Builders down to 'bottom line' on prices

The_Conductor

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=nav-qqqid=37589-qqqx=1.asp

A director of a leading house building company has claimed that construction firms cannot cut the prices of their properties, and are ‘‘down to their bottom line’’ at current prices.

Brian Byrne, of Wexford firm Cleary Doyle, expressed surprise at other developers cutting prices and said potential buyers were now ‘‘stupidly waiting’’ for prices to fall in property developments. Byrne said it was ‘‘important to know’’ when prices had bottomed out.

‘‘People have to see that developers are down to their bottom line now,” Byrne said. ‘‘If the banks pass on this half per cent cut in interest rates, things might change, but a lot of developers are just about keeping their heads above water now.”

Cleary Doyle has laid off about a dozen staff in the past two months. Of the 450 units recently completed by the firm in Wexford town and Gorey, only ‘‘10 to 15 per cent’’ remained unsold, he said.

‘‘As work finished on schemes, we had to let people go, but we are still open for business and have not closed any sites. We’ve been here since 1961, and intend to stay here. We still have contracting work in Cork and Dublin, but the figures on house completions this year show what a tough year it’s been.

‘‘Negative sentiment and negative media coverage don’t help anyone either, but I think there is light at the end of the tunnel,” he said.

bill_ashmount

smccarrick wrote: »

Brian Byrne, of Wexford firm Cleary Doyle, expressed surprise at other developers cutting prices and said potential buyers were now ‘‘stupidly waiting’’ for prices to fall in property developments. Byrne said it was ‘‘important to know’’ when prices had bottomed out.

Thanks for the heads up Brian.....

AARRRGH

smccarrick wrote: »

‘‘Negative sentiment and negative media coverage don’t help anyone either, but I think there is light at the end of the tunnel,” he said.

Eh... the negative sentiment and negative media coverage have been great for the buyer and getting our economy back to reality.

asdasd

A director of a leading house building company has claimed that construction firms cannot cut the prices of their properties, and are ‘‘down to their bottom line’’ at current prices.

i dont think this guy understands economics. To put him straight. He may have to sell at a loss.

jmayo

smccarrick wrote: »

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=nav-qqqid=37589-qqqx=1.asp

A director of a leading house building company has claimed that construction firms cannot cut the prices of their properties, and are ‘‘down to their bottom line’’ at current prices.

Brian Byrne, of Wexford firm Cleary Doyle, expressed surprise at other developers cutting prices and said potential buyers were now ‘‘stupidly waiting’’ for prices to fall in property developments. Byrne said it was ‘‘important to know’’ when prices had bottomed out.

‘‘People have to see that developers are down to their bottom line now,” Byrne said. ‘‘If the banks pass on this half per cent cut in interest rates, things might change, but a lot of developers are just about keeping their heads above water now.”

Cleary Doyle has laid off about a dozen staff in the past two months. Of the 450 units recently completed by the firm in Wexford town and Gorey, only ‘‘10 to 15 per cent’’ remained unsold, he said.

‘‘As work finished on schemes, we had to let people go, but we are still open for business and have not closed any sites. We’ve been here since 1961, and intend to stay here. We still have contracting work in Cork and Dublin, but the figures on house completions this year show what a tough year it’s been.

‘‘Negative sentiment and negative media coverage don’t help anyone either, but I think there is light at the end of the tunnel,” he said.

So if we aren't prepared to spend a fortune in a downward spiralling market we are stupid is the jist of his point.
No it is him that is stupid if he thinks people should jump in and purchase now, when they can sit it out and wait for him (or his fellow developers) to go bankrupt, then the banks that he owes will sell the assets and the buyer may actually get a bargain.
He did allude to fact that a lot of developers are just about keeping their heads above water. A lot of people are probably waiting for them to come up for the last breath

The buying public owe the developers nothing, after all the developers didn't do the buyers many favours up till now. Someone should remind him of gazzumping and introduce him to gazundering :rolleyes:

Ah bless him we are being negative about his products, which are still overpriced.
http://www.clearydoyle.com/residential-properties-for-sale/clonattin-village.html
What is an executive two bed apartment and why would I want o tbuy an aprtment in Gorey ?

Of course the media should say nothing now, but I'll bet he wasn't complaining when the media were yapping on that we should all get on the property ladder and what a great deal it was for people to buy one of his apartments in the likes of Gorey :rolleyes:

Tough **** would be my response.

spockety

The developers may be down to their bottom line, but obviously buyers are not. If the buyers bottom line is below the developers, then his development won't sell. He can't repay his loans, gets repossessed, and the bank then clear his development at the price the market will bear, which is the buyers bottom line.

Unfortunate for the developer and all of the staff he employs, but a harsh reality nonetheless.

AARRRGH

asdasd wrote: »

i dont think this guy understands economics. To put him straight. He may have to sell at a loss.

That pretty much sums it up!

The concept that people don't want to pay crazy prices for a crappy product is alien to the likes of him.

SimpleSam06

Brian Byrne, of Wexford firm Cleary Doyle, expressed surprise at other developers cutting prices and said potential buyers were now ‘‘stupidly waiting’’ for prices to fall in property developments.

Seeya in bankruptcy court, genius.

ravendude

spockety wrote: »

The developers may be down to their bottom line, but obviously buyers are not.

I don't necessarily believe they're all down to their bottom line even. Just as they taked up the market during the decline, now they're trying to talk it up by saying the market has hit the bottom and we should all start panic buying

ParkRunner

A developer is hardly going to predict a 15% fall in prices over the next 12 months. I was in Balbriggan yesterday and on the Maynooth train line today, if anyone has any doubts about the existence of ghost estates there is clear evidence in these 2 locations

Firetrap

Poor old Tom Parlon hadn't seen any of these ghost estates when he was on the Last Word the other week. Some listeners kindly offered to show him some...

As well as what money the banks were prepared to loan during the bubble, the property market was driven by sentiment. People who wanted to buy somewhere to live bought anything, anywhere just so they could get on the ladder. Indeed, some well-meaning relatives told me I'd better get my skates on and buy before I missed the boat and prices went out of my reach.

Now the shoe is on the other foot. Nobody who's got their eye on the property market can claim that prices are rising. Apart from the banks not loaning as much as they did anymore, most people are waiting to see how far prices can drop before they commit to buy. Telling people that prices are on the floor isn't going to wash I don't think.

dan_d

I wonder does he realise how blindingly obvious he sounds...of course he's not going to run around assuring people the prices will drop further.
I think this is what's known as Karma.;)

El Stuntman

silly man; buyers can wait years, sellers can't

whizzbang

So apparently builders want their customers to go into negative equity so they don't have to?

EKRIUQ

It doesn't really matter what he says as the market will decide the price in the end and I suppose he has to try something to sell the houses because if the builders start shouting that everything is over valued the prices would still go down even faster. I do believe a lot of builders have their bottom line on a lot of properties just to get the banks off their banks.