Galway News: Builders to slash prices 'to 2003 levels'

I went along to the “Sale of the century” for a bit of fun and to see if I could ruffle a few estate agent feathers. I was shocked on the way in to find 2 people on their phones talking excitedly about the new houses they just bought. I went in to find queues out the door. When I spoke to the EA I said I wouldn’t be interested in the price they were offering but would be back to them in a years time offering €50k less he informed me that all the houses were almost gone. I saw plenty of people shaking hands on deals so I don’t think he was telling a huge lie.

Seems like the population in Galway are a bit gullible and were fooled by a nice piece of marketing.

There must be a lot of poverty-stricken actors knocking around Galway these days…

Wonder how many of these people that shook on deals here wil find the bank unwilling to provide the loan for the house tomorrow?

It seemed quite succesful, I went to see one of the houses. I arranged viewing on event grounds and went to the estate to see it. When I arrived house was already sold. It seems that they sold around 10-15 million worth of estate. I think they were first of developers in Galway City to lower the prices.

Well done to them. They cut prices first and hoovered up a lot of latent demand in the area.

I think some on the Pin could have given this advice a while back :wink:

At least as early as here:
thepropertypin.com/viewtopic … dule#46153

They sold 40 houses during that sale apparently.

40 fewer buyers for the next lad who cuts his prices…

supply>demand = reduced prices

leading to a reduction in buyers and an increase in sellers

leading to further excess of supply.

just as the bubble was a big one the bursting too will be big…

looks like a slo-mo burst until we see some developers start capitulating

Or the whole country is turned into a giant student village :stuck_out_tongue:

4 bed semis were 360k - no savings there. Supposedly 40k off price so they would have been 400k before - no way, don’t believe this for a second, plus one would need to kit out – plenty of fools out there still. The mortgage on this house would be double the cost of renting it. 4 bed semi are going for 330k/340k in good areas of galway. The slashed prices campaign must have worked - I give up.

I wonder too! I am told that of 6 people who had booked houses in a new development close to me (not Galway!) 5 have pulled out due to failing to get funds! It’s going to be lonely for the other guy, so far his the only one in an estate with about 40 houses completed and bases in for another 20 or so!

I guess it’s a lot of those old chestnuts the "Sale Agreed"s

40,000 already in negative equity, another 40 here.

seemingly the prices were dropped to correspond to the bank’s valuation for the houses - in this way, buyers are guaranteed not to be denied mortgages based on price paid

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”. :confused:

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.

You know you should walk away when supposedly respectible Developers start using Time-share cowboy tactics like these.

Is that the sound of distant violins I hear ?

I don’t believe for a moment that the cost of land is as significant a component in Developer pricing as they make out. Thousands of acres have been sitting idle around the country waiting for people to cash in. My Father used to point out huge sections of land around Galway & tell me who used to own them until a land baron had bought it up. Most of the land being developed in the last 5 years was bought in the early 90’s not a week last Tuesday !

Well good news the sale is apparently extended to this weekend with another 10 houses up for grabs

Back due to popular demand!! :laughing:

And of course cost is the bedrock below which value cannot fall.

Where’s the monkey on roller skates when you need him?