€100,000 houses in liquidation sale

gurramok

http://www.irishtimes.com/newspaper/property/2009/0730/1224251661957.html?via=mr

THREE-BEDROOM houses go on sale this weekend at €100,000 in a Cavan development where a receiver has been appointed to dispose of 35 homes.

Ardkill Place near Ballinagh is a scheme of 65 three, four and five-bedroom houses, with 30 units already sold. The remaining units are now for sale at roughly half their original prices, according to selling agents Gunne Reynolds.

Three-bedroom townhouses are priced at €100,000; four-bedroom semis will sell for €130,000 while five-bedroom dormer-style houses, which originally cost €350,000, are now €185,000

First firesale?

Expect many more over the years.

voxpop

Imagine the ppl who bought the 30 houses for the full price and now see everything around them going for half what they paid.


Is it just me or does a 100k for a 3-bed townhouse in caven seem reasonable rather than dirt-cheap

seamus

If you consider the cost of purchasing a site, getting the utilities to it and having a house built on it, €100k seems to be "fair" as opposed to "knockdown", as you say.

subway

seamus wrote: »

If you consider the cost of purchasing a site, getting the utilities to it and having a house built on it, €100k seems to be "fair" as opposed to "knockdown", as you say.

or, if you consider the cost of purchasing a site, getting the utilities to it and having a house built on it in a remote rural area any time in the past few years to have been vastly over priced then you might think that 100k is still over priced.

Freddie59

And so it begins....as forecast six months ago.;)

This really puts an end to the 'we've reached the bottom' BS comments perpetuated in the media by VIs.

In our own case we've recently purchased a house in an area where they are still on at €290k-ish........for €175k.:) We could have waited, but it's in great nick and is 33% below current asking prices. And 50% off peak prices.

Eglinton

It's unfortunate that most of these so-called 'firesales' are going to take place well outside of major urban areas. In Dublin for instance, there are only a handful of new build houses. I would not be interested in any of the apartments no matter what they dropped to. Badly built, badly located and small with no sense of community, not to mention management fees.

Happy days though for those who have the opportunity to live in the likes of Cavan, Leitrim, Tipperary etc. Houses galore!

seamus

subway wrote: »

or, if you consider the cost of purchasing a site, getting the utilities to it and having a house built on it in a remote rural area any time in the past few years to have been vastly over priced then you might think that 100k is still over priced.

Let's be fair about it:

Site, €15-20k?
Materials: €40k?
Utilities: €10k?
Two men x 6 months to build: €40k?

Total: €110k.

Not having built a house though, my figures could be off.

Eglinton

A friend of mine had his house built in Letterkenny at the height of the boom. It was very big, borderline luxurious, 4/5 beds and fully furnished for €225K inc. site purchase (over 0.5 acres).

Any house in an estate should certainly cost well well below that.

ntlbell

seamus wrote: »

Let's be fair about it:

Site, €15-20k?
Materials: €40k?
Utilities: €10k?
Two men x 6 months to build: €40k?

Total: €110k.

Not having built a house though, my figures could be off.

a mile of i'd say

brickies/leccys/chippys etc were demanding in some cases 2k a week

a grand a week for a cheap one

i don't know many two man bands that can do

leccy work

roofing

carpentry

plumbing

brick work

plastering

etc

brickys could demand 70-80k+ a year

so even if we took that the two men could do it all (i wouldn't live in it)

and could demand 80k that's 40k each = 80k

I don't know many sites that were going in cavan that worked out at 20k per house

these are definitely well below cost (all beit a very inflated cost)

but the argument itself is fairly irrelevant

quozl

ntlbell wrote: »

but the argument itself is fairly irrelevant

Well, it does demonstrate the inanity of the minority of people on this board who claimed that houses can't be sold below cost.

bladespin

It's a little more than half the original price; bargain yes, absolute steal, no.

There are 5 bedroom houses in the same development being sold off for €185k, that's excellent value.

