Property
Autumn 2012 Heading here
The magazine of the Institute of Professional Auctioneers & Valuers
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Welcome
Dear Member Welcome to the Autumn 2012 edition of the Property Professional magazine. The arrival of Autumn means focus generally on education matters and this is particularly poignant for IPAV this year as we enter the new era of regulation. Details of IPAV’s range of courses are contained elsewhere in this issue and I look forward to a large percentage take-up in all of them. Following a review of its Education Programme IPAV has launched the new education programme for the upcoming academic year. The new Higher Certificate in Real Estate is a unique programme in so far as it is designed specifically to promote the Institute’s own objective of promoting professional standards and also to meet the requirements of the property professional in a changing and demanding market.
The property Professional is the Magazine of the Institute of Professional Auctioneers & Valuers 129 Lower Baggot Street Dublin 2
The programme is intended to meet the needs of those who are already in the business and require a formal qualification. It is also suited to those who may be contemplating a new career in property. The Higher Certificate programme will be delivered an IPAV’s offices at 129 Lower Baggott Street Dublin where further information may be obtained. I would like to thank Peter Brady and the members of the Academic Council for their ongoing efforts in reviewing IPAV’s education programme and in constantly updating it to meet the needs of the new environment.
Tel: 01 6785685 Fax: 01 6762890 E-mail: info@ipav.ie
Our regular Autumn seminars are currently being put in place details will be circulated to members in the weeks ahead. They will cover topics of interest to members in their day-today work including updates on the process for obtaining licenses.
Websites: www.ipav.ie www.OnView.ie CEI Website: www.web-cei.com
I am very heartened by the large numbers attending these seminars in recent years and I would encourage all members to use the current time to upskill on these and related items of interest. Our range of courses in the Fine & Decorative Arts continues to go from strength to strength and Course Director Roxane Moorhead and her team of lecturers continue to add to what are already among the most highly regarded programmes of their kind in Ireland and beyond. This year, two new courses have been added to the range and already there have been great expressions of interest. Details of all the Fine & Decorative Art courses can be found on www.fineartcourses.ie
Chief Executive Officer Fintan McNamara M.Litt. Dip. L.S. MIPAV(HON) Editor Tim Ryan Tim Ryan Communications Tel: 01 634 5330 www.timryan.ie Advertising & Design Designroom info@designroom.ie Tel: 01 615 4715 Publisher Designroom www.designroom.ie
Property Professional Autumn 2012 Views expressed by contributors or correspondents are not necessarily those of IPAV or the publisher and neither IPAV nor the publisher accept any responsibility for them.
Best wishes Fintan McNamara Chief Executive
Contents The Red Book Debate: Housing Minister publishes legislation to significantly reform Landlord and Tenant Law
Page: 4 Page: 5
IPAV Education Programme
Pages: 10-12
Ireland’s Favourite Painting
Pages: 16-17
No soft landing in Longford
Pages: 18-19
Brazil: pure gold investment opportunity?
Pages: 20 -21
In the Dáil…….
Pages: 26-27
Valuing the Valuer
Page: 28 Autumn Issue | page 1
President’s Message
Message from the President Autumn is already well upon us and there are still no clear indications that the season will be any easier for members or that stability is returning to the market. July saw a very significant change for auctioneers and estate agents when responsibility for licensing the sector transferred from the traditional courts and Revenue system to the Property Services Regulatory Authority. The transition is also of significance in that it is the first time that managing agents are required to have a licence to practise. While most members have coped admirably with the change there have been some problems in regard to form-filling and the provision of the required documentation. For its part, IPAV has done its best to help members along the way. In addition to providing day-to-day help to members from our Head Office, IPAV organised a special Seminar in Portlaoise on June 19 for all licence-holders, regardless of affiliation, which was addressed by the Regulator Tom Lynch. In this regard, I would like to pay a special word of thanks to National Council member Pat Davitt who is also a member of the Property Services Regulatory Board who organised the evening and who has been to the fore in his efforts to make the transition as easy as possible for all members.
From the commentary so far, it is clear that very little thought has been put into the details of the whole area of property tax by the Government and there is every indication that this tax is likely to follow the path of the highly controversial household charge and septic tank inspection levy. Of course, I am aware that there is a clear void in the Exchequer finances due to the huge drop in Stamp Duty receipts but that is no reason for the imposition of an ad hoc tax that is poorly thought out and incapable of being implemented in any equitable fashion. The conclusions, for example of the Commission on Taxation, which reported in 2009, are worth noting and many worthwhile ideas were put forward at that time. However, recent Governments have largely ignored its contents. The report did highlight one key issue as follows: “An important lesson to be learned from the residential property tax system that operated between 1993 and 1997 is that an overly narrow tax base led to an insignificant revenue flow for the Exchequer, high administrative costs and a perception of inequality.” Clearly, this matter will be the subject of much discussion over the coming months.
However, it is clear that it will be some time yet before all the difficulties of the transition process are sorted out and I ask members to be patient a little longer and to bear with us as we work with the Regulator and the Authority.
There is some good news to report, too, I am happy to say. IPAV’s courses in the Fine & Decorative Arts continue to thrive and we are about to see the 2012/13 season get underway. This year Director Roxane Moorhead and her team have added two new and exciting courses and I wish to compliment them on their ongoing efforts.
As IPAV’s Autumn series of Continuous Professional Development (CPD) courses get underway, we will of course be answering member’s questions on the transition process. I ask all members to make every effort to attend.
The above are some of the issues of concern at this time. Of course, if any members have any ideas or suggestions please feel free to pass them on to Head Office or to raise them at the Autumn Seminars.
With the new licensing scenario it is evident that IPAV’s role will evolve, with a strong focus on education. As President, I am currently addressing this area.
Meanwhile, I look forward to meeting as many of you as possible in the months ahead.
The early Autumn has also seen the thorny issue of property tax again raise its head and I felt it my duty to put the message out there in the media that the last thing the property industry needs now is yet another tax to further depress an already depressed market.
Autumn Issue | page 2
Le gach dea ghuí. Liam O’Donnell President
Property News
The Red Book Debate A personal view by Patrick Davitt FIPAV
On reading recent reports in the property media, one could be excused from believing the Red Book provides some kind of valuation magical methodology that enables Valuers to come up with an infallible valuation figure. Nothing could be further from the truth.
• How the figure is arrived at? Through the theory of valuation delivered from standard text books used in formal education courses by authors such as A.F. Millington, A.W. Davidson, Isaac and Stelly et al, and comparable information from experienced Valuers.
One has to applaud the Central Bank report “Valuation Process in the banking Crisis-Lessons Learned-Guiding the future” as a good first report that identifies several areas which need to be standardised in the valuation process. It is a guideline only and I believe a further report will follow.
• Who presents the valuation? A principal in a firm with at least 5 years experience should sign off on all valuations.
It does state “where the value of the loan to be advanced is in excess of €25m, the Credit Institution should seek a full Red Book Valuation from more than one Valuer”. It also recommends that clearer valuation instructions be given to Valuers. Financial institutions all stress the importance of Red Book valuations but when clarity is sought on the instruction, more often than not, the financial institution is not entirely clear on the concept. It is, therefore, appropriate I think to bring some clarity to the issue of valuation. The Red Book RICS (Royal Institute of Chartered Surveyors) handbook I understand is an English publication and to say it is of a global standard is, I believe, overstating the mark. So let us be clear from the outset. There is no such thing as “a Red Book valuation”. It is more appropriate to say that valuation and the ability to value is the result of a formal education and training and the Red Book contains a series of professional guide notes to achieve best practice. It is clear then that RICS itself does not claim the Red Book to be anything else other than as I have stated above. The danger arising from the current discourse is the belief that the Red Book is more than it claims. It does not, and has never claimed to be, a text book for would-be Valuers. There is no restriction on adopting the book’s contents which are laudable in their objective to bring clarity and uniformity to the procedures and benefit professionals and their clients.
Not the only authority It is also clear that the Red Book is not the only authority for standards in the undertaking of property valuations in the Republic of Ireland. Practice guidelines are also contained in the Blue Book which is used in 27 countries throughout Europe. The Institute of Professional Auctioneers and Valuers’ Practice Handbook also provides very similar guidelines for its members. Even utilising the standards in any of the above publications, Valuers all know the kernel of the valuation is the valuation figure. The Central Bank may find the following points useful:
Autumn Issue | page 4
• What protection is there for the financial institution if the valuation figure is incorrect? The level of Professional Indemnity (PI) insurance should have a direct link to the valuation figure and include a term during which cover is held after the valuation is written. At a time when professionalism, credibility, experience and standards were never as important in the property business, the Institute of Professional Auctioneers and Valuers has risen to the challenge with the introduction of an additional Valuer Category, “Registered Valuer (RV)” which contains all the above essential assurances including an ad hoc inspectorate. I congratulate the Minister for Justice, Alan Shatter for enacting into law the Property Services Regulatory Authority, the National House Sales Price Register and the National Commercial Lease Register. These three initiatives will raise standards in the property business in Ireland. (The office of the Property Services Regulator came about after a review group, of which I was a member, made recommendations to the then Minister). The two national registers mentioned above are to be compiled immediately by the Property Services Regulator and I believe they will take a lot of the heat out of the current debate as the information provided will be available to all Valuers. The central issue then in the discourse about so called Red Book valuations may be stated as follows: if the Property Regulator is satisfied that a licensee fulfils the regulatory requirements, why should any professional body believe it has any overarching authority to decide who is qualified to Value? I am aware that the Property Regulator does not regulate Valuers per se but he does issue a licence to practice to the Auctioneer/Valuer/Property Services Provider and one of their key skills is the valuation of the asset to be sold or managed. It would be a giant step forward if a common EU Valuation Standards, in the form of a Services Directive was introduced across Europe. However, in the meantime Irish property service providers are now among the most regulated in Europe in terms of standards. •Patrick Davitt is Managing Director of Sherry FitzGerald Davitt & Davitt, Mullingar, Co Westmeath and a Fellow of the Institute of Professional Auctioneers and Valuers
Property News
IPAV President dismisses notion of a new property tax IPAV President Liam O’Donnell has described the recent report of a new property tax as ill-timed and utterly inappropriate in the current economic climate. Responding to queries from the media, Mr O’Donnell said it would definitely cause problems in the current economic climate. “It will certainly affect the recovery of the property market,” he said. He continued: “We have people in negative equity and people struggling to pay mortgages. It just can’t be right to consider levying these people with additional tax.” Describing the tax as selective he said: “It’s taxing only the people who have gone to the trouble of buying and arranging mortgages. They probably have families and have spent on education and other commitments. There is so much coming down the track with water charges, another tax is not going to help anybody. It certainly is not going to help the property market.” The new controversy over property tax emerged in documents released by the Department of Finance on Friday, August 24 which informed the troika that the property tax will be based on valuation. While Ministers have insisted that no final decision has been made, it appears that the rate of the tax is the only major outstanding issue. In a comment Finance Minister Michael Noonan said: “The detail of the property tax has to be worked out. All that has been decided is that there will be a property tax on family homes and that the tax will be collected by the Revenue Commissioners.”
