Anyone else caught with apartment in Carrick-on-Shannon ?

The 2005 year-end edition of the permanent tsb House Price Index - compiled in association with the ESRI - reveals that house prices nationally grew by 9.3% during 2005. This compares to annual growth of 8.6% 2004.

Significantly the index reveals that the rate of house price growth accelerated during the year – unlike previous years when price growth tended to moderate as the year progressed. Dividing the year into two reveals that the rate of house price growth rose at more than twice the rate in the second half of 2005 (6.7%) than in the first half of the year (2.5%), the equivalent rates in 2004 were 3.7% and 4.7% respectively.

The index also reveals that the cost of houses for First Time Buyers grew significantly faster than was the case for second-time buyers or indeed any other market sector. According to the index, the price of houses for First Time Buyers rose by 12.7% in 2005 compared to an increase of 8.3% for second time buyers. The average price paid for a house by a First Time Buyer is now just shy of a quarter of a million euro - some €249,499.

And on a county by county analysis, the index reveals that County Kerry set the pace for price growth during the year – with a rise in average prices of 15%. This compares to an average rise of 10% for houses in Dublin City and County and an average rise of just 2% for houses in Co. Leitrim.

Looking specifically at December, the price of houses nationally rose by 1.2% during the month, unchanged from November '05 and six times the rate in December ‘04 (0.2%).
 
You havent got the capital growth (which is what you only seem to be interested in) and are unlikely to see any significant growth in overdeveloped leitrim.cash in and look at alternative investments.could you have bought in dublin/east coast 4 years ago? i think your always better investing in/near major population/employment centres. Had to laugh when i heard shane filan from westlife was going into property development with his brother and their first development was in leitrim! the guy has made big money with westlife and now is risking it all!
 
ClubMan said:
Is that €500 gross or net of tax, expenses and allowance?
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Rent is 6000 gross per annum as it stands....while my tenant is in place. Approx 30% of the time it has been empty.
As I said, there is a block management charge - to cover things like public area lighting , lawn cutting , maintenance , cost of lift repairs/ running costs etc. This has to be paid of course even if / when the apt. is empty.
It is a section 23 / section 27 type apt. - this is one of the reasons I bought it / one of its selling points - so at least the rent is tax free for the first ten years. Still saving a grand or two on tax each year does not really compensate on missing out on the property boom elsewhere.
I am not sure to try to sell it soon - the auctioneer says it would not sell in the summer because everyone is away on holidays etc - or hang on another few years - and what will the market be like there in another few years , or what would happen if the towns main employer pulled out to move to a lower cost country etc etc.

I am glad I was not tempted to borrow to buy another apt there, as the 1 bedroom that was for sale for 140 grand then is for sale again for the last number of months at 140 grand.
 

Thanks for that. It backs up my case. General inflation rose more than house prices in Leitrim during the year. It could even be the case that in Leitrim, house prices in the county ( rural areas ) rose say 4% and apartment prices in the town rose 0%, I do not know.
 

I perhaps could have bought in Dublin 4 years ago but I would have been stretching myself too much to borrow the extra money. If I had known there was going to be the capital appeciation in Dublin there has been , then yes I could have justified and and more importantly justified it to my accountant / bank manager, but even 4 years ago nobody could guarantee - and few people thought - that prices would continue to rise so much in Dublin. Hindsight is great.

Looking to the future, which is likely to fall more if / when there is a downturn in the market - an apartment for 140,000 in Carrick on Shannon , Leitrims main town or an similar spec / size apartment for 400,000 in Dublin ?

In Ringsend there are apartments now for about 650,000 I heard - I do not know for certain what prices will be like in Leitrim or Dublin in a year or 2, all we can do is try to make an educated guess as best we can.
 

my friend bought a 2bed apartment in ashbourne last year for 215k and they now go for 250k or more and the rent is pretty good around 900 a month.cant help thinking you overpaid in the first place due to sect23?
 
In hindsight yes but I was not the only one. I think one of the problems with Carrick is too many apartments were built. Mine was supposed to be one of the last tax incentive ones but as far as I can make out the minister for finance kept extending the scheme.


I wonder in 4 years will your friend in ashbourne still be winning ? I hope so, I do not begrudge anyone a fair or even good return if they make the investment.
 
yes sec23 premium is the problem
but if you sell there will be clawback of relief obtained?
has this been factored in?
have you other investment property that is profitable?
if so you should keep.
 
