Long time reader but first post, so be gentle.
Myself and my soon-to-be wife went property viewing in Galway at the weekend. We were not serious about buying as I’m a confirmed long-time skeptic of the Irish property boom and I have my other half firmly on board also, but we were curious to see what things were like “on the ground” as they say.
We went firstly to see these houses which were being launched in Renmore. We were quite curious about these, as the price (€385,000 rising to €417,000 for the woop-a-dee-doo showhouse) seemed quite crazy for a two bedroomed house in the current climate - even by the divorced-from-reality standards of the Irish property market. A quick internal inspection confirmed we were pretty much in glorified apartment territory - in particular the kiss-me-arse of a second bedroom was taking the proverbial. Total square footage was around 950 I think (we had to consult the literature for this as the fly young dude in the suit handing out the brochures didn’t know, or claimed not to). By way of making conversation I offered to fly-young-dude that they seemed overpriced for what they were (I meant by Irish standards, not rational ones). He got on his defensive hunkers straight away, asking me what do you think you’d pay for a site in Renmore - this made no sense to me, as a consumer, I have no interest in what the inputs cost, only the cost of the finished product, and what it compares to other finished products, but I let it slide as an argument with this guy seemed pointless. On our way out we got chatting to (I presume) the other auctioneer, an older gentleman. He was more phlegmatic: the land had cost an absolute fortune, they had to charge these kind of prices to make their money back. There didn’t seem to be any other rationale - obviously he was keen to push their close-to-the-beach location, but I did point out that it was about three minutes drive from where we were renting so it was hardly a USP (this is Galway after all, not Dublin city). Their target market seemed to be trader-downers, as the places were too small for older couples with kids potentially in the plans and a younger couple would be unlikely to have access to the funds required, and indeed most of the people looking at them were in that older age bracket.
From there we went to the “O’Malley Major Discount Housing Event” as discussed in this thread. They were pulling out all the stops, with a whole clatter of bankers, solicitors and of course sales people there to service your every need. The sales girl told us that they had decided to slash (her word, not mine) prices in an effort to clear unsold stock, and it appears to have been successful; if she was to be believed, they had sold 30 units already by the time we arrived, and there didn’t appear to be much stock left. These were the kinds of prices for the houses being sold in the “Boireann Bheag” development on the eastside of the city:
4 bed detached (1420 sq ft) 475k → 405k
4 bed terraced (1370 sq ft) 375k → 320k
3 bed terraced (960 sq ft) 335k->295k
3 bed end terrace (1050 sq ft) 340k->305k
4 bed semi (1310 sq ft) 385k->360k
The reductions appeared genuine and indeed compare favourably with asking prices for 2nd-hand properties in the same development on Daft. The condition was that the prices were only available for the weekend, a 5k deposit was required, and contracts had to be signed within two weeks. We also asked about a new development called Réileán in the same area which they are selling off the plans. The asking prices for these babies is quite gaga. She told us that they were not part of the price reductions, and that the reason they were so expensive was that the building land had cost a fortune. Are we starting to see a pattern emerging here?
After this we visited the Bank Of Ireland table to get the truth on the supposed tightening in the lending market. He had a document from head office (confidential!) with a table of their current multiples, which went from 4.5 to 5.25 depending on your income and whether you were single or a couple. He also admitted that 100% mortgages are still knocking about if your profession matches up. He also told us that he would happily take a statement of projected income for three years from an accountant for my other half (who is a self-employed chiropodist and is not showing a profit on her accounts yet) in lieu of actual income. Of course his replayment table would have had us paying €1600 a month for a mortgage over 30 years for a modest property, or exactly double what we pay to rent a similar property at the moment. His parting words were “you’re exactly the type of people we could love to talk to”. 
Its clear that in Galway we’re still a long way from a rational market at this point. The dilemma for companies like O’Malleys is interesting; they obviously have a lot of capital tied up in unsold stock hence the “sale” but they can’t depress prices too much as their long-ways-from-completion estates on massively-overpriced land need to be sold at a certain price also to avoid leaving themselves sitting on fat losses.
