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News & Updates

Developers selling homes before they're built for first time in years

Date: 26.02.2013

Mark Keenan – 25 February 2013

DEVELOPERS have started selling new homes off plans for the first time in more than five years, the Irish Independent can reveal.

The ongoing recovery in city property markets combined with a bottleneck in the supply of family-sized homes means deposits are being put down in advance of construction for more than 100 new homes worth €23m in five developments in the greater Dublin area.

Deposits of €5,000 are being put on homes that are selling for between €200,000 and €400,000. The trend follows a period since 2008 in which almost no new homes were sold.

Estate agents said the revival of advance sales is down to a shortage of family-sized properties close to city areas caused, in part, by negative equity.

The latter is preventing those who bought in the boom from selling and preventing second-hand property coming to market. The revival of advance sales also coincides with the publication today of a market sentiment study by showing that, for the first time since the crash, more than half of those surveyed (59pc) believed property prices presented good value.

The survey indicated an 8pc increase in those wishing to buy – and that they expected to pay an average of €229,000.

Estate agents say the revival in advance bookings began after the summer in response to an ongoing shortage of family-sized homes flagged by the industry since the beginning of last year.

In at least one scheme, prospective buyers have been paying deposits for homes that haven't even received full planning permission, a practice which was unheard of even in the boom years.

At another development, new home prices have started to rise in reaction to demand.

At the Peyton scheme off Stoney Lane in Rathcoole, Co Dublin, Blackchurch Homes has taken 13 deposits since the beginning of the year for €265,000 three-bedroom homes in the final phase, which have yet to obtain planning clearance.

Glenn Burrell, of Finnegan Menton, the agency selling the properties, said the deposit system was the fairest way of ensuring buyers could reserve a home in the last phase. If the scheme doesn't get permission, they'll get their money back.

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