This is Cavan, not Dublin, 5 bed stand-alone builds were coming in around €300k at the height of the boom in areas outside Baileboro.

seamus

ntlbell wrote: »

so even if we took that the two men could do it all (i wouldn't live in it)

I suppose I should really have put "a year's worth of man hours". I didn't literally mean two guys building the house.

and could demand 80k that's 40k each = 80k

I don't know many sites that were going in cavan that worked out at 20k per house

these are definitely well below cost (all beit a very inflated cost)

If you look at how low the figures I've quoted are, you'll see that I'm talking about today's prices, and the cost of building such a house today. The point being that if the price of one of these houses is equivalent to what it would cost to build the thing in the first place, then the prices themselves are approaching realistic and they're not being sold off well under the market value just to clear them.

Few brickies could demand €80k a year today.

techdiver

bladespin wrote: »

It's a little more than half the original price; bargain yes, absolute steal, no.

There are 5 bedroom houses in the same development being sold off for €185k, that's excellent value.

Affordable - Yes.
Excellent Value - Perhaps Not.

I think as a nation we still don't get the fact that our properties excessively over priced and some still are. The price relative to two years ago is probably good, but that's it.

bladespin

techdiver wrote: »

Affordable - Yes.
Excellent Value - Perhaps Not.

I think as a nation we still don't get the fact that our properties excessively over priced and some still are. The price relative to two years ago is probably good, but that's it.

I believe in the 7x rule, the average home should cost the average wage times 7. Wages etc went crazy here over the past few years, hopefully things will correct themselves soon.

My logic is that if the average wage is say, 40k (I'm below average ) then a good value house (reasonable size etc.) would be in the €280 bracket at maximum. Using that logic I'd say the 5beds weere very good value. I know the market is still falling but eventually that will stop and prices will recover to realistic levels, not silly phone numbers either I must add, the days of huge jumps in property prices are gone for a long, long time.

Eglinton

bladespin wrote: »

I believe in the 7x rule, the average home should cost the average wage times 7. Wages etc went crazy here over the past few years, hopefully things will correct themselves soon.

My logic is that if the average wage is say, 40k (I'm below average ) then a good value house (reasonable size etc.) would be in the €280 bracket at maximum. Using that logic I'd say the 5beds weere very good value. I know the market is still falling but eventually that will stop and prices will recover to realistic levels, not silly phone numbers either I must add, the days of huge jumps in property prices are gone for a long, long time.

The average wage is probably dropping closer to 30K these days I'd say. It was up to 37K at one point I believe.

Most banks will only lend 5 times your salary and max 92% value of the property, therefore your max affordable house price is: (5 x YourSalary/92)*100

Average industrial wage earners really couldn't expect to afford more than a 3 bed semi (regardless of whether this is fair or not!). Taking 30K as the wage would imply that no bog standard 3 bed semi anywhere in the country should exceed 163K.

If you want a bigger house, bigger garden, detached etc. then you have to earn more.

D3PO

bladespin wrote: »

I believe in the 7x rule, the average home should cost the average wage times 7. Wages etc went crazy here over the past few years, hopefully things will correct themselves soon.

My logic is that if the average wage is say, 40k (I'm below average ) then a good value house (reasonable size etc.) would be in the €280 bracket at maximum. Using that logic I'd say the 5beds weere very good value. I know the market is still falling but eventually that will stop and prices will recover to realistic levels, not silly phone numbers either I must add, the days of huge jumps in property prices are gone for a long, long time.

The average industrial wage peaked at 37k its less now. Furthermore you can be sure the average industrial wage in Cavan is below the countries average. At a guess its probably somewhere clsoer to 27k

Anyway a house 7 times your wage would come in roughly at about 30% of your income taking a term loan of 35 years with normal interest rate levels. Now if you factor in 51% of your income will go in taxs (thats the avaerage people end up paying im lead to believe)

you have 20% of your income to live on. That is WAY overexposing yourself.

