Would a firesale now of distressed properties here ultimately help the economy?

Slydice

interesting blog entry and comment discussion which includes parts on fire sales on the irish economy blog here: http://www.irisheconomy.ie/index.php/2011/03/26/a-four-part-banking-support-plan/

Slydice

Interesting article on the Financial Times - FT Alphaville site after the recent stress tests.

http://ftalphaville.ft.com/blog/2011/03/31/533326/ireland-does-the-fire-sale-start-here/
Ireland: does the fire sale start here?
Posted by Joseph Cotterill on Mar 31 18:25.

You’ve already had the stress test results (more on those in a moment), here’s the Irish finance minister’s statement regarding what survives of Ireland’s banking system.

In short: a rump Bank of Ireland, a mashed-together Allied Irish and EBS, and a cleaved Irish Life & Permanent. With the fate of Anglo Irish and Irish Nationwide still unclear.

No burden-sharing for senior bondholders; no replacement at the ECB for emergency loans from the Irish central bank. No succour, in short, for the pain from Irish banks selling assets to shrink their balance sheets. So let’s look at what has to be sold.

(later)

€72bn over three years. And not a fire sale?

(later again)

Deleveraging with asset sales -> more capital required -> more asset sales to finance this capital. Because the state cannot or will not bear the cost. Neither will senior bondholders.

And a fire sale will be avoided? Really?

barfizz

hmmm wrote: »

No, the government is artificially restricting the supply of property by taking large chunks of that supply off the market. It doesn't matter what these people think their houses are "worth", until the full supply hits the market few are going to be stupid enough to buy any property. So people can sit around content and happy that houses in their neighbourhood last sold for 400k in 2009, when the houses would go for 200k if it was a true market.

The taxpayer has billions tied up in NAMA. As a taxpayer I'd like to see some of those billions recouped and not have to pay to allow Fiachra and Charmaine feel good about their property investment.

There is no artificial restriction, there are no completed houses which are not or sale.

Godge

Dannyboy83 wrote: »

Not only this, but the continued government interference is causing all kind of nonsensical happenings.

For example, The Elysian Tower, smack bang in the middle of Cork City, tallest building in Ireland, is E-M-P-T-Y. You can't even get a quote! It's been pushed into Nama. It's a monument.

Massive chunks of property in inner city cork are empty.
Inner city Cork is full of old people. Or empty houses which are crumbling because nobody can get a mortgage.
Young people have been pushed out to the commuter towns for years.
This is complete fecking madness.

Even if you merely look at it from an environmental point of view, people are travelling far more than they potentially would have to, in order to reach schools, hospitals, jobs and so on.

I just can't get my head around this at all tbh.
All of this property should be released onto the market, allow property prices to reach market norms, and the whole congested machine will eventually start working again.

NAMA might have made sense if they thought the market would rebound after a year or 3. Evidently that is not going to happen. Anyone who has their head screwed on says there are still substantial falls to come. The market should already have self corrected by now.

Are they really going to sit on the Elysian for 20 years until inflation takes care of it? I can't see it happening.

Not just Cork, have you seen the parts of Dublin 8 around the Coombe or Dublin 7 around Smithfield or the North and Southside docks? There are plenty of undeveloped sites in these areas. I reckon you could easily house another 150,000 people within the M50 motorway from new development. Rebuilds and redevelopments could add to that.

barfizz

Godge wrote: »

Not just Cork, have you seen the parts of Dublin 8 around the Coombe or Dublin 7 around Smithfield or the North and Southside docks? There are plenty of undeveloped sites in these areas. I reckon you could easily house another 150,000 people within the M50 motorway from new development. Rebuilds and redevelopments could add to that.

Are you seriously suggesting that we build more houses, are you for real?

This is how we got into the mess in the first place.

Sometimes i just feel like I should just give up and not care anymore.

Godge

barfizz wrote: »

Are you seriously suggesting that we build more houses, are you mad?

