Irish Life's High Court case yesterday against Galway developer John Lally could signal a bad patch ahead for many developers. The rumour mill has been working overtime for months because of the heavy borrowings of by a range of developers, and the sudden cut off of finance by banks already heavily exposed on property.
By all accounts a few more developers who paid big money for sites in the last three years could be heading for trouble, as they are forced to sell.
Buckling under heavy interest charges and a cessation of sales, they are having some serious number crunching with their agents to see what can be sold. Even then these properties will have to be offloaded at prices well short of original targets. The banks meanwhile are reviewing values in all areas on a fairly constant basis to measure their exposure and reexamine their options. A few casualties seem inevitable, particularly where development is being held up, either by planners, a lack of demand, or lack of working finance.
There's always a silver lining and in this case it's estate agents who are benefitting from the busy valuation work that has now taken over from actually buying and selling. These same agents are trying to find buyers off market for their better sites, with big players being approached because of their deep pockets and unblemished track records
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