IN what is probably the biggest house price collapse in Ulster history, a home that sold for £3.5 million at the top of the property boom has just sold again for around £800,000.
The £2.7 million price plunge for the Belfast house represents a drop of almost 80 per cent.
The period home is in Malone Park, the wide, tree-lined street in south Belfast that is often considered by estate agents to be Northern Ireland’s most exclusive address.
The elegant red-brick property was sold by the businessman Jim McDonald (pictured) in 2007 at the height of the bubble.
Mr McDonald, who is chair of the RUC George Cross Foundation, had bought the six-bedroom, four reception room house in 1970, when houses could be bought for £2,000 and mansions for £20,000.
The 75-year-old widower sold the property in 2007 to a catering businessman based in Ballymena, Nicholas McKenna.
The head of the Galgorm Group paid an initial £1.35 million but then reneged on the deal as house prices plummeted.
Mr McDonald then began a lengthy legal action to be paid the remainder of the sum, which was finally resolved in September, when Mr McKenna was ordered to pay the shortfall of more than £2 million.
A judge rejected Mr McKenna’s argument that the £1.35 million had just been a loan. Mr McKenna, a long-time investor in property, also argued that he did not have experience in the residential market.
Mr McDonald, who is a former adjudicator of complaints against the military during the Troubles, described the house as an “oasis of peace and quiet” in Belfast.
He said that it was only after his children moved out, his wife died in 2003, and he suffered a stroke in 2006 making it harder to climb the stairs, that “the whole aura of the house” changed and he decided to sell.
At the conclusion of the action, Lord Justice Coghlin issued a “specific performance” order instructing Mr McKenna to pay the outstanding balance.
Mr McDonald said last night that he had since reached an agreement with Mr McKenna, the details of which are subject to a confidentiality clause.
At some stage in the process, the Malone Park property has been returned to Mr McDonald.
“I immediately put it on the market and it sold quickly,” he told the News Letter.
The asking price was £825,000 and it has been agreed for a sum thought to be slightly below that level. The house had been unoccupied for four years.
“But I of course had been looking after it and maintaining the gardens and making sure it is waterproof,” Mr McDonald said.
He remains active in voluntary roles. “I still feel I have something to give to society here which has been good to me and I am repaying that to charity,” he said.
He said the dispute had been a “very trying period for all concerned but I am glad we have a settlement and it is now behind me and hopefully I will be able to enjoy retirement in reasonable respectability”.
We approached Mr McKenna for a comment but he had not responded by last night.
In late 2010, the News Letter reported leading Malone estate agent Gerry O’Connor saying that the typical price for a large home in the Malone area had been £2 million at the peak of the market but was now £850,000 – a 57 per cent drop. He said that there were a handful of homes that still sold for more, but very few.
Since that story, asking prices at the top of the market have declined and are now rarely over £1 million.