You are making a habit of missing the point. A previous poster made the point that a mistake had been made in Cork with plenty of vacant housing and sites in central Cork unused while commuter towns had been developed (presumably at the joint behest of local politicians and developers). I just pointed out the parts of Dublin that were the same.

[Jackass]

There's a danger of over correction in property prices though.

A firesale of the vacant properties would ruin the prospects of some property holders who are in negative equity.

I feel bad for people owing 250k for an apartment in Dublin, because, the sad reality is, and there may be a correction, but 80% of all properties on this island are worth 100k or less..

A firesale of properties would expose the apartment value in Dublin from 20k - 50k ... and you've got people owing quarter of a mill on these?

There's a human element to the correction in pricing and I'm not sure it would be productive, as we have to live with some of the prices paid, as it would ruin the lives of many who simply would be indebted beyond reason on nothing.

Honeslty, a mass abandonment of the banks seems the only answer the more i look at it. Just mass default and state funding banking sector...we're in too deep for that now, but I can't see where this is going, but it's only going to get worse..I think we've only touched the tip of the iceberg at how much of a disastor we are in...

Snakeblood

[Jackass] wrote: »

There's a danger of over correction in property prices though.

A firesale of the vacant properties would ruin the prospects of some property holders who are in negative equity.

I feel bad for people owing 250k for an apartment in Dublin, because, the sad reality is, and there may be a correction, but 80% of all properties on this island are worth 100k or less..

A firesale of properties would expose the apartment value in Dublin from 20k - 50k ... and you've got people owing quarter of a mill on these?

There's a human element to the correction in pricing and I'm not sure it would be productive, as we have to live with some of the prices paid, as it would ruin the lives of many who simply would be indebted beyond reason on nothing.

Honeslty, a mass abandonment of the banks seems the only answer the more i look at it. Just mass default and state funding banking sector...we're in too deep for that now, but I can't see where this is going, but it's only going to get worse..I think we've only touched the tip of the iceberg at how much of a disastor we are in...

It's not fair to people now or in the future who want to buy properties that are overvalued that the prices are maintained. Why should they suffer and not the people who own the property? How will the housing market ever start moving if prices that everyone knows are unrealistic are maintained?

Balmed Out

barfizz wrote: »

There is no artificial restriction, there are no completed houses which are not or sale.

What gives you that idea?

I have no idea myself but would guess the Elysian Tower would count. Its the republics tallest building and apparently only four of the apartments are being lived in. Some of the apartments are on sale on daft but none for rent. Its in NAMA, and apparently they are trying to buy back what is sold in order to mothball the whole thing as it costs so much to run, well thats the rumour anyhow.
Id guess there is an artificial restriction and not only on sales prices but also on rent. If the rental market was flooded it would further reduce the amount potential buyers would be willing to spend.

Pete_Cavan

Snakeblood wrote: »

It's not fair to people now or in the future who want to buy properties that are overvalued that the prices are maintained. Why should they suffer and not the people who own the property? How will the housing market ever start moving if prices that everyone knows are unrealistic are maintained?

The problem is not simply that there is an over supply of houses, it is that there is an over supply of houses in half finished estates, the middle of nowhere, that no one is ever going to want to buy, at any price. A firesale is not going to do anything for these properties, the only properties that would be sold are the better properties, mainly in and around the cities, and all this would achieve is destroying the investment of people who already bought there. A firesale would only result in more defaults, meaning more money needs to be pumped into the banks, while the over supply of houses in most parts of the country would still exist. I dont see how this would get the housing market to start moving.

Unrealistic

barfizz wrote: »

There is no artificial restriction, there are no completed houses which are not or sale.

