Business Commercial Property

Sunday 31 August 2014

Site sold for almost twice guide price after bidding war

Peter Flanagan

Published 01/06/2014 | 02:30

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Potential: Cul Cuille, which is zoned residential in the Government’s development plan, went under the hammer with an estimated €750,000 price tag but it sold for €1.23m

A SITE in south Dublin earmarked for residential development has been sold at auction for almost double the original asking price.

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CBRE offered the site known as Cul Cuille, Sandyford Road at Sandyford Village, with a guide price of around €750,000.

At a public auction, however, the site drew huge interest and was sold after 24 bids for €1.23m. That equated to a rate of €1.42m an acre for the 0.87 acre site.

Importantly, the site is zoned residential in the Dun Laoghaire/Rathdown Development Plan 2010-2016.

CBRE said that the site had the potential, subject to planning permission, to accommodate 8-10 semi-detached or detached houses.

CBRE's Wesley Rothwell handled the sale on behalf of GMT Partnership, which is currently in receivership.

The final sale price continues the recent trend of development sites selling for well above their original list price, particularly when it comes to sites that are zoned or have full planning permission for residential development.

The shortage of suitable housing has pushed home prices up this year, with parts of Dublin jumping by as much as a fifth in the last 12 months.

That rate shows no sign of easing off even as concerns are raised about the potential overheating market. While Finance Minister Michael Noonan has dismissed concerns that there could be a bubble forming in parts of the capital, other experts are not so dismissive about the jumps.

Much of the growth has been driven by the number of professionals who sat out the crash and were not caught up in the huge prices that were paid in the last decade.

They now have significant savings and the pent-up demand means a huge number of buyers are focusing on a small number of areas, particularly in Dublin.

One property in Ranelagh that was in need of huge refurbishment is understood to have sold for more than €150,000 above its asking price in the €500,000 range after a bidding war between three parties.

Of the three bidders, two were cash buyers, while the third had a mortgage of only 30pc.

While house prices in desirable parts of Dublin have taken off like a rocket, other parts of the capital and regional destinations have not experienced the same growth, with house prices in those areas remaining stagnant at best.

Last month, the Government revealed a stimulus plan for the construction sector, which has been moribund for years now. The Construction 2020 plan has been assailed as unnecessary but Taoiseach Enda Kenny dismissed those concerns.

"There are 100,000 people on the live register involved in the construction industry: plasterers, blocklayers, chippies, tilers, roofers and everything else," he said.

"We want to see that these people get an opportunity to get back into the world of work."

The Government strategy, which will include 75 measures to get builders back to work, will involve top-quality and affordable new housing, Mr Kenny vowed.

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