IPAV President Liam O’Donnell (right) with National Council member Martin O’Mahony He added: “It’s very hard on people, I’m not making light of it. The issues are very serious and the burden being put on our fellow citizens is a very serious burden and they are having tough times.” Fianna Fáil Environment spokesman Barry Cowen accused the Government of sleepwalking into another “fiasco” along the lines of the household charge. Four years ago the Commission on Taxation recommended establishing a valuation system involving eight property bands with an online database giving all local valuations; the provision of limited and full waivers for those on low income; a seven year exemption for those who paid Stamp Duty between 2000 and 20008 and requirement that property tax returns should be made every three to five years. It also urged, as a priority, that a register be established with up-to-date valuations of all property and land in the state.
Housing Minister publishes legislation to significantly reform Landlord and Tenant Law The Minister for Housing and Planning, Jan O’Sullivan T.D., has published the Residential Tenancies (Amendment)(No. 2) Bill, 2012, which will see: • Those tenancies in the voluntary and co-operative housing sector that most closely parallel private rented tenancies being regulated under the Act • The agency responsible for regulation of the tenant-landlord relationship, the Private Residential Tenancies Board (PRTB), being re-named as the Residential Tenancies Board (RTB) • Formal effect given to the merger of the Rent Tribunal with the Residential Tenancies Board • A reduction in the size of the Board from 15 to 12 members • Measures to increase the take-up of mediation as a key dispute resolution mechanism Minister O’Sullivan said that the Bill “represents a significant reform of the residential tenant-landlord regulatory environment” and indicated that she hopes that some other significant policy issues, on which she has committed to action, will be addressed later in the Bill’s progress through the Oireachtas. “This legislation will further improve our system of tenant-landlord regulation. The measures that promote mediation in dispute resolution are particularly welcome. I firmly believe that mediation can give people in a dispute a speedy, effective way to resolve
issues. The extension of the registration requirement to a large number of voluntary housing tenancies is also a major development. It is the first step in a process that will see statutory regulation of the voluntary and cooperative housing sector in the coming years. This will bring greater transparency and accountability to this important sector that is playing an increasingly active role in social housing provision,” said Minister O’Sullivan. The Programme for Government commits to the creation of a deposit protection scheme to address the issue of illegal retention of tenants’ deposits. The Minister is awaiting the outcomes of Private Residential Tenancies Board (PRTB) commissioned research on this matter in Autumn 2012 and will, at that point, consider how best to address the research findings in the context of this Bill. The Minister is also determined to address the issue of nonpayment of rent by tenants who remain in situ and she confirmed that an amendment to address the matter is currently being drafted and will be ready in time for consideration when the Bill is presented to the Oireachtas. The Bill will now go before the Dáil and Seanad, commencing this Autumn and it is publicly available on the Oireachtas website, www.oireachtas.ie Autumn Issue | page 5
Income Tax Update
2011 Tax Return Deadline – 15th November 2012 By Shay O’Brien
The tax deadline is now just some two months away and the Revenue have confirmed the deadline to be the 15th November, 2012, in relation to returns filed through the ROS system. Investment property owners who are preparing their Tax Returns are still under severe pressure due to:A)
Mortgage interest restrictions
B) NPPR and Household charges,
2. USC Rates The Universal Social Charge is a tax payable on gross income, including notional pay, after any relief for certain capital allowances, but before pension contributions. The rates of Universal Social Charge for 2011 are: 2% - on the first €10,036
C)
Rents that are not enough to meet mortgage repayments
4% - on the next €5,980
D)
Property tax relief restrictions and new property surcharge of 5%
7% - on the balance
E)
Pressure with banks
F) Tax bills with no funds to pay the tax due The following are some points that may be of interest to readers when preparing their 2011 Tax Returns:-
1.
Rental Income and Expenses
(i)
When preparing your 2011 Rental Accounts, it is important to note that Rental Income is taxable on a receivable basis of taxation and not a received basis. This essentially means it is the rent that a landlord would be entitled to receive rather than the rent the landlord may necessarily have received in a tax year.
(ii)
It is important to know that the Revenue have a restriction on mortgage interest in relation to money borrowed for the purchase, improvement and repair of residential investment properties. The interest is restricted to 75% of the actual interest charged. So, for example, if a landlord paid €10,000 in interest to the bank a deduction of €7,500 would only be permitted by Revenue.
(iii) In order to claim the interest deduction it is necessary to show compliance with the PRTB requirements. If a landlord failed to comply with the PRTB requirements, the Revenue would not permit a deduction for a mortgage interest in the rental accounts. (iv) No rental deduction can be taken for the €200 NPPR charge and €100 household charge in the rental accounts. (v) The tax deductible expenditure that can be offset against Rental Income receivable is as follows: Repairs, Maintenance Expenses, Insurance, Letting Fees etc. (vi) Expenditure on fixtures and fittings i.e. furniture, electrical appliances etc qualify for a special wear and tear allowance at the rate of 12 ½% and a full deduction on the cost cannot be claimed against Rental Income receivable.
Autumn Issue | page 6
There is a surcharge of 3% on certain individuals, e.g. for those who have income from self-employment that exceeds €100,000 in a year.
3. Self Employed Income If you are a self-employed auctioneer you should ensure to claim all genuine business expenses incurred in the performance of your trade as an Auctioneer. All business expenses wholly and exclusively paid out in the performance of your trade as an auctioneer are fully deductable against income. Common expenses often overlooked and which should be included in self-employed accounts are motor and travel expenses, professional subscriptions and professional fees.
4.
Pension Payments
When faced with a tax bill for the 2011 tax year and a requirement to make a Preliminary Tax payment for 2012, many readers may wonder how to reduce their Income Tax liability. It is possible to make a personal pension contribution before 15th November and reduce the 2011 liability and in turn reduce the Preliminary Tax requirement for 2012 (that is on the basis that you pay your Preliminary Tax for 2012 on 100% of your 2011 liability). Tax Relief still applies at the rate of 41% on personal pension contributions.
5.
Preliminary Tax 2012
The most common methods of discharging one’s Preliminary Tax for 2012 would be to either (1) Pay 100% of your 2011 liability or (2) pay 90% of your estimated liability for 2012. New Property Surcharge and 2012 Preliminary Tax Minister Noonan introduced a 5% property surcharge in his Budget in December 2011. For those who are claiming property tax allowances on their 2011 Tax Returns, it is a requirement that the 2012 Preliminary Tax liability is computed on the basis that the additional 5% surcharge applied in 2011.
Income Tax Update
Suggested 2011 Tax Checklist •
Gather up all your 2011 information well in advance of the Tax deadline.
•
Calculate your 2011 liability.
•
Calculate your Preliminary Tax for 2012.
•
Go back through all your Income and Credits and make sure that you have claimed all tax deductible expenses. This can reduce your tax bill. Look at items that you may have forgotten to claim.
•
Have you claimed all Medical Expenses i.e. prescriptions, doctors, hospitals, Physio, Dental.
•
Bin Charges paid in 2010 (tax relief operates on a preceding year basis)
•
Marriage Relief – Did you get married in 2011 and think you may be able to claim some tax back?
•
Did you give any charitable donations in 2011 – Once a donation in excess of €250 has been made, you may be eligible for tax relief at the rate of 41%.
•
Did you take out a loan to invest in your business in 2011 and pay interest on this loan? You may be eligible for some business interest tax relief.
•
Did you make any pension contributions for which you have not obtained tax relief already i.e. through your salary etc.
•
Finalise all tax figures.
•
File your Tax Return for the 15th November. Shay O’Brien is the Tax Manager in PKF Tax Consulting Limited and can be contacted on 01-4961444 or by email s.obrien@pkf.ie
FOR SALE & TO LET
Residential & Commercial All licensed Auctioneers in Ireland can list all of their clients’ properties on OnView.ie absolutely FREE If you have not yet registered for FREE listings contact: admin@onview.ie
Ireland’s Property website for Ireland’s Auctioneers
Autumn Issue | page 7
Property News
Large turnout for seminar on new licensing system There was a very large turnout for IPAV’s Seminar on the new licensing system for auctioneers and estate agents which took place in the Heritage Hotel, Portlaoise on Tuesday, June 19. The Seminar, which was open to all auctioneers and estate agents, heard presentations from the Property Regulator Tom Lynch and IPAV National Council member Pat Davitt, who is a member of the Board of the National Property Services Regulatory Authority. Those present were given ample opportunity to ask a wide variety of questions on issues of concern in the new licensing system and hear direct answers from the Regulator. IPAV plans a further series of seminars in 2012/2013. Margaret Healy and Gráinne McKenna from DNG Skerries, Co. Dublin at the Portlaoise Seminar
At the Portlaoise Seminar were (l – r): Fintan McNamara, IPAV CEO; Tom Lynch, Property Regulator and Pat Davitt, IPAV National Council
Michael Lyng, Skenagun, Castledermot, Co. Kildare with Des Moloney
A section of the attendance at the Portlaoise Seminar
Autumn Issue | page 8
Property News
Former IPAV Presidents at the Portlaoise Seminar )(l – r): Martin O’Mahony, Churchtown, Dublin; Ronald Duff, Ratoath, Co. Meath; Padraig Smith, Ballyjamesduff, Co Cavan and Tom Crosse, Limerick
Pictured at IPAV’s Seminar on the new licensing system for auctioneers and estate agents in Portlaoise were Ella Dunphy, Kilkenny and Liam O’Donnell, IPAV President
Desmond Daly, Kanturk questions the top table at the Seminar
Frank Chambers, Newport, Co. Mayo asks a question from the floor at the Portlaoise Seminar watched by IPAV National Council member Martin O’Mahony.
