DLRCC €27.5m properties may go on sale with reserve tag

[Arbitrager]

The Irish Times - Saturday, April 10, 2010
DÚN LAOGHAIRE-Rathdown County Council bought properties from developers at a cost of €27.5 million.
They were acquired under the Planning and Development Acts, which stipulates developers must provide 20 per cent of any residential development to local authorities for social and affordable housing.
The 50 one-bed apartments, 52 two-beds and 15 three-beds are in eight developments in Sandyford, Stepaside,
Dundrum, Dún Laoghaire, Rathfarnham and Leopardstown.
Some 54 of the apartments are in one development, The Belfry, Enniskerry Road, Stepaside. The Gallops in Sandyford contains 23 of the properties and Belarmine Plaza, also on the Enniskerry Road in Stepaside, contains 21.
The properties had all been offered to the 1,900 applicants on the affordable housing waiting list at prices from €132,000 to €180,000. They were discounted more than once to keep them 20 per cent cheaper than the open market.
However there were no interested purchasers under the affordable housing scheme, which includes a claw-back penalty requiring buyers who sell their properties within 20 years to pay back a percentage of the profit.
The council also carried out a random survey of more than 100 applicants on the waiting list
to ascertain why they did not want to buy any of the properties.
Some 20 per cent of applicants were no longer in a financial position to purchase or could not secure a mortgage, while 14 per cent thought the prices were too high. A further 14 per cent wanted houses instead of apartments and 11 per cent had already purchased privately.
Director of housing at the council Charles McNamara has recommended that the properties be sold on the open market “subject to a reserve and with priority being given to first-time buyers”.
He has not yet stipulated what that reserve would be.
In a report to councillors to be debated at a meeting on Monday, Mr McNamara said it was that vital the council reduced the €27.5 million deficit incurred by the purchase of the properties.
“A failure to address this issue will have significant implications for the delivery of the council’s ambitious programme of capital projects, which are dependent on the availability of match funding from the council,” he said.
Other options considered by the council to deal with the unsold properties included introducing a let-to-buy scheme.
This would allow potential purchasers to live in and rent properties for a period before deciding whether to buy them.
However, at a meeting with the Department of the Environment last month, council officials were told that Dublin City Council had been approved for a let-to-buy pilot scheme.
Until that scheme has been assessed by the department and considered successful,
no other local authorities will be given permission to initiate such a scheme.
The report also said voluntary housing bodies would not be in a position to purchase the unsold homes because the department had confirmed that no further funding would be made available to the voluntary sector under the Capital Loan and Subsidy Scheme.
Should the council be unsuccessful in selling the properties on the open market, it may be given permission by the department to transfer some of them to social housing under the social housing leasing initiative.
However this has disadvantages for the council; although it will receive rent, the scheme only lasts for five years and the council would have to bear the cost of repairs and redecoration of the properties once the lease period was finished.
Councillors are due to debate the issue on Monday.

irishtimes.com/newspaper/ireland/2010/0410/1224268048554.html

[Arbitrager]

Irish Times
Thursday, April 15, 2010

GOOD LUCK to Dún Laoghaire Rathdown County Council in its bid to sell its affordable apartments on the open market at current market prices. We can’t help thinking it will have its work cut out determining what current market value is.
Currently Castlethorn Construction is selling one, two and three-bed apartments in Belarmine Plaza on the open market from €185,000 to €290,000. The affordable units in the same scheme were recently reduced to €128,000 to €212,000.
The council bought the 117 affordable units on its books in several different schemes for €27.5 million but none of the 1,900 people on the affordable housing list wanted them because of problems getting finance, a preference for houses and a belief that the prices were too high.
Now the council is looking to a wider target market but it remains to be seen if the prices will be attractive enough for buyers. The council is saying its stock is being revalued and will be released for sale within two weeks.
They may have to have the edge over competing apartments for sale on the open market in these areas. But will buyers maintain a “wait and see” approach in case there’s a flood of Nama-related apartments on the market to push prices down more?
Spread over eight schemes, the majority of the affordable units owned by the council are in The Belfry and Belarmine Plaza on the Enniskerry Road in Stepaside, and the Gallops in Sandyford, D18. These don’t include another block of 143 affordable housing units under construction in phase one of Cosgrave’s scheme at the former Dún Laoghaire Golf Club site.
While the 117 units will be available on the open market, the council says it intends to give priority to first-time buyers and to applicants who meet the terms and conditions of the affordable housing scheme. Prospective purchasers refused mortgage approval from two lenders may apply under the council’s House Purchase Loan Scheme – for which the maximum loan is 97 per cent of purchase price. The maximum loan is €220,000. Income limits apply: €50,000 for a single applicant and €75,000 for a couple.
This comes as some 1,100 affordable homes remain unsold around the country because of the slump in the property market.
Cork County Council is putting more than 400 affordable units on the market.

irishtimes.com/newspaper/property/2010/0415/1224268365529.html

[yoganmahew]

I think we are seeing the first signs of fear from council AH departments. They have most to fear from NAMA firesales.

[mr.agent]

Was talking to one of the boys in dun laoghaire council the other day. he showed me a list of 100 ah properties sold in the past 12 months and a further list of (I estimate) 200 unsold. I was surprised they have sold so many. In the past year, I’ve also sold a few through the shared ownership scheme (sub 300k houses). anyhow: seems to be some activity at the bottom end of the market.

[Cheeky_Offer]

@mr.agent

Was talking to one of the boys in dun laoghaire council the other day. he showed me a list of 100 ah properties sold in the past 12 months and a further list of (I estimate) 200 unsold. I was surprised they have sold so many. In the past year, I’ve also sold a few through the shared ownership scheme (sub 300k houses). anyhow: seems to be some activity at the bottom end of the market.

Still, there must be a flood of properties all over town. This drip, drip is getting tiresome.

[tea_drinker]

@mr.agent

Was talking to one of the boys in dun laoghaire council the other day. he showed me a list of 100 ah properties sold in the past 12 months and a further list of (I estimate) 200 unsold. I was surprised they have sold so many. In the past year, I’ve also sold a few through the shared ownership scheme (sub 300k houses). anyhow: seems to be some activity at the bottom end of the market.

Thanks for the info, but 300 K is the bottom end of the market? Isn’t this above average house price? Sub 200 or 100 would be bottom end … IMHO

[mr.agent]

you’re right: 250K is bottom end in Dun Laoghaire for a house. I believe there is a 300k limit for some ah schemes as many council assisted buyers only show interest when this limit is breached.