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Will the Governnment do anything about negative equity

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    #62
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    smccarrick wrote: »
    I'm not in negative equity- however the bank has revalued my home for 'mortgage purposes' (to establish the current LTV ratio as a means of my getting a better interest spread). The current value is EUR16k less than I paid for the property in 2001. Admittedly it was overpriced when I bought it- but the location is great. Ps- I'm with BOI too....

    Im not surprised. I was wondering when the banks would play this hand to boost their margins.

    no surprise they didnt value upwards when making this determination during the bubble


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    #63
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    amtc wrote: »
    Why do people assume that everyone in negative equity bought at inflated prices in 2006/7?

    I bought my place with 20% deposit in 2003 and borrowed only 200k, which is twice my annual income.

    I am now about 70k in negative equity and lose my mortgage interest relief. OK, I earn good money but getting hit hard with the levies AND a fixed rate mortgage (fixed in 2005 when interest rates were rising every month).

    I feel like I'm being hit every way. I acted responsibly - college, saved, lived at home until I could buy, and then told BOI that no, I didn't want five times my income, just twice.

    i smell something funny here.

    those numbers dont add up at all.

    a 240k house from 2003 now only worth 130k (and that valuation is assuming you have been interest only which wouldnt make sense if you earn what you say you are so that would mean more than a 50% reduction in the house price)

    probably somewhere closer to 60% drop in 2003 house prices. this is just not plausible your putting you house value at 1999 prices we arent that far gone yet.


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    #64
    thebman
    Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    Although probably slightly inaccurate, it is on RTE at the moment:
    http://www.rte.ie/news/2009/0527/house.html


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    #65
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    thebman wrote: »
    Although probably slightly inaccurate, it is on RTE at the moment:
    http://www.rte.ie/news/2009/0527/house.html

    Why are you suggesting its inaccurate? Just curious.


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    #66
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    thebman wrote: »
    Although probably slightly inaccurate, it is on RTE at the moment:
    http://www.rte.ie/news/2009/0527/house.html

    that report puts house prices at 2004 levels. the poster bought in 03 and is basically indicating his house is at 1999 levels. Im sorry thats just not plausible thats hes in negative equity not to mind to the tune of 50 - 60%


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    #67
    amtc
    Registered Users Posts: 2,490 ✭✭✭amtc


    It's a two bed apartment in blanchardstown. selling new for offers at 210k, but my neighbour just sold for 135k. (mind you, she had to).

    I bought for 263,700


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    #68
    thebman
    Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    smccarrick wrote: »
    Why are you suggesting its inaccurate? Just curious.

    Because its just a national average comparison which is always going to be out depending on your area, type of house etc...
    D3PO wrote: »
    that report puts house prices at 2004 levels. the poster bought in 03 and is basically indicating his house is at 1999 levels. Im sorry thats just not plausible thats hes in negative equity not to mind to the tune of 50 - 60%

    I know, I wasn't suggesting he was valuing it appropriately, pretty much the opposite.


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    #69
    bobbiw
    Closed Accounts Posts: 211 ✭✭bobbiw


    thebman wrote: »
    Because its just a national average comparison which is always going to be out depending on your area, type of house etc...



    I know, I wasn't suggesting he was valuing it appropriately, pretty much the opposite.


    I agree, from my understanding prices are currently closer to their 03/04 levels at the moment.

    A friend of mine sold a property in dublin for 360 in 2006 (late), today there are two houses on the street at 250 for the same one.

    But back to neg equity, what should the goverment do. They are already paying people interest if they loose their job.

    So if you bought a place for 300 and its now 250, what they give you 50k, and then it drops to 200 they give you another.

    Thats what got Ireland into such a mess, goverment spending with their buddies who could build with lego.

    Look at that tunnel that was too small, or the luas taking 50 years to build. Or even that stupid spire and countdown clock.

    It was all stupid ideas by unacountable civil servants who I am sure thought up all that crap while in a bar.


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    #70
    Himselfe
    Registered Users Posts: 126 ✭✭Himselfe


    bobbiw wrote: »
    that stupid spire

    I like the spire!! The Eiffel Tower was considered an eyesore when it was first built...


