Land takes a pounding in 2007

Cast your minds back to the 2001 bear trap.

I ran into an old mate who has been flipping upmarkety city sites for years after building on them first. The banks always opened the tap for him no questions asked.

He found himself with a new site …having used a good bit of his accumulated wedge to buy it and plans 8 townhousey type things on it .

Rolls down to the bank looking for the usual topup wedge. 4 hours he was in there being grilled.

They coughed what he wanted in the end but he admits he knows the game is up after he (or maybe if he) offloads this lot.

One very shook small developer. His record counted for nothing .

Damned right it counted for nothing - if it counted, he would have had enough of his own cash to invest that going to the bank would have been unnecessary.

Every property developer which has folded recently or will fold in 2008 had a pretty good record too, but it seems standard practice in irish construction / development companies to extract most of the profits each year and pocket it, and keep asking the bank to take the chance. Now that the banks are seeing the last round of ‘chances’ looking dodgy, they’re going to be very careful about the next round.

Sounds familiar, wots ur mates initials ?

Does anyone believe that lower development land costs will mean lower property prices? I doubt it…

Nope - I believe we’re gonna get lower property prices regardless of what was paid for the land.