House prices

femur61

I'm not in the market to buy or sell but looking at Primetime on Monday night, the fall in prices of houses has fallen up to 50% from during the boom. Why are the asking prices in Kilkenny still as high as they were a few years ago. Is this not the auctioneers who are disullsioning sellers with the result of people being put of. The market in my eyes is stagnated. Joe Coogan is advertising houses at such low prices it will hopefully shake up the market.

I'm just curious.

SabAlliance

Only houses new to the market are relevant and I assume that this is because auctioneers aren't willing to take on unrealistic business/sellers with prices that would waste EVERYBODYS time.

In fairness to auctioneers, they don't have the final say on the price and they hardly plan on wasting time on a house if it's not going to sell. So the houses on the market for a couple of years are probably still high but auctioneers can only advertise them at a price agreed with the vendor. I've noticed these properties going down really slowly actually if they are falling at all.

Surely it would be in auctioneers interest to lower the prices and sell them all cheaply (obviously not in the sellers interest). But don't be disillusioned by some prices advertised. Take for example a house I was interested in in Lintown advertised by Joe Cogan for 79,000.... it eventually sold for 130,000 which completely priced me out.

fabbydabby

The fact that the banks are effectively prevented from foreclosing on people who are not keeping up with their mortgage payments is having a major knock-on effect on the property market.

In the USA people who don't pay are turfed out after 90 days non payment. Bank sells the house for what it can get for it (usually not much) and the property value in the area is reduced significantly over time as a result of this happening constantly.

In Ireland, the fact that we as taxpayers now effictively own the banks means that our politicians (in order to get re-elected) are forced by the working population into making the banks not foreclose on people who took out mortgages they couldnt afford, therefore this does not happen in ireland.

Please don't get me wrong, I am not condoning turfing families out into the cold when they are doing their best, but it is the policy of letting them stay that is MASSIVELY postponing another inevitable housing crash when the banks do start foreclosing in a year or so (there's tens of thousands of mortgages not up to date at this minute) and a double dip recession and furthermore, it is one of another long list of reasons why the dolts in charge of this country should be strung up (the other main one being the bank bailout).

They should have an IQ test for political leaders, I think, or at least make them study leaving cert pass standard economics and finance.

A lot of house buyers are stubborn too I guess. They're holding out for the big cheque that will never arrive. But I'd say if you made an offer of 25% less than the asking, some people who've been trying to shift a place for months would take your hand off. Others might laugh at you, but the joke's on them. I keep an eye on it out of interest and there's places there for sale these last two years.

Dymo

fabbydabby wrote: »

A lot of house buyers are stubborn too I guess. They're holding out for the big cheque that will never arrive.

I'd say that's the problem with a lot of people, but an auctioneer was telling me that a person he met who bought their house in 2006 for €170,000 now wanted to sell, but because they spent a bit of money on the house that you wouldn't see they wanted at least €230,000 for it.He told them it was worth €170,000 -€180,000 and left it too them. Its up on daft now for €240,000 with another auctioneer that's based in another town. I guess kept getting valuations until they were happy with one.

Maybe their house is the exception to the rule that it can go up by a 1/3 in a property drop or maybe they just haven't a clue.

fabbydabby

Truth.

I suppose some people feel if they spend 20K on a kitchen and a patio in a house they bought in 1993 then it should be worth 20k more than the Jones's next door when it comes to selling it on.

Not the case though. Especially not these days.

Regarding the 79K house in Lintown as posted above, Mr Coogan is a big fan of auctions, 79K was probably the reserve price on the house.

All it takes is two people who like it a lot and it will go for a lot more.....

catbear

Fabby I agree with what you said about letting the market correct itself like in the US but unfortunately we have nationally an excess of stock. Some estimates say there are 370,000 empty (unoccupied) units for a country of 4 million. I read somewhere that that roughly is enough supply for 45 years!!!!!

Repossessing houses in a property market that's in a death spiral is merely playing musical chairs. Some kind of personal bankruptcy law changes like the IMF have recommended would help but our political elite are too heavy into property that they'd sooner have the taxpayer pay than take the hit personally; this is what the bailout was always about and it affects most parties.