Probably true that there a very few completed houses not listed for sale but, with so many listed at unrealistic prices, there are many that are nor really for sale. So many houses are listed at unrealistically high prices because individual vendors are still fixated on 2006 or the developers/investors need to show the bank that they are going through the motions of offering the property for sale.

fred252

Unrealistic wrote: »

Probably true that there a very few completed houses not listed for sale but, with so many listed at unrealistic prices, there are many that are nor really for sale. So many houses are listed at unrealistically high prices because individual vendors are still fixated on 2006 or the developers/investors need to show the bank that they are going through the motions of offering the property for sale.

also there are many people resigned to the fact that their house will not sell for the next few years but they still leave the ads up their at silly prices

Slydice

article by namawinelake talking about what michael noonans said in a recent speech. it includes a bit on what noonan said on the possibility of firesales:
http://namawinelake.wordpress.com/2011/04/06/minister-for-finance-noonan-delivers-upbeat-assessment-of-last-week%E2%80%99s-announcements/
Minister for Finance Noonan delivers upbeat assessment of last week’s announcements
April 6, 2011 by namawinelake

(5) The ECB will continue to fund Irish banks at rates which are currently far cheaper than available elsewhere and there will be no firesales. Though with more than €2bn per month to deleverage (€70bn in total over the next 33 months), it is hard to see how fire sales can be avoided.

hmmm

Slydice wrote: »

article by namawinelake talking about what michael noonans said in a recent speech. it includes a bit on what noonan said on the possibility of firesales:

This is a different type of "firesale", it will involve selling off parts of the banks loan books.

This idea of preventing a sale of property from NAMA & the banks is predicated on the notion that by doing this the price of property will be pushed down to a false level. Anyone with even the most simple understanding of supply and demand will realise how false this idea is. The taxpayer is holding a depreciating asset, just so joe and jane bloggs can pretend they are wealthier than they are and providing a taxpayer subsidy to property owners. Just like Mortgage Interest relief, Rent relief, Affordable housing, Section 35, Zoning restrictions etc etc etc.

Monty Burnz

barfizz wrote: »

There is no artificial restriction, there are no completed houses which are not or sale.

That's completely wrong barfizz - there are thousands of properties (almost certainly tens of thousands) that are being kept off the market (rental and sales).

Slydice

Interesting combination of articles:
http://www.rte.ie/news/2011/0331/banks_tracker.html
Bank stress tests results: Upates
Updated: 22:10, Thursday, 31 March 2011

1659 Mr Noonan said firesales would be avoided but the non-core assets of the banks would be sold off.

http://www.irishtimes.com/newspaper/ireland/2011/0401/1224293542590.html
The Irish Times - Friday, April 1, 2011
Bank of Ireland and merged AIB-EBS to form pillars of Irish banking sector

Bank of Ireland and AIB will be split into core and non-core divisions and their non-core businesses and assets sold or run off over time to avoid fire sales. Mr Noonan said the Republic’s first “pillar bank” will be designed from Bank of Ireland.

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/fce10d66-5bbb-11e0-b8e7-00144feab49a.html#ixzz1IsOhXdcX

http://www.ft.com/cms/s/0/fce10d66-5bbb-11e0-b8e7-00144feab49a.html#axzz1IsO2Eznb
Dublin tries to draw a line under bank failure
By Sharlene Goff
Published: March 31 2011 18:34 | Last updated: March 31 2011 21:23

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/fce10d66-5bbb-11e0-b8e7-00144feab49a.html#ixzz1IsOu7GpC

The finance minister said Bank of Ireland and AIB would become “significantly more domestically focused” banks.

One banker said that while the Central Bank has signalled that there would be no “firesales”, the capital buffers set aside to absorb losses sent a strong signal that the assets were nevertheless up for sale at huge discounts – which he feared could cause losses to spiral.

“Every hedge fund on the planet is going to arrive in Dublin looking at discounts of 50 per cent,” he said.

Balmed Out

Why is it in NAMAs interest to hold properties back off the market?
Surely the market will have to bottom at some stage and their only prolonging the inevitable?
Surely its private sellers who sell now that will be the only ones to benefit not NAMA and the taxpayer?

