Business Property & Mortgages

Sunday 18 March 2018

Three quarters of distressed auction buyers pay in cash: auctioneer

ALMOST three quarters of buyers in a series of special property auctions this year paid in cash, according to estate agents.

Of the €52m worth of houses, apartments and commercial buildings sold, 72pc were bought by people without needing finance.

British auctioneering giant Allsop - which is affiliated with Irish estate agent Space -are planning another five auctions next year, the first on March 1, and are aiming for 100 properties per sale.

Robert Hoban, Allsop Space director of auctions, said he has seen a pattern of buying from people who sold homes at the height of the boom and stayed out of the market.

"It's perfectly reflective of the reality we are in. There are lots of people who want to buy but they can't because there is no finance from the banks," he said.

"It's a distorted market.

"There's an assumption out there that anyone who buys at auction is a hard core vulture, that it's blood on the streets sales, but that couldn't be further from the truth.

"A lot of people are lucky to have the cash and the pattern we have seen is that it was people who sold in the boom and stayed out of the market."

Some 314 houses, apartments and commercial buildings were sold in four auctions at the Shelbourne Hotel with only six million euro coming from overseas bidders.

Mr Hoban added: "What is clear is that despite the downturn, the appetite for property within the Irish psyche is undiminished, once the price is right."

Allsop Space had more than 160 registered remote bidders but only 39 were successful.

Some foreign buyers were based in Monaco, Gibraltar, Israel, Luxembourg and France. Mr Hoban also noted intense interest from Irish people living abroad, thanks to what he called sensible prices, including in the UK, the Middle East, Australia, New Zealand, US and Canada.

Almost half of the properties sold in the auctions were income producing and sold with tenants.

Other research into the sales found three quarters of properties handled by Allsop Space were in the hands of a receiver or liquidator.

Mr Hoban refused to be drawn on how much further property prices could sink with asking prices now falling at their fastest rate.

"We were truly overwhelmed by the buyers. At the first auction people were waving their cheque books to try and get in and spend their money - that was massive in the market that was supposedly moribund," he said.

"The economy and the housing market was a busted flush, we were told.

"But I don't think the property price indexes are a true reflection of the market."

Allsop Space also said overall the average sale price was 29pc above the reserve and in Dublin alone it was 25pc.

Mr Hoban said foreigners were only interested in buying property in Dublin except for UK bidders looking for a holiday home.

According to Allsop Space, Dublin, Galway, parts of Wicklow, Wexford and Kilkenny were all strong markets if the correct price is set.

Mr Hoban warned however that the Midland towns of Portlaoise, Mullingar, Tullamore, Athlone have been seriously overdeveloped.

"There's a huge amount of foreign bidders. They tend to be a little more circumspect. They aren't in the room so they are not going to get as caught up," Mr Hoban said.

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