Currently Ireland is losing roughly 800 people a week to emigration, the severe reversal in the jobs market will have shaken everyones longterm confidence and our politicians legislate to underwrite corrupt banking and yet say they can't legislate to bring the likes of Sean Fitzpatrick to justice for years of deceiving his auditors and investors!

There is enough in this world for everyone but never enough for one persons greed. The government turned housing, the second essential for life after sustenance, into a get rich quick pyramid scheme. It could be worse, just google the Albanian government pyramid scheme of the mid nineties.

To sum up, a house that can't find a buyer is worth ZERO.

The banks rolled over the developers debts, the governments rolled over the banks debts and now through reduced public services and higher taxes the people are bailing out their the government rather than firing them!

To the matter of prices, Morgan Kelly predicted back in 06 that some houses will loose 80% of their bubble price. A house in Glendine Court sold at auction earlier this year for just over €300,000; it was put on the market in 07 for €900,000. A 66% reduction at the top end of the market, another 12% and we're in Morgan Kelly territory. I personally believe prices in kilkenny will overshoot the 80% in some instances. It's hard to call though as the market isn't producing enough sales to get any kind of trend.

It hard to form any kind of opinion as unlike every other OECD country Ireland has no way of ascertaining exactly how many units are occupied as there are no annual rates or charges on housing.

fabbydabby

Totally agree that a house with no buyer is worth sweet FA.

I remember having the concept and ramifications of mass housing negative equity explained to me back in 2005 by an economics hobbyist mate of mine who was convinced that Fianna Fail were leading us down the Gary Glitter. I wasn't convinced at the time, but oh how right he was.

It hard to form any kind of opinion as unlike every other OECD country Ireland has no way of ascertaining exactly how many units are occupied as there are no annual rates or charges on housing.

The annual housing tax should have been brought in years ago as it is extremely stable and predictable, it discourages buy to let and speculative purchasing and risky development because nobody wants to end up paying an annual fee on houses that they built but can't shift.

But no, we had to base our entire economy on the glorified pyramid scheme of stamp duty and selling each other cardboard buildings in Castledermot. I don't know why people have such a problem with property tax. We wouldn't be knee deep in sh!t now it we brought it in before that's for sure.

Business have to pay rates, why not houses? I haven't been rode to the same extent that a lot of others have by this recession but I feel so frustrated by the lack of accountability and the lack of a leadership with competence and integrity. When I become a (benevolent) dictator, my jackboot will rule with an iron fist!

But yeah, you'd be off your head to buy a house now, and most people know that, and don't.

the ostrich

Kilkenny has been slow to react to price falls, unlike other areas of Ireland which have plumetted very quickly. But the process has started and is growing in momentum.

There are hundreds, if not thousands, of buy to let landlords (amateur) who have purchased property in Kilkenny in the last 5 to 10 years. These are teachers, doctors, HSE workers, farmers, accountants, solicitors, EAs etc.

Up to now they have had their second or third homes rented out to tennants who have being paying the rent for the last few years, and therefore the mortgages have been paid, and everything has been rosy.

However, now these tenants have lost their jobs and moved on to other countries, and the landlords now just want to sell up and get out., and this is where the problem lies.

The owners are finding out to their cost that the 4/5 bed property in a prime location is now worth €250k less than when it was purchased just a few years ago, and in a falling market the property is only going one way.

catbear

Someone made a heat map of national asking prices increases a year of so ago, I'll post the link if I can find it. Kilkenny and Tipperary were the last to record price increases while the rest of the country had already peaked and the Dublin commuter belt was already showing price falls.

Someone had calculated that with inflation adjusted, Germany WWI reparations cost less per head than the Irish bank bailout. It would have been cheaper to go to war.

Captain Havoc

catbear wrote: »

Someone had calculated that with inflation adjusted, Germany WWI reparations cost less per head than the Irish bank bailout. It would have been cheaper to go to war.