I know that they have people like retired estate agents valueing properties for Nama at the moment so presumably their preparing to sell.

SupaNova

There is no artificial restriction, there are no completed houses which are not or sale.

Uncompleted houses should be put on the market also.

Slydice

Balmed Out wrote: »

Why is it in NAMAs interest to hold properties back off the market?

This article in the irish times might hint at the reason the NAMA folks think its a good idea:

http://www.irishtimes.com/newspaper/finance/2011/0402/1224293650830.html
The Irish Times - Saturday, April 2, 2011
Nama 'very concerned' at any changes to rent law
NEIL CALLANAN

The agency is “very concerned” about the impact any move to allow retrospective rent reviews could have on the value of its assets. Any such legislation would have a “dramatic reduction in the value of the income-producing assets transferred to Nama” because investment properties are valued on a multiple of their annual rent.

(later)

Any change in the law “would mean that Nama would have effectively overpaid and would of necessity be required to continue overpay (sic) the various participating institutions for bank assets that Nama acquired and will acquire from them”.

Slydice

Speech by the head of NAMA today, hinting in the direction of NAMA encourage house price drops (or maybe firesales) but it could be argued differenty.

Address by Mr. Frank Daly, Chairman of the National Asset Management Agency
Launch of Society of Chartered Surveyors Ireland
Tuesday, 12th April 2011
http://www.nama.ie/Publications/2011/FrankDalySpeechToCharteredSurveyorsIreland12April2011.pdf

We have two objectives over the coming year or two: to contribute to a re-activation of the property market and to act as a source of liquidity to potential buyers.

(later)

We could also infer perhaps that some landlords are being unrealistic in their demands.

(later)

It is only indeed when potential buyers are convinced that prices have flattened out that they will contemplate entering the market.

(later)

The only way that the market can be lifted out of its current slumber is by generating transactions at whatever prices buyers are currently willing to pay.

mlumley

What about the servicing of the houses on unfinished sites, who pays for that? Who pays for the new roads, sewers, gas mains, electric suply? It would be a hell of a price on top of the house. My opinion is it would be no cheaper. Where is the finance coming from, banks wont lend for compleated house, let alone a half built one. Insurance co's would not insure them as they cant garuentee the state of them. It would depress the price of houses people want to sell.
I dont know what the answer is, Knock them? I dont know. If I did, I'd be in the dail erning big bucks.

Unrealistic

SupaNova wrote: »

Uncompleted houses should be put on the market also.

mlumley wrote: »

What about the servicing of the houses on unfinished sites, who pays for that? Who pays for the new roads, sewers, gas mains, electric suply? It would be a hell of a price on top of the house. My opinion is it would be no cheaper. Where is the finance coming from, banks wont lend for compleated house, let alone a half built one. Insurance co's would not insure them as they cant garuentee the state of them.

Unfinished houses on estates couldn't be sold individually but unfinished estates could be sold as long as the cost of completion is lower than a conservative estimate of what the completed houses would sell for. The expected selling price might only €75k for a redeemed 3bed-semi in a ghost estate in the Midlands but so what as long as it costs less than €75k to get it to a saleable state. For any estates where the cost of completion could not be covered by the expected selling price getting the local authority in with bulldozers seems to be the only solution.

mlumley wrote: »

It would depress the price of houses people want to sell.

You make it sound like this is a bad thing. Houses are still way overvalued and there are far more people stuck in rental accommodation than there are people struggling with their mortgages. People in jobs that twenty years ago would have allowed them to afford to buy their own house but who still can't at current prices.

Bullseye1

Snakeblood wrote: »

It's not fair to people now or in the future who want to buy properties that are overvalued that the prices are maintained. Why should they suffer and not the people who own the property? How will the housing market ever start moving if prices that everyone knows are unrealistic are maintained?

