75% of property auction buyers paid cash, says estate agent

ALMOST three quarters of buyers in a series of special property auctions this year paid in cash, estate agents have said.

Of the €52 million worth of houses, apartments and commercial buildings sold, 72% were bought by people who did not need finance.

Estate agents Allsop Space plan another five auctions next year, the first on March 1, and are aiming at 100 properties per sale.

Robert Hoban, Allsop Space director of auctions, said he had seen a pattern of buying from people who sold homes at the height of the boom and stayed out of the market.

“It’s perfectly reflective of the reality we are in. There are lots of people who want to buy but they can’t because there is no finance from the banks.

“It’s a distorted market. There’s an assumption out there that anyone who buys at auction is a hardcore vulture, that it’s blood on the streets sales, but that couldn’t be further from the truth.

“A lot of people are lucky to have the cash and the pattern we have seen is that it was people who sold in the boom and stayed out of the market.”

Over 310 houses, apartments and commercial buildings were sold in four auctions at the Shelbourne Hotel with only €6m coming from overseas bidders.

Mr Hoban said: “What is clear is that despite the downturn, the appetite for property within the Irish psyche is undiminished, once the price is right.”

Allsop Space had more than 160 registered remote bidders but only 39 were successful.

Some foreign buyers were based in Monaco, Gibraltar, Israel, Luxembourg and France. Mr Hoban noted intense interest from Irish people living abroad — thanks to what he called sensible prices — including in Britain, the Middle East, Australia, New Zealand, US and Canada.

Almost half of the properties sold in the auctions were income-producing and sold with tenants.

Other research found that 75% of properties handled by Allsop Space were in the hands of a receiver or liquidator.

Mr Hoban wouldn’t be drawn on how much further property prices could fall with asking prices now falling at their fastest rate.

“We were truly overwhelmed by the buyers. At the first auction people were waving their chequebooks to try and get in and spend their money — that was massive in the market that was supposedly moribund,” he said.

“The economy and the housing market was a busted flush, we were told. But I don’t think the property price indexes are a true reflection of the market.”

Allsop Space also said that overall, the average sale price was 29% above the reserve and in Dublin alone, the level was 25%.

Mr Hoban said foreigners were only interested in buying property in Dublin, except he said for British bidders looking for a holiday home.

According to Allsop Space, Dublin, Galway, parts of Wicklow, Wexford and Kilkenny were all strong markets if the correct price was set.

However, Mr Hoban warned that the midland towns of Portlaoise, Mullingar, Tullamore, and Athlone have been seriously overdeveloped.