It was on the news the other day that Germany paid their last WWI payment this week, I think it was about the same as the bank bailout but in todays money came to a few hundred billion.

catbear

Found that link and it was Waterford and Mayo that had the last increase.
http://manyeyes.alphaworks.ibm.com/manyeyes/visualizations/heat-map-of-changes-in-irish-propert
Anyone have any ideas what happens next? To me the property market is frozen, a few sales here and there but far from any average.
Japans property market has been deflating for almost twenty years.

johnboy_123

Hi guys just having a look here ... I think the gov are in a no win situatin here..I mean it is partially there fault that we find ourselves in this situation but it is a triangle of blame.

The house owners for being cavalier with buying on 100% mortgages during the boom and now in neg qeuity

The banks for blatently ignoring common sense when it came to lending practises

The government for not regulating the banks

Now I have a house I bought and I am not neg equity just to state where I am coming from

The fact is that a person cant just say there you go mr bank manager I am in neg equity I cant pay my mortgage , you are the new owner of a 3 bed flat in the back arse of no where....This means that anyone who has bought in the last say 6/7 years and have lost a job are in dire straights..

Now out of the 3 sides of the triangle above.

The gov are well doing nothing as they dont need to

The banks have been bailed out

The poor schmuck who bought the house is the only one taking it up the rear

Now before anyone comes on with the saying "ah here we go where is the nama for the little man" (which is what I would like to see) or the "why should I pay for a decision you made in buying a house when you clearly couldnt afford it"

The simple answer to these are..That if we want to floor the market, if we want to get things going. Change the bankrupsy laws let people get out of the hugh personal debt that exists...

I mean I dont see how home owners as a group should not be supported..

I mean I have and will continue to support people who decide to have 1, 2, or more kids

I continue to support paying O.A.Ps with their pension

I continue to support paying P.S wage and pension

I continue to support people now signing on

So my argument is whats the fairest way out of this...as I say with the 3 sides of this triangle in people buying a house the person buying it was actually duped into thinking that they could afford it.

When I went for my mortgage I was told "oh you can borrow more" I didnt and on a personal note the last 4/5 years I have been whacking money off my mortgage to get it down and I am about 3/4s of the way there another 3 years and it will be paid so I am not in the category of defaulting and barring a sacking of myself and my wife I should be comfortable...But I see no difference in someone who is struggling paying a mortgage and helping them then someone who has 3 kids, has never worked and never will work

As I say the bankrupcy laws need to change and if this happens I garentee the banks will start doing deals to bring peoples debt down which can only be a good thing?

Good thread by the way

Captain Havoc

johnboy_123 wrote: »

Hi guys just having a look here ... I think the gov are in a no win situatin here..I mean it is partially there fault that we find ourselves in this situation but it is a triangle of blame. The house owners for being cavalier with buying on 100% mortgages during the boom and now in neg qeuity

I agree but there should have been more regulation, someone who was earning €25,000 getting a mortgage for €400,000 was a bit silly as there are an infinite number of stupid people out there who would take out such a mortgage. The flip side is that I am proud to live in a country where a man is free to ruin his own life.

The banks for blatently ignoring common sense when it came to lending practises

Of course, the banks were driving the whole thing, making money by lending to builders but this would've come to an end if there wasn't people to buy these houses so they had to lend to them too. They really forgot that there are only 4 million people in Ireland and not a billion as in China.

The government for not regulating the banks

Agree

Now I have a house I bought and I am not neg equity just to state where I am coming from

The fact is that a person cant just say there you go mr bank manager I am in neg equity I cant pay my mortgage , you are the new owner of a 3 bed flat in the back arse of no where....This means that anyone who has bought in the last say 6/7 years and have lost a job are in dire straights..

Unfortunately and as the houses are all worth SFA now, they really don't want to be repossesing houses which would reduce prices more.

Now out of the 3 sides of the triangle above.

