Thursday 20 October 2016

Real deal: New homes on the up

Published 06/09/2015 | 02:30

Lot 95, a detached five-bedroom at 16 Roganstown Golf and Country Club, Swords, Co Dublin, has a reserve range of €600,000-€650,000.
Lot 95, a detached five-bedroom at 16 Roganstown Golf and Country Club, Swords, Co Dublin, has a reserve range of €600,000-€650,000.
'The Central Bank must get a bigger stick out as it heads into the autumn term'

Noticed the long-limbed yellow animals straining against our skyline once again as construction heats up in the new homes market?

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A slew of developments are coming on stream between now and the end of the year, especially across the capital where big hitters Savills, Sherry Fitz and Knight Frank all have much-hyped viewings. Eagerly awaited are Rokeby in Lucan, Gerry Gannon’s Fairbrook in Swords and Stepaside’s behemoth at Belarmine Woods, so expect to be deluged with  references to “sylvan settings” and “desirable bijou residences”.

But the deposit restrictions imposed by the Central Bank have curtailed the chances of many trader-uppers — that valuable market with its eye on nice four-beds in the suburbs but who now need 20pc either in equity or cash to move it along. Much of the permission for new builds was granted before the rules changed, and digging out the necessary is a big ask, especially for those on the cusp of negative equity.

So, the nice detached homes will be suitable only for those who have the capacity to up-loan straight away and banks, finally, are eager to facilitate. The likes of Bank of Ireland’s 2pc cashback mortgage offer is sure to attract switchers, even if their variable rates are among the highest in the market.

We’d expect to see a number of developments selling out before they’re built, as happened at Hansfield in Ongar — the pent-up demand is certainly evident. This time around, it seems developers are sticking to building (a) where people actually want to live and (b) properties they want to live in.

Stick or carrot?

Hmmm. The Central Bank must get a bigger stick out as it heads into the autumn term. Headmaster Patrick Honohan needs to come down on banks who are (still) attempting to “entice” customers off valuable tracker mortgages. No matter how you couch the language, it is an absolute no-brainer to stay put if you have one. The saving over 20 years for someone with a €200,000 loan between a tracker and a variable rate is upwards of €82,000, and that’s using competitive standard variable rates (SVRs). Sadly, the SVR customers will continue to subsidise their tracker neighbours while the banks continue to lick their wounds.

That back-to-school feeling

Feel for the thousands of students who, having waited all summer for their Leaving Cert results, now face the scramble for accommodation.

On the plus side, they’ll get a taste of real life straight away as they realise how much their rent is going to cost. Expectations will move from a shared apartment on St Stephen’s Green to a grotty box room in the suburbs.

The banning of bedsits has meant that an entire section of the market supply has been withdrawn. While we all agree in principle that people ought to live with an en-suite bathroom and a wall dividing their bed from the stove, it was a fact that many tenants in bedsits were doing perfectly well, thank you very much. It wasn’t A-rated luxurious dual aspect surroundings, but it was home.

In return, we have an ever-increasing housing list (over 50pc of those on it are in need of single person accommodation only), and a raft of students who would give their right  arm to not be able to swing a cat in their own place, and a bunch of property owners who, far from being emboldened and incentivised to do up their flats, have instead boarded up their flats in exasperation.

Dublin City Council is to be commended for loosening its views on smaller new builds, but that’s all in the future.

What about the class of 2015?

Under the hammer at Allsop

The Allsop auctions are always eagerly anticipated — by punters and protesters alike. This coming week sees them splitting their commercial and residential sales into two events —  on Tuesday and Thursday.

While the usual range of apartments, over-the-shop flats and lands appear, it is an eye-opener on the “real” value of housing, eschewing the glossy estate agent version of events and pricing to sell, rather than what the vendor thinks it’s worth.

It also continues to highlight the great urban/rural divide. For example, a fairly ordinary modern four-bed semi in Foxrock, Co Dublin, is guiding at €500,000. For the same money, you can snap up no fewer than 14 three-beds in Bridgetown, Co Wexford. Still too rich for you? Well a mid-terrace three-bed in Dundalk will set you back just €30,000, while a four-bed semi in Moate,

Co Westmeath, is just half that at €15,000.

Allsop has a hit rate of 75-85pc at auctions this year and proves an accurate leveller.

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