Parkside purchasers in financial limbo
THE collapse of the property market will mean that there will be "no positive outcome" for those no longer in a position to pay for apartments at the landmark Parkside development in Portlaoise, and the developers behind the project.
Those who signed contracts for apartments at Parkside could now have to foot the bill between the initial cost they signed up for and the current market value of the property - somewhere in the region of n80,000.
John Grace, a director of G&L Property Investments Ltd, confirmed that the issue is now a "legal matter". He said all those who signed contracts, "have been requested to come and meet us. There was a discount offered to them and its now entirely up to them whether they are going to proceed, or if they are unable to.”
One prospective tenant - who does not wish to be identified - signed a contract to buy an apartment and initially paid a deposit of n20,000 and, along with losing this, he could now be facing a double financial whammy. As the value of the one bedroom apartment has plummeted from the initial n200,000 to between n100,000 and n120,000, mortgage companies will not loan out more than this.
In this instance, contracts were signed in March of 2007, with the development expected to be ready the following June. The delay in finishing the Parkside development has left those who paid deposits, or in some case bonds for smaller sums, in a financial no-mans land.
"We are left in limbo," the man said. He added that they received legal correspondence before Christmas which outlined that if they weren't going ahead with the purchase, then they would be summonsed for breach of contract.
"I was still happy enough to buy the apartment, but I can't get a mortgage to cover even the reduced price of n170,000," he explained. He added that he would have been better off to buy the apartment at the full market value three years ago. While the man would now be in negative equity, at least he would have somewhere to live and eventually the value of the house would rise, "even if it was in 20 years time".
During the property boom it was relatively easy for people to get mortgages to buy the properties at Parkside, which began at n199,000. However, in a vastly changed economic climate, even if an applicant is successful in securing a mortgage, the mortgage company will only provide finance on a current valuation, which is now significantly lower than the original one, leaving many without the financial means to honour the contract they signed in the boom times.
Those who cannot now secure a large enough mortgage on top of the deposit to buy out the property, could be faced with the prospect of making up the shortfall between what the property is sold for, and the original evaluation.
A well placed source admitted that there will be "no positive outcome" for all the parties involved. This source added that banks in general have little appetite to loan money for the purchase of apartments, not just in relation to Portlaoise, but nationally.
Parkside apartments were launched amidst much fanfare in the town. Phase 1 and 11 were sold out, with a waiting list for the second phase. A marquee was set up to cater for the numbers hoping to purchase the apartments. with people reportedly willing to queue on behalf of prospective purchasers, for a fee.
The website marketing for the development outlined: "Parkside heralds a revolution in luxury living in Portlaoise. This all-new concept incorporates high profile offices, boutique shopping, gourmet restaurants and luxury living spaces all combining to create a total living environment celebrating a cosmopolitan lifestyle".
"This collection of landmark buildings will be a beacon for all who seek perfection. From the visually stunning raised plaza to the ultra modern concourse our open spaces will be amongst the best designed and specified in the country. The office suites are designed to maximise the aesthetics of the working environment and the precinct style shopping offers a whole new approach to maximise your shopping experience. Safe in the knowledge that Parkside is being developed by the same people who brought you Stradbrook; currently Portlaoise’s most affluent and successful apartment complex, purchasers can look forward to another spectacular living environment," the website enthused.
The location and standard of the development was also extolled: "Parkside apartments will offer exquisite living spaces designed and completed to exacting and luxurious standards. And what a location. Situated just 2 minutes from the M7/M8 Motorway junction and Portlaoise town centre, your new home will boast unrivalled access. With Dublin just under an hour away, Kildare, Newbridge and Naas just 30 minutes away and excellent shopping facilities in Portlaoise, you can be assured whatever your needs, you are never far away at Parkside".
However, the collapse in the property market has now meant that the Parkside apartments is symptomatic of the general difficulties being encountered by many in the property market.
The solicitor acting on behalf of the vendors, McDowell Purcell Solicitors did not comment on the issue.
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