"a little pricey..." admits the Irish Times

The address: 2 Crannagh Hall, Landscape Rd, Churchtown, D14.

The agent: Colliers Jackson-Stops.

The property: two-bed duplex for €575,000.

The landscape: built in the mid-1990s Crannagh Hall is a low density redbrick apartment and duplex block in Churchtown. Dundrum is a 20-minute walk and there are good services closer to home in Churchtown.

The features: the 103sq m (1,108sq ft) duplex has its own front door. There is a kitchen, utility and spacious livingroom with hard wood flooring on the first floor. Two decent bedrooms (one en suite) and the main bathroom are on the top level. The duplex is in good condition.

How much for an investor to buy? At AIB’s buy-to-let tracker mortgage rate of 5.1 per cent (APR 5.21 per cent), the repayments on a loan equivalent to 85 per cent of the asking price (or €488,750) would be €2,879 a month over 25 years. On an interest-only mortgage at the same rate and term the monthly repayments would be €2,077.

How much for a residential buyer? A single first-time buyer would need a salary of €133,000 to fund a 100 per cent mortgage over 35 years, while a couple would need to earn €62,000 and €60,000 to fund this mortgage.

Based on AIB’s one-year discount tracker rate of 4.6 per cent (APR 4.96 per cent), the loan would cost €2,749 a month for the first year. On its standard variable rate (SVR) of 5.25 per cent (APR 5.36 per cent), the monthly repayments would be €2,984. On a 92 per cent loan, the repayments would be €2,529 a month in the first year and €2,746 based on the SVR.

Potential: the house should make around €1,700 in rent a month, according to the selling agent. Maintenance fees are €1,800.

Verdict: the duplex is in a good rental location and well served by local amenities. It seems, however, **to be a little pricey **and, going on the above figures, investors on an interest-only mortgage would have to supplement the rent by almost €400 to pay the mortgage.

It’s concrete example like this that show how bloated the housing market still is after a year of falls…

We have only seen the froth blown.off the top.

the real falls start this year. The Irish times property supplement is packed with Discount price offers 80k off here 100k off there and literally thousands of new builds to choose from.

Fear is about to kick in…

The Maths just don’t stack up anyway you look at it to buy a gaff this year.

Excellent find Rupert.

There it is in black and white. Totally over priced in every respect , both for the buy to let brigade and owner occupier. Those on single incomes of 133k wouldn’t even consider lowering their standard to live in such a place and would aspire to a dwelling more suited to their image.

Being an apartment , rental values which seem to be falling , average industrial wage etc , etc , this property should be valued at sub 300k.

Where’s Country Tom when you need him?

He could easily explain the ‘great value’ that this property represents to us thickos.

Sure we’ll all be left behind when the market gets back to normal having missed the Value

I make that a net rental yield of about 3%, even a net rental yield of 6% looks full.

Gross Yield = 3.5% (575,000/20,400)

Excluding management fee, insurance, agents fees, voids, maintenance, tax etc.
Interest rates now around 5.5%.

You’d have to be cracked in the head.

They would also need to be under the age of 30 so they could pay the bastard off before they retire.

So this property is aimed squarely at

  • Under 30s, earning in excess of €133k a year
  • Canny McSavvy’s whose financial objectives include guaranteed losses of thousands of euro a year

Any takers?

I don’t doubt that there are still some people out there who would seriously consider going for this even now. What is more depressing is that two years ago you would have had to beat the investors away.