Marianne Kavanagh, Ballymore Eustace, Co. Kildare asks a question at the Seminar Autumn Issue | page 9
Education Courses
The Higher Certificate in Real Estate (Valuation, Sale and Management) Following a review of its Education Programme IPAV has launched the new education programme for the academic year 2012/13. While it reflects the essential aims and objectives of previous programmes, the content has been re structured to facilitate greater understanding of the complexity and range of knowledge in the programme. It is also the result of an exercise whereby IPAV can better pursue its policy of collaboration and co-operation with other professional institutes, higher education colleges and universities in the best interests of its students. IPAV is comfortable in collaborative environments and has always recognised the significance of education in the delivery of a professional service to clients. Indeed it is a hallmark of any professional association that this should be so. The principal objective of the institute is to protect and promote professional standards through the provision of a sound education based on practice. For that reason the Institute established an Academic Council to develop and monitor the content and delivery of a programme that is relevant to modern practice. The task involves constant monitoring of the content of the programme and its delivery to ensure that quality standards are met and that it reflects current market demands. The Higher Certificate in Real Estate is a unique programme in so far as it is designed specifically to promote the Institute’s own YEAR 1 Semester 1 September – January Semester 2 February - June Year 2 Semester 3 September – January Semester 2 February - June
objective of promoting professional standards and also to meet the requirements of the property professional in a changing and demanding market. The content of the programme is unique in so far as the subject matter covered is highly integrated and focused on professional practice. The programme is intended to meet the needs of those who are already in the business and require a formal qualification. It is also suited to those who may be contemplating a new career in property. The ultimate aim of the programme therefore is to enforce the idea of best professional practice by focusing on the key factors that determine it. These can be summarised as follows: Professionals must be accountable to their professional association and to their clients if they are to deliver a quality service. Good professional practice is rooted in respect, honesty and confidentiality. The good professional needs to be an effective communicator and this involves the acquisition of skills that will allow him/her discharge his/her duties responsibly and professionally. Most importantly IPAV professionals operate within the law and strongly adhere to the principles of their professional association. The Education programme is designed to deliver on these issues through an integrated approach in curriculum design. The programme is delivered part time over two years as follows:
Property Valuation
The Regulatory Environment
Communication and Agency Practice
Economics for the Property Market
Valuation for Investment
Principles of House Construction
Land Law
Marketing
Statutory Valuation
Building Services and Drainage
Agency Law
Financial Studies
Valuation for Development
Building Pathology
Landlord and Tenant Law
Planning Marketing and Property Promotion
The delivery strategy acknowledges that learning takes place in different contexts and is not confined solely to face to face tuition. Rather, people learn in a multiplicity of ways – reading newspapers and magazines, watching television, listening to radio programmes, attending seminars etc. While on the programme students will be expected to reflect this learning in a student learning diary. It is a policy designed to enforce and expand the content of each module. The assessment strategy is also designed to link theory to practice when students will be expected to undertake practical assignments based on the theoretical learning of the lecture hall. Members of the Confederation of European Estate Agents (CEI) who held a joint meeting with the European Council of Real Estate Professions (CEPI) in Hamburg in June. IPAV was represented by CEO Fintan McNamara who is pictured fifth from right.
Autumn Issue | page 10
The Higher Certificate programme is delivered in the Institute’s offices at 129 Lower Baggott Street Dublin and further information may be obtained from the Education Programme Co-ordinator by phoning 01 6785685 or email: info@ipav.ie
Education Course
IPAV Education Programme Estate Agency Courses
Fine & Decorative Arts Courses
Higher Certificate in Real Estate, (Valuation, Sale and Management) Level 6. Lectures held on alternate Saturdays. IPAV Headquarters, 129 Lower Baggot Street, Dublin 2
Diploma in Fine & Decorative Arts (1 year) Lectures held three days per week IPAV Headquarters, 129 Lower Baggot Street, Dublin 2
B.Sc (Hons) in Property Management (3 years) Distance Learning. By arrangement with the College of Estate Management (CEM) at Reading University IPAV certificate graduates may top up to degree level through their distance learning programme. Valuation Course Stage 1 and Stage 2 (1 Day) The course covers all aspects of Valuation IPAV Headquarters, 129 Lower Baggot Street, Dublin 2
Certificate in Fine & Decorative Arts (1 year) Lectures held one evening per week IPAV Headquarters, 129 Lower Baggot Street, Dublin 2 French Course in Fine & Decorative Arts (16 Weeks) Lectures held one evening per week IPAV Headquarters, 129 Lower Baggot Street, Dublin 2 Twentieth Century Course in the Fine & Decorative Arts (16 Weeks) Lectures held one day per week IPAV Headquarters, 129 Lower Baggot Street, Dublin 2
For futher information contact 01 678 5685 or info@ipave.ie
Ipav ’s Continuous Professional Development (Cpd) Programme This autumn, IPAV will resume its Continuous Professional Development (CPD) programme with the continuation of the formulised points structure for members. For a number of years now, many members have participated in the programme and it is hoped that even more will participate this year. Participation is again voluntary but will become compulsory under the new Regulator. In order to qualify, each member taking part will be required to have a minimum of 5 CPD points during the eight months from September 2012 to the end of May 2013. Those who successfully complete the programme will be awarded a Certificate
• All members may qualify for 1 CPD point for professional reading material. However, the material read must be listed on the form when being submitted to National Office. All forms duly signed and completed must be submitted to IPAV by May 31, 2013. IPAV Chief Executive Fintan McNamara said he wished to encourage as many members as possible to again take part in the seminars as further proof of the Institute’s drive to be at the cutting edge of education.
• Each Seminar attended by a member will carry a maximum of 2 CPD points. Evidence of attendance must be signed by the member and counter-signed by the Chief Executive or by a person designated by him. • Details of all Seminars will be sent to members shortly, along with an explanatory leaflet and CPD form. • In addition, separate one-day weekend courses on Valuation are being organised for existing IPAV members. • Courses and private education must be verified by an authorised officer of that body or the Head of the relevant department of the educational institution. The number of CPD hours allowed will be decided by IPAV’s CEO in conjunction with the Education Advisory Committee.
Attending a dinner hosted by IPAV President Liam O’Donnell and Senior Vice-President Ronald Duff in Dublin prior to the ‘The Emerald Isle Classic 2012’ were Jack Torza & his wife Debbie with colleagues Chris & Sharon Perry. Jack is the past President of Virginia Association of Realtors & Director of the National Association (NAR) with 1m Members.
Autumn Issue | page 11
Education Courses
Two new courses on IPAV’s Fine & Decorative Arts menu Two new and exciting courses have been added to IPAV’s existing range of courses in the Fine & Decorative Arts this Autumn. The Twentieth Century Course will cover a wide range of topics from the last century while the French Course will examine the finest of French Decorative Arts in the Eighteenth and Nineteenth Centuries. The course will culminate with an intensive guided tour of Paris. The two new courses are among the wide range of courses IPAV is now offering for the 2012/2013 academic year. All courses are designed to provide an opportunity for students who are interested in the Fine and Decorative Arts to pursue their interest in a supervised and very well structured manner. For some it may lead to a rewarding career, while for others it may be the fulfilment of a personal ambition to develop and sustain knowledge picked up over the years. IPAV’s Diploma in the Fine & Decorative Arts, run in association with the Irish Antique Dealers Association, is a full-time course which runs three days per week (Mon – Wed) for one academic year. This is the only full time course in the appreciation of fine and decorative arts in Ireland and begins on Monday, October 8. Suitable for all age groups, it attracts students not only from Ireland but from many other parts of the world. The syllabus is a broad and flexible one, with the emphasis on identifying art objects in their historical context. Lecturers are drawn from the commercial art world as well as from the universities and art colleges. Topics covered include the History of Furniture, the History of Painting, the History of Architecture and the History of Silver. Students also benefit from study trips during the year to cover the main museums, art galleries and some historic houses. Students are also welcome to partake in an organised and guided annual weekend trip to the UK, visiting famous galleries, museums and stately homes complimenting the course subjects.
Course Director Roxane Moorhead with Chantal Fortune, Dargle Road, Bray who was named Most Enthusiastic Student of the Year 2012
Autumn Issue | page 12
A particular requirement of the course is the preparation and submission of a written dissertation by students on a subject of particular interest to themselves, allied to the course. The project is carefully selected in conjunction with their lecturers and is undertaken with the personal supervision of an individual lecturer. “This course is of immense help to people who are not sure what path their career will take,” says Course Director Roxane Moorhead. “It is also useful to people who are deciding on a career change or who have taken retirement for one reason or another. Despite jobs in the art world being scarce many former students have found opportunities in the auctioning of fine arts, galleries, antique shops and interior design. Lecturers are more than willing to help people in their careers by giving useful advice and assistance.” The Certificate Course is part-time and runs one evening per week (Tuesday) from October to May and commences on October 9. The Certificate course is a condensed version of the in depth Diploma course in which lecturers give a broad introduction to the various subjects. It is ideal for people who have an interest in the field but who cannot attend the day course. The Twentieth Century Course will consist of eight weeks in the Michaelmas term from October 25 to December 13, 2012 and eight weeks in the Hilary term from January 17 to March 7, 2013. Lectures will be held on Thursdays from 10.30am -12.30pm and from 1.30pm - 3.30pm. The French Course will consist of eight weeks in the Michaelmas term from October 22 to December 10, 2012 and from January 14 to March 4, 2013. Lectures will be held on Monday evenings from 6.30pm – 9.30pm. Details of all Fine & Decorative Arts courses as well as application forms for download are available on the website www.fineartcourses.ie. Further information and application forms are also available from IPAV Head Office at 01 – 678 5685 or e-mail info@ipav.ie.
External examiner Dr Paul Caffrey with the overall Student of the Year 2012, Eleanor O’Donovan, Castleconnell, Co. Limerick
Property news
Has the property market turned? By Pat Davitt. People who believe the property marked has turned may be right. Clients ask me all the time have we reached the bottom and my answer will always be the same: “I am merely selling the property and whether the price is low or high I have to keep selling”. There are enough agents who want to speculate on the market, whether it’s at the top or the bottom but who knows, without me adding my sixpence worth... If we examine the recent Central Bank’s view (after their wake up call) that prices have over corrected by 26% is it possibly right? Take a 3-bedroom house approx 100sq mts in Abbeylands, Mullingar. We have sold one there recently for €70,000. From a price high of €256,000 in 2007 this is a drop of 73%. If we use the Central Bank’s correction figure, this property should now be selling for €90,000. This is far more realistic and you would imagine where the price should be. However, if we use the same property and examine the building costs today you will find it is approximately €70,000 plus the site at €30,000 plus 15% profit for the builder which gives a total of €115,000. Any of the three figures may be correct today: Actual sale price €70,000, what the Central Bank believes the correction should have been which is €90,000 and the new build figure of €115,000. If this same property has fallen 73% to €70,000 it will have to increase by 270% to get back to the 2007 levels. Will we ever see it again? Property prices are a funny thing: when they are low it’s too soon to buy and when they are high it’s too soon to sell! Will we see new houses built in the short term when we can buy second-hand ones at a discount of 50% to the building market cost?
