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I'm selling cut-price housing at a loss, says builder

A BUILDER has claimed property prices have fallen so much that he is losing money on apartments in Dublin.

Francis Rhatigan, joint managing director of Ellier Developments, said yesterday that on one contract his company has been losing money for "two or three years".

His developments include Dalriada, in Knocklyon, Dublin 16 and Hanover Quay in Dublin city centre. At the height of the boom he was selling a two-bedroom apartment in Dalriada for €395,000. They are now selling for €235,000. Duplex apartments were €450,000, they are now €297,000.

"We are selling units at less than cost," Mr Rhatigan said.

" The '80s were very difficult but I think it is worse now. At least you could sell at a price. There wasn't much money but you could make a living.

"The market picked up in the 1990s because there were some initiatives by the government to encourage building in Ireland. That got things moving a bit.

Creditors

"We are losing money on Dalriada in that we won't make enough to reinvest and replace the land with all the interest and the bills to pay. We are servicing the bank, basically. We are performing on all our loans and we are paying our creditors, trying to keep the men working,'' he pointed out.

Mr Rhatigan is the first developer to publicly state that he is selling at a loss -- but he believes he is far from being the only one, claiming that it is hard to imagine anyone breaking even.

"The architect has to be paid, the engineers, the insurance costs, planning permissions, landscaping, public lighting -- all these things cost money.''

He warned that the carbon emissions law, "will add on another €15,000 to the cost of building a house. It's a great aspiration but can we afford it at the moment?

"I could sell you a house in the morning if you had loan approval, but if I didn't have it ready in four months, your bank could pull out. So you can't make pre-sales at the moment, and if you can't make pre-sales, you have no finance.''

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Mr Rhatigan added: "The reality is that all costs went too high -- labour costs, production costs -- everything in the economy was too expensive. Our men have taken big reductions in their salaries. We have cut our overheads down as tight as we can. The managers are picking up tools, the foremen are driving forklifts. Everything is back to very basic stuff.

"At peak we would have had close to 300 employees. Now, we are down to about 15."


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