Owning or buying property in a falling market can be a constant challenge, writes CONOR POPE
‘THERE IS A human story behind many properties selling here today, and we want to remind everyone that the people behind these stories are not just numbers in an auction lot,” said David Hall, who stood holding a placard outside the most recent Allsops-Space auction of distressed properties, at the Shelbourne Hotel in Dublin last week.
As house after house went under the hammer for prices of up to 70 per cent below what they might have fetched at the height of the boom, it was easy to be lulled into a trance by the metronomic call of the lead auctioneer, and easy to forget that many of the properties up for grabs formed at least part of people’s dreams.
Hall is a leading member of New Beginnings, a lobby group made up of lawyers, businesspeople and consumers that is pushing the Government to address the property crisis meaningfully. “It is sickening to think that there are lots on sale that did belong to families and were repossessed,” he said.
Robbie Marsh had his home repossessed against his will. In 2007 he bought a house in Drimnagh, Dublin 12, for €350,000. At the time he ran a cleaning business, but as the recession took hold his financial circumstances changed and he struggled to make his payments of €1,500 a month.
As he fell farther behind, the subprime lender that had given him a 100 per cent mortgage took swift action. He asked it to restructure his mortgage and park the arrears for a couple of years, to give him a chance to sort his finances out, but the lender refused. Instead it obtained a court order for repossession, and the house was sold this year for just €150,000. Marsh now owes €230,000, which he will never be able to pay, and he describes the stress of the debt as unbearable.
When he lost his business, he was declared bankrupt. “I am 38 now, and because of the laws in this State I will be in a bankrupt state until I am 50,” he says. “I had people employed and tried my best to pay my mortgage, but I just couldn’t manage it.”
Today he is renting a house near his old home. “They are still chasing me for the outstanding balance on the mortgage, of course they are. I don’t have it and can’t see how I will ever have it.”
The numbers that swirl around the bursting of the property bubble are one thing, but, however shocking and depressing they are, they don’t tell the full story. Only people can do that, and tens if not hundreds of thousands of people in Ireland have troubling stories.
Some, understandably, would prefer not to be identified. Siobhán is one of them. She and her partner bought a two-bedroom apartment in Glasnevin in 2005 for €390,000. It was a fine property, and they had a happy couple of years there, but in late 2008 they decided to put it on the market and search for a bigger house.
As the months passed, the apartment failed to sell, and even with a reduced asking price it attracted no serious bidders. “We are told it is worth about €250,000 now, but that is a guess. We certainly cannot afford to sell it at that price even if we did find a buyer.”
In March, after two months in limbo, and with a second baby on the way, they grew tired of waiting, let their apartment and rented a three- bedroom house on the south side of the city for €1,600. The rent they get does not cover the mortgage, so they are substantially out of pocket.
“I spent so many nights lying awake, worrying about whether this was the right thing to do, but while renting has limitations and is a big step backwards, ultimately I think we made the best decision. Sometimes I feel like the apartment is a noose around our neck, but at least it hasn’t tightened yet. We can’t sell, so we can’t buy, but at least by doing what we have done we have a garden our two-year-old can play in, and the extra space means an improved quality of life,” she says.
JONATHAN LEAHY LIVES in Douglas, in Cork. He is 37 years old and has four children, of whom the eldest is doing her Leaving Cert next summer. His three-bedroom house is too small for six people, but there is nothing he can do, because he can’t sell to trade up.
He bought the house in 2005 for €360,000; now it is worth about €280,000. “We are really struggling to find space, and even finding a corner where my eldest can study for her Leaving in peace is impossible. When I approached the bank and asked about the possibility of selling up and getting a new mortgage, or even a loan so we could extend our house, I was told the only option available to me was to save.” In fact, the bank official did not even turn on the computer before declining his request.
Leahy says with his outgoings there is no room for savings. “I haven’t had a pay rise for five years and have seen my wages cut and taxes and other costs rise. It is like we are drowning, and the water gets a bit deeper each month. It is a constant battle to keep afloat.” He knows he is lucky to have a job but can’t see “any light at the end of the tunnel”. He is angry. “We have done nothing wrong but are still being punished.”