So the question remains: Has the market turned? If you believe what is happening and what we are all hearing in the broader market place at the moment you would be forgiven for thinking Yes. But the only way the market will turn, I believe, is when demand has out stretched supply. There will be different parts of the country where this will happen at different times, depending on stock levels. But when mortgages are easier to get and the sense of fear disappears, confidence starts to return and, in a very short time, the sales price and the building figure of €115,000 will not be too far apart for Abbeylands. When we think the market is changing, all of a sudden all of the old actors/ cliques will soon be back in play; too many people renting, mortgages availability, no new stock, confidence, house quality and so on. There is one thing for certain, if you are ready to buy right now, will there ever be better value in the market, with prices back to 1999/2000 levels. Will prices fall further? That is the burning question. Even if they did fall another 10% the same house in Abbeylands could fall to €63,000 but I think at this stage there is more of a realistic chance of up rather than downside. And even if you don’t get in on the very bottom, it is not a crime anyway. The old saying: “Buy at the bottom and sell at the top” is well worth remembering but it is difficult to find someone who has been able to manage both. The new saying “Buy low and sell at a profit” may be more apt. The above is a personal view. Pat Davitt is at pdavitt@sfdd.ie
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Property news
Overcome these four barriers to business success By Susan Hayes
Do you regularly regroup and reassess the foundations your business is built on? Continuous improvement, targeting these four crucial areas, will work wonders for your company and, targeting these four hurdles will turn obstacles into assets.
Strategy: the vital first step A strategy is essential to know your way forward instead of floundering around. Suddenly the overwhelm disappears and is replaced by one question: Is this part of my strategy, or not? If not, then don’t pursue it. But remember that strategy is not set in stone: it is evolving and can always be fine-tuned. It is a process, as much as a destination: it comes after trying things out, and seeing what interests you. Understandably, sometimes you will take any sort of business just to keep afloat. But the only way your company will grow is when you become more selective in the kind of jobs you take. Otherwise your attention will be scattered over so many potboiler projects, instead of being focused laser-like on your ultimate goal. Discuss what strategy you have for your business with as many people as possible. Harness the wisdom of crowds. Sit down with your business partner and talk it over. Talk to your mentors (http:// www.mentors.ie/) and speak to people at networking groups (http://www.bni.eu/ireland/). Talk about what you do, and make sure to listen a lot to what they say. After a while you’ll start hearing the same things over and over again – until finally they click and you see the way forward.
Time and productivity: do you really need to be there in person? There are times when a face-to-face interaction is indispensable: a first contact with a client, closing a deal. But when the objective is only to communicate about an idea and to agree on steps forward? Then perhaps this is doable online, through software like Skype or Webex. Act like an international business person in a domestic capacity. When my US-based partner company wants to discuss an idea, we do not schedule for me to be on a flight to the US the next week. We log on to Skype. Of course that makes a lot of sense when there is an ocean between us – but how much time could you save by replicating this here in Ireland? Keep a time diary for a week – how much time do you spend on the road, going out on site visits, to meet clients and suppliers? How many of those meetings can be replaced by online interaction? This time diary technique can be an eye-opener – just try it for yourself!
Money: get innovative about funding Of course you could get more money into the business by making more sales – but before you drive yourself into the ground by just scheduling more sales meetings, how about availing of free money?
Autumn Issue | page 14
For example, there is a lot of funding out there for Innovation Partnerships (http://www.enterprise-ireland.com/ipp), in which a company takes it upon itself to commercialise the result of research done in universities and gets up to 80% of the money to do so. Now before you think that there is nothing innovative about your business and no way you could get financing for innovation, think again. You could approach your local university and find out about what they do: you might be surprised to see that they could help you revolutionise your own company and offering!
People: engage more of them First, tell more people about your business by leveraging media and PR. You can get very good, free PR if you make the effort of coming up with a really interesting press release. The media like to hear some good property stories. Make sure to cultivate your brand as well, to set yourself apart. Could you offer a refreshing take on the local property market? A well-turned press release can be sent to the local radio station, the local paper, TV shows like Ireland AM or online (http://www.irishpressreleases.ie/). Second, get more people to work for you. This might seem both obvious if you are time-constrained and not focusing enough on sales – and hopeless, if you simply do not have the resources to hire. How about having somebody else to pay for an extra employee? Take advantage of the “Erasmus Entrepreneur” programme (http://www.erasmus-entrepreneurs.eu/). This initiative funds people to go and work in another European country for a period of one to six months. You could get somebody to work in your business essentially for free, if you are over three years in business. If you haven’t been in business long enough to be a host, you could get funded to work for a property company in another European country and it might take away some of the pressure, by tiding you over a quieter period. You would come back with sharpened skills and a fresh outlook. The European Commission wants people to realize the benefit that we can derive by teaching each other and working in different countries – it does make an awful lot of business sense. Susan Hayes is Managing Director, Hayes Culleton Ltd. www.hayesculleton.com susan@hayesculleton.com +353 86 1003948
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Fine & Decorative Arts
Ireland’s Favourite Painting. ‘Hellelil and Hildebrand: the Meeting on the Turret Stairs’, (1864) was recently voted by the public as Ireland’s favourite painting. Sara Donaldson explores the picture and its creator, Irish artist Frederic William Burton, to find out why this romantic image has captured the public imagination. ‘Hellelil and Hildebrand’ is one of the most popular paintings in the National Gallery of Ireland’s collection. Marriage proposals have taken place before it and a full size reproduction hangs in prime position inside Dublin’s Civil Registrar of Marriages at Sir Patrick Dun’s Hospital. In May 2012 ‘Hellelil and Hildebrand’ was voted the favourite out of a shortlist of ten works of art selected for the television documentary ‘Masterpiece: Ireland’s Favourite Painting’. The short-listed artworks in public collections included works by Yeats, Caravaggio, Vermeer, Lavery, le Brocquy, Leech, Clarke, Henry and Scully. Burton’s ‘Hellelil and Hildebrand’ came first with 22 per cent of the votes cast, while Caravaggio’s ‘The Taking of Christ’ came second with 16 per cent. To understand its attraction, let us delve into the story behind Burton’s image of love and loss. The subject is taken from a medieval Danish ballad, ‘Hellelil and Hildebrande’ which was translated into English by Whitely Stokes, an Irish lawyer and philologist, and friend of Frederic William Burton. It was published in ‘Fraser’s Magazine’ in 1855 and tells of Princess Hellelil’s love for Hildebrand, Prince of Engelland, one of her twelve personal guards. Their affair angers her father, who regards the bodyguard as an unsuitable match for his daughter and orders his sons to kill him. In the ballad Hellelil describes the moments before Hildebrand goes to meet his certain death:
‘My father gave me a glorious guard: Twelve noble knights were my watch and ward.
Celtic interlace patterns Hellelil wears a regal blue gown cut in the medieval style, lined with white fur and decorated with a band of Celtic interlace patterns. A thin jewelled belt is slung around her hips and her long hair is wound in the style worn by young unmarried women of this period. One of her fur-lined trumpet sleeves trails on a step, where a fading rose and its petals lie, a symbol of the tragic events to follow and of the transience of beauty. Hildebrand’s chain mail contrasts with his crimson surcote, the latter adorned with a pattern of fantastical beasts. His leather shoes have the fashionable pointed toes of the Middle Ages. Minutely observed details include the Celtic-inspired running scroll on his sword scabbard and the jewelled monster on the noseguard of his helmet. Burton worked almost exclusively in watercolour, although his style was so controlled and his colours so intense that many of his works have the appearance of oils. This is especially true of ‘Hellelil and Hildebrand’, on which he worked slowly and meticulously, using small overlaid brushstrokes to build up depth of colour. Burton’s attention to detail is almost scientific; he suggests a wide variety of textures and uses opaque gouache to highlight details of the chain mail and the monster on the helmet. This painting is exceptionally large for a watercolour (95.5 x 60.8cm) and was an ambitious undertaking involving scores of preparatory studies. He created it at the height of his career and proudly signed it with his initials in Gothic script.
“Say never my name, thou darling love”
The painting caused a sensation when it was first exhibited in London in April 1864, prompting a critic of ‘The Times’ to write: ‘The artist rises to his climax of power in the expression of the lover’s face, which is rapt in intensity of pure adoration . . .’ In a letter to Burton from the same week, his friend, the novelist George Eliot, praised it glowingly: ‘The subject matter might have been the most vulgar thing in the world – the artist has raised it to the highest pitch of refined emotion. . . . the face of the knight is the face of a man to whom the kiss is a sacrament.’ Eliot went on to generously acknowledge Burton’s efforts: ‘Only through a great deal of suffering could anyone have worked his way to such height as you have gained in this picture.’
Out of the door Lord Hildebrand sprang;
A country gentleman
Eleven daily served me well, But oh, I loved the last – I fell . . . They stood at the door with spear and shield: “Up Lord Hildebrand! Out and yield!” He kissed me then mine eyes above:-
Around his head the sword he swang . . .’ The story turns gruesome with Hildebrand killing the heroine’s father and six of her brothers before she intercedes to save her youngest brother: ‘And while I spoke, Lord Hildebrand/With eight wounds sunk upon the sand’. Hildebrand perishes at the hands of the youngest brother and Hellelil dies of a broken heart. Burton chose not to depict the bloodshed, instead imagining the ill-fated lovers’ final embrace on the stone stairs of a turret. Their partially obscured faces, closed and averted eyes and tender touch enhance the poignancy of their stolen moment. As Hildebrand breathes in his beloved’s scent for the last time in deathly silence, the air is filled with understated yet deep emotion.
Autumn Issue | page 16
Frederic William Burton (1816-1900) was the son of a country gentleman and amateur landscape painter, Samuel Frederick Burton of Clifden House, Corofin, County Clare. Burton’s father may have encouraged him to become a painter, and his mother was related to the Irish portrait painter Sarah Purser. Another factor which may have influenced his choice of career was a childhood accident which severely injured his right arm, requiring him to paint with his left hand. His reported aversion to the fumes of oil paint may explain why he specialised in watercolours. His family moved to Dublin in 1826 for the children’s education and Burton enrolled at the Dublin Society Schools. At sixteen he had a watercolour exhibited at the Royal Hibernian Academy and he initially practised as a portrait painter in miniature.