The gov are well doing nothing as they dont need to

The banks have been bailed out

The poor schmuck who bought the house is the only one taking it up the rear

I wouldn't call pumping €50 billion into the banks and guaranteeing deposits as doing nothing. The banks have been bailed out which in the case of AIB is fair enough as there's a lot of ordinary people as customers but Anglo was ultimately a business and should have been treated as such. I don't agree that the home owner is the only one, most of us will be paying back for years to come. At the end of the day, any investment can go pear shaped, why did one section of the population (including myself) decide not to buy and one section buy (some of which as per earlier, clearly hadn't a snowballs chance in hell of ever paying it back). I'm not suggesting that you took a silly decision as I know someone who had a fantastic job and had to sell her home at a loss and will be paying the bank back for a very long time.

Now before anyone comes on with the saying "ah here we go where is the nama for the little man" (which is what I would like to see) or the "why should I pay for a decision you made in buying a house when you clearly couldnt afford it"

The simple answer to these are..That if we want to floor the market, if we want to get things going. Change the bankrupsy laws let people get out of the hugh personal debt that exists..

Bankruptcy laws are in line with the UK (except you're declared 12 years here instead of 10, I think). How as ever, I do think it's discraceful that there doesn't seem to be a level playing field between big business people and the ordinary fella or is this just my imagination?

I mean I dont see how home owners as a group should not be supported..

They're too busy pumping money into failed business.

I mean I have and will continue to support people who decide to have 1, 2, or more kids

I continue to support paying O.A.Ps with their pension

I continue to support paying P.S wage and pension

I continue to support people now signing on

Now that's a very unfair statement to make, the population can't grow unless babies are born. No the OAPs paid tax (up to 70% in the eighties) all their lives. Civil servants are necessary and do need to get paid. No, a lot of the people signing on paid PRSI and find themselves in the position that they paid for.

So my argument is whats the fairest way out of this...as I say with the 3 sides of this triangle in people buying a house the person buying it was actually duped into thinking that they could afford it.

Noboday way duped, it's called selling, I sell to people everyday, it's up to me to convince them that they want to buy my product, it's up to them to realise if they can affoard it or not.

When I went for my mortgage I was told "oh you can borrow more" I didnt and on a personal note the last 4/5 years I have been whacking money off my mortgage to get it down and I am about 3/4s of the way there another 3 years and it will be paid so I am not in the category of defaulting and barring a sacking of myself and my wife I should be comfortable...But I see no difference in someone who is struggling paying a mortgage and helping them then someone who has 3 kids, has never worked and never will work

It's the kids, it gets them every time. I think it is terrible that people who never worked a day in their lives are supported. I also think it's terrible that some of these people do have multiple children due to the economy of scale where each child costs less and they get more. Someone told me it's possible to get €35,000 in benefits with the right set of circumstances, this just doesn't make sense.

As I say the bankrupcy laws need to change and if this happens I garentee the banks will start doing deals to bring peoples debt down which can only be a good thing?

The banks would be idiots not to do deals otherwise they'll find themselves owners of a lot of houses that they can't sell or will have to sell at a price you won't need a mortgage for.

fabbydabby

Noboday way duped, it's called selling, I sell to people everyday, it's up to me to convince them that they want to buy my product, it's up to them to realise if they can affoard it or not.

False. We're not talking about a washing machine or a set of matching furniture here.

If you offer somebody a loan you must ensure that they have the means to pay it back, along with any interest due. You must also ensure that in the event that the borrower defaults, they have sufficient collateral for you to recover your intial outlay.

It is the lender's responsibility to ensure that.

People lie through their teeth on loan applications all the time. It is the bank's responsibility to run a solvent business. It is not the reposnsibility of the customer or the financial regulator to ensure a business remains solvent.


The fact of the matter is that the banks were leveraged up to their tits and had to lend at ridiculous rates to totally unsuitable reciepients in order to make money.

If the banks are incapable of running a solvent business, they shouldn't be in business. They should have been let fail, but as Noam Chomsky said: (paraphrased by myself) "Financial instiutions take massive risks, the guys at the top make massive money and then it fails, as risky business inevitebly does, then the taxpayer is called in to pick up the tab while the people who committed the crimes walk away scott free with bulging wallets."

This is a recuring theme.

