Galway Auction report 26 Feb 2010

5 Galway houses on auction today (26/2/2010)

13 St. Dominics Road, Claddagh, Galway City Suburbs
3 Bedrooms, 1 Bathroom
AMV: €250,000
Bidding started at 200k, 2 bidders, 5k increments
Sold @ 255k

Clogher, Cahergowan, Claregalway
3 Bedrooms, 4 Bathrooms
AMV: €290,000
Bidding started @260k, 3 bidders, 5k increments
Sold @ 306k

Killowen House, Lower Salthill, Salthill
11 Bedrooms, 5 Bathrooms
AMV: €500,000
Bidding started @370k, 3 bidders, 10k, then 5k increments
Didn’t meet reserve - Negotiating with top bidder @ 440k (reserve maybe 450k?)

31 The Maples, Dr. Mannix Road, Salthill
5 Bedrooms, 3 Bathrooms (+ 2 rooms in attic/second floor)
AMV: €595,000
Bidding started @540k, 2 bidders, 10k increments
Sold @ 635K (below reserve, maybe 650k?)

62 Dalysfort Road, Salthill
4 Bedrooms, 1 Bathroom
AMV: €395,000
1 bid @ 330k
Withdrawn - not close to reserve (400k maybe?)

Thanks for that. I was wondering how it went.

Those prices still high. Wonder how much the Dr Mannix Rd house would have fetched at peak?

635k for the 31 The Maples…WTF???

yep, I was a bit surprised…thought it would go for 560-580k …but there were 2 couples and guess they both had set their hearts on it. I guess with an auction where you already have paid for a survey, etc, you have an attachment to the place

It does highlight the point that is often made on the pin - if a similar house came on the market tomorrow, it is likely there would only be one couple bidding on it and it would fetch a lot less (540k opening bid?)

Before I clicked on it, I was expected a Victorian pile.

Jaysus, there’s life in the bubble yet.

I live in the maples. Lovely houses and area. Not sure if worth that money but they are really premium houses. Would I buy here instead of rent? Probably not.

Galway is different.

Glad it’s not just me who sees the Maples price as incredible. Prices have a loooooooong way to go yet.

but if people are prepared to pay these sums during the worst credit availability conditions known for some time then what does that say about the likelihood of prices falling further. irish people have and will continue to have an irrational relationship with property, if the banks were still lending then prices would continue to go up, and up, and up. some lessons will be learned after all the dust has settled but if the results of this auction are anything to go by then the most important ones will be overlooked.

This is the key part of your post.

House prices are influenced very much by the availability of mortgage credit.

So whoever bought that house either has serious income, a lot of cash or both. And yet, to my mind they have made a dubious choice as to how to spend all that money. 1700 square feet?
Irrational - this is the perfect example.

And is it fair to say that the availability of mortgage credit is still inflated by two factors.

On the supply side, the Government Bank Guarantee means that banks can raise money backed by the ability of the State to repay those funds, rather than on the basis of that money being backed by the value of the properties underlying the mortgages.

On the demand side, the Government is still borrowing billions for day-to-day spending. That money ends up in someone’s pocket (this isn’t a go at the public sector - for instance, pensioners and parents and plenty of other folk get the benefit of this cash). The fact of all that money being out there means people are more able to demand credit. For instance, if I’m a small retailer some portion of my income is people coming in to my shop and spending money they got in the form of Childrens Allowance. If I apply for a mortgage, I can still show that as part of my income.

That’s a crude example, that I frankly haven’t time to put more elegantly. Yet hopefully my key point is clear. The Government bank guarantee and budget deficit mean that, presumably, people are still able to get more credit than would strictly be justified on the basis of those famous fundamentals.

To put the Maples house in context, here is what may be an equivalent house from May 2005

Don’t forget the public procurement market amounts to €16bn (a number I read today) annually also.

My only thinking on the price of that house is they must be some kick ass ninja goldfish in that pond. :nin