Fine & Decorative Arts
He became friendly with leading Irish writers, historians and scholars of the time including Sir Samuel Ferguson, Sir William Wilde, Professor Eugene O’Curry and Dr William Stokes, as well as Thomas Davis of the Young Irelanders. The Irish antiquarian and artist George Petrie was a close friend and mentor who brought Burton on sketching trips to Connemara and the Aran Islands, experiences which imbued him with a love of Irish landscape, history, archaeology and folk life. Burton became a member of the Royal Irish Academy and the Archaeological Society of Ireland, and a fellow of the Royal Society of Antiquaries of Ireland.
Due to its sensitivity to light, ‘Hellelil and Hildebrand’ is on view for a limited period on certain days in the Millennium Wing (Room 1) of the National Gallery of Ireland. It is currently on view on Mondays and Wednesdays from 11am-12pm and Saturdays from 3-4pm. See http://nationalgallery.ie/Collection/Irelands_Favourite_ Painting.aspx •Sara Donaldson has an MLitt in the History of Art and an MA in the History of Design and the Applied Arts. She lectures in the History of Art, Design, Costume and Fashion for the IPAV Diploma and Certificate Courses in the Fine and Decorative Arts and in the same subjects at Griffith College, Dublin.
During the 1850s Burton spent seven years in the employment of Maximilian II of Bavaria as curator of the royal collection, during which time he gained extensive knowledge of the history of art, copying and restoring Old Master paintings and studying the work of the German Nazarenes and romantic painters. On his return from Germany in 1858 he settled in London, where he became part of the Pre-Raphaelite circle. This set included the critic John Ruskin and the artists Rossetti and Burne-Jones, who tended to favour literary and historical subjects from the Middle Ages. It was during this period that Burton created his masterpiece ‘Hellelil and Hildebrand’, a time when he was influenced by the Pre-Raphaelites, though he was never a member of the group.
Director of National Gallery Ten years after creating his masterpiece, in 1874, the English Prime Minister William Gladstone appointed Burton as the third Director of the National Gallery, London. This came as a surprise to the English public, but Burton justified his position by organising hundreds of astute acquisitions. His main purchases were outstanding: Leonardo’s ‘The Virgin of the Rocks’, Holbein’s ‘The Ambassadors’, Vermeer’s ‘A Young Woman Standing at a Virginal’, and masterpieces by Duccio, Piero della Francesca, Botticelli, Raphael, Van Dyck and Velazquez. Due to the demands of the Directorship, unfortunately, Burton ceased to paint entirely, but was knighted in 1884 and retired in 1894. Reputed as popular in society, he never married but reared the family of his brother who had died young. Frederic William Burton died at his home in Kensington in 1900 and was buried at Mount Jerome cemetery in Dublin. In 1901 ‘Hellelil and Hildebrand’ was kindly bequeathed to the National Gallery of Ireland by Margaret Stokes, the younger sister of Whitley Stokes who had translated the ballad. ‘Hellelil and Hildebrand: the Meeting on the Turret Stairs’’ was voted as Ireland’s favourite painting in May 2012. The National Gallery of Ireland and the other public institutions featured in RTE’s widely publicised campaign reported increased visitor numbers throughout, and postcard sales of ‘Hellelil and Hildebrand’ are up 400 per cent against the same period in 2011. ‘The Irish Times’ cautioned readers however, because as it was not known how many people voted, ‘it was hard to know what that really means’, apart from the fact that, as producer Bill Hughes observed, the Irish public ‘really are a romantic lot’ (Bernice Harrison, ‘The Irish Times’, 26 May 2012).
‘Hellelil and Hildebrand, the Meeting on the Turret Stairs’ Frederic William Burton (1816-1900). Irish, 19th century, 1864 Watercolour and gouache on paper, 95.5 x 60.8 cm Photo © National Gallery of Ireland
Autumn Issue | page 17
Member focus
No soft landing in Longford but IPAV estate agent set for take-off By Tim Ryan It is said there is no such thing as bad publicity and the truth of this saying is being borne out for Longford IPAV member Fintan McGill.
In 2000 he decided to return to property and completed the IPAV course at UCG.
Rightly or wrongly, Co Longford is often singled out by the media as the county which was hit worst by the property collapse due to the huge amount of speculative development that occurred there. In fact it was there over the course of the Summer months that NAMA demolished the first ghost estate, an event which attracted even further media attention for the town.
“I was always deeply interested in houses and had a passion for property,” he says.
Fintan McGill is Director of Sherry FitzGerald McGill on Ballymahon St, the main business street in the town. He is also Vice-President of the Longford Chamber of Commerce and it is to his door that inquisitive journalists from home and abroad often call for an on-the-spot interview on the property crisis. “I have journalists from all parts of the globe looking at the Irish collapse and I find it all very interesting,” says Fintan who has a reputation for telling it straight, often with a light sense of humour added. During this Summer, for example, he featured in a three-part series entitled Coming Here Soon which was broadcast on BBC 3 as TV personality Stacey Dooley explored the lives of young people in three countries affected by the global financial crisis, namely Greece, Japan and Ireland. “There was even talk about a soft landing here, as it turned out there wasn’t even a runway,” he told Stacey on the programme during which he showed her some of the infamous estates around Longford.
Public service Fintan McGill grew up on Co. Monaghan and was educated at St Aidan’s College in Cootehill. After leaving school he went to serve his time in a local architect’s office before joining the Public service where he was to remain for the next 25 years.
So in 2000 when a Sherry FitzGerald franchise came up for sale in Longford he headed to Dublin to meet Philip Sherry and took the plunge. At that time the franchise belonged to Ken Kearney on Grafton Court and he, along with one employee, initially moved into the premises. There were already four other estate agents in the town but Fintan took his chances. Business thrived and in the Autumn of 2005 he purchased 26 Ballymahon St and decided to move to the town’s premier business street. A principle in Fintan’s approach to the business is to do things a little differently and to add an extra personal touch. So, before refurbishing the office, he travelled to London and took stock of the latest trends view. In a London office, for example, he was attracted by the notion of having Sky TV on view in the office waiting area and on the front office window where people would be attracted to stop and watch various news and sporting events. Through a contact in the West of Ireland he had come across a Chinese business man in Athlone who offered a very competitive fitting-out service for offices. Fintan was impressed by the quality of the service offered and opted for it. Having placed the order in detail down to the last bulb and wall fitting, a 40 tonne truck arrived in Longford on Christmas Eve, 2005, accompanied by two Chinese shopfitters who went to work immediately. “Everything was in the truck and they did not cross the road for as much as a nail,” he said. “I came in on Christmas Morning to wish them a Happy Christmas and all they said was : ‘We No Christmas’ and that was the extent of their English! They were there for four days and worked non-stop.” The offices were fitted out exactly to order and today are in the same top-class condition. “I wanted to put in a fit-out that would last a minimum of 10 years or more and that is what they did,” says Fintan. “They even put in the familiar Sherry FitzGerald red circular carpet and the colour scheme with which people are familiar and I did not have a single complaint.” The final cost came in at €78,000, almost €50,000 lower than the most competitive Irish quote.
The Property Centre Longfield (3,700 sq. ft.) on 1.2 Acres which is on sale for €290,000 3,700 Sq Ft by Sherry FitzGerald McGill
Autumn Issue | page 18
On January 6, 2007, the new Property Centre opened its splendid new offices. The property industry was still booming at the time and Fintan employed a staff of Four who worked non-stop to meet the demand. When the year ended he had achieved a turnover of €52 million, a phenomenal turnover by any standard for a relatively small office.
Member focus The trend was not to last and when the downturn came, Longford which had soared high during the boom, crashed the fastest. Fintan adapted quickly. “When I saw what was happening, I quickly reviewed my situation, cutting my costs as best I could down to staffing levels, phone deals and so on,” he says. Fintan McGill is a great believer in Information Technology as a power tool in marketing property, an area in which he thinks many agents still fail miserably. “I have made it my business to familiarise myself with the best that is out there and I can now literally be in any part of the world and remotely move the cursor on the office pc’s in Longford,” he says. “It is truly amazing what is available to an agent.” Physical presence is no longer a priority, he argues and a good business can be run from virtually any location. Key organisational skills and delivery of a top class quality service are the keys to today’s successful property professional.
Ireland’s Property Website for Ireland’s Auctioneers
“You also need first class business advice and in that I am lucky to have a top class solicitor, Joan Devine in Strokestown and Pat O’Brien, my accountant in Longford,” he says. “They are critical to the success of my business particularly in these difficult times. Without them I could not function and I would urge all IPAV members to have top class advice available to them at all times.”
Fintan McGill outside his office in Longford town For the moment Fintan operates the practice just by himself and one employee. However, his day is highly organised and a lot is packed into a 12 hour day. “I am in the office at 7.30am five days a week, he says. “I deal with email enquiries, valuations etc at that time. Then it’s time to attend to the post before a break for coffee at 9.30am.” From then on he is engaged in talking to vendors and purchasers and in showing houses. Saturday mornings are given over to more viewings and erecting and removing signage. All the time his phone is active and the unsuspecting caller to view a property may be entirely unaware that the agent is in fact talking from any corner of the county!
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Improved “This year is much improved on the recent past,” he says. “It is clear that in Longford the market has bottomed out and we are witnessing a reasonable amount of activity.” By the end of July Fintan had already completed 22 house sales for 2012 which amounts to an average of one per week. Prices of course are at a new level and are down by up to 50 %. Currently prices are fetching around €77 per sq ft. A typical 1500 sq ft bungalow which would have fetched €270,000 at peak is now making €140,000. A typical Longford three-bed semi which would have fetched €190,000 at peak is now making as little as €40,000 in some cases.
Ireland’s Property website for Ireland’s Auctioneers
Fintan also handles lettings, where business continues to be brisk. A typical two-bed apt commands a rent of around €400 per month and a four-bed semi €500 to €550 per month. There may not have been a soft landing for the property industry anywhere in Ireland, and - as Fintan McGill says, not even a runway on which to land in County Longford - but already he is confident the worst has been overcome and left behind. It’s again time to look up.