Nobel Prize winning economist Joseph Stiglitz in his address to Trinity College last year:

"this bank bailout is a simple transfer from taxpayers to bondholders, and it will saddle generations to come. The only thing that might give you solace is that, as chief economist of the World Bank, we see this type of thing happening in banana republics all over the world. Whenever a banking crisis happens, the financial sector uses the turmoil as a mechanism to transfer wealth from the general population to themselves. I’ve been very disappointed to see that it has happened, not only in banana republics, but in advanced industrialised countries."

So blame the politicians, and don't re-elect Fianna Fail.

catbear

Bankruptcy laws are in line with the UK (except you're declared 12 years here instead of 10, I think).

You are very mistaken Captain Havoc, in some instances you can be out of bankruptcy within a year in the UK. Here's just one link; http://www.becomingbankrupt.co.uk/bankruptcy-laws-and-you.html
In Ireland dangerous sexual predators have got their full liberty sooner than citizens who went bankrupt because of things beyond their control, like redundancy.
The idea with the UK system is that the borrower and lender both takes a hit rather than in Ireland where the borrower ends up in chains for a decade to a bank that is being bail out with money that should be providing essential services.
The banks under the guarantee scheme are effectively on social welfare.
Here's a sobering piece on why the Irish bailout could be the worst political disaster in Europe since the last War; http://www.eurointelligence.com/index.php?id=581&tx_ttnews[tt_news]=2915&tx_ttnews[backPid]=901&cHash=5fc6365df5

The flip side is that I am proud to live in a country where a man is free to ruin his own life.

I know what you mean Captain Havoc but that isn't happening in Ireland, in Ireland the gambler fails but the prudent are paying his debts. He was never going to share his profit so why should the prudent share his losses?
Fianna Fail have done far more damage by incompetence by corruption. Craven yes, but smart, no.

To put it in perspective, the banks were joy riding, bonuses were their speed and they went out of control and were about to hit a wall in September 08 at high speed ensuring their own destruction. Then Lenny and Cowen put every citizen between the banks and that wall.

Splat!

up for anything

As someone who is trying to sell a house it is a complete nightmare. We've priced the house below market value to get a quick sale (that was back in May). There are apparently two parties seriously interested in it but they are trying to sell their own properties in order to fund buying it. We've looked at reducing the asking price by €30+ to attract a quicker sale but were told we would probably end up in the same situation with the two who are interested still trying to flog their houses and maybe a few more people interested but trying to sell their houses and realising 30K less than an already reduced price.

If more people find themselves in the same situation as us it could result in a dramatic house price drop in the area. There is a limit to the time that the bank will play nicey-nicey with people. So our beautiful, family dream home that we were offered 650K for back in 06 as we were finishing it can't even attract a quick buyer at 250K. I'd burn it to the ground if I could afford to insure it.

catbear

Up for anything, you are not alone.
Your story is one of many out there.
I don't know how this thing will unravel but some sort of debt restructuring mechanism will have to be put in place.
My bet is that the non lending Anglo Irish bank prescribed by the ECB is actually a back door agency for Europe to sort out irish solvency issues that the domestic politicians are reluctant and incapable of resolving.
Ireland will be managed.
Just one question, have you asked your bank if they can produce their copy of your contract with them?

fabbydabby

This was actually on Matt Cooper this evening.

Matthew Elderfield is bringing in regulations which protect people in mortgage arrears from getting turfed out. Naturally the banks are not in favour and the debate continues.

Essentially, if you work the appeals and negotiations system, you can stay in your house indefinitely without paying your mortgage. Sweet eh?

That was a good link Catbear.... i think the whole sorry saga is summed up by this sentence in the article:

Ireland and Greece, too, preferred to cripple their economies for generations to come in order to avoid the political blemish of a default

up for anything

catbear wrote: »

Just one question, have you asked your bank if they can produce their copy of your contract with them?

No, I haven't. Why would I do that?

yosemite_sam

This is more interference in the market, it has to be left to reach it`s natural level. The last recession in the UK I was able to buy a house in London for £23,000, the mess here will continue for decades because of the meddling in the housing market. No one knows what anything is worth

up for anything

fabbydabby wrote: »

Essentially, if you work the appeals and negotiations system, you can stay in your house indefinitely without paying your mortgage. Sweet eh?

