Buyers grab apartments as new loans lure pays off
Sunday September 07 2008
DRASTIC measures taken by two prominent developers to revive the property market succeeded yesterday in attracting some buyers, showing there is some life left in the Irish housing market.
McNamara's Elm Park development, which is offering 30 per cent loans to buyers, was a busy place yesterday, and there was only a handful of properties left for sale by close of business last night.
McNamara is offering the interest-free loans to attract buyers for 70 of the 330 units at the Merrion Road development. Most of the apartments f yesterday were one or two-beds on sale for between €420,000 and €470,000.
Mortgages of 100 per cent were also being offered on spec to prospective buyers by the Irish Mortgage Corporattion, which is handling the finance deal on the Elm Park properties.
According to staff on duty yesterday, since the news emerged about the finance offer, 25 units have been sold. Prices at the Elm Park development in Dublin 4 have already fallen 20 per cent to attract buyers.
Up the road in Stillorgan, Ray Grehan's Grange development didn't quite have queues out the door, but handfuls of people arrived in the first hour.
Grehan's firm, Glenkerrin Homes, is offering buyers loans worth 15 per cent of the value of the property. The company explained that the move will help bridge the gap between the mortgages being offered by banks and the purchase price. It said that, in effect, buyers will now only have to find 5 per cent of the value of the home as a deposit.
Developer Ray Grehan earlier dismissed claims that his company was facilitating poor financial practice by offering buyers a loan for their house deposits.
He said builders were stepping in because of a lack of money and a lack of confidence in the housing market.
Radora, the company managing the development, is now offering interest-free loans of up to 30 per cent of the selling price to be paid back within five years.
The buyer will own 100 per cent of the home, with the developers' loan secured by way of a second charge on the property. The 15 per cent must be repaid either after seven years, or when the property is sold, whichever comes first.
Glenkerrin said that if the property rises in value, it will share in the gain, but it will also take the hit if the property falls in value.
Elsewhere, estate agent Douglas Newman Good has seen prices on some new home developments fall by as much as 17 per cent over the course of this year, the Sunday Independent has learned.
Hooke & McDonald, the country's largest new homes and apartments provider, has also advised the paper that a development on their books, Stocking Wood, now has its units priced at an average of 27 per cent cheaper than when they were first launched 24 months ago.
Stocking Wood, a development of two-bed apartments and three- and four-bed houses, has seen its four-bed houses drop from €790,000 two years ago to their new price of €550,000. Other developments on Hooke & McDonald's books have seen similar sharp falls in price. Priors Gate, near Tallaght Village, has seen the price of its one- bed apartments fall from €315,000 to €215,000.
Douglas Newman Good, also active in the new homes market, has reported huge reductions in a matter of months.
In one scheme at Castlegrange, Dublin 15, two-bed, mid-terrace houses that were €355,000 in January last are now down to €294,950, a 17 per cent reduction. Larger three-bed, end-of-terrace houses that were priced at €399,000 are now €344,950.
- DANIEL McCONNELL and JOHN O'KEEFFE