This kind of mentality is what gots people into mortgage payment trouble. If a house is 7 times your gross wage then you cant afford it.

you are then down to only 20% of your salary to live on

techdiver

bladespin wrote: »

I believe in the 7x rule, the average home should cost the average wage times 7. Wages etc went crazy here over the past few years, hopefully things will correct themselves soon.

My logic is that if the average wage is say, 40k (I'm below average ) then a good value house (reasonable size etc.) would be in the €280 bracket at maximum. Using that logic I'd say the 5beds weere very good value. I know the market is still falling but eventually that will stop and prices will recover to realistic levels, not silly phone numbers either I must add, the days of huge jumps in property prices are gone for a long, long time.

7x annual wage is a crazy amount of money to give out and is part of the reason we are in the current mess.

D3PO

lol I just worked out this guys 7X salary logic on the 100 grand houses for sale

that would mean you would need to be earning €14,285 per year to be able to afford it

Thats €274.71 per week before tax or €6.86 per hour (assuming you work a 40 hour week)

So that means somebody earning less than minimum wage can afford it or a couple on the dole can afford it :rolleyes:

jmayo

seamus wrote: »

Let's be fair about it:

Site, €15-20k?
Materials: €40k?
Utilities: €10k?
Two men x 6 months to build: €40k?

Total: €110k.

Not having built a house though, my figures could be off.

What the feck has cost of build got to do with it ?
You sell it at what the market says it is worth and if that is at a lost so it is.
The prices people are looking for houses and indeed land is still too effing high.
I still know one eejit in Wicklow looking for €55,000 odd an acre for a 6 acre field in countryside that you would never get planning permission on.
Also it not great farmland.
A few years ago some people were willing to pay extortinate prices for land and for cr** located cr** built properties.

Anyway tough sh** for builders and developers.
They had it good, very good, but now reality is here and ain't it a bitch :cool:

The only sad thing is that the people that didn't climb on the bandwagon are going to suffer as well, because we now own the developer's loans and our taxes are going to go through the roof because of complete collapse of the industry.

Freddie59

jmayo wrote: »

What the feck has cost of build got to do with it ?
You sell it at what the market says it is worth and if that is at a lost so it is.

Innnnnn one! Dead on.;)

BobbyD10

I believe it is still early days in the trials and tribulations of the property burst.

Come this time next year we may have a somewhat slightly clearer picture.

There is so many factors driving prices down that more of these firesales will become common place, though things will become clearer when we know all the details about NAMA.

canapat

I have heard of a 4 bed dormer style house 1750sq ft. for sale in Ballinlough, Co. Roscommon for €120,000 (obviously a distress sale but not a liquidation) - a much better buy than the 1000sq ft house in Ballinagh, Co. Cavan (at least it looks about that size from the photo)

stepbar

Seen that today.

I come about a half an hour away from the area (different county) and know the lie of the land in the locality. Ballinagh is about 5-10 minutes drive away from Cavan Town. Quiet town / village with SFA all local employment. Locals would either go to Cavan town for employment or maybe onwards to Oldcastle / Kells / Navan. They wouldn't be going west let me tell you. Someone mentioned above that the average wage would be in around 27k, I would say it's a lot less. There's nothing but retail in Cavan Town for the average employee and retail hourly wages aren't much more than min wage.

I don't care what anyone says but them houses are not worth 100k each. A house like that would perhaps rent for c400eur p.m (that's if you could get anyone to rent it at all because in fairness it's not much more expensive in Cavan Town). If I had the choice I'd wouldn't even have to think where I would go.

Based on David McWilliams theory the property in question would be worth 12 times monthly rent X 14 = 67.2k. This is probably about right. My first estimate was about 70k. Good luck to the men and women who buy them houses because at 100k they are already overprised.

SkepticOne

I think the effect of NAMA will be to limit the rate at which firesales come on the market. They will still happen but they will be dragged out over a longer period. This will extend the period that people who buy now or who bought near the peak will be in negative equity.

the_syco

As the company is gone, who will do the snag list?

faceman

You have to bare in mind that a Receiver is selling these units, not the developer. The receiver is going to want to sell the assets of the developer as quickly as possible.

