Repossessed properties in Ireland being sold at auction are going for a relative song – this means as much as 60 percent below the selling price they fetched during the peak property boom years.
The figures are serving to depress housing prices in general but that has led to renewed interest in buying, on the part of Irish buyers and others from overseas.
The Irish property website Daft.ie revealed that the average asking price of residential properties around the country fell to €196,000 euro in June, almost half of 2007 rates.
In Dublin, Cork, Galway and Limerick, asking prices fell by 5.7 percent between April and June. Waterford saw a nine percent drop, with asking prices down by 10 percent in Donegal, Cavan, Laois and Offaly.
Ronan Lyons, economist with Daft.ie, said the second quarter of 2011 has seen one of the sharpest adjustments in prices over the last four years.
“With successful auctions of distressed properties at 60 per cent or more below peak levels, the sharp fall may actually reflect increased realism on the part of sellers,” Lyons told the Irish Independent.
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“Other factors are also important though. One is the intense competition sellers face due to the high level of stock sitting on the market, especially outside Dublin. Another factor is that would-be buyers continue to face significant obstacles to obtaining a mortgage.
“Nonetheless, over half of properties posted for sale in Dublin at the start of the year are now sold or sale agreed,” he said.
One house that did recently sell, while attracting a lot of international attention, was a “trophy house” on one of Dublin’s most affluent streets. The large period red-brick on Ailesbury Road on the south side of the city fetched more than €2.3 million at a “distressed property auction.”
The selling price was well over reserve of €1.45 million but houses on the leafy road regularly changed hands for more than €10 million just a few years ago.
An anonymous telephone bidder secured the property, which is in need of complete refurbishment, after around seven minutes of bidding.
Stephen McCarthy of estate agents Space, which hosted the sale, said its second such auction showed there was a market for property if it was at the right price.
“Clearly, if you get people in a room and you offer something in a transparent way, that is the price today. But I wouldn’t be arrogant enough to think that is the bottom of the market. We’re all hopeful it is but I have no idea.”
Just five of the 83 lots that went under the hammer at Dublin’s Shelbourne Hotel were pulled from the sale because they did not reach the reserve, or over legal issues.
Organizers said more than 800 people took part, with telephone bidders from Dubai, Hong Kong, Singapore, Switzerland, Australia, France and Britain.
Most of the lots exceeded their reserve, including a detached coastal house in County Cork, which along with an adjoining mews dwelling, sold for more than twice its starting bid of €270,000 at €560,000.
The prices reached suggested reserves were set too low, although a red-brick house on the prime Villiers Road in Rathgar, Dublin, sold for €45,000 less than its reserve at €450,000. The property has been divided into five self-contained flats.
The majority of bidders were cash buyers looking for an investment, but some were looking to secure a bargain family home, or first-time property”
Despite the high level of sales, the auction was more low-key than the first “fire sale’ by property agents Allsop and Space in the same venue in April.
At that auction, the crowds spilled on to the street in front of the hotel and television cameras jostled for position in the hall.