Giving it the hard sell
With house prices falling for the first time in five years and developers working harder than ever to sell properties, Rosita Bolandasks whether stamp duty is really exercising buyers in a jittery market.
'The developers are trying to promote a hugely glamorous way of life if you live here - are they mental? Do they think I'm that guy with three girls draped over him?"
Potential first-time buyer Ken Manahan is looking at giant, glossy hoardings that hyperventilate all the way in from the Malahide Road towards the information centre for the newly launched phase of the extensive Belmayne residential development.
The ad to which Manahan refers depicts a man wearing only bulging swimming trunks, sunglasses and a pair of beach shoes. He has his hand on the hip of a swimsuit-clad high-heeled blond lassie,who in turn is gazing with mild boredom at another swimsuit-clad young woman, who for some unknown reason is petulantly tossing the contents of a glass of champagne over her shoulder in their direction. Yet another bare-legged girl stands in the background, legs wide apart, one hand placed suggestively on a pole. They all appear to be in some kind of faux sauna.
Adjacent to this hoarding is another, of a girl in a red dress, strawberry in open mouth, right leg in the air, lying flat on her back on a kitchen unit. A man in black leans over her, looking like the Milk Tray man's more libidinous brother, one hand between her thighs and the other holding a strawberry flan. He seems to be wondering what to do next. Issues of stamp duty and property prices look far from his mind. "Standard Features @ Belmayne," runs the tagline.
Yesterday's Permanent TSB/ESRI house price index published figures showing prices had fallen for the first time in five years. For the first quarter of this year, prices decreased nationally by 0.5 per cent. By contrast, during the same period last year, prices rose by 3.5 per cent. Nationally, the average price paid for a house last month was €2,007 less than the average price paid in February. Anyone who is currently contemplating either buying or selling is sure to be studying these figures closely.
Manahan lived in England for 16 years and has been back in Dublin for a year, renting in Malahide. "I'm very, very nervous about jumping onto the property ladder, at what might be the worst and most expensive time to do so," he says. "These ads are hilarious, but they're just a gimmick. No buyer would seriously be swayed into thinking they're going to be buying into that kind of life. But what's nearly funnier than the ads are those other pictures in between them, of Malahide Marina and Portmarnock golf course and horse-riding on the beach, as if they were all located right beside us here, when in reality this development is just opposite the 'Darndale Hilton'."
Manaha is referring to the new hotel opposite the development, which, like a pedigree dog, has one formal kennel name used in the show ring and another used by those who know it best. The given name is the grandly-titled Hilton Dublin Airport hotel, but to Dubliners it's known simply as "the Darndale Hilton".
Only a couple of years ago, it was not uncommon for people to routinely queue overnight to buy newly launched apartments and houses off plans in Dublin. The developers didn't need to make hard sells. Now, where several different developers can be in competition with one another for buyers in the same area, they have to try a lot harder. "Marketing suites" are common, where potential customers look at sophisticated models of the developments and view simulated computer images on plasma screens, while availing of the free tea, coffee and soft drinks served up by designated staff. Gone are the days of waiting out in the cold for hours overnight to make your booking deposit. At Belmayne, you even get chauffeured in a flashy Chrysler Voyager the short distance from the information area, with its potted palm trees, posh sofas, and clipboard-wielding staff, to the show apartment.
The developers invited their rivals to Monday's launch party, where champagne was on offer all night, and former English footballer Jamie Redknapp and his wife Louise were "invited guests". Such PR-driven, champagne-fuelled parties with minor celebrities in tow are common enough in Dublin at launches of cosmetics or fashion collections, but rather more unusual for apartments in Dublin 17.
There's another noticeable change in recently-launched new developments. While you can't change the all-important physical location of a property, you can push it by giving it a high quality fit-out, such as the unusually high-spec McNally kitchens in each of the 50 units that went on sale this week in Belmayne for prices ranging from €275,000 to more than €365,000. Eventually, there will be 2,500 units in this development alone, so there's a lot of hard selling to do. You can also, like Belmayne developers Stanley Holdings and LM Developments, go for an advertising campaign that grabs public attention, as their launch did this week, even if that campaign seems undecided as to whether it's promoting underwear, apartments, or a new season of The Podge and Rodge Show.
Or you can do what no developer or private seller ever wants to do, and that's drop the price of the property. Last month, the property website, Irishpropertywatch.com, using data from Myhome.ie, found that over a two-week period in March, asking prices on 799 residential properties had dropped. The total collective value of the fall was more than €24 million, and the properties were located countrywide, across a wide range of types, from the most expensive and well-positioned houses in the capital to the most modest rural bungalows.
For example, in Dublin, a house on Asgard Road in Howth dropped 20 per cent and €500,000 in price from the original €2,500,000, while in Kilmaine, Co Mayo, six kilometres from Ballinrobe, a bungalow dropped 4.65 per cent and €10,000 in price to €205,000. Among the other examples were: a two-bedroom apartment in the Pavilion Complex in Dún Laoghaire, down from €750,000 to €695,000; a house on Shelmartin Avenue, Marino, Dublin 3 from €520,000 to €490,000; and a house in Friars Hill, Galway city, from €365,000 to €350,000. And with the drop in asking prices, the cost of stamp duty also often drops, depending on which band the final price falls into.