Rebelheart

At least Mr Lenihan is not going to offer to pay "bubble prices" for these houses under NAMA:

http://www.irishtimes.com/newspaper/frontpage/2009/0731/1224251764850.html?via=mr

How fu cking stupid does that arsehole take us to be to come out with such a contrived statement - "bubble prices" were never on the table but Lenihan wants to give the impression that he is somehow helping us.

Rebelheart

gurramok wrote: »

http://www.irishtimes.com/newspaper/property/2009/0730/1224251661957.html?via=mr


First firesale?

Expect many more over the years.

And a lot cheaper than this, too - unless of course the government invents an organisation which is designed to pay banks a higher amount of money ....

Imagine how cheap houses would get if the government of this state were not using our taxes to prop-up the banks and their developer friends. How many more examiners would have to be appointed to offload empty houses by reducing prices dramatically as the only way to get money back from bankrupt developers?

PS: No wonder bank shares rose dramatically this morning, just after the details of the state's handout via Nama were released. AIB has risen 7.25% so far today and Bank of Ireland has risen 8.14%: http://www.rte.ie/business/markets/iseq.html

D3PO

Rebelheart wrote: »

And a lot cheaper than this, too - unless of course the government invents an organisation which is designed to pay banks a higher amount of money ....

Imagine how cheap houses would get if the government of this state were not using our taxes to prop-up the banks and their developer friends. How many more examiners would have to be appointed to offload empty houses by reducing prices dramatically as the only way to get money back from bankrupt developers?

PS: No wonder bank shares rose dramatically this morning, just after the details of the state's handout via Nama were released. AIB has risen 7.25% so far today and Bank of Ireland has risen 8.14%: http://www.rte.ie/business/markets/iseq.html

i expected that bounce was going to fill my boots. pity you cant short sell these days would have been a nice little earner :(

jmayo

the_syco wrote: »

As the company is gone, who will do the snag list?

Actually interesting point who will do any items picked up on snag lists ?

stepbar wrote: »

Seen that today.

I come about a half an hour away from the area (different county) and know the lie of the land in the locality. Ballinagh is about 5-10 minutes drive away from Cavan Town. Quiet town / village with SFA all local employment. Locals would either go to Cavan town for employment or maybe onwards to Oldcastle / Kells / Navan. They wouldn't be going west let me tell you. Someone mentioned above that the average wage would be in around 27k, I would say it's a lot less. There's nothing but retail in Cavan Town for the average employee and retail hourly wages aren't much more than min wage.

...

Ballinagh is just surrounded by farmland formmy memory of the place.
Not great village either :rolleyes:

Did Cavan Crystal close down around time hotel built ?
Only big non state employer in Cavan would be Quinn I presume ?

SkepticOne

Rebelheart wrote: »

At least Mr Lenihan is not going to offer to pay "bubble prices" for these houses under NAMA:

http://www.irishtimes.com/newspaper/frontpage/2009/0731/1224251764850.html?via=mr

How fu cking stupid does that arsehole take us to be to come out with such a contrived statement - "bubble prices" were never on the table but Lenihan wants to give the impression that he is somehow helping us.

You can tell it is going to destroy the country by the lameness of the language Lenihan uses:

“There is nothing in the proposed Bill that will provide a ‘bail-out’ for borrowers, whether builders, developers or otherwise.
“Anyone who owes money before Nama continues to owe it, and is expected to repay the full amount of the debt,” he said.

From this it appears that Brian Lenihan does not appear to know what a bailout actually is.


If some entity bails you out, it is normally on the basis of a loan. For example an IMF bailout is a loan that you have to repay in full but it is a loan on much more favourable terms than the market on its own would provide (if at all).


This is exactly what is being extenced to the developers many of whom would otherwise be facing foreclosure.

jmayo

Looking at the whole scheme it appears to be a way of prolonging the inevitable.
Look at case of the liquidation sale in Cavan, at least you can see that the hosues have dropped in value and if there were more of these sales then eventually the bottom would be reached.