Autumn Issue | page 19
Property Feature
Brazil: pure gold investment opportunity – or Olympic-sized property bubble? The Brazilian real estate market will continue to boom until 2017 at least, which is probably the best any economy in the world can claim at the moment. But are unwary investors busily inflating a new property bubble, asks Peter Cluskey? It’s just a year since we cast our eye over the Brazilian property market. But, with the London Olympics now just a Summer memory and Rio de Janeiro up next in 2016, not to mention the World Cup in 2014, it’s high time for another look – to see if that really is a bubble on the horizon. Probably we’re at the point where it’s debatable. There’s no doubt that the economy is still booming. China’s apparently insatiable demand for commodities has been the driver here, and although the Chinese economy is slowing, there’s no sign so far of a hard landing. That’s the relatively good news. On the other hand, here is the view of Capital Economics (CE), one of the world’s leading economics consultancies: “The Brazil property market is overvalued by 50 percent.” Simple as that. Economics has been called “the dismal science”, and there’s been plenty of justification for the description in recent years, but that really is a pretty unequivocal warning. The logic is simple: “Prices in Rio de Janeiro have trebled since 2008, and prices in Sao Paula have doubled. There are several reasons why we should reasonably have expected a sharp rise in house prices over the past five years – but the sheer scale of this increase is difficult to justify.” There is, however, for the moment at least, a point at which the cheerleaders and the naysayers converge: that, given the impetus injected by China, the build-up to soccer madness in 2014 and the infrastructure development which is essential to prepare for the Olympics in 2016, the Brazilian economy has very little option but to continue to outperform most of the rest of the world – at least until 2017. And even then, concedes Capital Economics, “the housing bubble will deflate slowly”.
Quality will retain its value That means that anyone who has already invested is safe for another five years at least – and anyone about to invest had better be very careful about what they buy, where they buy it, and the price they pay for it. At this point in the economic cycle, only quality will retain its value.
Rio de janeiro in the Campos Basin, 195 km off Rio at a depth of 2,800 metres, looks like being one of the most significant in years.” We Irish – especially auctioneers and estate agents - will recognize, with not a little trepidation, many of the symptoms of Brazil’s property fever. Apartment prices are a popular dinner table – and beach – conversation in Rio and Sao Paula. Stories of taxi drivers and shopkeepers switching careers to become real estate brokers are commonplace (3,300 new brokers were registered last year, a tenfold increase since 2005). And the purchase of properties, and often multiple properties, sight unseen, is a regular occurrence. Rio’s most affluent addresses - such as Leblon (named after Charles Leblon, the Nineteenth Century French businessman who once owned the area) and neighbouring Ipanema - are rapidly catching up with the eye-watering prices of Central London and Manhattan. Nice though not spectacular two- and three-bedroom apartments a block or so from the beach in Leblon, admittedly the most desirable address in the city, are changing hands for up to $1.2 million (although Brazilian reals are the currency, a lot of business is done in US dollars) – and even so, estate agents say there’s still a waiting list for viewings. Remember those days?
“There’s a psychological boost that Brazil is enjoying at the moment as a result of oil discoveries off the coast of Rio, the World Cup and the Olympics and all that makes the country very attractive to foreign investors who’ve been looking at a flat-lining global market”, says Marcus Vinicius de Oliveira of valuation firm, Consul Patrimonial. “When those big events are over there will still be a feel-good factor. Foreign inward investment will undoubtedly slow, probably from 2017 onwards – but even so, the oil income will remain. And the joint discovery last February by China’s Sinopec and Spain’s Repsol Sao Paulo - where the World Cup kicks off in 2014
Autumn Issue | page 20
Property Feature
Little Miami And of course there’s still huge demand for new-build projects, most of which are in the Barra da Tijuca beach area, west of Rio, where the bulk of the Olympic events will take place. Even before Brazil won the Games, it was already known as “Little Miami”. At the same time, according to global agents, Cushman & Wakefield, Rio’s business district now has the fourth most expensive office space in the world – behind Hong Kong, London and Tokyo. In fact, it’s just nudged Midtown Manhattan out of the fourth spot. Brazil’s economy grew by 7.5 percent last year, generating record-high employment and confident consumers, all contributing to a growing middle class eager to get a foot on the property ladder. The mortgage market is growing rapidly on the back of that economic stability – and with a historic housing deficit of more than seven million units, there’s enormous pent-up demand. “Of course we have seen what’s happened in other countries, especially in the United States and Europe, but here the property boom is real – it’s well-founded”, insists Joao Paula Matos, a director of Rio de Janeiro civil construction firm, Carmo e Calcada. “This is real demand. We don’t have a bubble and there’s not a chance of one because mortgage debt as a percentage of GDP is very low at only four percent or so and the less well-off have been left out of the property market for many years. That’s what’s changing now, domestically. That would happen even without the World Cup or the Olympics.” As a result of that demand big construction firms such as Rossi Residencial, Cyrela and Gafisa have been among the most successful performers on the Brazilian stock market, the BOVESPA, in the past few years – backed by a $41-billion government-backed low income housing programme. So, in a survey at the start of 2011, for instance, 9.1 million ordinary Brazilian families announced their intention to take out their first mortgage and buy a new home. Ask why all this does not amount to a recipe for rampant house price inflation right from the cheapest properties to the most expensive (where big-name footballers are already leading the charge) and the answer is that, although mortgages are now more accessible, mortgages interest rates are high enough to dampen the ardour of any less-than-serious buyers.
Booming Brazil – a tale of two cities Rio de Janeiro and Sao Paula are the two Brazilian cities which stand to benefit most economically from the twin boosts of the World Cup in 2014 and the Olympic Games in 2016 – four more years of unbridled growth.
President Dilma Rousseff of Brazil
Property prices in both have risen dramatically since Brazil was named one of the burgeoning BRIC emerging economies – Brazil, Russia, India and China – not long before the entire Western banking and financial structure began to come tumbling down.
The general feeling of well-being has been added to by the fact that Forbes magazine has just named Brazilian President, Dilma Rousseff, the third most powerful woman in the world – after German Chancellor, Angela Merkel, and US Secretary of State, Hilary Clinton.
RIO DE JANEIRO – Olympics HQ In Rio, Barra de Tijuca will be home to the Olympic Village and most of the venues for the Olympics and the Paralympic Games. The rest will be located in three other areas – Copacabana beach, Maracanã and Deodoro. It’s also worth knowing that 1,200 acres of Rio’s historic downtown is undergoing a multi-million-dollar restoration and revitalization in a project named Porto Maravilha. A quick look online, at, say www.vivareal.net, shows there are new-build and relatively new-build apartments in Barra de Tijuca to suit every pocket – and there’s going to be huge rental demand for them over the next few years. A 292-square-metre luxury property, with three parking spaces, will set you back over $1.5 million. However, a 110-square-metre two-bed, with two parking spaces, again in a nice new development, can be had for around $485,000.
SAO PAULO – When the World Cup kicks off There’s a certain symmetry in the fact that the 2014 soccer extravaganza kicks off in Sao Paulo and most of the matches are being held here – while the final will be back in Rio. For Sao Paulo property , take a look at www.braziloverseasproperty.co.uk and you’ll see there’s plenty on offer, a lot of it still off-plan – and much better value for your money than in Rio. For instance, there are two- and three-bedroom beach condos at Praia Grande, ranging in size from 69 to 91 square metres, starting from $133, 328 (€105,015). This is a development of two towers, each with 35 floors, and the communal facilities include a beachfront swimming pool and a spa with sauna. Each apartment has a sea-facing balcony with a built-in BBQ.
Banco do Brasil, whose mortgage portfolio has more than doubled in the past year alone, is now offering 30-year loans at a fixed rate of 13 percent … in or around three times current rates in Europe. And that’s low by past standards in Brazil.
Another not-dissimilar development is located in the upmarket district of Vila Mascote, closer to the city centre. Again there are two towers of condos, ranging from two- to four-beds, with prices from $261,081 (€205,639). Here the package includes indoor and outdoor swimming pools, a gym, a games room, a function room, and a kids’ cinema. Duplex penthouses have private swimming pools.
It’s a fascinating market – and it has arguably five to eight good years left.
Are they inflating a bubble? Only time will tell. But one thing is certain – the West certainly isn’t in any position to preach!
Autumn Issue | page 21
Member Focus
Biking to relax! IPAV National Council member Paul Gartlan likes to relax by taking a trip on one of his two prized motorbikes. Property Professional editor Tim Ryan took a trip to Carrickmacross to meet Paul and his bikes. If a potential viewer of property goes to see a property for sale by Gartlan O’Rourke Property Advisors in Carrickmacross there is a possibility the agent may arrive by motorbike. Auctioneer and former IPAV President, Paul Gartlan has been a fan of motorbikes for as long as he can remember. “Bikes have been a lifelong passion of mine,” he says. “I even had one going to my final years of school in Dundalk when I was 17 and 18. I was fascinated by all things mechanically propelled!” Paul took over the practice of his late father Michael Gartlan in 1979 and helped to shape it in the pre-Celtic Tiger era. However, when he got married in 1995 to local lady Mary he put aside his bike and got down to the serious business of raising a family. The couple have two children, Michael now aged 13 and Rachel aged 14. Paul kept his love of bikes hidden while his young son was growing up. Ironically, once he established that the young Michael had no interest in the machines, he rekindled his passion. “There was no way Mary and I were to be sitting at home with Michael out there on the road on one of those super machines,” he says with an ironic smile. Paul rekindled his passion for bikes by buying a brand new Harley Davidson in Florida in 2007. He rejoined old friends with a similar interest and was quickly back on the circuit visiting shows and clocking up the miles. Owning a Harley Davidson allowed him to become a member of the Harley Davidson Gaelic Chapter in Ireland, which brings together like minded Harley enthusiasts from all over the country. In 2011 Paul travelled to Canada and the US for a long biking tour and, instead of renting a bike, he decided to buy one instead! “I calculated that it was cheaper to buy a second-hand bike and bring it home than to rent one for the time I was there.
Paul Gartlan aboard his beloved Harley Davidson Softail
The journey from Canada and down the northern states of the US took a full 13 days on the road, the longest he has ever travelled at one time. Today Paul owns two bikes, a Harley Davidson Electra Ultra Glide and the Kawasaki Nomad 1500 which he bought on his US trip. He rides both bikes on a virtually weekly basis and finds them a very relaxing and ideal way to get away from the difficult challenges facing the property business. Recently he has returned from a week long biking trip to Spain with five biking friends where they “ate, drank and slept bikes”. In all his years of biking, Paul has only had one minor fall when his bike slipped on grain on the road in 1980. Dedicated care and attention is due at all times, he says and a few seconds loss of concentration can have fatal consequences. He argues that the licence requirements for motorbikes far outstrip those for cars. For example, you have to have many hours of training and pass tests before you can go on the road at all. He is happy that the standards required are high and riders are generally well qualified. Biking is in Paul Gartlan’s blood since he was a young boy. And as he grows older, it is still showing no signs of fading and as he says “I have so far resisted the temptation of arriving on my Harley to a viewing but who knows some day I might!”
Paul Gartlan with his two motorbikes Autumn Issue | page 22
Tim Ryan tries out Paul’s Kamasaki Nomad for size!
