Having attended many overseas property exhibitions where properties were sold off the plans, it doesn’t come as any surprise to hear that Irish buyers are ripped off by unregulated and unsupervised promoters.
A few bring along somebody they describe as their firm’s legal representative but most don’t, confident that the legalities are usually the last thing an Irishman is going to ask about when he has a line of credit ready to be pumped out of his semi-detached house.
Some buyers, says O’Sullivan, take the contract to their own solicitor, but “most Irish solicitors don’t have the local knowledge needed to give proper legal advice or conduct the necessary searches”.
A specialist legal firm is a welcome addition to the booming overseas property market. Property sales generally are badly regulated and supervised, but the redeeming thing is that in Ireland the courts can ultimately intervene in any dispute.
Overseas property shows meanwhile have the air of a travelling circus about them, manned as these exhibitions sometimes are by hawkers and flim-flam artists who probably cut their teeth selling used cars and timeshares.
Advertisement
Since the Financial Regulator persists in doing nothing, Warren Buffett’s quote that, “you only see who is swimming naked when the tide goes out”, is worth repeating.
If the overseas property bubble bursts, as many predict it will now that interest rates are rising everywhere, investors who haven’t done their due diligence will be caught out with nothing more than a tanned hide and a dodgy title deed.
Cider victory leaves flat taste
Advertisement
Cider drinkers will be relieved to see that John Shine, the new director of consumer affairs, is as zealous about catching overcharging publicans as was his predecessor, Carmel Foley.
The owners of the Village inn in Inchicore had the audacity to breach Section 7 of the Consumer Information Act 1978 by charging €4.40 for a pint of cider on November 11, 2004 and again on June 10, 2005 when the display price was €4.30. It was found guilty and fined €250 plus costs and the case has been publicised to shame the publican and to highlight the fact that consumers have a right to accurate pricing information.
I suppose there is a moral victory to celebrate, but these “small fry” cases pale into insignificance when one considers that consumers are facing a 40% increase in the price of natural gas from October — and still they have only one supplier to complain about. Can nothing be done about this important issue?
Advertisement
Others fall for equity release
Misery loves company they say, so at least we know we won’t be alone when the investments and lifestyles that so many Irish people are funding with the equity in their homes dries up and our houses become, well, just places to live in again.
In Toronto, where the average house now costs as much as it does here, rising interest rates are starting to hit monthly repayments, but not necessarily expectations.
Just like here, nobody under 35 can imagine, let alone believe, that property prices will ever come down. In some neighbourhoods, prices are rising by 10%-12% or about four times the underlying Canadian inflation rate and three times income growth. (The hottest Canadian market is Calgary where the booming oil industry is attracting thousands of workers and house prices are up 20%-30% this year.) With younger buyers stretching themselves to the limit to get on the property ladder, the same temptations as here are being dangled in front of them, except that in Toronto, 50- and 60-year intergenerational mortgages are now on offer, in addition to interest-only loans.
Soaring Toronto property values mean soaring property taxes and, much to the horror of older generations, their children are paying their annual property taxes (typically Can$3,000-$4,000 or €4,200-€5,600) by automatically adding it to their monthly repayment schedule.
Advertisement
It’s hard to believe that Toronto suffered a devastating property crash in the early 1990s from which thousands recovered only in the past few years. The only evidence of it that I could see last week was the home reversion market for the elderly where the interest rate and lending criteria is quite stiff.
Unlike here, where the pensioner needs to be of a certain age and own their home outright, there it is the quality of the neighbourhood that determines whether you get the equity release loan or not. For nearly everybody else, the money is yours, it seems, if you have a beating pulse.