It was an exceptionally busy week for the Irish construction and property industries and this is reflected in the bumper weekly round-up. Below is a catch-up on the stories that caught my attention earlier in the week, together with some of the industry stories from across the broadsheets today
Before I start, I must let you know that I attended the inaugural Women in Property & Construction Ireland (WPCI) breakfast briefing earlier this week at 1 Windmill Lane, Dublin 2, which featured two panel discussions (sponsored by Jones Engineering Group). It was an excellent event and I can thoroughly recommend it: http://www.constructionnetworkireland.com/wpci-breakfast-briefing/
Also, the Dublin crane count rose to 78 in May and work began on the Johnny Ronan-led 66,599sq m scheme next to new Central Bank building
If you only have time for one newspaper today, I recommend picking up the Sunday Independent for the best industry content today. Niamh Horan‘s interview with Dr Alan Ahearne on page 8 is a ‘must read’.
Okay, so this isn’t a property-related story but it made my weekend so I just had to share… The Exchequer Wine Bar in Ranelagh is now dog-friendly on the terrace from Thursdays to Sundays for the summer – so for pooch and prosecco, head to the Exchequer: https://www.irishmirror.ie/news/irish-news/exchequer-wine-bar-restaurant-ranelagh-12513261
As always, you might let me know if I have missed out on any relevant property news by emailing email@example.com.
(Apologies in advance for any typos, it’s difficult to get good help on a Sunday!)
As mentioned above, Niamh Horan has an excellent interview with economist Dr Alan Ahearne on page 8 of the Sunday Independent. She starts by noting this Thursday, May 17 as the anniversary marking 12 years since the first sign the housing market was turning, back in 2006. She then refers to the warning issued by Philip Lane, Governor of the Central Bank, earlier this week that house prices could fall as supply picks up over the next 2 to 3 years.
Dr Ahearne is marginally more optimistic about the potential resilience of the Irish property market today compared with Ireland of 2002. He describes back then how rents were so low that investors did not need to rent out the property is in order to get a return on their investment, which actually sounds crazy but their return was coming into Hearty from capital appreciation of between 12 and 20% per year. He is quoted in the article is saying “today there is a world of difference in the market“. In fact, provided the banks don’t lend recklessly over the next four years, it is unlikely that the same mistakes will be made and to the same effect. Like most economists and commentators, he is cautioning that at some stage interest rates will certainly rise. Back to the notion of cycles, it is a virtual certainty-insofar as anything can be certain-that we will experience a downturn over the next 3 to 4 years. The objective is not to distort this or artificially stop it from happening, but rather to have the right controls in place that we as a nation are resilient enough to cope with it.
Sunday Proptech Read
Wayne O’Connor reports that it is now taking up to 200 days to complete a sale because of issues with contracts. Estate agents are calling for the sales process to be overhauled to allow for speedier sales and great for efficiency and transparency for vendors and those looking to buy home. It is interesting to read this given estate agents themselves have been so slow to respond to market and buyer demands to use the technology that already exists, like online bidding (OLB) platforms etc, to ensure speed and transparency throughout this process. Of course, conveyancing solicitors need to get on-board with this or find their role displaced by superior technological advances including blockchain (more on this at www.prop-tech.ie and in the Irish Examiner this week).
Also, Eithne Shortall has an article in the Times today, the like of which we haven’t seen for a few years thankfully, headed ‘Phantom bidders drive up estate agent gripes’. This refers to the number of complaints made to the regulatory authority against estate and letting agents, which increased by 16% in 2017. One of the common complaints among potential homebuyers relates to so-called “phantom bidders“, that is rival bids invented by estate agents to drive up prices. It is interesting that this article appears today just as the above-mentioned article talks about estate agents calling for changes to the process. On the basis that this is something I have mentioned here numerous times over the past year or two, I think we need to get very clear on this; firstly, the technology already exists in the Irish market place and is being used by some good Irish estate agents to facilitate open and transparent building online for private treaty transactions not just auctions. Secondly, estate agents themselves have been quite resistant to engaging with change and technology. If this resistance is down to fear of change and general lack of education, then estate agents must educate themselves. If the reason is to resist transparency then these agents will unlikely remain in business beyond the next few years as both buyers and sellers demand better service.
The marketplace has changed and traditional estate agents must change along with that in order to remain relevant otherwise they may find themselves removed from the transaction. The key is to find new and better ways to add value and improve the whole user experience for both buyers and sellers.
Property of the Week
I don’t normally feature a ‘Property of the Week’ but I might just start if the quality of this Victorian beauty is anything to go by:
“The Ranch”, Dublin Road, Monasterevin, Co Kildare, is a 6-bedroom home situated on a spacious 0.5 acres (approx.) of mature land with plenty of trees providing privacy and tranquillity for its inhabitants.