Most people haven't got to that stage yet and are still working on reduced payments/interest only arrangements. I doubt very much that if they find themselves in that predicament that they would find it sweet though. That kind of 'free' house for most people would almost certainly equal a heavy heart, stomach eroded by acid and a sense of hopelessness at the burden of debt still owed and no foreseeable way of even beginning to make a dent in it.

fabbydabby

Perhaps you misunderstood. I probably should have made that clearer:

I was not referring to unfortunate cases who avail of the protection system (as well they should). Such systems exist to protect people and they are for the most part a very good thing.

The unfortunate and inevitable thing is that when you have a system in place to protect the vulnerable, you have a very small minority who abuse it and work it to their own advantage.

The PRTB is the very same.

catbear

I asked about the contract because if you have been hassled by the bank then asking them to produce something that they can't find but must legally possess puts them on the backfoot. It's been discussed on the property pin website before.

Just remember that you, as a citizen are bailing out the banks that you are in fear of. This does not make sense. I know that this can be hard to see when faced by constant demands but if everyone is in the same boat as you then this phony war the banks are waging will come to end.

This is war, make no mistake. Banks and those too well connected to fail versus the taxed. Forget RTE and the media, they'll bark to their paymasters tune.

AIB share price has started what looks like its death spiral but the general public must get behind a heave for transparency and bankruptcy reform for there to be any constructive outcome for the future.

Jinxi

My partner and i are first time buyers with our deposit saved, ready to go, both working and looking for a house in the 150 to 185 range in kilkenny. We have been looking for around 6 months, but i refuse to buy because everything is so overpriced. The truthful actioneers I have talked to have said more than once when viewing a property that the owners are deluded.
We had settled on a price with one owner in beechlawns, not a steal by any means, it needed alot of work, she decided that the autioneer was doing her out of money because the house two doors up sold at 15th more(it had a conservatoy built on and immaculate decor).
Some Kilkenny house owners are just deluded. Good priced houses are selling.

pavb2

Just a query on a previous comment, is this a double dip recession? I thought it was the same one but just got worse.

Also technically have we come out of recession, things definitely aren't improving unemployment etc etc if anything things are getting worse.

catbear

It's not a recession, it's a depression.

Just to clarify, from the wiki definition

1) a decline in real GDP exceeding 10%, or 2) a recession lasting 2 or more years

pavb2

Thanks catbear I did wonder when does a recession turn into depression interesting that we don't hear about the green shoots of recovery anymore also Lenihan's speech last year about turning the corner.

I posted on another thread about the Farmleigh Irish Global Economic Forum where all the successful Irish business men came back to give advice/solutions,seems like this has also been quietly forgotten.

Frustrating that our only influence on changing things is a vote.

Not a great option is it ?

catbear

pavb2 wrote: »

Frustrating that our only influence on changing things is a vote.

Any new government, regardless of hue, would have to deal with the debts of the property bubble.

The government for most of the next decade will primarily be a debt servicing authority. The upside of this is that the government reforms are been prescribed by outside agencies with no regional or local alliances.

fabbydabby

Green shoots me hoop.

Expect maybe another five years of the most severe budgets in the history of the state. Budgets which will kneecap the economy for the lifetime of our entire generation though cuts and borrowing.

The die has been cast, unfortunately, and voting any which way won't change that. Without getting overly technical... it's one mega fking sh!t sandwich and we're all going to have to take a bite.

pavb2

The die has been cast, unfortunately, and voting any which way won't change that. Without getting overly technical... it's one mega fking sh!t sandwich and we're all going to have to take a bite.[/QUOTE]

I presume that's extra large without fries or drink

up for anything

Was I imagining it but skimming through the front pages of today's newspapers on the stand in Supervalu I noticed an Indo article saying that the rating agencies (I think) say that Ireland's economic recovery will be faster than they thought and faster than a lot of other countries. I did check the date to see whether it was a reprint of 1.4.10.

I can't see anything on the their website about it.