Property News
Minister Launches Survival Guide For Renters As thousands of college students continue to search for rented accommodation, a new book “Renting in Ireland - The Tenant Survival Guide” has been launched by Phil Hogan TD, Minister for the Environment, Community and Local Government. The book, which contains specific advice for students seeking rented accommodation, highlights the pitfalls to avoid and guides students and other renters through the process of trouble free renting. It is also a useful guide for those advising tenants.
The author of the book, John Leahy of the website www.renting.ie, highlighted the growing popularity of renting in Ireland, pointing out that “an increasing number of people are choosing to live in rented accommodation. The latest census figures show that the proportion of households renting in Ireland has almost doubled since 2006. This trend is likely to continue in the coming years.” Speaking at the recent launch, the Minister, whose department has overall responsibility for housing matters stated that, “with the increasing popularity of renting in Ireland this book will be a very useful resource for anyone living in rented accommodation.” The book is a practical guide to trouble free renting in Ireland and is an essential handbook for anyone living in rented accommodation or advising tenants. Topics covered include:
Minister Phil Hogan with John Leahy of www.renting.ie author of the book.
•
Renting Advice For Students
•
Your Rights As A Tenant
•
Understanding Leases
•
Protecting Your Deposit
•
Tips And Checklists
•
What To Do If Things Go Wrong And Lots More…
The book can be purchased on-line at www.renting.ie for €9.99 (FREE P&P). It is also available in book shops including Easons and Hughes & Hughes. Discounts are available for bulk purchases. Please e-mail john@renting.ie
Is your sex letting you down? Over half of UK landlords care about the gender of their tenants -Survey Finding a place to rent can be hard enough but what if your sex was a deciding factor in whether you get your foot in the door of your potential new pad? According to new survey data from UK online lettings agent Upad, over half of UK landlords care about the gender of their tenants. Asking 885 landlords in their latest survey, Upad discovered that the sex of a tenant was a genuine concern for 57.4% of respondents with James Davis, CEO of Upad commenting, “Who’s the better sex - men or women is probably one of the oldest debates in the book. Like it or not, gender can sometimes be a deciding factor in whether a person makes the cut even in the rental arena. In our survey, we really wanted to see if the sex of a prospective tenant actually matters to landlords and from our research it appears that it does.” When asked “who makes the best tenants?” it seems that gender stereotypes still apply with one respondent explaining: “Men make better tenants. They can (usually) change light bulbs, they know how the central heating works, and they’re more likely to carry out minor repairs than women. Men are more easy going, they take care of the small things - generally they just want a roof over their heads.”
Meanwhile, speaking in favour of female tenants one respondent commented: “On average, females are tidier which means less maintenance. Females also seem to like their outside space being picturesque and generally do more in the garden - cutting the lawn and keeping it tidy. Females are also more in control of finances than males, I find I get on time payments from female tenants and they are also more likely to stay put.” A landlord himself, Davis remarks,“Based on our findings it seems that the majority of landlords have a gender preference with the typical typecasts of men being good at general maintenance and women being clean and tidy still very much in association. However, what was interesting was the fact that while men and women can be penalised for various different reasons, it seems singletons are in the firing line as well. When we asked landlords “who makes the best tenants?” a number explained that they were more in favour of couples as both parties fulfill certain jobs in the home.” In relation to this, one respondent in Upad’s results noted: “Both genders have their pros and cons but ideally I prefer couples as tenants. You often find one is good at keeping things clean and tidy and the other is good at sorting out the little things. Also, couples tend to be the best long-term tenants particularly if they have a child. I just tend to avoid sharers in favour of couples.”
Autumn Issue | page 23
Property News
Choice of rental accommodation for students falls for third year in a row Rents nationwide were 0.5% lower in the second quarter of 2012 than a year previously, according to the latest report published by the property website Daft.ie. Between April and June, the average asking rent in the country was €809 per month, compared to €814 during the same period in 2011. The last twelve months have seen rents rise in Ireland’s major cities but continue to fall elsewhere. Rents in Dublin are up to 2% higher than a year previously, as are rents in Cork city (up 1.7%). In Galway, rents are up marginally (0.2%). In Limerick, prices are 0.9% below the level of a year ago while in Waterford city, rents have fallen by 4.5%. Outside the cities, rents are down year-onyear by between 1.3% and 3.5%. Ronan Lyons, economist and author of the report, noted that supply conditions are becoming tighter. “This is the third summer in a row where there were fewer properties available to rent nationwide at any one time. This is particularly the case in Dublin, which means that some prospective tenants may find that they have to live further out than expected.”
Back to college With CAO points out this week, the latest figures will make interesting reading for new and returning college students. Between 2007 and 2010, rents fell steadily but since then have on average changed little. Commenting on the report, USI President John Logue said: “Rents are still down 25% from their peak in 2007, meaning students now are at a significant advantage compared to their boom-time peers. Savings in rents provide a rare comfort to families that are faced with ever-increasing costs.”
Autumn Issue | page 24
The table below shows the cost for a double-room in those parts of the country close to Ireland’s third-level institutions. Areas close to TCD, DIT, DCU and NUI Galway have seen small increases in the last twelve months, while students in Tralee, Waterford and Dundalk can expect savings up between 4% and 6% on average.
College
Area
Avg. Monthly Rent
Year On Year Change
TCD/DIT
Dublin City Centre
€499
1.6%
UCD/IT Tallaght
South Dublin City
€473
0.9%
DCU
North Dublin City
€402
1.3%
IT Blanchardstown
West County Dublin
€372
-0.8%
NUI Maynooth
Maynooth
€358
-1.9%
UCC
Cork City Centre
€340
-0.0%
NUI Galway/ GMIT
Galway City Centre
€338
2.4%
Cork IT
Cork City Suburbs
€314
-1.6%
Carlow IT
Carlow Town
€293
-0.3%
UL / Limerick IT
Limerick City
€288
1.4%
Dundalk IT
Dundalk
€285
-4.7%
Sligo IT
Sligo
€264
3.5%
Athlone IT
Athlone
€263
0.8%
Waterford IT
Waterford City
€254
-5.9%
IT Tralee
Tralee
€251
-3.8%
GMIT
Castlebar
€237
0.9%
IT Letterkenny
Letterkenny
€231
0.0%
Property News
New IPFMA chairman warns water charging may cause difficulties for owner management companies Property management professional Sean Aylward has recently been elected the new chairman of the IPFMA (Irish Property & Facility Management Association) at its AGM. A Chartered Surveyor, Sean Aylward is Centre Manager of Nutgrove Shopping Centre at Rathfarnham, Dublin. Mr. Aylward has been elected for a one-year term and takes over from outgoing chairman, Paul Whelan, managing director of O’Dwyer Property Management Ltd. In his inaugural address at the IPFMA AGM, Sean Aylward warned that the introduction of water rates could create difficulties for Owner Management Companies, the companies formed by residential apartment owners to manage their buildings. In referring to the new public utility, Irish Water, which will be responsible for water charging, Mr. Aylward stated that “with about one-third of residential households to be charged a flat rate only, this is going to be a hot topic for Owner Management Companies to ensure there is fairness in computing the bills, while encouraging all occupiers to conserve water”. “What is the incentive for the owner/occupier of a large apartment to conserve water, if all in the complex pay the same rate?” he asked. The IPFMA made a submission to the Department of the Environment, Community & Local Government on the issue in February of this year. The new IPFMA chairman also expressed some concerns over the proposed new database for commercial lease terms, which, he stated, “when introduced may cause some teething problems for commercial practitioners and investors. There are, I think, unintended effects, especially with retail leases that will need to be teased out with the Property Services Regulatory Authority”. Sean Aylward welcomed the new residential property sales database, due to be introduced in the next few months which is “expected to put accurate information in the public domain”.
Property management professional and chartered surveyor Sean Aylward (left), Centre Manager of Nutgrove Shopping Centre, Rathfarnham, Dublin, has been elected the new chairman of the Irish Property & Facility Management Association (IPFMA). He is pictured receiving the chain of office from outgoing chairman Paul Whelan, managing director of O’Dwyer Property Management Ltd.
Another area in which the new IPFMA chairman plans to be actively involved during his term of office is the proposed new Landlord and Tenant Bill. The IPFMA has already made a submission to the Department of Justice & Equality on the Bill and Sean Aylward says that the Association is ready to engage with them again when it moves to the next phase. Vincent Hickey of Aramark was elected the new vice-chairman of the IPFMA, with John Mockler of Knight Frank Ireland Management the new junior vice-chairman. Jerome O’Connor was re-elected honorary treasurer, while IPFMA chief executive Fiona Barron continues as company secretary. advertioral
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Information and data is held securely and can be accessed easily from the office laptops and mobile devices . The worry of loosing data through server crashes or damage to buildings or Pcs is not a problem with cloud. We will give the best advise based on your needs whether you just want a simple voice and text phone or if you require data services e mail / internet /sat nav. Etc on the move . Trade in service . You can now trade in your old mobile phone when upgrading to a new model . We offer attractive rates on trade ins up to €250 on some models . You can even trade more than one phone against a new phone to further defray costs. Interested? Please call us on 018061403 or Jim on 086 8060056 e: jim@allstat.ie. (see advert on page 13)
Autumn Issue | page 25
In the Dáil
In the Dáil……. The following is a selection of recent written Dáil replies to TDs on topics of interest to auctioneers and estate agents: Property Tax
Abolition of Ground Rents
Deputy Niall Collins(FF Limerick) asked the Minister for the Environment, Community and Local Government the timeframe for the publication of the Thornhill report on Property Tax.
Deputy Thomas P. Broughan (Ind. Dublin North-East) asked the Minister for Justice and Equality if he will proceed with legislation to abolish ground rents in view of the resurgence of demands in certain ground rents by landlords.
Minister for the Environment, Community and Local Government (Deputy Phil Hogan): An independentlychaired Inter-Departmental Expert Group was established to consider the structures and modalities for an equitable valuationbased property tax. The Group has recently completed its work and submitted its report to me. The approach to the report will be considered by the Government in due course.
House Prices Deputy Michael McGrath (FF, Cork South Central) asked the Minister for Justice and Equality when the register of residential house prices envisaged in discussions with the Troika will commence. Minister for Justice and Equality (Deputy Alan Shatter): I can inform the Deputy that Section 86 of the Property Services (Regulation) Act 2011 provides that the Property Services Regulatory Authority shall prepare and maintain a register of residential property sales prices in the State. I am advised by the Authority that it expects to publish the register by the end of September 2012. It is anticipated that the residential property sales prices register will comprise a database searchable by a number of criteria including address of property, value of property, by county, city or town. The information which will be contained in the database will be the full address of the property, its sale price and date of sale. The register will, at the outset, cover all sales between 1 January 2010 to date of publication. It is anticipated that the information will be updated regularly and will be current within 30 days of the actual date of sale of the property.
