Looking at the 106 lots offered, we see the usual line-up of Castleforbes apartments, which always exceed their reserve prices significantly. There is also another Grallow Wood house in Abbeyleix, these houses tend exceed their reserve by 35-40%.
With a total of 42 houses, the most we have seen in this type of auction, compared to just 38 apartments, it is clear that the sellers are attempting to respond to market demand. However, what happens at discounted property auctions such as this one is not reflective of the market as a whole. At distressed property auctions, bidders tend to be cash investors and apartments tend to be in greater demand and, therefore, attract a relatively higher price. This is completely at odds with current market trends.
There are a few Galway townhouses that will surely excite investors in the west and it will be interesting to see the take up for the remaining holiday homes in Marella Holiday Village, Enniscrone, in county Sligo. At the previous auction, the low reserve prices of €55,000 were exceeded by almost €20,000.
Rose Cottage in Waterville is one of the few ‘holiday homes’ that is genuinely well located and suitable for use. I have no doubt that this beautiful home will find a deserving owner.
First time buyers and home buyers in County Cork trading up should definitely take a look at the houses on offer, as always the reserve prices are low and houses in Cork rarely exceed the reserve.
Tullfarris Village in Blessington, County Wicklow is the latest offering of golf houses – with low yields and virtually zero potential for capital appreciation in the current market, only die-hard golf fanatics need bid!
Finally, half of all the lots offered claim to be income generating. An important note for investors is to check the quality and recent payment receipts of supposed tenancies. In our experience, few of the check tenancies are as reported. In some cases the tenants may be in significant arrears or paying a lesser sum than provided or in the lease, with or without the receiver’s agreement. In some instances, the tenant may have even vacated the premises prematurely, contrary to the lease. For a residential lease this should not be a big deal, in fact, it is probably preferable. As a general rule, unless you are buying an entire portfolio, taking on a single investment property with a sitting tenant can be a recipe for disaster. You may well be buying someone else’s trouble. If the property is in good condition and in a rentable area, it should rent again relatively quickly. Where the unreliable tenancy information may be fatal, will be for a commercial investment, where the tenancy is the main basis of valuation. If the tenancy goes, regardless of location, it will be difficult to replace in the current market. A vacant commercial property, with little prospect of a new tenancy, is virtually worthless. A bargain under the hammer might just turn out to be an expensive mistake! In order to avoid this scenario, it is imperative that commercial investors take time to carry out due diligence.
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