Let me get this straight are you saying that those people who have spent money on housing or taken out large mortgages and who are now in negative equity are not suffering? Really? Not only are they suffering but you want them to suffer more so that those who have not bought property can get on the propery ladder. Jez.

Balmed Out

Bullseye1 wrote: »

Let me get this straight are you saying that those people who have spent money on housing or taken out large mortgages and who are now in negative equity are not suffering? Really? Not only are they suffering but you want them to suffer more so that those who have not bought property can get on the propery ladder. Jez.

People chose to buy properties at ridiculously inflated prices. I feel sorry for them but why should anyone else have to pay for their bad decision?

We now have a situation whereby by means of NAMA not putting its properties on the market the natural supply and demand is being interfered with meaning prices arent dropping as fast as they should. How is that fair to those who chose not to get into a housing bubble which has ruined the country?

The return of normal market conditions isnt being unfair on home owners. If I believe that 10 euros is a fair price for a mug and purchase it, why should i complain if someone else buys it for half that price down the road?

Bullseye1

Balmed Out wrote: »

People chose to buy properties at ridiculously inflated prices. I feel sorry for them but why should anyone else have to pay for their bad decision?

We now have a situation whereby by means of NAMA not putting its properties on the market the natural supply and demand is being interfered with meaning prices arent dropping as fast as they should. How is that fair to those who chose not to get into a housing bubble which has ruined the country?

The return of normal market conditions isnt being unfair on home owners. If I believe that 10 euros is a fair price for a mug and purchase it, why should i complain if someone else buys it for half that price down the road?

€10-€5 no worries. €300,000-€150,000 lots of worries.

Balmed Out

But is the principle any different. I have a lot of sympathy for those who unexpectantly lost jobs with big mortgages or who have to emmigrate and sell up but for all others in negative equity i really dont see the big deal other then wounded pride.

Bullseye1

Balmed Out wrote: »

But is the principle any different. I have a lot of sympathy for those who unexpectantly lost jobs with big mortgages or who have to emmigrate and sell up but for all others in negative equity i really dont see the big deal other then wounded pride.

The big deal is they sell the house and still owe money to the banks.

Balmed Out

yeah but if you sell at the new price and buy a similar property at the new price you owe the bank the same amount of money.

femur61

I think some of the properties sold yesterday were still overpriced. The unfinished house in Drumcondra looks like it needs a lot of work and in a neglected housing estate. People (Irish) are mad.

ei.sdraob

http://www.independent.ie/national-news/bargain-time-as-thousands-of-houses-to-be-sold-2621352.html

and then there was a firesale...

Local auctioneers will be used to offload properties on a commission.

Hahahaha, Jobs for the boys continues...

Slideshowbob

femur61 wrote: »

I think some of the properties sold yesterday were still overpriced. The unfinished house in Drumcondra looks like it needs a lot of work and in a neglected housing estate. People (Irish) are mad.

How do you define overpriced?

With all the knowledge and scepticism about these days, clearly wasn't yesterday (a free auction) the best way to determine current market prices !!

I myself was glad to hear lots on average went 22% above reserves. I t.hink it's an indication that things are not as bad as generally made out

If you think Irish people are mad (apart from being a huge generalisation), why have you engaged on an IRISH forum to discuss such matters / profer opinion??

Slideshowbob

ei.sdraob wrote: »

http://www.independent.ie/national-news/bargain-time-as-thousands-of-houses-to-be-sold-2621352.html

and then there was a firesale...



Hahahaha, Jobs for the boys continues...

The alternative for giving these boys these jobs now is for NAMA to continue to hoard these gems and for them to remain a greater burden on the taxpayer! Is it the lesser of 2 evils!?

Or have you a better idea?

Also won't the commission for these boys now be alot less than the heady days of the celtic tiger!?

ei.sdraob

Slideshowbob wrote: »

The alternative for giving these boys these jobs now is for NAMA to continue to hoard these gems and for them to remain a greater burden on the taxpayer! Is it the lesser of 2 evils!?

