Major Irish Property Auction - will true value of property there be established?

tod123

http://www.irishtimes.com/newspaper/frontpage/2011/0416/1224294804348.html?via=mr

:rotfl:

Buyers spill on to street as 'fire sale' raises temperatures - and €15m




ORNA MULCAHY, Property Editor
CONSIDERED A dead duck for more than three years, the property market sprang to life yesterday when 81 out of 82 distressed properties were sold in the Shelbourne Hotel – many for well over their reserves.
Though most of the properties auctioned are in Dublin, the buyers came mainly from the country, and the feeling was that they had cash. A total of €15 million was spent in the five-hour auction, which had to be suspended in the first hour because of crowds trying to get in.
London auctioneers Allsop put on an impressive show with flashy pink catalogues and nattily dressed young men and women lined up on the podium behind auctioneer Gary Murphy. Irish in name but frightfully English in delivery, he invited bidders to go “another thousand pounds, sorry euro”.
Word is that he is Allsop’s slowest auctioneer – the company, which specialises in distressed property in the UK, generally gets through its auctions in a fast, businesslike way. Yesterday, each lot was drawn out as long as possible and not everyone appreciated the Anglo overtones. “Making a show of us in front of the world with Sky television out there,” said one onlooker. However, others were more upbeat: “Who cares about the IMF? This is the real market economy in full flow,” said one gleeful punter.
Bidders arrived early to bag one of the 350 seats inside. By the time the auction got under way at 12.15, the room was packed and there were another hundred or so queuing outside. By lot 9, the auction had to be interrupted when garda! objected to crowds blocking the footpath. A two-bed apartment in Portlaoise was sold to a bidder on the street for €61,000.
The first lot of the day, a studio apartment in Temple Bar, made €126,000, while a city centre penthouse, on the market three years ago at €1.3 million, sold for €345,000. It was bought by an Englishman for his daughter who is studying at the College of Surgeons.
Spotters moved through the crowd identifying bidders and, when the hammer came down, escorting them from the room to get their deposit cheque and details in a hushed room upstairs that was bristling with solicitors.
The sales rolled on. The mews house in Raglan Lane in Ballsbridge that had a reserve of €600,000 sold for €550,000, to the surprise of one Dublin auctioneer who admitted he valued it last year at €850,000.
If there were bargains to be had they were mainly in the commercial lots such as a premises at Rathgar Road with a betting shop producing €30,000 in rent downstairs and offices upstairs. It sold for €350,000, a 9 per cent return even before the offices are let. A total of €15 million was spent, which, in the old days, wouldn’t have meant much, but in a market that has been on the floor for so long, it was a dazzling success. No surprise then that Allsop and its Irish partner Space are planning another sale for the summer. By all accounts there will be no shortage of stock.
The next auction is scheduled for July 6th. Cancel the holidays and get the cash out from under the mattress.

Graham_Devon

while a city centre penthouse, on the market three years ago at €1.3 million, sold for €345,000.

May have sold for more than the reserve prices, but just look at that. Madness.

This sort of thing, surrounded by VI spin, such as "sprang into life" and "the real market economy in full flow, who cares about the IMF".

Desperation & delusion on a grand scale.

DervProf

:wall:

I missed out there.

HAMISH_MCTAVISH

DervProf wrote: »

there can be situations where price levels can be become somewhat detached from pure supply & demand.
.

A speculative bubble can certainly happen, but not all dramatic price rises are speculative bubbles.

If you remove 70% of mortgage funding from a market, prices will certainly fall in the short term. But that also doesn't mean there was a speculative bubble.

In the case of the UK, it does rather seem that the majority of price rises were down to a genuine supply and demand imbalance.

There's no other reason for the difference in performance between the UK and Ireland after the credit crunch.

Both had ZIRP, liquidity interventions, bank bailouts, help for homeowners, etc.

But we're now stable at around 11% below peak, and they're down 45% and still falling.

Wookster

DervProf wrote: »

Just a little bit of "subtle" market interference ?

The solution was to control the credit before it went ti*s up.

No, I got that wrong, it isn't the solution, it's the prevention.

hamish is only for "free" markets when means that property prices rise.

DervProf

Wookster wrote: »

hamish is only for "free" markets when means that property prices rise.

And that is a very accurate and concise conclusion.

(Without the use of "percentile", "answers on a postcard" or "comedy gold". Or "taking the top 23.37% of IO mortgages granted on a salary multiple of 4 or less, the arrears to income ratio is in the bottom percentile of those who would otherwise be renting a property in Aberdeen, preferably from me. OK dear, I'll be down in a minute, I'm just finishing off").

Graham_Devon

HAMISH_MCTAVISH wrote: »

There's no other reason for the difference in performance between the UK and Ireland after the credit crunch.

None?

None at all?

Mindyou. I feel it's pointless questioning your thoughts. All you do is ignore the questions.

DervProf

HAMISH_MCTAVISH wrote: »

A speculative bubble can certainly happen, but not all dramatic price rises are speculative bubbles. True.

If you remove 70% of mortgage funding from a market, prices will certainly fall in the short term. But that also doesn't mean there was a speculative bubble. No, but it might be a clue that there was.

In the case of the UK, it does rather seem that the majority of price rises were down to a genuine supply and demand imbalance. Unless you take into consideration that without a supply of easy credit, there are now no meaningful price rises. Your beloved supply and demand is part of the equation, but not all of it.

There's no other reason for the difference in performance between the UK and Ireland after the credit crunch.

Both had ZIRP, liquidity interventions, bank bailouts, help for homeowners, etc. As a matter of interest, I'd like to see some figures for how much liquid intervention the ROI had compared with the UK.

But we're now stable at around 11% below peak, and they're down 45% and still falling. So, the only thing preventing > peak prices is a return to loose lending. I say hold back lending for a good while longer, or build more houses.

That'll do for now.

ussnooky

Hold on gus, you are tackling the problem from the wrong side.
the problem came from the US with the toxic mortgage and spread to the rest of the world; that showed the same problem that occured in 1929 (sort of), well, banking and market speculation here is the problem.
I don't think bulldozing houses will solve any problem, since the root still exist.
my opinion is to flush all the banking system with the market, and use a human monetary system based on offer/demand with borrowing based on business relationship rather than interest rate/speculation.
Irish problem is the same as Portuguese and Spanish, market guru are like hunters those country are all time targeted not like UK France Germany, yet we don't see the same aftershock.
bring down the banking system as it is and remove any speculation in any kind will solve partially the problem, in fact the big hurdle is in people themselves, are they ready to ditch their greed and start a clean relationship with their fellow citizen? I don't think so, it's always like that Power and Money.
At the end who is paying for the mess, you me and the mass, not the elite or the bankers or power state.
I say poor me and poor us.
After reflection, do I want to be rich or poor? not rich nor poor, just a balance which we are denied.

zappahey

DervProf wrote: »

Your beloved supply and demand is part of the equation, but not all of it.

<dusts off standard response>

There is nothing else.

Everything else is simply a factor that influences supply and demand.