Real Deal: The business of property
Last year's inaugural INM Property Excellence Awards drew a full house, with over 750 attendees from across the sector in Dublin's National Convention Centre to celebrate the contribution of individuals and organisations to conservation, community, infrastructure, design and more. Among the winners were Scott Tallon Walker Architects for Infrastructure, Savills took the Commercial Agency award, while Sherry Fitz picked up the residential prize. Hibernia REIT and Stephen McCarthy of Space Property Group also won awards.
The 2016 event is now open for entries at propertyexcellenceawards.com - the closing date is September 9. The judging panel boasts an impressive range of independent experts and industry heavyweights, including Clare McGrath, chair of the Office of Public Works, Terence O'Rourke of Enterprise Ireland, Pat Davitt of IPAV and Jim Clery of KPMG, who are also lead sponsors of the event.
In response to industry feedback and the changing market, two new categories have been added - one for Emerging Talent, aimed at the under-35 age group, for a potential future industry leader who has already shown the ability to contribute to the industry. The second acknowledges the importance of the industry outside Dublin, with a Regional Excellence Award for a person or firm who has played a pivotal role, providing high standards and excellence in their particular field. This award will be eligible to all sectors, including agents, architects, engineers, planners.
Even greater numbers are expected this year on November 12 at the Convention Centre when the awards are announced - and if last year's party is anything to go by, it should be a night to remember.
Don't stint on paperwork
The auction season is in full swing. The large multi-unit auctions taking place in various locations around the country are as popular now as they were when they first arrived to these shores. Success rates are between 80 and 90pc and this trend looks set to continue for the next couple of years as banks, receivers and property funds dispose of their assets.
Even after the bulk of their assets are sold, I predict there will be a niche role for this type of auction because of the transparency and efficiency of the process and the value that is on offer. Galway-based Donnellan Joyce has established a very successful platform on the western seaboard and their next auction takes place on June 17, while Allsop, which provides the largest national offering, holds its next auction in Dublin on June 30.
I have advised clients at a number of these auctions and am always amazed at the number of purchasers prepared to bid without having had the contracts for sale assessed by their legal advisor before the auction. You wouldn't buy a house by private treaty without having all the legal paperwork carefully examined by a solicitor, so why would a buyer neglect to do so at auction? By their nature, some of these assets may have issues relating to title, boundary, planning and compliance, management company or tenancies.
The onus is on the purchaser to familiarise and satisfy themselves with the contracts for sale. When the hammer falls, the purchaser is legally bound and if the purchaser does not complete within the usual 28 days, the vendor can confiscate the 10pc deposit and sue the purchaser for any loss incurred.
In a high percentage of cases, a copy of the contract for sale is available online prior to the auction. The cost of having these assessed for your typical residential dwelling is around €200-€300. A solicitor will query any issues with the vendor's solicitor and will make sure that the paperwork you receive will allow you to sell or mortgage the property in the future.
This is something that a purchaser can neglect in their enthusiasm to buy. The likelihood is that they will sell on the property again, therefore it will need to prove attractive to future potential purchasers.
The next time you are in the heat of battle of an auction room, pause and ask yourself: have I carried out sufficient due diligence? As the old saying goes, let the buyer beware.
Mortgage stats a concern
A report released this week on housing activity by the Banking & Payments Federation Ireland (BPFI), which represents 70 institutions and associates in Ireland, makes for interesting reading, raising further concerns in relation to the persistent housing shortage.
It considers housing supply, prices, rents and housing transactions. The report highlights an upward trend in activity, but supply will still fall well short of demand this year.
According to Ali Ugar of BPFI, the Federation's economist, head of accounting and tax: "Supply of new homes still remains low, despite a year-on-year increase of about 20pc in completions in the first quarter of 2016 compared to the same period in 2015. If the same trend were to continue for the rest of the year, it is likely that completions would be around the 15,000 mark."
This makes only 60pc of the required number of new homes, adding to the demand into 2017. If we are to look at the numbers of new homes provided in 2014 (11,000), 2015 (12,000), and an expected figure of 15,000 for 2016, it is not unreasonable to assume that a figure of 50,000 would be required in 2017 to satisfy the pent-up demand. Be under no illusion, the supply crisis will continue nationally and will be further fuelled by developers' reluctance to build in areas where it is just not profitable.
Of houses completed in Q1 2016, 39pc were individual units or one-off dwellings.
The report also confirmed the fact that just under 50pc of all transactions were cash purchases - the UK figure is 35pc.
Looking at mortgage drawdown numbers, traditionally the first quarter has the weakest figures. The Q1 figure of 5,446 mortgages or (€1bn) is 3.1pc down on 2015 - but that figure was inflated due to the scramble to secure finance before the new deposit requirements were introduced in February 2015. Close to 50pc (47.7pc) were first-time buyers, a figure which hasn't really changed over recent years.
The size of the mortgage market in 2015 was €4.9bn. It is estimated that a properly functioning market should be around €8bn per year. In 2006 it was €40bn. Do the math.
Philip Farrell is a property expert and market commentator