TALKING PROPERTY:SINCE UK property auction house Allsop joined forces with Irish agent Space to introduce our bankrupt little nation to the concept of disposing of distressed property under the hammer, we have had to get used to a few changes in format and style.
Gone are the “posh” trophy-home Irish auctions of the boom years (as my London estate agent friend quite accurately described them), only to be replaced with the UK-style “fire-sale” events; generally held to efficiently dispose of less salubrious properties, which are somewhat unceremoniously lumped together and sold off under the hammer.
Irish property auctions, particularly at the height of the boom, were almost considered to be social occasions, drawing crowds of all sorts, from elderly neighbours (who could hardly believe that a home similar to their own, could possibly sell for so much money) to mafia-style men in sharp suits, shouting into mobile phones, while pacing up and down outside the auction rooms, like nervous expectant fathers.
Today, however, Allsop Space auctions are far more likely to be attended by grey-haired 50-something cash buyers in scruffy jumpers, scribbling calculations on the back of used envelopes and bidding with subtle nods and glances, which leaves the UK auctioneers somewhat bewildered as to whether they’re bidding or not.
There was no such confusion in the noughties, when auctions were so competitive that it was all about how much you could afford to spend rather than how little you were prepared to spend, in order to secure a property.
In those heady days, when virtually overnight Irish bricks and mortar turned to gold, pre-auction “guide” prices, later changed to AMVs (advised minimum valuations) were generally dismissed and disregarded. Most automatically added at least 20 per cent and their bankers obviously agreed, facilitating loans and mortgages for figures far in excess of the auctioneers’ estimates.
They were the days when sky-high auction results frequently made the national news and were the subject of bar-counter analysis and dinner-party gossip. Now, sale prices are still discussed in detail, but for very different reasons.
Today’s distressed auctions are appropriately named for many reasons, not least of which is the fact that the term most accurately describes the state of mind of so many who purchased property over the last decade or borrowed based on their boom-time values.
And solicitors, some of whom are equally “distressed”, appear at these auctions (although few actually do, as Allsop acts for the vendors) only to be relegated to an “off-stage” holding pen, as legal queries must be addressed in advance of the event, with no time for such niceties on the day.
Potential purchasers must arrive prepared – with a chequebook, proof of address and photo identification in hand – and, depending on attendance levels, may even be required to queue to gain entry. And lest they should change their minds and disappear into the crowd, successful bidders are quickly nabbed and escorted away to sign and pay their deposit. (Regardless of the apparent lack of formality, this is still a serious business.)
Well-planned and well-executed, legal and above board, but without any of the pomposity and sophistication once associated with Irish property auctions, Allsop doesn’t mess about. As long as the low reserves are met, the properties will sell to the highest bidder.
However, with the banks still not lending and the (presumably) limited number of people with cash in hand and an interest in investing in Irish property, for how long more can these distressed property auctions continue?
For some time to come, according to one solicitor I spoke to last week. She believes that with the glut of public servants, including teachers and judges, taking advantage of the Croke Park agreement and retiring before February 29th, (to avail of having their pensions and lump sums calculated based on their “pre-cut” salaries), there will be a lot of cash floating around over the next few months. Cash, which she believes, will be invested in property.
Indeed, it might. But the question is, will it be invested in Irish property or will my London estate agent friend rejoice when he sees a few 353 prefixes appear once again on his screen?
Isabel Morton is a property consultant
