N
newcarneeded
Guest
I have some observations related to the affordable housing scheme and the Marrsfield and Station Pt developments in Clongriffin. Marrsfield is in the scheme, Station Point isn't I don't think. However it's a very closeby development and I would really value people's opinions on the following.
The open market price of 2 beds in both developments
Both Marrsfield and Station Point developments are in the Clongriffin area and are approximately 5 minutes walk from each other. For 2 bed apartments the Daft market values are €380k for Marrsfield and €310k for Station Point. That's a sizeable difference of €70k for the same size unit (2 beds) which are so close together.
Station Point prices have fallen in the past year
2minutes research on Google yields an Irish Times article dated June 7, 2007 showing that Station Point 2 beds were priced at €350k on that date. The developer presumably wasn't selling (any/enough) units in Station Point at that price and one year on cut it by €40k or 11% to €310k to stimulate demand. I don't know if Station Point are selling at this price and with the national economy now being in recession (according to the ESRI), forecasts of a return to net emigration and most commentators anticipating sizeable job losses in construction following the August builders holidays, they may need to cut the price farther to sell.
Probability of a cut in Marrsfield price in light of Station Point cut
Now Marrsfield, which at €380k is already €30k over what Station Point was priced at 12 months ago when the market was pretty much at it's height, is priced at a hefty premium of €70k or 22% to what Station Point is now selling for. Presumably this developer will have to cut prices to stimulate demand also as I fail to see why anyone would pay a €70k premium for Marrsfield over Station Point prices for the same size unit. (Additionally Station Point 3 beds are also cheaper at €355k for 93sq m versus €380k for a 65.9 sq m Marrsfield 2 bed. To me this would appear to be compelling evidence that Marrsfield is overpriced if a Station Point unit with 40% more floor space is selling at a €25k or 7% discount).
'Real' social and affordable housing discount
The social and afforable housing price for a 2bed in Marrsfield is €270k. This is a nominal €110k or 30% discount on the advertised price of €380k, but a mere 13% or €40k below the Station Point units. I think that Marrsfield are overpriced at €380k, that the €310k Station Point open market value is a better indicator of what the real value is, and as such, the council are only offering a discount of 13% in real terms.
Would you take the offer given the circumstances outlined above
Assuming that Marrsfield should be priced approximately equal to Station Point units, considering they are so close together and basically equal in size, is the council discount of 13% (assuming Marrsfield ought to be priced equal to Station Point open market value) really offering what ought to be expected in the spirit of the social and affordable housing scheme? With that low level of discount, the possibility of continuing house price deflation in the current economic environment, rising interest rates and unemployment, would you exercise the option?
Were values to decrease by a furhter 10% or greater in the near future
I am worried that even the Station Point units remain overpriced in the current environment and a further cut of 10% or greater in the next 12 months is not entirely unfeasible. Assuming this 10% cut did happen these 2 beds would then be selling for €279k. If prices fell by 13% then the open market value would equal the social and affordable housing offer of €270k. If it fell by greater than 13% then I would be in negative equity. That's a very real prospect in the current economic environment in my opinion, and it also ignores solicitor costs, valuers fees etc.
Personal Circumstances
My own personal circumstances are that i am living at home, mid 20's with no children. I would be stretching myself to buy, and it would be painful in the short term. I would hope to rent out a room but this income might not materialise given the recession, loss of construction jobs, increasing unemployment and not least the supply of rooms for would be renters would likely outstrip demand given the sheer number of apartments going up in the area.
Probably one and only chance at the scheme:
Given my occupation I ought to see good salary increases in the next 18months or so such that after the tax year 2009 I may cease to be eligible for the scheme as hopefully my gross earnings would go above €55k ceiling. Caveat - if the economy continues in recession I may not have a job never mind that €55k salary I aspire to.
Therefore this may be my one and only opportunity to buy under the affordable housing scheme.
What would be your own opinion on whether to go for it or not based on the information above?
And finally:
Please don't take me up the wrong way, I am not ungrateful, I think that it's a good scheme, I'm very happy to have been offered a unit but my issue is that in the current climate whereby the unit I have been offered was valued at the peak of the market, consequently it doesn't appear to be at much of a discount to the market value when you look at similar properties on the open market in the area, the clawback appears to be set against an artifically high price and the prospect of negative equity appears to be all too real.
