A global financial crisis, poor economy, tight national lending restrictions and oversupply has forced property values in Ireland to record lows. Properties are being auctioned off for pennies on the dollar, with some ocean-view condos starting at bids below $30,000. Reports say values have dropped more than 80% from their peak in some areas, and Irish national banks hope the auctions will attract the interest of foreign buyers. For more on this continue reading the following article from International Living.
Real estate prices in Ireland have hit extraordinary new lows, dropping by as much as 80 per cent since their pre-downturn peak in 2008.
Ireland’s property price boom, which began in the 1990s, came to an end with the onset of the global downturn and real estate asking prices have been in free fall ever since.
The decline was worsened by oversupply and a severe tightening in the flow of capital from the country’s main lenders.
However, the scale of the price drops is reaching almost unparalleled levels and overseas investors are moving in on the distressed market in increasing numbers.
“In April 2011, Ireland had its first-ever ‘fire sale auction,’” explained Ronan McMahon, real estate writer at International Living magazine. “Units sold at massive discounts compared to peak prices.”
During the initial auction, a house in the Midlands region of the country sold for $41,356. A city-center condo in the popular tourist city of Galway sold for $96,514 – a fraction of what these properties would have fetched when prices were at their peak.
“Tenanted commercial and residential units sold with yields averaging 9 per cent but some were well into double digits,” added McMahon.
A second auction took place on July 7, 2011 with pricing and deals broadly in line with those seen in April. The third auction, set to take place on November 30, 2011 is expected to produce even bigger discounts.
“74 units are going under the hammer in the third of these auctions,” said McMahon. “And the deals are getting better.”
Among the properties set to hit the market is an ocean-view condo in the seaside town of Bundoran in the northeast county of Donegal. It comes with a maximum reserve of $27,580.
Land prices have also all but collapsed—the auction book features a five-acre lot with a reserve of $45,508 with previous approval for the construction of two homes.
Much of the real estate on offer at the sale auction is now the property of banks that are either part or fully owned by the Irish state.
The Irish government is hoping to attract overseas attention in the auction, and the agency handling the event has enabled remote bidding in order to boost interest.
This article was republished with permission from International Living.