New development of houses and apartments

cubatahavana · 04-08-2020 10:01pm #1

Ready to place deposit on a house in a new development in the southside. It is a mixed development, with 48 dwellings divided in 20 x 4 and 5 bed houses and 28 apartments.

I emailed EA today regarding the apartments, as we were thinking to purchase one of the units in front of them (there are 4 houses still available of the 20). The EA got back to me saying that the apartments will be finished around September and that the developer will be keeping them. This raises a few concerns with me

- Will the developer offload them all as social housing? Would something like this be normal?
- The developer now will have a majority in the management company until the apartments are sold, so he can do whatever he pleases, as the houses will have less than a 50% presence in the MC
- am I a bit paranoid? Does anyone else see this as orange flags?

Mrs OBumble · 04-08-2020 10:23pm

Yes. Yes. Agreed. No. Yes.

cubatahavana · 05-08-2020 9:12am

Mrs OBumble wrote: »

Yes. Yes. Agreed. No. Yes.

To the point! Thanks

acer911 · 05-08-2020 10:15am

Mrs OBumble wrote: »

Yes. Yes. Agreed. No. Yes.

Agreed that I would be worried about the situation but curious as to the assertive nature of your response. Surely it is not likely that they will all be sold as social housing - meaning c. 60% social housing in the development?

Do you have evidence of this being the done thing in some developments?

cubatahavana · 05-08-2020 10:29am

I went today to speak with one of the owners of the occupied units. He was told that the apartments are going to be mainly for private renting. That would be good news. Still waiting for further clarification from EA

Mrs OBumble · 05-08-2020 10:42am

acer911 wrote: »

Do you have evidence of this being the done thing in some developments?

Yes.

I even know of a development where the local authority purchased the lot, including already some completed and privately rented apartments.

acer911 · 05-08-2020 11:04am

Mrs OBumble wrote: »

Yes.

I even know of a development where the local authority purchased the lot, including already some completed and privately rented apartments.

Is there any way you could protect against this from a contract perspective? I mean if you were to buy a 700k plus house and then 60% of the units were sold as social I can imagine that your house price would plummet straight away.

cubatahavana · 05-08-2020 11:49am

acer911 wrote: »

Is there any way you could protect against this from a contract perspective? I mean if you were to buy a 700k plus house and then 60% of the units were sold as social I can imagine that your house price would plummet straight away.

I wouldn’t say there’s a way, as the developer will not agree to the change, but I know knitting about this.

I spoke with the EA and they confirmed that the apartments are going to be privately rented. No social. Social units will be 10% on a different apartment block. Feeling more relaxed. This is the same that what I was told by a home owner in the development today.

cubatahavana · 05-08-2020 11:50am

Mrs OBumble wrote: »

Yes.

I even know of a development where the local authority purchased the lot, including already some completed and privately rented apartments.

Where was that development if you don’t mind me asking?

Mrs OBumble · 05-08-2020 1:35pm

cubatahavana wrote: »

Where was that development if you don’t mind me asking?

Galway city.

Cuddlesworth · 05-08-2020 1:58pm

cubatahavana wrote: »

I wouldn’t say there’s a way, as the developer will not agree to the change, but I know knitting about this.

I spoke with the EA and they confirmed that the apartments are going to be privately rented. No social. Social units will be 10% on a different apartment block. Feeling more relaxed. This is the same that what I was told by a home owner in the development today.

Ask him to put that in a contract with penalties.

em_cat · 05-08-2020 2:43pm

acer911 wrote: »

Is there any way you could protect against this from a contract perspective?

No, buyers solicitor could try, but the vendor (developer) in this case would not agree, it severely limits the possible financial gain or leverage with the council or housing body.

I mean if you were to buy a 700k plus house and then 60% of the units were sold as social I can imagine that your house price would plummet straight away.

Not a legal argument, I only know because we had to go thru it. The whole Buyer beware clause comes into play here.

DaveyDave · 05-08-2020 3:02pm

cubatahavana wrote: »

I wouldn’t say there’s a way, as the developer will not agree to the change, but I know knitting about this.

I spoke with the EA and they confirmed that the apartments are going to be privately rented. No social. Social units will be 10% on a different apartment block. Feeling more relaxed. This is the same that what I was told by a home owner in the development today.

I thought they weren't allowed tell people where social housing would be? If I knew travellers would be moved into the house I bought 4 months ago I would have picked a different one...

acer911 · 05-08-2020 9:16pm

DaveyDave wrote: »

I thought they weren't allowed tell people where social housing would be? If I knew travellers would be moved into the house I bought 4 months ago I would have picked a different one...

Would have thought the same alright, maybe it was an off the record comment. Not great situation to be in for yourself. Have you had much hassle over it?

cubatahavana · 05-08-2020 10:19pm

DaveyDave wrote: »

I thought they weren't allowed tell people where social housing would be? If I knew travellers would be moved into the house I bought 4 months ago I would have picked a different one...

Meant that EA said that they won’t be sold as social, that they’ll be private rental. They didn’t say where they’ll be. I assumed myself a different apartment block. They mentioned 10% allocation to social.