Or have you a better idea?

Also won't the commission for these boys now be alot less than the heady days of the celtic tiger!?

Just pointing out that all of the reasons for NAMA have been shown to be fud

the original plan was to hold onto properties and wait till market recovers, or so we where told .... in order to prevent firesales .. and now we get them.

Slideshowbob

ei.sdraob wrote: »

Just pointing out that all of the reasons for NAMA have been shown to be fud

the original plan was to hold onto properties and wait till market recovers, or so we where told .... in order to prevent firesales .. and now we get them.

I agree - NAMA appears to be flawed.

Yes - appears to be a change of policy now and it's looking like "firesale" stuff.

I wonder is this all due to IMF/ECB/EU insistance? The Trioka !!! who came up with that name anyway!?!?

ei.sdraob

I dont know but its sure brings up images of Stalin in my head

Slideshowbob

ei.sdraob wrote: »

I dont know but its sure brings up images of Stalin in my head

Probably christened by some gurrier hack with nothing better to do than concieve negative conotations.

It's a harsh term for people who are essentially assisting us.

The IMF came about from the UN after all!!

cbreeze

Every Thursday a comic falls out of the Irish Times - its called the property section. This is where you go to see the delusion that is still called the Irish property market. The poor hacks who try to give cpr to the deflated property bubble must be commended for trying! A suggestion here, a nuance there, a perhaps somewhere else, a might be on the rise (seen this one a few times over the past two years). Taking a peek at the section called 'Take 5' gives you a clearer picture. You can see a dull little semi in Crumlin on offer for the same price as a minor castello in the Abruzzo and what does that tell you? A. That property in Ireland is still way over priced.

femur61

Slideshowbob wrote: »

If you think Irish people are mad (apart from being a huge generalisation), why have you engaged on an IRISH forum to discuss such matters / profer opinion??

I live in ireland so why would I not engage in an Irish forum, TBH if I didn't have 4 kids kids I'd be gone. The dishonety displayed by Irish politicans has put a pit in my stomach and we bought into it. We have a terrible reputation abroad, and yes we do. Back to the good ol' days of the thick paddy.

Back to the question re: selling of distressed properties, I just think we are in for a double dip recession if we allow a property bubble start again, what is with the Irish and home ownership, it is because of this idea we are in this mess.

Monty Burnz

Slideshowbob wrote: »

How do you define overpriced?

I would define value on a yield basis.

Slideshowbob wrote: »

With all the knowledge and scepticism about these days, clearly wasn't yesterday (a free auction) the best way to determine current market prices !!

Absolutely. Well, that or a database detailing current clearing prices.

Slideshowbob wrote: »

I myself was glad to hear lots on average went 22% above reserves. I t.hink it's an indication that things are not as bad as generally made out

Or that some people think that 50% off any price is a bargain. I made the same mistake with Parthus shares back when I was more naive about these things: I jumped on a bargain when they had dropped 80% in value, and then watched them fall to about 97% off their peak. I lost about 85% of what I spent on them.

The lesson there is that 50%, or 60%, or 80% off a price that was based on total fantasy does no necessarily represent value. A lesson that many Irish people are about to learn to their cost.

Slideshowbob wrote: »

If you think Irish people are mad (apart from being a huge generalisation), why have you engaged on an IRISH forum to discuss such matters / profer opinion??

I can't speak for him, but who else would you talk to? Not everyone is mad, and even talking to loons can be educational. One of the things that I found convinced me most that we were in a bubble was arguing with bubble-believers as to how in the name of all that is holy they could justify property prices around 2005-2007. Sheer delusion.

whiteonion

People don't complain when the price of electricity, gas or food drops. So I see no reason why they should complain when prices of houses drop.

