Whether all of those who marched in through the Shelbourne's revolving front door were genuinely interested in buying or were satisfying their curiosity is anybody's guess. I suspect Pareto's 80/20 rule applies: that close to 80 per cent of those attending any auction are there for the vicarious thrill of watching other people engage in a dynamic that eggs everybody on to spend money in public.
But, one way or the other, Allsops Auctions and Space Real Estate must surely have been happy with the end result. Apart from the odd exception, like the four-bedroom house on Raglan Lane in Dublin that sold for €550,000 -- €50,000 under the guide price, prices were actually higher than had been expected. About 30 per cent greater. Each price, nonetheless, was still a fraction of the price of property at the height of the boom. Those present on Friday must have realised that they were witnessing a vivid exemplar of the meltdown -- a perfect example of the Bonfire of the Vanities.
In all the excitement of the day it would have been easy to forget the human story behind the sales. The distress that shattered dreams, pushed people into humiliating climbdowns, caused endless sleepless nights. It's not hard to imagine the endless months of worry on the part of the original owners that preceded the repossession. If they were wise they stayed away on the day, rather than witness the appalling speed at which the quintessential symbol of their earlier success story was sold for a fraction of what they paid for it. Heart- breaking. These were not massive properties like buildings in the hands of Nama or blocks of unsold apartment built by overzealous developers. These were private homes and small commercial and investment properties. Five years ago, being rich was a legitimate aspiration. Today, being rich, in the past or present, is to be a stereotype -- a caricature with a 2005 Ferrari they can't shift. But the properties sold in the Shelbourne weren't owned by those kind of people. The owners tended to be private individuals caught by the downturn. Ordinary people who have lost their jobs or businesses, or have taken such large cuts in income that to maintain the repayments became impossible. The scary bit is it could be you or me tomorrow packing up our belongings and closing the door on an empty house.
That, I am sure, was the furthest thing from the minds of anyone at the auction on Friday. They were hanging out of the rafters by all accounts. Standing room only and spilling out on to the street. So much so that the gardai were drafted in to help manage the crowds.
It seems, despite the recession, there's still money around. Mattress money I've heard it called. Call it what you like but we Irish are always up for a bargain. That is, of course, if you're in a position to avail of the bargain and there were lots of those present. Brochure in hand, anxiously waiting for their chosen lot to come up, there was no sign of distress among the hundreds that turned up.
People buying in today's market have cash in hand. It's virtually impossible for the average 'Joe Soap' to get a mortgage. Wouldn't it be nice if, just for once, the average guy in the street could benefit from a price reduction? It must be heart breaking for anybody in negative equity to see what their property is now worth. To know that even if they handed their house back, they'd still owe a fortune.
The Irish League of Credit Unions in a recent survey found that over 200,000 people haven't enough money to pay essential monthly bills and a further 200,000 have no funds left after mortgage or rent and utility bills are paid. Coupled with that, the interest rate increase imposed by the European Central Bank last week is likely to push mortgage payers into more difficulties and arrears. More repossessions. More fire sales. Where will it all end?
The real benefit of Friday's auction, according to liquidator Tom Murray, is that it will help to clarify the true value of property in Ireland. It seems that property prices have now found their level.
They're on the floor. Great for the buyer, dreadful for the seller. What I found most interesting was the international interest in the auction. Does that signal a cautious confidence in growth potential in our economy? Is there a light at the end of the tunnel? Let's hope it's not an oncoming train. God knows, we could do with some good news.
Whatever the tragic stories are behind the prop-erties sold last week, the auction did signal a move in what has been a stagnant market. Let's hope that this drop in the ocean creates enough of a ripple effect to prompt the banks and buil-ding societies to grant mor- tgages again, realistic ones.