Brisk sales were reported last weekend at a new homes scheme in Ashtown, Dublin 15 where price drops of up to €100,000 per unit attracted first-time buyers and investors back into the market.
Selling agent Savills HOK says it has deposits for 26 of the 27 apartments that were on sale at the launch. Two-beds at the scheme sold last weekend for between €335,000 and €360,000 - €70,000 and €100,000 cheaper than when first launched in October 2006.
Twenty-six sales would have not been considered a major success this time last year but, at a time when the new homes market has come to a virtual standstill, it illustrates that the market does exist at some level. The developer, Capel Construction, is releasing another block of 18 apartments at the same reduced prices this weekend.
Buyers who had bought at earlier phases of the scheme for higher prices and who now face the prospect of negative equity voiced their discomfort at the price drop to sales agents working on site, according to Ronan O'Driscoll of Savills HOK.
The launch was also closely watched by developers operating in the greater Dublin area, keen to see how successful it would be. There was a lot of enquiries from estate agents and builders after the weekend, says O'Driscoll.
It remains to be seen whether other developers will follow Capel's lead and revise their prices down in 2008 to shift some of the extra stock they have on their books.
All agents and developers will be looking at their prices in the new year, according to Joe McPeake from McPeake Auctioneers who has been selling homes in the Dublin 15 area. "In the last three to four months sales have been slow enough and we will all be reviewing pricing," he says.
Another new homes agent said that, given that "sales had virtually dried up in the last quarter", developers will be considering price drops in the New Year. Some are likely to make it official and adjust their price list, others will do deals quietly, the agent added.
Ross McParland from Sherry FitzGerald New Homes says that 2008 will be "a buyers' market in the first six months of the new year". Once the overhang of stock is accounted for prices will harden again, he said.
One-third of buyers at last weekend's launch at The Crescent were investors. There is speculation that groups of up to 10 investors are getting together to buy large chunks of new homes schemes, taking advantage of the slower market.
Peter Carthy from accountants and financial advisers BDO Simpson Xavier says that his firm is looking at putting together a number of deals involving bulk purchases of apartments for individual and group investors.
In the "uncertain market" developers are looking for equity release and investors can expect to get reductions of between 15 and 20 per cent on bulk buys of 20-plus units, he says.
