Trouble brewing in +2m Dublin resi market

Total estimated PPR “genuine” sales of +2m Dublin houses / single sites.

(ex. apartments, semi-commercial units, internal transfers, non-market transfers to developers etc.)

2012 … 46 sales

2013 … 50 sales

2014 … 66 sales

2015 (to date) … 16 sales

Total +2m Dublin houses /single sites currently for sale (ex. apartments, semi-commercial, multi-site etc.) … 72

There is probably about another c 20-30 +2m Dublin houses off market.

And we have only seen a tiny handful of foreclosures yet of +2m houses by Irish banks for the last 5 years.

God forbid when that supply comes on …

Interesting and slightly less than I thought. Do you think there will be any significant number of foreclosures prior to the election?

No chance from Irish banks - a bill was passed a while back to make it almost impossible to foreclose on a family home in Ireland.

That is why foreign mortgage providers shy away from Ireland (despite juicy yields).

Might see some activity however from the buyers of the IBRC / Danske loan books. They have bought so cheaply that they have enough financial space to cut deals that work for them and the borrowers. That could bring some more activity.

Makes sense but only in the uniquely warped world of Irish mortgages.

Given the general strength in the market at other levels towards end of 2014 - and the cgt exemption - this is very surprising - some of the 2015 must be CGT related

I count 19 in the PPR so far this year, see below - maybe some of these are excluded in your count? Also - don’t forget, only the first 4 months of 2015 will be close to fully populated at this stage in the PPR. May will only be partially populated.

1: €7,500,000.00 Strathmore House and Gate Lodge, Strathmore Road, Killiney Co. Dublin
2: €5,500,000.00 Embassy House 32 Burlington Road, Ballsbridge, Mews at Waterloo Lane
3: €4,800,000.00 ‘Mugnano’, 7 Shrewsbury Road, Ballsbridge
4: €4,655,000.00 Abington Wood, Malahide, Co Dublin
5: €3,500,000.00 30 ST KEVINS PARK, DARTRY, DUBLIN 6
6: €3,434,985.00 2 WILTON PLACE, DUBLIN 2
10: €2,900,000.00 52 Merrion Square, Dublin 2
13: €2,700,000.00 49 Upper Leeson Street, Dublin 4
16: €2,101,000.00 1 CAMBRIDGE TCE, LEESON PARK, DUBLIN 6
17: €2,100,000.00 LEGENDE, FALLS RD, SHANKILL
19: €2,000,000.00 4 HYDE PARK, TERENURE, DUBLIN 6W

I don’t think it’s CGT related - almost all of these are family homes (get the CGT exemption anyway). I think there was a general panic in 2014 at the upper end which flushed out more buyers who had been holding on (and outbid in 2013). They are all gone now. I also get the feeling that Irish banks are not keen to lend +1m mortgages any more.

The +2m market is different to that of the naughties. The 2-10 million 3 month interest-only perpetual rolling mortgage at Euribor + 1% from Anglo (and others) is gone. Every law partner, consultant, developer, other could draw such mortgages in the naughties. Now, not so much (Irish banks are full of these loans - none of which have been foreclosed on).

Without these mortgages, the wealth is just not there vs quantum of +2m for sale (and potential quantum when Irish banks eventually start foreclosing).

Embassy Hpuse is an internal transfer, not a sale (he paid zero for this)
Abington Wood is an apartment scheme (not a house)
2 Wilton Place is semi commercial scheme (not a house)

I suspect there are two others which are also not real arms length deals or single resi site deals but I left them in at 16

I agree re closure time delays but I check vs. this time last year and it is lower. (similar to 2013). The +2m market is obviously much smaller and it is easier to track the pipeline (I.e houses that have gone sale agreed), and only very few genuine resi deals are sold completely off market (i.e. and therefore appear on the register out of the blue). I suspect the true total (I.e ex. apts, commercial, multi site, internal transfers etc.), will come in somewhere in early 50s.

I was asked about this before - I must get the specific reference for you.

Interesting that Rockall in The Birches has been flipped for so much a few weeks ago - that’s a 142% profit (nearly €2m profit) on the €1.4m paid in 2012. It isn’t possible to see the house as it is so private, but I don’t see any planning to do anything with it (nobody will do anything other than knock it) so the profit is likely pure profit if this is an arm’s length transaction and not some internal transfer. After CGT (assuming it is payable and there is no PPR relief or other relief available) they have still cleared nearly 100% profit on the purchase price. Thought it was a good buy at the time (fab site) but it has turned out to be an exceptionally good buy. I expect we’ll see planning soon for redevelopment, possibly a full housing scheme given the price paid rather than one mega mansion.

I believe it is going to be a scheme.

I think land in Foxrock (and South County Dublin) was going for c 1-1.5m an acre in 2012/ early 2013 (i can think of sites in Foxrock, Dalkey, Killiney etc.). 2m an acre closer to Blackrock (ie Avoca Avenue), and higher in core D4 (+4m).

I think it is now getting closer to 2m an acre in South County Dublin (higher for very good sites), and over 3m an acre closer to Blackrock, and higher in core D4.

Again, the top end is not that strong, so getting the 2x on the site really needs a multi-family scheme option (in which case it is very likely). Again thinking of site like Elton Park or some in Dalkey.

there were some but yes probably a minority

eg the off market 49 Leeson st at 2,7m was one - as the for rent sign went up as soon as it hit PPR

In many cases site value was not recognised in 2012. An important house sold in D4 on 1.3 acres for €2.6m and the structure itself, at over 5,000sqft of high quality space, accounted for the vast majority of this price. Likewise, houses in the likes of Mount Merrion sold with colossal sites capable of housing multiple houses at prices only marginally more than their neighbours with large gardens that had no added development potential. The idea of development was well and truly dead, nobody was willing to pay much of a premium for gardens that extended beyond the usual desirable 100ft-type size. Today it is once again all about the site and ability to demolish or squeeze extra houses in.

Some of these banking stats are not always apples to apples.

How many FORCED evictions of families have you seen in Dublin (i.e. kicked out because they could not meet the mortgage AND did not want to leave). It would be on TV - front page news. Remember the German guy out in Killiney who camped outside (even through it turned out he was not poor!).

I have yet to see a +2m house in Dublin that was a FORCED foreclosure by an Irish bank except for McFeely (Ailesbury Road) and two others. Gorse Hill could - eventually - be another. I know of many +2m owners in bad situations who get threatening and nasty letters from Irish banks to sell their houses, but they have stopped reading them and nothing has happened.

I saw several FORCED foreclosures by UK banks, but the updated legislation makes it very hard for them any more.

We won’t see FORCED foreclosures of family homes this side of an election.

I agree with you, and of course I am generalising over the whole market.

There were some terrific such deals done in core D4 and D6 (and quite a few).

However, even in the madness, on average, the same core site metrics and ranges would often reappear again and again. Now I think they are stating to become more uniform.

I thought the same as you Mantissa - Did Europe not force us to reverse Dunne and make “in theory” repos possible -same as UK - but bank and court tactics delay etc

No it’s not that

It was actually a senior civil servant to pointed it to me as part of a deliberate pre 2016 election planning strategy. Let me - tactfully - try and re-reference it for you.

I’m not aware of any pending legislation to make bank repossessions more difficult. In any case I don’t think it is needed. Due to government interference with the court system (political pressure on registrars and judges), it appears that we are not going to see meaningful numbers of repossessions this side of the GE in any event

subscribes … -1.2065583