JUL & AUG 2012 |www.opp.org.uk


LETTER FROM... IRELAND & UNITED STATES | 47 Letter from Ireland


Increasing transparency has given the Irish real estate market a much- needed boost - both from buyers within the country and from abroad


W


ith the dramatic fall in values and lack of transparency in the


marketplace, vendors have struggled to sell their property over the last few years. Allsop Space introduced multi- lot auctions at the beginning of 2011 and changed the way property is sold in Ireland. This has been heralded as the


catalyst for kick-starting the property market as price transparency restores confi dence in where the market has settled. Banks and private vendors alike are now more highly motivated to sell at sensible prices, as they can determine real value through the auction method. 92% of the 530 properties offered at the Allsop Space auctions sold.


A veritable smorgasbord of buyers have left the auction room clutching their signed sales contract. International investors, owner occupiers, the young trading up and the old trading down all compete on the day. Pinstripe suits stand shoulder to shoulder with country tweed, in many cases bidding on the same property. There is an increasing worldwide interest in Irish property and nowhere has this manifested itself more clearly than in the auction room, where over 50 overseas bidders take part via telephone and internet at each sale. 20% of all sales have been to foreign investors, with tenanted city properties selling at prices refl ecting double digit yields. Each time a catalogue is released, over 140,000 people from 130 countries across the globe access it online.


There is something for everyone. Whether you are an investor, developer, returning émigré or just looking for a city centre penthouse pad or a holiday home in some of Europe’s most spectacular scenery, there is an opportunity awaiting those with the means to buy. In a market where cash


Robert Hoban is Director of Auc- tions at Allsop Space in the Republic of Ireland. They specialise in the disposal of real estate assets via large scale, multiple lot public auctions. He can be contacted at: Robert@allsopspace.ie +353 (0)1 6789748 . www.allsopspace.ie


is king, the rewards are great, and the future is green.


Property example: 44 Chancery Court, Dublin 8. City centre, 3 bedroom penthouse apartment near St. Stephen’s Green. Peak asking price €1.3m. Sold for €345,000 to a UK buyer at an Allsop Space auction.


Letter from the United States


The US seems to be recovering, though slowly, from the disastrous crash of a few years ago. Cynthia Fauth takes a look at the statistics


he US is in recovery mode after it endured a turbulent economic tempest. Evidence suggests the worst of the storm has passed, and both the real estate market and the economy in general are poised for a modest recovery this year.


T


Flat home sales in the United States have crippled the real estate market for the past four years, hovering around 4.2 million homes. This year, however, the National Association of Realtors is forecasting a solid increase to about 4.6 million home sales. NAR’s Chief Economist Lawrence


Yun attributes the increase to affordability remaining at an all-time high, low interest rates, continued interest of foreign buyers and investors, and the strengthening of the U.S. economy.


Home prices nationally have appeared to stabilise and all major home price trackers show prices going up in many areas. For the past few years, foreign buyers have enjoyed record affordability in the United States, but signs are pointing to the end of discount price tags. The national


median existing-home price for all housing types in the United States rose 7.9% to $182,600 in May from a year ago, the third consecutive month of year-on-year price gains. The last time the US saw price gains continue for three months running was in 2006. “Some of the price gain results from a shrinking share distressed homes in the sales mix,” explained Yun. Distressed homes - foreclosures and short sales sold at deep discounts - accounted for 25% of May 2012 sales (15% were foreclosures and 10% were short sales), down from 28% in April and 31% in May 2011.


Foreclosures sold for an average discount of 19% below market value in May 2012, while short sales were discounted by 14%.


First-time buyers accounted for


34% of purchasers in May 2012, compared with 35% in April and 36% in May 2011.


Single-family home sales slipped 1.0% to a seasonally adjusted annual rate of 4.05 million in May from 4.09 million in April, but are 10.4% above the 3.67 million-unit level in May 2011.


According to Yun, inventory shortages in certain areas have been building all year. “The slight pullback in monthly


home sales is more likely due to supply constraints rather than softening demand. The normal seasonal upturn in inventory did not occur this spring,” he said. “Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier.” Existing condominium and co-op sales fell 5.7% to a seasonally adjusted annual rate of 500,000 in May from 530,000 in April, but are 4.2% higher than the 480,000-unit pace one year ago. The median existing condo price was $180,000 in May, which is 8.8% above May 2011.


While things are certainly looking up, there are still many uncertainties at play with regard to housing-related rules and legislation in Washington, D.C. this year. Until that clarity comes, lenders are unlikely to restore underwriting standards, which could continue to impact the market.


Cindy Fauth is the Global Market- ing Manager for the National Association of Realtors. She specialises in writing about inter- national real estate. cfauth@realtors.org +13 12 329 8627


That being said, opportunity is still ripe for foreign buyers who wish to purchase in the United States. The uptick in pricing is modest, and there is still a level of uncertainty plaguing the economy, so affordability remains high relative to other parts of the world. Take a look back at March issue


of OPP on www.oppconnect.com for a breakdown of the most affordable markets in the United States.


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