The open market price of 2 beds in both developments
Both Marrsfield and Station Point developments are in the Clongriffin area and are approximately 5 minutes walk from each other. For 2 bed apartments the Daft market values are €380k for Marrsfield and €310k for Station Point. That's a sizeable difference of €70k for the same size unit (2 beds) which are so close together.
Station Point prices have fallen in the past year
2minutes research on Google yields an Irish Times article dated June 7, 2007 showing that Station Point 2 beds were priced at €350k on that date. The developer presumably wasn't selling (any/enough) units in Station Point at that price and one year on cut it by €40k or 11% to €310k to stimulate demand. I don't know if Station Point are selling at this price and with the national economy now being in recession (according to the ESRI), forecasts of a return to net emigration and most commentators anticipating sizeable job losses in construction following the August builders holidays, they may need to cut the price farther to sell.
Probability of a cut in Marrsfield price in light of Station Point cut
Now Marrsfield, which at €380k is already €30k over what Station Point was priced at 12 months ago when the market was pretty much at it's height, is priced at a hefty premium of €70k or 22% to what Station Point is now selling for. Presumably this developer will have to cut prices to stimulate demand also as I fail to see why anyone would pay a €70k premium for Marrsfield over Station Point prices for the same size unit. (Additionally Station Point 3 beds are also cheaper at €355k for 93sq m versus €380k for a 65.9 sq m Marrsfield 2 bed. To me this would appear to be compelling evidence that Marrsfield is overpriced if a Station Point unit with 40% more floor space is selling at a €25k or 7% discount).
'Real' social and affordable housing discount
The social and afforable housing price for a 2bed in Marrsfield is €270k. This is a nominal €110k or 30% discount on the advertised price of €380k, but a mere 13% or €40k below the Station Point units. I think that Marrsfield are overpriced at €380k, that the €310k Station Point open market value is a better indicator of what the real value is, and as such, the council are only offering a discount of 13% in real terms.
Would you take the offer given the circumstances outlined above
Assuming that Marrsfield should be priced approximately equal to Station Point units, considering they are so close together and basically equal in size, is the council discount of 13% (assuming Marrsfield ought to be priced equal to Station Point open market value) really offering what ought to be expected in the spirit of the social and affordable housing scheme? With that low level of discount, the possibility of continuing house price deflation in the current economic environment, rising interest rates and unemployment, would you exercise the option?
Were values to decrease by a furhter 10% or greater in the near future
I am worried that even the Station Point units remain overpriced in the current environment and a further cut of 10% or greater in the next 12 months is not entirely unfeasible. Assuming this 10% cut did happen these 2 beds would then be selling for €279k. If prices fell by 13% then the open market value would equal the social and affordable housing offer of €270k. If it fell by greater than 13% then I would be in negative equity. That's a very real prospect in the current economic environment in my opinion, and it also ignores solicitor costs, valuers fees etc.
Personal Circumstances
My own personal circumstances are that i am living at home, mid 20's with no children. I would be stretching myself to buy, and it would be painful in the short term. I would hope to rent out a room but this income might not materialise given the recession, loss of construction jobs, increasing unemployment and not least the supply of rooms for would be renters would likely outstrip demand given the sheer number of apartments going up in the area.
Probably one and only chance at the scheme:
Given my occupation I ought to see good salary increases in the next 18months or so such that after the tax year 2009 I may cease to be eligible for the scheme as hopefully my gross earnings would go above €55k ceiling. Caveat - if the economy continues in recession I may not have a job never mind that €55k salary I aspire to.
Therefore this may be my one and only opportunity to buy under the affordable housing scheme.
What would be your own opinion on whether to go for it or not based on the information above?
And finally:
Please don't take me up the wrong way, I am not ungrateful, I think that it's a good scheme, I'm very happy to have been offered a unit but my issue is that in the current climate whereby the unit I have been offered was valued at the peak of the market, consequently it doesn't appear to be at much of a discount to the market value when you look at similar properties on the open market in the area, the clawback appears to be set against an artifically high price and the prospect of negative equity appears to be all too real.