Receivers to help reduce ghost estate oversupply
The Government's ghostbuster team of Ciaran Cuffe, Michael Finneran and John O'Connor looks set to have an easier task than first feared.
At one stage it was claimed that as many as 300,000 homes were vacant in ghost estates around Ireland.
Now it appears that those particular figures suffered from a case of overactive imaginations.
In reality, more thoroughly researched figures from the Department of the Environment show that 23,250 homes are complete and vacant. Dublin city and county accounts for 6,816 or 29pc of those.
This research also shows a further 9,976 dwellings are nearly completed, meaning they are watertight but require fitting out or connection to services, and 2,315, or 23pc of these, are in Dublin city and county.
However, a major portion of the near completions are in ghost estates where construction work has stopped, and it appears the three ghostbusters may need to decide which are worth completing.
Of course, these unsold new homes are just part of the market overhang, if you will excuse that ghoulish word.
To identify the wider market availability, Marian Finnegan, economist with Sherry FitzGerald, has undertaken an analysis of all the second-hand houses and apartments available for sale in all 26 counties and her research revealed that there were 53,900 second-hand units for sale, of which 7,054 were in Dublin city and county.
When this is combined with the DoE's figure of 33,226 completed and nearly completed homes, she says there are less than 100,000 units available for sale in Ireland.
"This represents a housing stock market availability of just 6pc of our overall private housing stock," she adds.
There are some market observers who will argue that the overhang figure should also include those dwellings developers have been letting because they have been unwilling to sell them at the current low prices.
The same observers are concerned that NAMA and the banks will bring these unsold properties to the market in the near future.
Others in the industry will counter that those units which are rented out are occupied and reflect a demand for these types of property.
Consequently, they argue, even should a receiver de-tenant a property to achieve a sale with vacant possession, the displaced tenants will move to another property so these units are fulfilling a demand for accommodation and therefore the overall amount of vacant homes on the market generally is not affected.
Either way the banks are not waiting for the three ghostbusters to come up with reports and plans. Some banks are already making it easy for them as they have already begun addressing the overhang. They have appointed receivers who, in turn, have had some notable successes in selling completed homes. Some have sold large luxury homes in Wicklow and Rathfarnham.
Others have sold completed apartments and more modest homes around the country and in Dublin at prices that are less than half what the developers were asking for them. On page four of this supplement, our new homes feature three developments being sold by receivers.
But the price cuts are not the only factors generating the sales. Some receivers have even raised funds from their banks to finish snaglists and common areas so that buyers can move into finished developments without fear of ghosts and vandals.
As this trend has gathered momentum, some receivers have begun selling whole blocks of apartments both new and second hand.
The first known successful block sale was seen recently when agents HT Meagher O'Reilly sold a block of 30 flats at Blakestown Road, Mulhuddart, Dublin 15, in one lot for €1,895,000 or €63,000 for each apartment.
The three ghostbusters may find even more hope at a forthcoming auction of flats in Ballybofey, Co Donegal. These units in Naveney Place are partly completed to first-fix stage but need to be finished as they don't have bathrooms or kitchens; some need their walls plastered; and a lift needs to be installed in the block. Selling agent Dermot Rainey of Sherry FitzGerald Rainey will auction all 47 together in one lot and is guiding €550,000 for the lot. That works out at only €11,700 each plus VAT at 13.5pc.
This will be a key test of the appetite of some cash-rich builders and developers for purchasing uncompleted housing.
After all, the ghostbusters will be hoping that such builders will take ghost estates off the hands of banks and the taxpayers.
But rather than wait for reports and plans, the ghostbusters need to take urgent action now to ensure that their colleague Minister Brian Lenihan doesn't make their job more difficult in his Budget.