time lag in the official statistics, which means that it is going to be difficult to say when we have hit the bottom when it comes to property prices." “Permanent TSB/ESRI uses figures based on prices agreed at the point of mortgage drawdowns, but the sale price for the house may have been agreed months before. Dr Duffy acknowledges that the house market may have stabilised, or even turned, before this is picked up in the index. He adds that anecdotal evidence would suggest that the housing market is close to bottom, & he expects it to have stabilised by the end of the year. - Charlie Weston, I/Indo 26.01.10]. When the market has turned, as a buyer, you’re too late to avail of the bottom of the market bargains. To buy at the bottom of the market again you’ll need to press the “pause” button, keep you finger on it (probably for a decade or two) & hope that you don’t miss your next chance a generation later. That’s how economies work, up & down, up & down & so on. Charlie’s article also identified that “HOUSES ARE THE MOST AFFORDABLE THEY HAVE BEEN FOR THE PAST 25 YEARS, WITH JUST 13.6PC OF A COUPLE'S COMBINED INCOME OF €77K REQUIRED TO SERVICE A MORTGAGE, ACCORDING TO THE EBS/DKM ECONOMIC.”
With positive property price reporting more buyers will emerge. Even without positive reporting should the trend that Ms Hennessey’s reported in her article continue into 2011, 2,150 houses would be at “sale agreed” stage in January, an 11 fold increase over the ‘09 figures.
@Chris, why dont you quote David McWilliams piece (The Great Property Scam Is Back To RIP Us Off Again) where the first line in the article states "THEY ARE BACK. THE CREEPS, THE SNAKE-OIL SALESMEN AND SPOOFERS WHO CONDEMNED A GENERATION TO NEGATIVE EQUITY ARE CHEERLEADING AGAIN." The above comments by Chris are a fine example of what David is talking about, need I say more.
Hi to everyone on both sides of this discussion. Chris a point I would like to make to you, I personally have carried out many surveys over the past year and I keep coming up with the same result, the property market is not moving at the moment and in my opinion will not move for some time to come. The trouble with sale agreed statistics is that you could have thousands of sale agreed properties and none go to sold, so for this reason as part of my own survey I decided to follow through on these sale agreed properties and so far 32 of those 658 properties went on to be sold. My point is that sale agreed does not mean sold. I think it is unwise for any one particular person to advise another to go out and buy now when the experts advise otherwise. I think Mr Lucey, Mr McWilliams, Mr Kelly and all the other experts that have given advice on this market have only got peoples best interest at heart.
@Chris I find it comical that you would cherry pick quote's from David Duffy, Charlie Weston and Niamh Hennessy to back your argument. It seems that David, Charlie and Niamh disagree with you as shown in these recent headlines and quotes: Charlie Weston - 22/04/10 "NUMBER PLANNING TO BUY HITS RECORD LOW....THE NUMBER OF PEOPLE INTENDING TO BUY HAS FALLEN TO ITS LOWEST EVER LEVEL AS POTENTIAL BUYERS FEAR THE PROPERTY PRICE CRASH HAS NOT YET REACHED BOTTOM.", Niamh Hennessy 27/04/10-"300,000 HOMEOWNERS FACING NEGATIVE EQUITY......HALF OF THE COUNTRIES HOMEOWNERS WILL SOON OWE MORE ON THEIR MORTGAGE THAN THEIR HOUSE IS WORTH.", David Duffy Spring 2010- "Estimates that 116,000 BORROWERS WERE IN NEGATIVE EQUITY AT THE END OF 2009, RISING TO 196,000 BORROWERS IN NEGATIVE EQUITY BY END-2010.", Rosin Burke 11/04/10- "DONT BET YOU HOUSE ON END OF PRICE FALLS.", Charlie Weston 16/03/10- " FIRST TIME BUYERS FACING 10 YEARS IN MORTGAGE BIND.", David Duffy 16/03/10- "SECOND TIME BUYERS WHO BOUGHT IN THE PAST SIX YEARS ARE LIKELY TO BE STUCK FOR ANOTHER SIX YEARS IN A SITUATION WHERE THE VALUE OF THEIR HOME IS WORTH LESS THAN THEIR MORTGAGE." I could go on and Chris but I think that the above quotes prove that people feel that it is an unsafe time to buy as I said in my last comment I am one of these people who can not afford any of the still way over valued properties on the market. You suggest that the experts that are trying to advise people not to take out huge loans on houses that are simply not worth the asking prices are scaremongering. The opposite is true as it is you that is scaremongering people to feather your own nest. The Economists and Professors that called the bust long before it took place are the people that I will put my trust in thank you very much.
Chris...Are you an Estate Agent cum Developer cum Banker cum Solicitor? Because you're very enthusiastic about flogging houses again at still inflated prices. I mean, we're one step away from being a Greece "Clone". & getting help from you to be such...a debacle?
In a word "Scaremongering".
Oh so you're "Scaremongering"! Chris, why didn't you just say that in the first place?
WARNING, WARNING, WARNING , WARNING , Buying a house in PADDYWENTSIDEWAYS aka ireland will cause brain damage, to the few of ye who have a brain left. Paddy look,'' the snakes are back.'' The good news though is that you get free Radon gas with the cold concrete box aka house. If your lucky enough to buy in flood plain you will have a river view and be able to tie your boat on to the bottom of your stairs every spring. Just leave the front door open ,the rats will only eat through it anyway. Now more good news, if you can catch the fury little critters I hear they are quite nice with mustard sauce and sauteed wild morel mushrooms yum yum. So now thats free Gas free Water and free Food if you buy a house in PADDYDONTKNOWWHICHHWAYTOGO, so hurry ,hurry, hurry buy now before they start giving houses away free when you buy a full tank of PETROL. Poor old Chris SMITH will have to get a real job to pay off all his credit card debth 5th and 6th house remorgage car loans ect ect. Take a hike sucker. So nice in CHICAGO today, no thick Paddies in their cheap suits trying to sell shoddley built pigstyes aka houses, rot in hell there paddy boy. Well its down to the lake with my puppy for our walk, he really likes to walk and run in the water [clean water ] FREEDOM MAN FREEDOM what a great City Chicago truly is, HAVE A NICE DAY suckers. come on pups lets go talk to some normal people to hell with the old shallow minded thick backward PADEEEEEENS OBAMA ROCKS USA USA USA USA USA
I can't say I'm surprised at the lack of sales here. The circumstances which fuelled the property bubble mostly don't exist any more. A thing that is sorely lacking in this country is factual information about how much houses are being sold for at the moment. Of course it suits the vested interests (and that includes the government) to keep this information clouded in secrecy so that prospective buyers won't be able to make an educated guess as to when the bottom of the market has been reached. All we have to go on is weasel words from estate agents, economists employed by banks and politicians. All of whom have impure motives.
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This is a great piece and very much reflects what happened on the day. I went to this auction out of curiosity, I was not surprised to see it was a complete washout. I spoke with the few people who attended the auction and they were of the same view as myself that it was a failure and that the property market has much more to fall. There was a lot of very unhappy faces i.e (auctioneers). Another attempt to try to fool the public into buying has just failed. I speak with auctioneers on a daily basis and there is a lot of them coming to terms with the fact that property is overvalued by at least 50% and that the property market in in deadlock. Maire.