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    #71
    thebman
    Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    lol, the Eiffel Tower is a tower, we have the worlds biggest flag pole with no flag!

    At least there is more to the Eiffel Tower than when you first see it. you can go up it in a lift etc...

    The spike looks like a spike from the distance and up close, no reason to actually go see it IMO.


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    #72
    Tigger
    Closed Accounts Posts: 16,705 ✭✭✭✭Tigger


    spockety wrote: »
    I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

    In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.
    how do ye calculate neg equity if houses arent selling they don't have a price


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    #73
    bobbiw
    Closed Accounts Posts: 211 ✭✭bobbiw


    Tigger wrote: »
    how do ye calculate neg equity if houses arent selling they don't have a price


    Thats true, the person who thinks that the goverment can pay it off hasnt got a clue.

    Negative equity is a fact in property cycles.

    Some of these people just think they have a right to everything.

    The ironic thing is, when houses do hit the 150k average or even less than that, there will not be a ton of people going to buy them.

    Most people wont have jobs.


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    #74
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Tigger wrote: »
    how do ye calculate neg equity if houses arent selling they don't have a price

    While I accept what Bobbiw is saying- equity is calculated for investment and mortgage purposes by lenders, on an ongoing basis. Thus- despite a lack of sales- a lender will have a valuation for mortgage purposes (at the moment typically 20% below what an accessor will quote as an open market selling price).

    Banks (AIB and Bank of Ireland) are beginning to refuse to allow people sell at below certain levels and convert the difference between sale price and outstanding mortgage into a personal loan. This is locking them into living in a property which may be wholly unsuitable for many different reasons.


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    #75
    thebman
    Closed Accounts Posts: 10,012 ✭✭✭✭thebman


    They could always try to rent it at a price to pay the mortgage and start renting somewhere else themselves.

    Obviously not an easy thing to do but not impossible for everyone either. Its not pleasant but nobody said it would be.


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    #76
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    thebman wrote: »
    They could always try to rent it at a price to pay the mortgage and start renting somewhere else themselves.

    Obviously not an easy thing to do but not impossible for everyone either. Its not pleasant but nobody said it would be.

    Stamp duty implications (and they'd also loose ftb mortgage relief etc....)


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    #77
    mathie
    Registered Users Posts: 5,102 ✭✭✭mathie


    bobbiw wrote: »
    Thats true, the person who thinks that the goverment can pay it off hasnt got a clue.

    Negative equity is a fact in property cycles.

    Some of these people just think they have a right to everything.

    The ironic thing is, when houses do hit the 150k average or even less than that, there will not be a ton of people going to buy them.

    Most people wont have jobs.

    As in more than 50% unemployment?
    :rolleyes:


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    #78
    Tigger
    Closed Accounts Posts: 16,705 ✭✭✭✭Tigger


    smccarrick wrote: »
    While I accept what Bobbiw is saying- equity is calculated for investment and mortgage purposes by lenders, on an ongoing basis. Thus- despite a lack of sales- a lender will have a valuation for mortgage purposes (at the moment typically 20% below what an accessor will quote as an open market selling price).
    but the assesors will value at whatever the vendor says is the price


    Banks (AIB and Bank of Ireland) are beginning to refuse to allow people sell at below certain levels and convert the difference between sale price and outstanding mortgage into a personal loan. This is locking them into living in a property which may be wholly unsuitable for many different reasons.

    how do you know , link?

    what effect do you think nama will have on these -ve equity issues


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    #79
    wrightao
    Closed Accounts Posts: 19 ✭wrightao


    spockety wrote: »
    I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

    In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.

    Can people not take responsibility for their own actions. If our houses had gone up and up indefinetly, we wouldnt turn over the profits for the good of the tax payers would we? I myself am in substantial negative equity. Just deal with it. Why would the Govt have to rescue us, are we enervated wards of the state? We got stung. In ten years time, we should be fine. Thats the risk we took buying a house. Why anyone else s=on a more prudent footing should be contaminated with our bad decisions is beyond me. People keep looking for someone else to blame. I only have myself to blame, I thought foolishly my house was the goose that laid the golden egg. Simple avarice. No such thing as easy money and now we have to bear with it. Its what adults do.


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