Autumn Issue | page 26
Minister for Justice and Equality (Deputy Alan Shatter): The position is that Part III of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 contains a statutory scheme whereby any person may, at reasonable cost, acquire the fee simple in his or her dwelling house. This scheme is operated by the Property Registration Authority. Since it was introduced in 1978, over 80,000 applicants have availed of the scheme to acquire the freehold title to their property. I should note that the value of a ground rent lease to a landlord increases the closer the lease is to expiry and the best advice to give tenants is to buy out their ground rent in good time. This has been the consistent advice offered by Ministers for Justice and Equality. In the case of property other than dwelling houses, the Landlord and Tenant (Ground Rents) Act 1967 contains provisions which facilitate acquisition of the fee simple subject to agreed terms or on terms set out in an arbitration carried out by the County Registrar. Any proposal regarding the abolition of ground rents is, however, subject to the resolution of possible constitutional and practical difficulties. The constitutional difficulties referred to concern the respective rights of ground rent tenants and landlords while the practical difficulties concern land law generally and in particular the land registration system.
Non-Principal Private Residence Charge Deputy Michael McGrath (FF, Cork South Central) asked the Minister for the Environment, Community and Local Government the number of properties registered for the non principle private residence tax; the proportion this represents of all residential properties in the country and his views on the level of compliance with the tax.
Minister for the Environment, Community and Local Government (Deputy Phil Hogan): The Local Government (Charges) Act 2009, as amended, broadened the revenue base of local authorities by introducing a charge on non-principal private residences (NPPR). The charge is set at €200 and liability for it falls, in the main, on owners of rental, holiday and vacant properties in the State. As of 17 July 2012, the number of properties registered for the non-principal private residence charges in 2012 was 273,163. The full year figure for 2011 was 330,652. The majority of residential properties in the State are owner-occupied and as such would not be liable for the NPPR. I am satisfied with the response to date to the legislation, which places the onus on the owner of a property to assess his or her liability for the charge in the first instance. However, application of the legislation in particular circumstances is a matter for the relevant local authority and ultimately for the courts.
Septic Tank Registration Scheme Deputy Niall Collins (FF, Limerick) asked the Minister for the Environment, Community and Local Government the time frame for septic tank registration and the fee structure. Minister for the Environment, Community and Local Government (Deputy Phil Hogan): The Water Services (Amendment) Act 2012 was signed by the President on 2 February. Registration facilities (both on-line and by written application) have been available to owners of domestic waste water treatment systems since 26 June on foot of the Domestic Waste Water Treatment Systems (Registration) Regulations 2012, a copy of which is available in the Oireachtas library. Householders served by a domestic waste water treatment system have to register their system by 1 February 2013. A reduced registration fee of €5 will apply to those registering on or before 28 September 2012. The fee will then increase to €50.
In the Dáil A public consultation process on draft performance standards for domestic waste water treatment systems was concluded on 30 March. In total, 165 submissions were received and these included a submission from An Taisce. All submissions were thoroughly reviewed by my Department in consultation with the Environmental Protection Agency and informed the preparation of the Domestic Waste Water Treatment Systems Regulations 2012 which I signed on 26 June 2012. I am satisfied that the Act and the associated regulations satisfactorily address the legislative deficit highlighted by the European Court of Justice ruling against Ireland in October 2009 and my Department continues to liaise closely with the EU Commission on the case. Inspections under the new legislation will commence in 2013. I have stated on many occasions that there is no question of applying modern standards, such as those in the EPA’s 2009 Code of Practice, to older domestic waste water treatment systems nor is there any question of additional land being required to facilitate remediation work that might be required.
Unfinished Housing Estates Deputy Catherine Murphy (Ind., Kildare North) asked the Minister for the Environment, Community and Local Government what guidance is in place for local authorities taking residential estates in charge. Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O’Sullivan): In February 2008, my Department issued Circular Letter PD 1/08, Taking in Charge of Residential Developments/Management Arrangements. The policy guidance set out in this circular was subsequently incorporated into the Guidelines for Planning Authorities on Sustainable Residential Development in Urban Areas issued under section 28 of the Planning and Development Act 2000 in May
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2009. The circular is available on my Department’s website www.environ.ie. A new local government service indicator in relation to taking in charge was introduced from 2008 onwards. Planning authorities are required to provide the following information in respect of the previous year: · The number of residential estates for which the planning permission has expired in respect of which formal written requests for taking in charge (from residents or developers) were on hands at the beginning of the year;
Minister for the Environment, Community and Local Government (Deputy Phil Hogan): I have no proposals to create a price register for commercial property.
Mortgage Arrears Deputy Michael McGrath (FF, Cork South Central) asked the Minister for Finance if he will provide a progress report on the implementation of the Keane report on mortgage arrears.
· The percentage of estates, where requests were made for them to be taken in charge, not completed to the satisfaction of the planning authority;
Minister for Finance (Deputy Michael Noonan): Last October the Government published the Report of the InterDepartmental Working Group on Mortgage Arrears (“Keane Report”) and the implementation of its recommendations is now a significant part of the Government’s overall efforts to tackle mortgage difficulty. As announced recently, a number of significant milestones have now been achieved in the implementation of the report’s recommendations. These are:-
· The number of such estates in respect of which enforcement action was taken in the year in question and/or the bond was called in; and
· The Minister for Justice, Equality and Defence has published the Personal Insolvency Bill which is now before the Oireachtas;
· The number of such estates in respect of which works were undertaken by the authority to bring them to taking in charge standard.
· The Minister for Housing and Planning has formally launched the “mortgage to rent” scheme on a nationwide basis;
· The number of estates that were taken in charge in the year in question; · The total number of dwellings in these estates;
In 2010, 321 estates were taken in charge. Further statistics on this issue, including a breakdown by local authority area, are outlined in the 2010 Service Indicators Report which is available to view and download at www.lgmsb.ie.
Commercial Property Register Deputy Barry Cowen (FF, Laois/Offaly) asked the Minister for the Environment, Community and Local Government if he is considering creating a property price register for commercial property, similar to the residential property price register that is currently in development.
· Finally, a specific website keepingyourhome.ie - has been put in place by the Citizens Information Board, which will very shortly be enhanced by a telephone helpline, to provide information to mortgage holders. The further development and roll out of these measures will considerably enhance the supports available to distressed mortgage holders. It is the Government’s intention to continue to work intensely on all these areas to further advance the various measures during the second half of this year.
IPAV Diary 2013!
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This year we will include a number of pages containing colour adverts for members who wish to have a more prominent space within the 2013 Diary. If you would like more information or advertising rates please email the publisher: info@designroom.ie
Autumn Issue | page 27
The Last Word
Valuing the Valuer By Peter Brady, Chairman IPAV Education Advisory Committee
While the market remains in its current dormant state, there is a strong debate raging about valuation. Who should value? And what constitutes a professional valuation? There is a whiff of “Red Book” in the air and I suspect it is being plucked from the ether without any due consideration as to its origin or indeed its place in professional practice. Indeed, the fact that this new buzz word is being so readily embraced by the financial institutions raises serious questions about previously held beliefs about what constituted a valuation. As a person involved in the education of property professionals for the last twenty years, to me the issue is old hat and yet in a tragic way, it serves to illustrate the madness that raged around property in the boom years. Valuation? What Valuation? Indeed the prevailing attitude at the time appeared to be why borrow x amount when you can have x plus y amount. Ironic then that the present regulatory imperative appears to be founded in the application of the standards and procedures outlined in the famous Red Book. Ironic also that students educated by the Institute of Professional Auctioneers and Valuers are taught valuation theory and practice in the context of international best standards. The tragedy of the Celtic Tiger years is that when they graduated and went into the market place, much of what they learned was put aside, disregarded and seemed almost superfluous in a raging market where notices for sale disappeared as quickly as they appeared.
A lot of smoke Now, of course, we have come full circle and the value of a professional education rooted in best professional practice is realised. In the frenzy there is a lot of smoke. I suggest that the worst aspect of the current discourse is the emerging battle for legitimacy in the area of property valuation. Who is best qualified to conduct a valuation? The debate cannot be conducted without first accepting that the services delivered by a qualified valuer can be very varied
Autumn Issue | page 28
and specialised. This is dictated largely by the country in which s/he operates, the legislation which governs the business and the particular activity or section of the market s/he is engaged in. There is no such thing as a ‘one size fits all’ in this context. The objective of the Red Book is ‘to ensure that valuations produced by members achieve high standards of integrity, clarity and objectivity and are reported in accordance with recognised bases that are appropriate for the purpose’. The Red Book then is a worthy set of guide notes to assist the valuer, for example, when agreeing terms of engagement or when preparing a valuation report. The Red Book presupposes that the user is grounded in Valuation through education and training. It does not pretend or claim to be a valuation text book. The guide to the new format of the book puts it very succinctly: ‘The standards set a framework for best practice in the execution and delivery of valuations for different purposes but do not instruct members how to value, nor do they discuss valuation methodology or techniques.’
Three levels of knowledge We need to be careful then when talking about Red Book-based valuations and perhaps focus on what knowledge the practitioner must have to prepare a valuation. In this instance it is worth noting the observations of the European Group of Valuers Association (TEGoVA) which represents forty leading bodies in Real Estate Valuation from twenty four European countries. According to their literature, the valuer requires three levels of knowledge formally gained in education and sustained through a continuous professional development programme (CPD). Valuers require an understanding of economics and business in addition to a general knowledge of buildings, construction and environmental control. Above all, the valuer requires an in depth knowledge of the law relevant to property,
professional practice and Government Policies and Land Use. The key subject area in any valuer’s education is, of course, Valuation itself - and this is at the heart of any reputable education programme for would-be professional valuers. The understanding and general knowledge gained in any formal education programme feed into and sustain the in depth or specialist knowledge required for professional practice. The objective is not to produce economists, solicitors, or engineers; rather the type of knowledge thus gained provides insight into the theory and practice of valuation. Adopting the adage that valuation is a science and an art, it seems to me that those who are entitled to call themselves valuers should not necessarily belong to any one organisation or group but should satisfy the prescribed educational requirements to practise and have the necessary experience to complement it. Globalisation and the integration of markets have affected the work of real estate professionals as much as they have business in general. They are the key drivers for change in the kind of knowledge required of the modern professional. Guide notes (red or blue) assist in bringing order and transparency to the task of the valuer, but they do not replace or lessen the need for a rigorous and relevant valuation-based education.
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