I wouldn’t mind 10% social. It is the way it is in a new development. I live now in clongriffin where there’s plenty of social housing and there is rarely a problem I would mind if they sold all to social as it could create a guetto, more than integrating people

cubatahavana · 05-08-2020 10:27pm

Cuddlesworth wrote: »

Ask him to put that in a contract with penalties.

What does this mean?

kravmaga · 05-08-2020 10:33pm

cubatahavana wrote: »

I spoke with the EA and they confirmed that the apartments are going to be privately rented. No social. Social units will be 10% on a different apartment block. Feeling more relaxed. This is the same that what I was told by a home owner in the development today.

Social allocation in a New development by a builder is usually much higher than 10%, its a sweetener for the council by the builder.

I would suggest a figure of 25/30 % , so buyer beware, EA is a sales agent, dont believe everything they tell you, he/ she just wants the sale, they will tell you anything in order to get it.

brisan · 06-08-2020 8:22pm

Mrs OBumble wrote: »

Galway city.

The same happened in Coolock Village

Hollybeg · 06-08-2020 8:34pm

cubatahavana wrote: »

Ready to place deposit on a house in a new development in the southside. It is a mixed development, with 48 dwellings divided in 20 x 4 and 5 bed houses and 28 apartments.

I emailed EA today regarding the apartments, as we were thinking to purchase one of the units in front of them (there are 4 houses still available of the 20). The EA got back to me saying that the apartments will be finished around September and that the developer will be keeping them. This raises a few concerns with me

- Will the developer offload them all as social housing? Would something like this be normal?
- The developer now will have a majority in the management company until the apartments are sold, so he can do whatever he pleases, as the houses will have less than a 50% presence in the MC
- am I a bit paranoid? Does anyone else see this as orange flags?

A developer holding on to a block of apartments in this climate? One word... HAP.

brisan · 06-08-2020 8:39pm

Hollybeg wrote: »

A developer holding on to a block of apartments in this climate? One word... HAP.

Guaranteed
Long term guaranteed rental income at 85% of market rate
A nice cash flow for future developments and nice figures to take to the bank

cubatahavana · 06-08-2020 9:17pm

Well, it doesn’t really need to be like that, does it? Look at the likes of Vesta in clongriffin. Very good quality apartments rented exclusively privately. As well, the credibility of the developer will go down if they provide >50% of a luxury development to HAP/social housing. Let’s be cautious, though...

cubatahavana · 06-08-2020 9:19pm

brisan wrote: »

The same happened in Coolock Village

Don’t want to sound elitist, but Coolock is not the best of neighborhoods

brisan · 06-08-2020 9:29pm

cubatahavana wrote: »

Don’t want to sound elitist, but Coolock is not the best of neighborhoods

The whole estate bought by the council
3-4-5 BED 3 story houses in a horseshoe around a large green right in the centre of a village with every possible amenity on your doorstep

cubatahavana · 06-08-2020 9:51pm

brisan wrote: »

The whole estate bought by the council
3-4-5 BED 3 story houses in a horseshoe around a large green right in the centre of a village with every possible amenity on your doorstep

I could understand selling the whole lot, but selling over half of it after selling really expensive homes within the development seems counterintuitive to me, as nobody would buy again from that developer, not a 700k home at least

cubatahavana · 06-08-2020 9:52pm

Again, I’m not saying it’s not going to happen. I’m being cautious myself at the moment. Let’s see what the solicitor says

acer911 · 08-08-2020 8:59am

brisan wrote: »

The whole estate bought by the council
3-4-5 BED 3 story houses in a horseshoe around a large green right in the centre of a village with every possible amenity on your doorstep

This was obviously pre-agreed and fully sold to council? What the OP is concerned about here is buying a 700k plus house in an estate that will end up with 50% or more council housing.

Hard to know what way it will play out, on one hand you would think that it would damage the builders reputation if it did happen but the guaranteed income could make it a real possibility.

Caranica · 08-08-2020 9:29am

There's nothing to stop any purchaser from renting their property to the Council so you can never guarantee that you won't have social housing next door. Social housing tenants, like private tenants, are primarily decent people, often working but on low wages. It's wrong to tar people with the same brush, there are bad tenants/neighbours in both groups.

PhoenixParker · 08-08-2020 9:41am

Hollybeg wrote: »

A developer holding on to a block of apartments in this climate? One word... HAP.

None of the developers have been selling individual apartment units in the last few years. They've all gone to REITs either in house or sold off. They might end up as HAP due to the economic downturn but them not being sold doesn't say much.

RANIA · 08-08-2020 3:17pm

Where in Galway is this, roscam?

Mrs OBumble · 08-08-2020 11:24pm

RANIA wrote: »

Where in Galway is this, roscam?

East side. But not Roscam (that I know of anyways).

StoptheClocks · 11-08-2020 4:18pm

Sometimes the developer will hold back houses to get a better price for them when the development is finished.
If the houses are overlooked by apartments then they will be less desirable to sell if the demand isn't there at the beginning.
He/she can get a better price after the other houses are occupied and the feedback is good on the development.

New development of houses and apartments

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