The property was originally designed by the renowned architect William Chambers back in 1882 and the house was built for the groom on Lord Drogheda’s estate and it was originally known as Grooms Cottage. This property is listed as a protected structure in The National inventory of Architectural Heritage and it was tastefully renovated in 2004 to bring back its classic style and elegant charm and it was renamed “The Ranch”. (Guide price €520,000)
Other Property News
- The lead business story today in the Sunday Independent Business section is by Samantha McCaughren: ‘ 850 homes planned for South Dublin in €375 million development’. She is referring to a planning application by Dublin homebuilders Victoria Homes, which will go straight to An Bord Pleanála under the fast-track process. This is described as “one of the country’s largest residential building projects since the onset of the recession“. Director Derek Byrne is quoted as saying “we”ll be looking for 850 units and that’s a mixture of apartments, duplexes and three and four bedroom houses“, which will be music to the ears of struggling house-hunters in South Dublin.
- Cairn Homes to build 320 properties on Dublin site – Fast-track planning application for Marino site set to be lodged in coming weeks: https://www.irishtimes.com/business/construction/cairn-homes-to-build-320-properties-on-dublin-site-1.3487137
- Central Bank governor warns of potential fall in house prices – Philip Lane says there is now a ‘material risk of a reversal in house prices’: https://www.irishtimes.com/business/economy/central-bank-governor-warns-of-potential-fall-in-house-prices-1.3490498
- Residential property prices rise by 12.7% in year to March – Official figures show property values are increasing by 12.1% in Dublin – https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/economy/residential-property-prices-rise-by-12-7-in-year-to-march-1.3489020?mode=amp
- House price growth outside Dublin remains higher than in capital – CSO: https://www.rte.ie/news/business/2018/0509/961247-house-price-growth-outside-dublin-higher-than-capital/
- Richard Curran: National net worth figures mask full story of how many families are really managing: https://www.independent.ie/business/irish/richard-curran-national-net-worth-figures-mask-full-story-of-how-many-families-are-really-managing-36890597.html
- Bank of Ireland expects mobile mortgages of €325m this year – Competition forces banks to visit potential customers in their workplaces and homes
- Central Bank stance on interest-only BTL mortgages ‘worrying development’: https://www.rte.ie/news/business/2018/0509/961323-c-bank-stance-on-btl-mortgages-worrying-development/
- Construction worker shortage putting housing and infrastructure projects at risk -Construction Industry Federation estimates nearly 120,000 workers needed for projects: https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/construction/construction-worker-shortage-putting-housing-and-infrastructure-projects-at-risk-1.3486207?mode=amp
- Nama to sell off north docklands site on 5.9 acres for €110m – Permission granted for 347 apartments and pending for 332,497sq ft office development: https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/commercial-property/nama-to-sell-off-north-docklands-site-on-5-9-acres-for-110m-1.3487906?mode=amp
- JLL Ireland: Ireland’s population is expected to increase by 1 million people by 2040 generating demand for an additional 500,000 homes. Max Reilly outlines the opportunities for investors. READ MORE https://bit.ly/2HQevkG
- One of the last remaining development sites in Dublin’s Docklands on the market for €110,000,000: http://www.savills.ie/_news/article/112474/241236-0/5/2018/one-of-the-last-remaining-development-sites-in-dublin-s-docklands-on-the-market-for–110-000-000
- D2 infill site with two-house permission for sale for €950,000 via Robert Colleran Properties – Two 148sq m homes could be developed on location behind the Merrion Hotel: https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/commercial-property/d2-infill-site-with-two-house-permission-for-sale-for-950-000-1.3485911?mode=amp
- The Sunday Independent issues its Political Rich List and we ought not be surprised that half of TDs are now worth over €1 million (this actually IS a property story as you will discover if you follow the money) .
- Dan O’Brien, writing and analysis piece on page 19 of the Sunday Independent today states that “the Central Banks warning is good. Blindness to risk was the greatest hour before the crash“. He is, of course, referring to the warning issued by Philip Lane, Central Bank governor last week that house prices will likely fall as supply increases over the next 2/3 years.
- Louise McBride On page 8 of the business section in the Sunday Independent has an in-depth look at “The landlord game: worth the hassle or time to get out of it? As property owners could face damages of up to €20,000 for not playing by rent rules, they must understand their responsibilities“. This is a particularly relevant article at the moment given that statistics are showing more landlords leaving are planning to leave the market and fewer entering or planning to enter. I believe that the rise of institutional landlords has been positive for the Irish property market, however, it would be very short-sighted to think that they can service all markets or that we can simply do without the private landlords who have been providing a necessary service since before the beginning of the State. If you are private landlord struggling with the decision to stay or to go, I recommend taking the time to read through this article fully today. Unfortunately, there is no right answer but you might find what is right for you.