The most rational thing would be to sell all NAMA properties in one swoop so the market could use it's pricing mechanism to figure out what this houses should cost.

I myself would benefit greatly from this, seeing as I have savings and possibly would be able to afford to buy a place outright.

Slydice

hmmmm... looks like there will be more price lowering auctions and sales

The Irish Times - Saturday, April 16, 2011
Buyers spill on to street as 'fire sale' raises temperatures - and €15m
Related
http://www.irishtimes.com/newspaper/frontpage/2011/0416/1224294804348.html
ORNA MULCAHY, Property Editor

No surprise then that Allsop and its Irish partner Space are planning another sale for the summer. By all accounts there will be no shortage of stock.

The next auction is scheduled for July 6th.

and

Bargain time as thousands of houses to be sold
http://www.independent.ie/national-news/bargain-time-as-thousands-of-houses-to-be-sold-2621352.html
By Michael Brennan, Emmet Oliver and Donal Buckley
Saturday April 16 2011

Finance Minister Michael Noonan yesterday ordered the agency to start selling both commercial and residential property -- worth up to €2.7bn -- as soon as possible.

NAMA will sit down with Ireland's leading banks within the coming fortnight to organise finance for purchasers.

The aim is to kick-start the beleaguered property market and provide a "floor" for prices.

However it is a calculated risk, because NAMA could flood the market with cheap properties to the detriment of other sellers.

Unrealistic

Slideshowbob wrote: »

I myself was glad to hear lots on average went 22% above reserves. I t.hink it's an indication that things are not as bad as generally made out

The reserves were a meaningless marketing gimmick. The were set wildly below current asking prices. I think the record was the apartment in Portlaoise where the advised reserve was set at 80% below the current asking price for identical apartments on Daft. So, even though the selling prices for the most part came in above the advised reserve prices, they came in way below current asking prices. For the Galway lots they were 20-50% below current asking prices. So your conclusion is inaccurate. Things are worse (or better if you take a buyer's perspective) than deluded vendors on Daft think they are.

femur61

Monty Burnz wrote: »

I can't speak for him, but who else would you talk to? .

Or her!

Monty Burnz

femur61 wrote: »

Or her!

My sincere apologies, my good lady...

gurramok

I'd sworn I heard on the RTE report that half of those in attendance at Allsop were actually estate agents. Plus just under a hundred were possible buyers(all investors) and the Allsop spokesperson did state that most buyers were Irish. That speaks volumes in that foreign buyers still see no value in Irish property.

Slydice

namawinelake giving an opinion on firesales:
What is a fire sale?
http://namawinelake.wordpress.com/2011/04/17/what-is-a-fire-sale/
April 17, 2011 by namawinelake
(jumping into the article)

Or to put it another way – “a fire sale is a forced sale at a price regarded by the market as low because potential buyers can’t get credit”

(later)

So was the auction on Friday a forced sale? I’d tend to say no and that the bank had the discretion to wait another year before disposing of the properties.

(later)

I would say that prices have some way to decline yet. My unscientific assessment of the prices on Friday is that they represent 60% drops from peak which was the Central Bank’s adverse projection. My view is that they will go lower. Does the market generally think prices on Friday were low? I would tend to say yes and if the prices were achieved on Friday were reflective of the market then the Permanent TSB/ERSRI house price series which says that we were 39% off peak at the end of Q4, 2010 must surely have lost credibility.

(later again)

If property was offered for sale we would then perhaps get a better idea of credit availability. Although we are unlikely to get an official assessment, anecdotally most of the sales on Friday were cash sales.

So was the auction on Friday a fire sale? I would tend to say no because the bank was not truly forced to sell and might have waited longer in the hope that prices recovered and because in my opinion, the prices were not bargain basement. Anecdotally it seems there was an absence of credit. So with only one of the three criteria, I would say it wasn’t a fire sale.

