Ireland’s Most Expensive House In The Bubble Can’t Sell At 75%-Off

“The detached Edwardian residence sits on 1.8 acres and looks out on to Dublin’s most expensive residential road. However, last year it was listed with a reserve price of €15 million, 75 per cent below its selling price, and invited interested parties to submit tenders for the property by October 27th last. … It has now been withdrawn from the market.”
– from ‘Ireland’s most costly house withdrawn’, Irish Times, 20 Apr 2012
[Thanks to ‘C’ for the story.]

20 responses to “Ireland’s Most Expensive House In The Bubble Can’t Sell At 75%-Off

  1. Cheap credit unfortunately spiked the Irish bubble. Ultimate loosers are the irish tax payers – it is a cruel world.

  2. Craig Sterling

    … one from your European correspondent here: a question, and it’s one which plagues me in our aim to return to Canada. Whilst I’ve no doubt property in primary markets like YVR and YYZ is badly over-valued, could anyone seriously envisage the Canadian economy going “pop” in the way Ireland has to produce these kinds of falls?

    I was in Ireland two weeks ago, as I wrote elsewhere, and the place is done for a generation. I don’t think people would argue that future for Canada?

    • Ireland is done because of the housing pop, right?
      Here in Canada, and in particular BC, we’ll take a serious downturn because we’ve become overdependent on RE (about 22%-25% of GDP, + related activity).. there will be many knock-on effects of the downturn.
      But, once the dust settles we’ll get back to selling the world rocks, trees, water, power, porn, pot, gambler-refuge, cheap movie sets, sports entertainment events, computer games, etc, etc.
      We should do okay, in the long run.

      • It’d be wonderful if one day we learnt to add value to the rocks, trees (and oil) before we sold them.

      • It’s 27% of GDP according to Macleans
        “The housing boom has helped prop up Canada’s construction industry, which now represents 7.4 per cent of the labour force, higher than it was in the U.S. at the height of its boom. Add in other housing-related industries, such as real estate agents, mortgage brokers and insurance companies, and the sector represents a staggering 27 per cent of the Canadian workforce. In the U.S., those same numbers peaked at 23.5 per cent. ”

      • Sorry my bad…% of labor force.

      • And that is exactly where the immigrant investor money should be getting deployed. Other countries create lists of what is and what is not permitted as investments for investors. Why not draw up our own list here and let them choose from it rather then just allow every dog and his cat to take the shortest route of buying a house and dumping short-term bucks onto the government ledger to meet the requirements.

        This country has always come up short in the processing sector, secondary and tertiary manufacturing. We have big needs in the areas of Ag and process food production, the movie industry, energy, wood fibre, pellets, plywood…..the list is a very long one.

        What our immigrant investor program needs is focus.

        If it works it should be expanded. There is a lineup to get in for very good reasons. Good governance, a trusted judiciary, free voting, equality between race, religions and sexes. The list goes on. We are in demand for these and so many other good reasons that it is fair to earn a dividend from investors. We should demand a higher standard where our expectations are concerned.

        Where else are they going to go that is better?

    • Ireland’s bubble was quite a bit larger than ours is now. The graphs from the Economist are instructive. Try “price to rent” to assess overvaluation and “prices in real terms” to gauge the ferocity of the bubble:

      It looks like we’re worse than the US now, and we’ve done more damage in aggregate by propping up the bubble for longer. Ireland is “done for a generation” as you say.

  3. the higher the value the more price sensitive, up or down. During our “correction” of 2008 east Vancouver didn’t budge while Vancouver west shed value in huge chunks. If you want to look smart by predicting the future just look at the recent past.

    • Where you’ve seen the biggest run-ups, you’ll see the biggest drops.
      The market has a weird wisdom about it; we may revert to ‘200_’ prices across the board. (Where _ = 3 or 2 or 1.)

    • So, it’s the magnitude of the run-ups that correct, rather than the absolute prices. All price levels and property types are vulnerable.

  4. This is a sad case of humanity shamefully commodifying a home. It comes to show that even the rich only buy houses (and live in houses) for the sake of speculative purposes.

    The house is made out of solid brick, has a slate roof, marble columns, large wooden timbers, etc. A house such as this will last a thousand years. This isn’t like the million dollar cheap wood McMansions they sold in the USA – and a far cry from the large particle boxes shoved onto a tiny lot we see in the west end of Vancouver.

    But the wealthy don’t buy – even at a bargain, why? Because Irish real estate is unsexy. The “values” are going down; even despite at the end of the day it’s still the same house.

