Twenty houses are to be offered for sale on Saturday in a group auction in Kilkenny – with guide prices low, the hope is to get the market moving, writes MICHAEL PARSONS
PROPERTY AUCTIONS have become rare – adding to the general lack of transparency in the market. Michael Grehan, managing director of Sherry Fitz-Gerald, says “auctions have declined by 95 per cent since the boom and the percentage of houses sold by auction is now at its lowest level in 50 years”.
But, in an initiative by estate agents, the “mega-auction” model, which has allegedly stimulated the property market in the US and Britain, is now being introduced here. The concept involves selling multiple properties at one “super-sized” auction and is expected to provide guidance on house price values and the state of the market nationwide.
A mega-auction will take place in Kilkenny this Saturday which should provide an insight into the provincial market. That will be followed by a national event which includes property from all over the country and takes place in Dublin next month.
The concept has already been tested on a modest scale in Galway where last week O’Donnellan Joyce held an auction of six properties on the same day. They say the format was “extremely successful with five out of six sold” – with one withdrawn. A three-bed end-of-terrace house in the Claddagh, “in need of refurbishment”, with an advised minimum value (AMV) of €250,000 realised €255,000. A cottage-style property on 0.5 acres in Claregalway, which had an AMV of €295,000, sold for €306,000; while a five-bed at Dr Mannix Rd with an AMV of €595,000 sold for €635,000.
Sherry FitzGerald McCreery is hosting “Kilkenny’s biggest ever auction” at the Newpark Hotel on Saturday morning when a mix of residential and commercial property goes under the hammer.
Auctioneer Peter McCreery says “we’ve identified the buyers and we’ve got the vendors to reduce prices”. Whether or not potential bidders can raise the funds is another matter. McCreery says “it’s now up to the banks to provide the funding”.
He believes the auction offers “good value” to buyers and that “vendors have been very realistic in their approach to pricing”. He has not disclosed reserve prices “as these are still being finalised” but expects “little or no variation from the published guide prices”.
He cites, as an example of “exceptional value”, a 167sq m (1,800sq ft) four-bed “detached executive house overlooking the fairways of Kilkenny Golf Club” with a guide price of €350,000 which is “down from €700,000 at the height of the market”.
Asking prices for apartments have also dropped by 50 per cent. A two-bed, 89sq m (960sq ft) apartment “in the city centre just yards from the High Street” is guiding €120,000 “reduced from in excess of €200,000”. An apartment at 18 Seville Lawns, on the periphery of town, has 80sq m (858sq ft) of space and the price is down from €210,000 to €120,000.
McCreery says that since he began marketing the auction early in 2010 “viewings have increased five-fold” and claims to have identified “200 buyers”. Of the 21 properties listed for sale (on sherryfitz.ie) “three have already been sold prior to the auction” and he is confident of further sales. “We are seeing a buzz in the market, and we have now probably reached the bottom or thereabouts.”
On Friday, April 30th the Real Estate Alliance – a network of independent estate agents – will host a “national property auction” at Dublin’s Shelbourne Hotel. The event, “the largest of its kind to be held in Ireland”, will include residential, commercial and investment properties “from right across the country”.
The auction manager, Philip Farrell, says it provides “a unique opportunity for buyers to get off the fence and take the plunge while the market is still in their favour”. He advises first-time buyers not to be “intimidated” by the auction process which is “a much less stressful way to buy, as the purchaser generally will know very quickly whether they have been successful as opposed to private treaty sales which can tend to run and run”.
Farrell, director of Brophy Farrell Real Estate Alliance in Newbridge, Co Kildare, says “property will never again be the national pastime it once was” and hopes to “see a change in the way Irish people buy property”.
Michael Boyd, chairman of Real Estate Alliance, says 2010 will see “the investor returning to property as Government guaranteed deposit interest rates are expected to fall and those with money to invest will look to capitalise on the fact that a buyers’ market prevails”.
Áine Myler, president of the Irish Auctioneers and Valuers Institute, says “the auction method ensures transparency for all involved” and “provides a mechanism to secure property at an attractive price, safe in the knowledge that binding contracts will be exchanged on the day”. As “there is no national house price register in Ireland, it is extremely difficult to ascertain what price is being achieved for various different types of property”. (See realestatealliance.ie for details).
