Banks get tight on land lendingDon't be surprised if your bank manager is getting a bit frosty even if Christmas is still a while away. The big spending spree that has driven the property market over the last few years is slowing down and the difference now is that the finance is not likely to be as readily available over the coming months. Where once bank managers were satisfied with drive-by valuations, they are now looking again at their loan books, particularly in the case of builders with sizeable landbanks.
In short, the banks are tightening the screws on land investments, and it's no coincidence that there are any amount of them still for sale. That's not surprising because the flow of sites onto the market this year has probably been the highest in the last 20 years, spurred by the spectacular prices and the run-away new homes market. And still they come. This week the wealthy Odlum family is the latest to sell their long-standing holding along the Naas Road between Naas and Citywest. The 482-acre spread, which they have owned since before the second World War, is expected to sell for around €150,000 per acre, because of the provision of two interchanges on it since the dual-carriage was upgraded. Any number of punters will take a long term view on the land because, inevitably, it will be rezoned, and once that takes place the value will shoot up to at least €1 million per acre.
Investors hot for small retail investments
Despite the gloom and doom there are still plenty of investors ready to snap up a well located property - even if it is in rag order. Take 14 Orwell Road, Rathgar, a huckster shop with a flat overhead which was auctioned yesterday by Douglas Newman Good Commercial. With an AMV of €750,000, the premises attracted inordinate interest among small and medium-sized investors who reckoned that they could turn it around with a decent refurb and market it as a top retail spot with separate offices overhead. No less than 22 conditions of sale were issued in advance of yesterday's auction where it was knocked down for an amazing €1.605 million! Just three years ago the next door building, in better condition and occupied by Fortes café, was sold for €617,000. Who says that prices are not increasing? The reality is that there is plenty of money out there looking for small retail investments in good locations, like Orwell Road, and the investors are not put off by the punitive stamp duty levels like their residential counterparts.
Overseas developers target Irish investors
While the residential market is effectively switched off until the stamp duty issue is clarified in the Budget, yet more investors are drifting overseas in search of second homes and well priced buys in both established cities and more exotic locations. The slowdown at home is in contrast to the huge marketing effort now running continuously to persuade Irish buyers to move their money offshore. Nowhere seems to be off limits for the intrepid Irish investors, though the more cautious - and more moneyed - buyers are sticking to the well-tested markets in London, Paris, New York and Toronto where they are snapping up apartments, as well as villas in the Med. Italy too is picking up pace with apartment and villa developments in Tuscany and Umbria particuarly popular. People seem to have very few complaints so far about their adventures in the overseas property markets which have seen a major invasion by the Irish. So much so that estate agents in Ireland are constantly being petitioned by foreign developers to handle their latest schemes in all sorts of obscure places.