    Sadly, because of this new reality, nobody wants to take the time/money to paint and drywall the interior of the Walford home to make her appealing for perspective buyers. If you can’t invest anywhere from half a million to a million and flip it for say 30 million, why bother? They have trouble selling it at 1/4th it’s last listed price – it’s not like a paint job will make a difference. A part of me wonders if they might have more luck just scraping the house and selling the 1.8 acre lot. I wouldn’t be surprised if the wholesale value of the materials alone is close to 15 million. Just comes to show the stigma against Irish houses.

    Vancouver isn’t different. Once real estate drops, the “investors” ship out. Make no mistake, they’re not here for the scenery, the amenities, “because Vancouver is cheap compared to China,” or because they actually believe their Vancouver shack priced at 2 million is worth 2 million. They’re here because the prices kept coming up (until this month when the bubble fell like an anvil). They’re here to make money off speculating on housing – nothing more, nothing less. And if “mad March 2012” is any indication – most were too late in the game to get out. They will lose their shirts and may soon have to work real jobs like the rest of us – either out there in China or in here in Canada where their lack of language skills means they may soon end up sweeping your office floors. And based on their job prospects in China, trust me, the sweeping floors here is the better deal.

    It amazes me to this day how people with money are the definition of stupid. I can’t help but to laugh hysterically at any conservative capitalist worshipper who believes the rich are smarter or more disciplined than the rest of us. Let’s just say, if I earned as much money as many of the wealthy I’ve had the misfortune of meeting – I would spend it a hell of a lot better.

    They say that society is wasted on the young; I would argue that society is wasted on the rich.

    • “Let’s just say, if I earned as much money as many of the wealthy I’ve had the misfortune of meeting – I would spend it a hell of a lot better.”

      No you wouldn’t. Do you waste water? I bet you do, and if so there are plenty of people around the world who would want to kill you for it.

  5. Ireland’s spectacular pop had much to do with profound demographics born out of the sectarian violence in the very late 60’s and early 70’s. While the fighting was going on, so was the sex. Does one feed upon the other? of course, look at the echo boom that peaked during the First Gulf war. Remember when Bush Senior pulled out of Iraq in what seemed like wars version of coitus interruptus? That was to coach the boomers dick, you and your new wife age 30, on the couch, gettin’ off on war violence, then ‘pulling’ out.

    It’s a personal opinion, but the best use of the Walford may be to turn it into a modern age monastery. A residence of ‘balance’ for those conceived during the Irish civil war, while Pluto was in Libra.

    • Paul, you aren’t really as dense as you seem, are you? Demographic boom due to sectarian violence? Huh? For one thing, there was no sectarian violence in Ireland in the 60s or at any other time. You are confusing Irelend with another country to the north, a part og the United Kingdom. You are a troll.

      • Paul Streppel

        bottom line @ Deed, Ireland has amazing demographics, much more pronounced late 60s – early 70s, but similar to PIGS countries. Second, violence produces breeding. It’s humanities primitive (ape) way of replenishment of the species. Thirdly, Northern Ireland, or the Irish Republic, the argument is specious, I treat the Island as one entity. Fourthly, you add nothing to this forum, teach me something or [expletive deleted].

      • [Deed, Paul -> Keep it civil, please. -ed.]

  6. As for Canada demographics, especially the West, the rise of Trudeau, his installment as justice minister in April 1967, the abrupt exit of Pearson later that year, and the making way for Trudeau’s final ascent and bill 150, resulted in a profound effect on ‘the falling’ of Western Canadian birthrates. Lag peak spending at age 45/46 to this dialectic, and here we are, spring/summer 2012

  7. I’ll step in on the side of Deed. PS, you may “treat the Island as one entity” but the people that actually live in the North don’t treat th issue in such a cavalier manner. I guess they should treat Canada and America as one big country too. I mean, they all speak with an “american” accent, don’t they?

    The large numbers of young people in the Republic has more to do with Catholicism and lack of birth control and the terror of violence occurring 100 miles to the north. It wasn’t exactly WW2 and the Blitz for goodness sake!

    The market when crazy in the south due to lax lending and a booming economy pumped up by foreign multinationals. The newly-minted property speculators then saw the low, low property prices of the north as fair game. They came up from Dublin, started the price bubble, and this drew in the locals who then believed the “property only goes up” hype.

    Prices in the North are now down on average 50% and thankfully people have stopped watching house-porn TV – and even more of a relief, they stopped talking incessantly about their latest property flip. As much as a 50% prices crash hurts, it has allowed the society to go back to generating wealth through more conventional, boring means.

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