City Council ‘fire sale’ to slash property values

Date Published: 31-Jul-2009

RESIDENTIAL property values in Galway City are set to be slashed from this weekend as the City Council attempts to off-load 90 homes across the city, in a move that could cut values in some areas to less than half what they were two years ago.

The ‘fire sale’ of the local authority stock is the latest element to be added to the ‘perfect storm’ for the property market in Galway.

But Council officials have been warned by the Government not to undercut existing open market asking prices by more than 25% – already, property prices in the city have dropped by up to 40% since the height of the housing boom in 2007.

The Council’s move will have the knock-on effect of reducing the baseline ‘clearing price’ of open market properties is some parts of the city by up to 50% on what they would have achieved in 2007, as private homesellers are forced to drop their prices to compete.

The selection of one and two-bed apartments and two, three and four-bed houses – which will range in price from €140,000 for a one-bed apartment to €220,000 for a four bed semi – are all properties which have been rejected by the 200 people on the Council’s ‘affordable housing’ list.

And while the news will be welcomed by first-time buyerskeen on taking advantage of the property crash, it will cause serious problems for more and more homeowners who face into the nightmare of negative equity.

Effectively, the move by the local authority completes..