By NAMA (i.e. the taxpayers of this country) taking these loans, firstly will it transpire that the assets are not take from developers and secondly will the state hold onto them until they reckon that they were worth something.
In other words is the state not keeping the property values artifically high ?

If only Angloa had been cast adrift and the real banks saved we would not be looking at carrying the can for McNamara, Fleming, Carroll et al :rolleyes:

stepbar

jmayo wrote: »

Ballinagh is just surrounded by farmland formmy memory of the place.
Not great village either :rolleyes:

Did Cavan Crystal close down around time hotel built ?
Only big non state employer in Cavan would be Quinn I presume ?

Pritty much and a few sporadic housing estates.

Cavan Crystal is still opened on the same site, abeit on a smaller scale. Around that time the hotel started to operate. A radio station occupied part of the building for some time until a fire destroyed it.

Quinn, Pauwels and Elliotts are probably the biggest employers in the locality.

Freddie59

jmayo wrote: »

Looking at the whole scheme it appears to be a way of prolonging the inevitable.
Look at case of the liquidation sale in Cavan, at least you can see that the hosues have dropped in value and if there were more of these sales then eventually the bottom would be reached.

By NAMA (i.e. the taxpayers of this country) taking these loans, firstly will it transpire that the assets are not take from developers and secondly will the state hold onto them until they reckon that they were worth something.
In other words is the state not keeping the property values artifically high ?

If only Angloa had been cast adrift and the real banks saved we would not be looking at carrying the can for McNamara, Fleming, Carroll et al :rolleyes:

And no doubt some of these ""developers"" may, down the road, buy them back at a reduced reate. Through a third party. Just a thought.:rolleyes::mad:

tedstriker

House prices are continuing to drop so this guy is way ahead of the pack by offering the price so low. We are just so conditioned to excessive prices that this seems unreal but it is actually a proper price for a house of this type in this location.

Freddie59

tedstriker wrote: »

House prices are continuing to drop so this guy is way ahead of the pack by offering the price so low. We are just so conditioned to excessive prices that this seems unreal but it is actually a proper price for a house of this type in this location.

Too true. We bought a house recently for €175k. There are other houses in the same estate still on at €299k/€290k. The peak price was €320k. So, going by that link, we've bought (roughly) at Feb 00 prices. Signs of things to come. And not before time. It's the only way the property market will be kick-started. Reality.

ronbyrne2005

Rebelheart wrote: »

And a lot cheaper than this, too - unless of course the government invents an organisation which is designed to pay banks a higher amount of money ....

Imagine how cheap houses would get if the government of this state were not using our taxes to prop-up the banks and their developer friends. How many more examiners would have to be appointed to offload empty houses by reducing prices dramatically as the only way to get money back from bankrupt developers?

PS: No wonder bank shares rose dramatically this morning, just after the details of the state's handout via Nama were released. AIB has risen 7.25% so far today and Bank of Ireland has risen 8.14%: http://www.rte.ie/business/markets/iseq.html

Dont mind those small rise, the big scam is bank shares have risen ten fold over past 6months. If you had put a spare 50k into bank shares at their lows they would be worth half a million now all as a result of the perception/fact that government thru NAMA is gonna be a massive bailout for the banks/shareholders. Imagine if you had friends high up in government or department of finance and knew the detailsof NAMA before it was announced and bought shares with this inside info, you'd have made a fortune.

Freddie59

ronbyrne2005 wrote: »

Dont mind those small rise, the big scam is bank shares have risen ten fold over past 6months. If you had put a spare 50k into bank shares at their lows they would be worth half a million now all as a result of the perception/fact that government thru NAMA is gonna be a massive bailout for the banks/shareholders. Imagine if you had friends high up in government or department of finance and knew the detailsof NAMA before it was announced and bought shares with this inside info, you'd have made a fortune.

Most probably already have.:mad: