Listed homebuilder Abbey says 'healthy rebound' will come if banks start to lend
CHARLES Gallagher, the one-time Tory Party candidate and founder of the country's only remaining publicly listed housebuilder Abbey, says there could be "a healthy rebound in the housing market," if mortgage lending conditions here improve.
The optimistic builder is also interested in buying land in Ireland if he can get good deals, ideally on distressed assets from banks, according to informed sources.
Abbey sold one house here a week on average, and just over four a week in the UK in the year to the end of April.
Describing Irish market conditions as "very difficult", the company's main focus is now firmly on housebuilding in the south-east England, where cheaper building costs helped it to bank profits of €9.3m for the period, meaning it can pay out a dividend of 5¢ per share.
There have been some signs of life in Ireland's otherwise bombed-out property market in recent weeks. Earlier this month Irish investors spent €16m at the distressed property auction held by estate agent Allsop.
A house on Ailesbury Road in Dublin 4 which would have fetched up to €10m during the boom sold for just over €2.3m. Some 82 of the 87 properties listed sold as investors took out their cheque books.
However, the new "credit crunch" has seen banks slow their lending to a mere trickle as they seek to restore their balance sheets. Latest figures from the Central Bank show mortgage lending fell 2.1 per cent in May compared to the same month a year earlier, while lending for other purposes was down 13.6 per cent.
Household lending fell by €449m in May following a decline of €570m in April. The drop in May lending was attributed to a €262m fall in loans for house purchases.
Sunday Indo Business