If this is a S23 apartment then it's actually a depreciating asset in it's own right since the tax break which is built into the price gets used up each year. As if it's worth more or the same now as when you bought then it has actually appreciated in value. Scant consolation I'm sure. Expect to many similar such posts once all the S23/S50 apts come back onto the market as 2nd hand properties.
 
As the tax relief is only worth a couple of grand a year max. ( rents have decreased in the area ) then in retrospect it has not been worth the hassle / expense of tying up / borrowing so much money for so long. The auctioneers / builders are the only ones who have done well out of it. If the govt had not kept extending the expiry date of the window of opportunity for building section 23 units that would have helped as well.
 
Sorry to hear about your predicament... But i know friends with houses (3 bedrooms and new) in Longford town and smaller towns in the region like Ballymahon, Rooskey etc and they are now willing to accept 350 per month if they can get them into long term leases (12 months plus)- They reckon they are the lucky ones to have some rent coming in!

Have you checked the RAS (Rental Accommodation Scheme) with the Housing Section of the Local Council. They might be willing to rent on a long term basis under the scheme (check www.sdcc.ie for details of how the scheme works in Dublin).
 
Why not try and sell it yourself and cut out the costs and fees? Research the areas you could advertise free such as the buy and sell. We found our house there.
 
tayrowjet said:
Why not try and sell it yourself and cut out the costs and fees? Research the areas you could advertise free such as the buy and sell. We found our house there.
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There's also daft.ie. Beware though..all of these free sites attract estate agents who waste your time with calls and emails.
 
Friends of ours jumped on the 'apparent' boom in the UK apartment market last year - think they bought in Manchester (not 100% sure) but they are all seriously up against it now - can't sell, rent doesn't cover mortgages and have had to use any equity in their own homes to finance - one guy is being hit with an additional 800 stg a month trying to cover. It's starting to affect his own business..........serious stuff.

We took a major stretch in Jan 04 and bought a house in Dundrum having just bought an apt in Dun Laoghaire - we just sold the apt and cleared 100k after fees/cgt etc and our house has actually over doubled which is just ridiculous - not complaining mind.

Rabitt, hang in there - I wouldn't bail yet, you have a tenant, it could be alot worse.
Best of luck.
Kitten
 
Think the ptsb county by county 10 year report is due out this week.
 
My neighbour (who is a developer) was selling 2 bed apartments in Carrick on Shannon 4 years ago for €143000, just on the Sligo side of the town, and adjacent to river.

I think your perceived lack of capital growth is due to the fact that it appears you paid over the odds at the start at €189000.

I'd hang on in there, Sligo is being developed very strongly, and subject to major infrastructural improvement, property prices are rising very fast in Sligo, and I'm sure for any first time buyers, Carrick is a good 'Plan B'.
 
Culchie said:
I think your perceived lack of capital growth is due to the fact that it appears you paid over the odds at the start at €189000.
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I don't think the OP paid over the odds, he bought an apartment AND a tax break. The value of the apartment must have increased by quite a bit for the the entire package to still be worth more or less the same in value, it's just that the depreciating tax break makes up such a large part of the initial price. As such the apartment itself would probably have been a sound investment if there hadn't been a massive premium to pay for the tax break.

It'll probably take another couple of years for this to dawn on a lot of investors.
 
I think the poster paid over the odds and it may not have been the appropriate property to buy if the poster didn't have another house to offset tax against.

I was looking at s.23 property in longford at the time for my father and there were very good new three bed houses in a nice part of the town for 170,000 at the time - s23 included and not econo-box design.
As the property was sold on the basis of s.23 it was competing with superior products like this and should have been sold cheaper.

The mgmt. fee seems very high for the back and beyonds - between two and three months rent.

Staying still might be the best option now.
 
Dipole said:
As the property was sold on the basis of s.23 it was competing with superior products like this and should have been sold cheaper.
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Not necessarily, the tax break on the Carrick apt may have been greater. You'd need to factor out the tax breaks before you can compare them like for like. But yeah, can't argue otherwise.
 
Dear Rabbit, The one thing a property investor should consider is rental income and its ability to cover the mortgage, bils, fees etc. You should never presume that capital growth is a sure thing. I feel that a lot of novice property speculators are going to be burnt if there is any type of wobble in the market. I know an extended family member that went on a holiday to Murcia in Spain and returned owning a 2bed apt. She can barely afford her own house. CRAZY.
 
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