Three stories in today’s Irish Times property supplement that reveal something of the death of the Irish property dream. Alison O’Riordan bought the dream. She paid €525,000 for an apartment, where those in a neighbouring block are now selling for €190,000. This is what she had to say:
“It’s such a bitter taste of defeat as I stare out my window each morning that I leave the blind down continually … As a homeowner, my load was already heavy enough to carry as, stuck with a property I cannot sell, I struggle to meet my monthly repayments …I chastise myself for incarcerating myself in my own financial prison. A prison, I soon learned, that had no more than about 10 inmates. … I am so worried, I can hardly think of anything else … At least I can put the newspaper down or flick over the page, however there is no getting away from the apartments across the street. … Yesterday the bill for the management fee came in. It is for €1,600 – another figure I carefully choose to ignore back then.”
And she’s far from the only one locked in a financial prison. Over 250,000 mortgage holders are in negative equity. For those that have lost their jobs or taken pay cuts, they are struggling to pay the bills and over 36,000 are over 90 days in mortgage arrears. The dream has turned very sour for many and the stress is chewing up their lives.
And the property supplement lets another set of people know the extent of financial hole they are in. A 62-unit apartment complex in Booterstown has prices half what apartments in a similar adjacent development went for during the boom years. One bed apartments for €215,000; two-bed from €289,000; two-bedroom duplex from €355,000. The one beds are still six and half times the average industrial wage. A complex in Leopardstown start at €210,000, selling at 40-50% the price of when they were first released in 2008. A bitter pill for those who had already bought in the complex and similar apartment blocks nearby.
And finally, Meath County Councillor are selling five houses that were bought compulsorarily for the M3 motorway but were not demolished. The units are up to 80% the price they would have fetched at the top of the boom and before the motorway was built on their doorstep. Interestingly they warn that the properties may need ‘entire rebuilding – “as they haven’t been lived in for about six years”.’ So, houses that were family homes that have not been lived in for six years may need to be knocked and rebuilt. Well, that confirms the clock on doing something re. the unfinished and ghost estates around the country. Many of these estates have already been empty since 2006/07, so they’re very much on short time before the bulldozer may need to be bought in as they may not be fit for purpose.
Reading the property supplement can indeed be bad for your health.
Rob Kitchin
Ireland after NAMA 
October 14, 2010 at 11:28 am
Just what did people think? That there was no end to credit? That they can trust bankers? Politicians? Economists? Newspapers? She is better off bankrupt!
All this useful knowledge still applies in respect of the state as it is borrowing for all it is worth ….
But for Ireland write a note to your grandchildren and ask them to open it in 50 years time.
Just what will you write in it?
October 14, 2010 at 12:14 pm
I genuinely felt bad for Alison as I read her story this morning. So she got sucked in. So she didn’t think it through. But still, she’s a young woman who will be paying through her nose for years to come. And while (some of?) the apartments across the way are selling for 190k today, they won’t be worth that this time next year. Prices are at 2002 levels, apparently. 1995 prices by the time this is over? Lower?
October 14, 2010 at 12:26 pm
Included in the price of her negative equity are stamp duties, “contribution fees”, over inflated site costs. Trades men earning 200 to 500 a day, architects, solicitors and auctioneering rip-off’s not to mention the insane Property Supplements telling people to get on the ladder before it was too late. Probabaly 100, 000 of her negative equity is site inflation alone. Section 23 and other tax incentive traps designed by a government who then refused to get rid of them. Also, her problem is that here was no regulation of the financial sector whatsoever in the economy and a minister for finance who’s stated policy was ” When I have it I spend it and when I don’t have it I don’t spend it”. This finance minister’s boss had no bank account and depended on horses and plasterers when he fell upon hard times with the moth! So Alison is not to blame it is the “gods of finance” or more aptly the “gods of treason” who are to blame. Of course through all of this those of us that are still in professional jobs still insist on paying ourselves the highest salaries in the world. The emperor without his clothes but nobody is brave enough to tell them because we shoot messengers.
Stories like Alison;s play no part in Lenihan’s NAMA but her story multiplied by XXXXXX is what is going to incinerate what is left of the Irish Financial system which our finance minister has such a love of that he wants to “restore it to it’s former glory”. We now own all the institutions bar BoI in that one we only own 36%, so far. so the problem has been transfered from the banks to the state hence, rightly, we are under lock down by the bond markets. Eventually, it will dawn on the government that these people need to be released from their debt bondage to “our” criminally run banks. Debt write off is what is going to happen and the Irish people are going to be paying collectively for this for a very long time. Thanks once again to Lenihan and his department of financial advisors who had the foresight to guarantee their own salaries last january even before Croke Park.
The people who presided over this financial destruction should not be allowed to walk off with a 27 million pension pot this and other such assets should already have been frozen by CAB. People need to stop staring out windows.