Every general election is guaranteed to focus on some public issue that becomes a dogfight between competing parties. Whether the dog is worth fighting about or not is something the public will decide, come polling day. This year it's stamp duty, with various degrees of clarity from different parties on how they intend to amend the current rates, should they come to power. So is stamp duty really exercising the public (only a small proportion of whom are buyers and sellers at any specific time), as much as the politicians seem to think?
Debra Barker from Clondalkin is looking in the window of the Felicity Fox estate agency office on St Andrew Street in central Dublin. "A lot of people are holding off selling and buying until they see what happens," she says. Her own house, a three-bed in Clondalkin, Dublin 22, was put on the market last August for offers in excess of €355,000. They took it off after Christmas, as they hadn't received any offers. "The market has gone stagnant. But the stamp duty thing is a pure red herring for the election, and it won't affect the way I vote, although it might if I was a first-time buyer."
James Gough, who has his own house in Dublin 8, is looking at the properties for sale in Fox's window "to see how shocked I can get at the prices". As a homeowner who doesn't plan on moving, stamp duty doesn't currently concern him. "It's only something like 50,000 people who are directly affected, although I suppose all those people have family and friends who they complain about it to."
Linda Keogh, from Rathfarnham, is looking in the window to keep an eye out for properties for her daughter, who is trying to buy. "My other two children bought recently, in Dublin and Kildare. One bought before the Budget and one after, so they each took a risk with stamp duty, but it didn't stop either of them buying. I do think it's crazy that if at our stage of life we want to downsize to a smaller house we pay stamp duty. What seems to be happening at the moment is that people are sitting and waiting; not buying and not selling. I know several people with houses for sale and none of them have sold, or else they're getting ridiculously low offers."
Out in Lucan village, on the edge of the Dublin postal code region, which was one of the first areas close to the city to see developments go up at the start of the property boom, resident Ciara Peppard is looking at the properties on offer in the window of Gunne's estate agency.
"I'm living in Lucan and would like to trade up, but it would kill me to pay stamp duty," she admits frankly. "It probably will affect the way I vote, I'll be looking at what is on offer."
For Christy Nolan, who has lived in Lucan for years, the stamp duty election issue is "all a load of bull. It's being bandied about as a red herring for votes. I think politicians think we're stupid." Nolan's daughter is currently unemployed. "She wouldn't be able to afford a house in a million years. We are light years behind where we should be with affordable housing. The whole stamp duty thing has taken the focus off more important, wider social issues like health . . . Besides, stamp duty is predominantly a Dublin-only issue."
Friends Janet Gartlan and Sharon Nolan both report they have noticed "For Sale" signs staying up much longer recently in the Lucan estates where they live than used to be the case. "All the estate agents round here will tell you nothing is moving," Gartlan says. She wants to move to a better area of Lucan, but the stamp duty she'd pay is holding her back at present. "I'm going to wait and see what happens."
"I don't think there should be stamp duty on family homes if you're trading up," Nolan says. "Yes, investors should pay, but why should families be penalised for wanting to move somewhere bigger?"
Paul Douglas traded up five years ago to a second, bigger family home in Lucan, and is still fed up about the fact that he had to pay stamp duty a second time. "It's a totally unjust tax. I paid duty on the first house and then paid duty on the full value of the second house. I should only have had to pay the differential."
Exercised though he is, Douglas says stamp duty policy won't affect his vote. "The fact is, the number of people directly affected by it is quite small. It's election hot air. What makes me mad is that the government have allowed property to become totally disproportionate to its real value. What they're doing now is blaming stamp duty for the instability in the market. And there's no end to the developments they are still building. We keep losing our green amenities to more buildings we don't need. But you'll never hear about the builder who knocks down a street in order to build a park."
Denise O'Reilly moved seven years ago from Lucan village to a house in an estate beyond the village. "There's a lot of hot air about stamp duty right now, but when the election is over, people will go ahead and do exactly what they were going to do anyway. We just put up with things in Ireland. We accept things. We'll complain for a while and then we'll get on with it. I don't think it's going to affect the way people vote."
As it happens, Belmayne, which is promoted under the generic slogan "Gorgeous living comes to Dublin" is not the city's first suburban development to give itself airs and graces. That distinction went to Glenkerrin Homes at the Grange on the Stillorgan Road in south Co Dublin two years ago. Hoardings there carried pictures of models in pearls eating asparagus and drinking champagne, while men moodily adjusted their cufflinks. "The spirit of gracious living" and "Few addresses generate these kinds of dreams" went the ads. This for a development on the Stillorgan dual carriageway, which, though certainly wide, could not be described by even its most enthusiastic admirers as Dublin's Champs Elysées.
Dubliner Anouska Rickard went to the Belmayne development this week, thinking of possibly buying. "The advertising is very extravagant. I don't think any other development in Dublin is doing this, using sex to try and sell apartments. The market has definitely changed, and they're trying much harder to sell now. But none of this advertising would make any difference to me, and I don't think it would to anyone else either. This is Dublin 17, not Malahide, and we all know that. At the end of the day, buying a property always comes down to price."