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Seems Irish are more pragmatic and want to reach the bottom faster.
“‘Vultures’ in Ireland Grab Champagne, Mercs in Recession Sales
Share Business ExchangeTwitterFacebook| Email | Print | A A ABy Dara Doyle and Louisa Fahy
Dec. 4 (Bloomberg) — The worst recession in Ireland’s modern history has turned the country into a bargain basement with cut-price champagne, country houses and Mercedes cars.
The liquidator of Dublin wine importer Parbind is selling boxes of six bottles of Bernard Remy rosé champagne for 132 euros ($199), down from the original tag of 205 euros. Elsewhere, prices of empty homes have been slashed by as much as two-thirds as property developers are forced to wind up.
“It’s a bit like old vultures over the carcass,” said Donall O’Murchu, a retired school teacher, avoiding shoppers with trolleys laden with cases of Parbind wine. “You see all sorts of places coming down. The recession seems to be biting.”
Ireland’s decade of breakneck economic growth made it one of the richest countries in the world, alongside Switzerland and Austria, and with that new wealth came unprecedented demand for faster cars, fancier homes and finer wines. The abrupt end to that boom has made the country prime ground for deal-hunters.
Accounting firm KPMG LLP is selling 23,000 cases of wine at a discount of as much as 60 percent as it liquidates Parbind to try to pay creditors. The wine wholesaler joined developers, pub owners and car merchants struggling to meet debts as consumers spent less and unemployment rose to a 14-year high.
‘Going Bust’
The government estimates that economic output will shrink 7.5 percent this year, more than anywhere in the euro region. Ireland’s economy doubled in size in the decade through 2007, the period when the country became known as the Celtic Tiger.
“It’s not nice to see businesses going bust, but it’s a reflection of the economy,” said Rebecca Wilson at Wilson Auctioneers, which handles wine, car and furniture sales for insolvency accountants. “We are certainly much busier now.”
The company held a sale of 200 cars in October, including a silver 2006 Mercedes C200 CDI, which sold for 17,500 euros, about 20 percent less than the usual retail price, according to the auctioneer. About 1,200 people showed up at the auction, said Ricky Wilson, general manger and brother of Rebecca.
“Everyone is looking at how much they have in their pocket,” said Ricky Wilson. “It’s the fashion. People are looking to buy used goods.”
The number of insolvencies in Ireland more than doubled to 1,209 in the 10 months through October, according to the InsolvencyJournal, a Web site that compiles reports.
Taking Action
“Banks are taking enforcement action by appointing receivers and many unsecured creditors are quick to petition for a liquidation,” said Declan Black, head of insolvency at Dublin business law firm Mason, Hayes and Curran.
In Newbridge, outside Dublin, all 45 two-bedroom apartments at Capella Court sold after agent HT Meagher O’Reilly slashed prices last month to about 125,000 euros from a high of 322,000 euros on instructions from a bank-appointed receiver.
“We are going to see more of this,” said David Browne, a director at Dublin-based HT Meagher O’Reilly, which sells homes in the area surrounding the capital. “Everything has a price.”
House prices have fallen by about 25 percent from their peak in 2007, based on an index compiled by Irish Life & Permanent Plc, while land sites have plunged by as much 90 percent, according to the Dublin Docklands Development Agency.
Ireland’s government has had to plough 3.5 billion euros into each of the country’s two biggest lenders, and nationalized Anglo Irish Bank Corp. as bad debts mounted.
Half Price
Browne is also looking for 3 million euros for a block of 31 apartments in Mulhuddart, west Dublin. The complex had previously been valued at about twice that amount.
He’s selling homes in a third development, Rocky Valley Estate in Wicklow, for 800,000 euros, down from 1.8 million euros. Rocky Valley, about 20 miles south of Dublin, has views of the surrounding Wicklow mountains.
The houses feature under-floor kitchen heating and central heating that can be controlled by mobile phone. “We have to clear the stock,” said Brown. “There’s no other way.”
Back in Dublin, at the wine sale, a line of customers snaked onto the street last week less than an hour after the doors opened. Bargains included a box of 12 bottles of Pinot Grigio white wine reduced by 60 percent to 73 euros.
“It’s Christmas time,” said David Doyle, as he browsed the cases. “Everyone’s looking for a bargain.” “
http://www.bloomberg.com/apps/news?pid=20601109&sid=aQw1pm.Qz9sg&pos=15
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Hi Flosmichael,
Interesting reading! The truth is that on the ground prices of houses have actually dropped 40% and 50% in some cases. To start with the prices of houses here in Ireland were out of control to say the least – Auctioneers with throwing values around like they were smarties – people are paying the price now.
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