Round the Block: When Michael McDowell first suggested back in September that the Government could afford to reduce the present penal levels of stamp duty few expected that it would virtually bring the property market to a halt.
That is exactly what has happened as buyers have pulled out of the scene, prepared to sit and wait for some good news in next month's budget. Whether he likes it or not, Finance Minister Brian Cowen will have no option but to take some drastic action, beyond simply twiddling with the stamp duty bands if he hopes to help the Government back into office next summer. For the buyers, the penny has finally dropped that stamp duty is at crazy levels.
Those planning to trade-up just don't want to hand over hundreds of thousands to the Government. Instead many are going to stay and extend, if they can find a decent builder. The Institute of Professional Auctioneers and Valuers, who won't be inviting McDowell to their annual conference again in a hurry, have come up with a sensible solution in their pre-budget submission. They have suggested that the threshold for stamp duty should start at €250,001, where a rate of 3 per cent should apply up to €500,000, after which it moves to 5 per cent up to €1 million.
Over €1 million, they suggest the duty should be 6 per cent instead of the current rate of 9 per cent which kicks in at €635,000. Everyone accepts that stamp duty is a tremendous cash cow for the Government but, with sales activity dangerously low, there may be very little mobility in the market for the foreseeable future. Once couples stop trading up, there is a trickle down effect, which will influence voters and curb the flow of funds to the Exchequer. The minister can't have it both ways.
It's been a long haul for Feltrim's Gary Kenny but he's finally bought himself a large slice of central Florida which he intends to develop as a town centre with over 1,000 residential units, retail, offices, a park and playing fields - all to be called Mayfair. Kenny, who has been in involved in the Florida scene for many years, signed off on the 373-acre site in Lake Wales city late last week, after three years of negotiations with the locals. The wait may have been worth it. He got the land for $3.5 million, an absolute snip by Irish standards. Even the Lake Wales council agreed that the site is worth a good deal more than when they first started talking to Feltrim in 2003 but, since they delayed the deal, they were bound to honour the contract. In the meantime Florida has had its floods and hurricanes, and real estate values have taken a dive, but Kenny says he will be concentrating on the domestic market in this new venture, rather than on the fickle lot that are overseas investors.
Meanwhile, the fortysomething Dubliner was in London last week to pick up a string of awards at the International Homes Overseas Property Awards, including "Best Floridian Estate Agency" for the selling arm of his growing empire, Coldwell Banker Team Realty.
A trade delegation from Morocco arrived in Dublin this week to promote the kingdom's position as the latest property investment hotspot. Weather-wise, Morocco has much to recommend it - mild winters and long hot summers in coastal regions. Add a stable economy, superb cuisine, endless beaches and the Sahara, and it's no wonder 6.5 million tourists visited Morocco last year. Keen to persuade yet more visitors to come, and investors to follow, King Mohammed V1 and his government have freed up land in scenic areas for development as high-end holiday resorts with golf courses galore. Property transactions are modelled on the French and Spanish systems, but prices are cheaper - €79,000 buys a two-bed apartment and €284,000 a villa at Mediterrania-Saidia, one new resort on the Mediterranean coast. But, with UK buyers snapping up both new build villas and old riads (traditional houses with internal courtyards), prices are moving up fast, though there are still bargains to be had, particularly on the Atlantic coast. The problem is getting there. There are no scheduled flights from Ireland, although Ryanair operate flights to Fez and Marrakesh from Luton Airport and may introduce the route to Dublin.