(later still)

Of course if you control a large amount of property assets, you will want to avoid fire sales. You might consider how credit can be advanced to potential buyers. You will want to assure potential buyers that prices will not go lower and that there may be shortages. You will not want to reveal to potential buyers that you are being forced to make sales. Those of you following the NAMA saga will be familiar with the agency’s manouevring under each of the three headings. And that should be accepted as the nature of NAMA, it is not a neutral participant in the market and it wants to see prices stabilize and rise. It should be remembered that although last Friday’s auction probably doesn’t meet the criteria to be considered a fire sale, it would seem that there will be large-scale forced sales in the not-too-distant future and perhaps then we will truly see fire sale prices.

Those are just bits I've selected to quote. It's a pretty long article but I found it very interesting.

Slydice

Allsop announced the date of their next auction to be July 6th:
http://www.allsop.co.uk/283/irish-auctions

Irish auction
Next auction
Wednesday 6th July 2011
Dublin

catalogue coming soon

NamaWineLake posted about it including the information that allsop intent to do around 4 to 6 auctions and that this next one is likely to have 200 properties.
http://namawinelake.wordpress.com/2011/04/20/next-allsop-auction-announced-for-6th-july-2011-%E2%80%93-200-lots-to-be-sold/

there had been confirmation that there would be 4-6 “increasingly large” auctions held by the British auction giant together with its local partner

(later)

In the Independent, the Space Managing Director, Stephen McCarthy says that the next auction is likely to have 200 properties, more than double the number of lots available last Friday. And it is estimated that some 1,300 will be brought to auction by non-NAMA banks this year. It is unclear if that is just for Bank of Scotland Ireland or includes Permanent TSB, National Irish Bank, ACC, KBC andUlster who are known to have foreclosed property.

There is still no word from the biggest forecloser of property NAMA. Also Allsop expect to have another four auctions in 2012. The 80 properties sold last Friday were indeed a drop in the ocean. NAMA reportedly controls some 6-16,000 properties within the M50 aroundDublinalone. This time next year, we will probably look back at the frenzy on display last Friday and smile at the naivety of some of the participants fretting over just 80 properties when so many more will shortly come under the hammer.

barfizz

barfizz wrote: »

My point of view is simple:
A lot of people are in debt with their properties, they overpaid, simple!
Now, do i want to "dance on their grave" (a well know saying) and drive down the value of their property further and cause them more problems?

The value of the house has little bearing on their ability to repay...

Of course if you control a large amount of property assets, you will want to avoid fire sales. You might consider how credit can be advanced to potential buyers. You will want to assure potential buyers that prices will not go lower and that there may be shortages. You will not want to reveal to potential buyers that you are being forced to make sales.

Last thing we need is for them to rise again!!

Slydice

I see namawinelake put up a blog last saturday about hundreds of houses that are coming up to be auctioned:
At last. Signs that Ireland is to be flooded with property brought to market.
June 11, 2011 by namawinelake

There is certainly the prospect of a large volume of new property coming onto the market in coming months. First of all, there are auctions. And if 20 lots in Kilkenny last year was “mega”, what superlative will be use for auctions with over 100 lots? Here are forthcoming multi lot auctions

GMAC – 62 properties, 24th June, 2011

Gunne – 12 properties, 30th June, 2011

Allsop/Space – 87 properties, 7th July, 2011

Savills – 100 properties, 29th September, 2011

In addition NAMA has announced that it expects to make available a new “negative equity” mortgage product in the Autumn. The agency has not confirmed how many of its properties will be made available with the NAMA mortgage but there has been speculation (not confirmed by NAMA) it might be 5,000.

There are some 23,000 homes on so-called “ghost estates” that are complete and vacant, and an additional 20,000 at varying stages of construction.

looks like some interesting times ahead

keithclancy

NAMA is flooding the market with cheap housing and also sorting out a finance deal ....

So Essentially its an entity that already has huge losses and is now offering a service that will result in even bigger losses.

I smell disaster.