- In The Sunday Times today you will find the annual Rich List for 2018, please note that this is the UK list so probably not as exciting as the Irish Political Rich List above!
- Also in The Sunday Times today, apparently Transport Infrastructure Ireland spent €24.5 million buying property along the proposed Metro route, which are now known longer needed. It appears that the properties are in good condition with some rented out but others are lying idle at the moment. It is likely that these will be sold, which will be positive for the market as they are in the popular Drumcondra area. The tone of the article is quite critical however, when such projects are in the early stages, land must be acquired and it sometimes happens that plans change and the land is then either repurposed or sold.
- Nick Webb reports that Oaktree private equity mogul turned Glenveagh Properties chief Justin Bickle “may be on his way to Dublin is most expensive residential area“ as company documents are showing his address as one of Derek Quinlan‘s former homes on Shrewsbury Road.
- Roisin Burke, writing in The Sunday Business Post today, reports that Forecastle, which is a new real estate group, has apparently secured funding of €350 million from AIB to provide for affordable rental homes for young professionals on entry level incomes who are being priced out of the rental market.
- Host in Ireland’s report, with support and technical input from Bitpower, has released an update to its report demonstrating the sustainability of the Irish data hosting industry. Building upon the findings of its recent 2017 study, this update reinforces how Irish data centres have evolved to become an industry of substance, examining the opportunities and risks associated with the digital asset hosting industry in Ireland: http://hostinireland.com/irelands-data-hosting-industry-2018-q1-report/
- Why Most States Are Struggling To Regulate Airbnb – At least 16 states debated bills to regulate the short-term rental industry this year. Only one, Indiana’s, was signed into law: https://m-huffpost-com.cdn.ampproject.org/c/s/m.huffpost.com/us/entry/us_5af068cce4b066cd764091f5/amp
Proptech and Construction Innovation
- It’s great to see John Fleming, one of the early casualties of the market crash, return to profit only eight years after bankruptcy. His UK development company Tide Construction made €11.6 million profit in 2017. Related company Vision Modular Systems UK has been involved in some of the largest modular building projects In London in recent years and certainly this is a growth area.
- Also, former Century Homes chief, Gerry McCaughey (now Entekra) is planning to bring his offsite timber framing success from California back home to Monaghan, according to Philip Connolly and Gavin Daly in The Sunday Times. This story also features on page 5 of The Sunday Business Post today.
- Laing O’Rourke boss Ray O’Rourke talks offsite manufacturing, modular building and robotics with John Collingridge on page 7 of the Business section. He describes how the work once carried out by humans on building sites is now carried out by robots in factories and then ferried to its final destination and assembled on site. He is quoted in the article as saying “I’m old but I’m blessed by not being fair full of technology. The idea that somehow you feel better knowing there is a handmade brick five storeys up in the air is nonsensical“. Excellent!
- There is a concerted effort by the industry leaders to revolutionise traditional construction across Ireland and the UK so this might be useful: Embracing tech may be the best way to cut construction costs – but where to start? https://www.evolusioninnovation.com/news/embracing-tech-may-be-the-best-way-to-cut-construction-costs-but-where-to-start
- Via Antony Slumbers – Real Estate as a Service: Are flexible short term leases the new future? 16 Provocations! https://www.linkedin.com/pulse/real-estate-service-flexible-short-term-leases-new-future-slumbers
- *CLOSING DATE TODAY, 13th MAY 2018* Calling all companies that want to solve problems and develop innovative and/or disruptive technologies across the property and CRE industries. Apply to the Colliers Proptech Accelerator Powered by Techstars today! http://ow.ly/BSr930jSptu
- The world’s tallest atrium is currently under #construction in Beijing – FULL VIDEO: https://lnkd.in/d4pb9V5
- 5 Fundamental Ways PropTech Will Revolutionise Real Estate | AllWork.Space: https://allwork.space/2018/05/5-fundamental-ways-proptech-will-revolutionise-real-estate/
- Japan Is Replacing Its Aging Construction Workers With Robots – This is definitely not for everyone but here is a lengthy interview with John McFee on just about everything: https://youtu.be/WBgFGwJA1D0
- 5 Ways Amazon Is Reinventing Construction And Development: https://www.bisnow.com/national/news/retail/5-ways-amazon-is-reinventing-construction-and-development-88216
- To keep up-to-date on all things tech and innovation for the planning, construction and property industries, head over to http://www.prop-tech.ie, the national resource website for innovators, investors and mentors or email firstname.lastname@example.org .
Property Insiders Guide
As many of you might know, my annual property book The Irish Property Buyers’ Handbook (since 2011) has undergone a rebrand for 2018 and will now appear as part of The Property Insider series, published by Oak Tree Press, the first three titles are now published and available here.