High End Hit

Walford, Shrewsbury Road, Dublin
4,000sqft Tudor style house
Sold 2005 €58 million
For Sale 2011 €15 million

[hat-tip Don, by e-mail]

That’s about 75% off.
When a speculative mania ends, the high end of the market is as vulnerable as any other.
Owners like to argue that, for some particular reason, their enclave will be relatively resistant to any possible market drops; they are uniformly wrong, across all property types.
– vreaa

More from the Guardian article [22 Sep 2011] –
“Dunne was one of the most colourful characters in the Celtic Tiger – he paid record prices for the Jurys and Berkeley Court hotels just down the road from Walford in the heart of leafy Ballsbridge – with a view to knocking them down and creating a mini-Manhattan…”

What is it with speculative bubbles and Manhattan-wannabes?
– ed.

14 responses to “High End Hit

  1. Rumble in the Bronx was ahead of its time.

  2. As I understand the article the house has not sold yet. It could still drop in price who knows maybe it will sell for less than one million

  3. Yes and no. Choosing a property in Ireland as proof that “the high end of the market is as vulnerable as any other” is misleading. Ireland has the highest debt to GDP in the world at 1,382%. Compare this to the basket case that is Greece which is merely 180% of GDP. Ireland along with Iceland was ground zero for the collapse of leveraged finance since 2008, and its economy has been hammered back to the stone age. A more appropriate example would be high end property in places like Central Park South in Manhattan or Nob Hill in San Francisco, which declined at their nadir around 25% since their peak in 2005/2006. Compare this to losses exceeding 65% in outlying areas such as Sacremento etc. Many high end properties in Vancouver West declined more than 30% between 1997 and 1999, so certainly the potential is there for larger drops. But if you compare how high end properties in North American cities have historically performed during downturns to low end properties, generally speaking the former have outperformed, in some cases by a significant margin. As I’ve said before, while this website sometimes contains good information and is often entertaining, some of the conclusions drawn here are inaccurate.

    • I stopped reading when you started comparing Vancouver to Manhattan and San Francisco. yawn

      • Matt, there are intelligent bears and there are stupid bears. It’s painfully obvious which type you are. I was not comparing Vancouver to Manhattan or San Francisco, although I’ve lived in each of those cities for over 10 years so I’m very familiar with them. I am saying that to understand how the high end market in N. America behaves relative to the low end market, we should be comparing price changes in neighbourhoods pairings like Vancouver West vs Vancouver East, Central Park South vs Brooklyn, or Nob Hill vs East Bay during past downturns. Looking at some randomly chosen high priced property in Ireland without context is not particularly helpful. If the intention of the lead story is just to demonstrate that “even high priced properties can crash”, then this seems to be answering a question that nobody is asking, since I doubt anyone is foolish enough to believe there is an asset class out there that never drops in value. I would venture that even Matt isn’t dumb enough to think that.

      • realist -> “I doubt anyone is foolish enough to believe there is an asset class out there that never drops in value.”

        Oh, really?
        Actually, there are, in spades, in this town.
        The asset class is ‘Vancouver Real Estate’, and, despite all historical or fundamental arguments, the majority of people don’t really believe that it is capable of dropping in value. At most, some say it may drop by 10-15% (which, after a 200% run-up, is pretty much noise fluctuation).
        Check out the ‘Limitless Demand Argument For Ongoing Market Strength’ sidebar, where people are arguing that a significant pullback is impossible.
        It is with that in mind that the example above (and others like it) is offered.
        We are in the grips of a speculative mania, and people are incapable of seeing the obvious…

      • Are you really fucking challenging me to look up price drops in Florida, Arizona and the assholes of California for similar price differentials to SF and NYC? Or are you telling me the mainland Chinese nouveau riche somehow magically the acquired the acumen of SF and NYC bankers?

      • Matt, you need to take your meds. Perhaps if you had finished elementary school you would have less trouble with comprehension. Nobody is asking you to compare Florida with NY or Arizona with SF. Central Park and Brooklyn are both neighbourhoods in NYC. Nob Hill and East Bay are neighbourhoods in the SF Bay Area. Van West and Van East are neighbourhoods in the lower mainland. If you want to know how the high end and low end markets behave in downturns, all you have to do is plot one historical price graph against the other. I am trying to speak plainly but let me know if I’m using too many big words for you.

    • realist ->
      The broad point to be drawn from this story is that the high end is not impervious to price drops.
      In the 1980 Vancouver boom and bust, all market sectors, peak to trough, in the end had dropped by ballpark similar percentages.

    • I think one reason why high end housing might hold up better is that the wealth distribution has become more and more skewed. The rich keeps getting richer and has more money to spend while the middle class is getting squeezed. That is part of my theory. I think realist brings up a few good points.

  4. http://www.bbc.co.uk/news/uk-england-london-15032159

    A US businessman who drunkenly abused staff on a British Airways flight to London has been jailed for three months.

    Timothy Bradley, 32, a mortgage consultant, of Phoenix, Arizona, had pleaded guilty to common assault and being drunk on an aircraft.

    The incident took place on 20 August on a Phoenix to London flight.

    Isleworth Crown Court heard Bradley swore at staff and was abusive after he was refused more alcohol.

    Mr. Bradley refused to stay in his seat after downing 3 tinnies of Strongbow and start screaming that “VANCOUVER REAL ESTATE NEVER GO DOWN” as he was tackled and hog tied by an air marshall.

  5. Central Park and Brooklyn are both neighbourhoods in NYC.

    Brooklyn isn’t a neighbourhood, it is many neighbourhoods.

    • You’re right, but people from Manhattan generally view things in terms of being on the island or off the island. Once you hear that someone lives in Brooklyn, it doesn’t really matter if it’s Williamsburg or Park Slope; either way it’s not Manhattan. It’s a bit condescending but this is how most residents of Manhattan think.

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