Things you should know before buying

Villa05

To anyone considering buying this year, I urge you to read and understand the following article from Colm McCarthy

http://www.independent.ie/opinion/analysis/colm-mccarthy-states-gigantic-portfolio-of-property-and-bank-loans-will-be-a-tough-sale-3074209.html

The scale of the required sales is enormous. Nama alone needs to dispose of assets carried on its books at almost €30bn. The IBRC has half as much again to dispose of and AIB must somehow shrink its loan book of €99bn substantially, as must Permanent tsb.

Much of this de-leveraging involves property or property-related loans. In total Irish State entities could need to shrink balance sheets, through borrower repayments and asset disposals, to the tune of €100bn in the years ahead. Even at the top of the credit bubble, the Irish commercial property market had an absorption capacity of about €2bn a year.

Nama has a target of winding itself up inside eight years, IBRC is on a similar timescale while the surviving banks are under pressure to slim their balance sheets even faster. The State will be competing with other sellers: the banks still privately owned, including Bank of Ireland, Ulster, National Irish and the wind-down vehicle for Bank of Scotland (Ireland), all have property and loan assets they would be pleased to get rid of. The necessary sales cannot be financed through credit from the banks doing the selling, since this defeats the object of the exercise, which is de-leveraging and balance sheet shrinkage.

The same applies to Nama. Excessive external debt in the overall economy needs to be reduced and this boils down to persuading foreigners to buy the surplus assets whose retention can no longer be financed. You cannot deleverage by lending money to people to buy your surplus assets. Retiring excess debt through asset disposals needs cash buyers, not buyers financed through domestic credit extension.

The task of persuading foreign investors to commit to Ireland on this scale should not be under-estimated. Property and banking assets are for sale at reduced prices in many countries whose international reputations are in better shape. Not merely has Ireland endured a mighty property bubble and near-collapse of the banking system, the State itself has been forced from the markets and into the care of official lenders in the form of the EU and IMF.

Villa05

Interactive map showing population stats, Number of vacant houses per area and other important information from Census 2011

http://airomaps.nuim.ie/flexviewer/?config=Census2011.xml

Villa05

The property pundits (Vested Interests) What they said and when they said it

http://quotesfromthebubble.blogspot.com/

Villa05

IMF/EU plan on taxation and Social Welfare
http://www.fixmytax.com/index.php/fix-my-tax-blog-2/17-what-the-imf-eu-bailout-for-ireland-means-in-detail.html

Fiscal Measures in the Programme

Taxation

1) Lowering of personal income tax bands and credits or equivalent measures
2) A reduction in pension tax relief and pension related deductions
3) A reduction in general tax expenditures
4) Excise and other tax increases
5) A reduction in private pension tax reliefs
6) A reduction in general tax expenditures
7) Site Valuation Tax to fund local services
8) A reform of capital gains tax and acquisitions tax
9) An increase in the carbon tax

Programme Expenditure

Savings in Social Protection expenditure through
1) enhanced control measures,
2) structural reform measures,
3) a fall in the live register and if necessary,
4) further rate reductions.
5) Increase the state pension age to 66 years in 2014, 67 in 2021 and 68 in 2028.
6) Nominal value of State pension will not be increased over the period of the plan.



Public Service Costs

Reduction of public service costs through

1) a reduction in numbers and

2) reform of work practices as agreed in the Croke Park Agreement.

3) A reduction of existing public service pensions on a progressive basis averaging over 4% will be introduced.

4) New public service entrants will also see a 10% pay reduction.

Reform of Pension entitlements for new entrants to the public service
including

1) a review of accelerated retirement for certain categories of public servants and

2) an indexation of pensions to consumer prices.

3) Pensions will be based on career average earnings.

4) New entrants' retirement age will also be linked to the state pension retirement age.

mazdamps

Thanks for posting.

Interesting read.

So the banks will be selling off houses for nothing and there will be more taxation/cuts on everything?

When will the banks be forced to get all there assets/properties of there books?

This year? Next? Years later?

What percentage of property are residential?

Much in Co.Limerick?

delad

mazdamps wrote: »

When will the banks be forced to get all there assets/properties of there books?

This year? Next? Years later?

It says in the article name and ibrc have a target of winding up within 8 years, so they'll be offloading a bit each year you would think.

There's been no updates from nama for quite some time now, it seems they are making little to no progress. They haven't offloaded anything in the Irish market yet have they?

Villa05

mazdamps wrote: »

Thanks for posting.

Interesting read.

So the banks will be selling off houses for nothing and there will be more taxation/cuts on everything?

When will the banks be forced to get all there assets/properties of there books?

This year? Next? Years later?

What percentage of property are residential?

Much in Co.Limerick?

Namawinelake (blogger) keeps a list of NAMA property currently for sale.
Please note this list is not extensive, I believe they are inclined to sell where the present owner is not co-operating

http://namawinelake.wordpress.com/nama-property-for-sale/

ted1

Nama has no houses in Dublin so its not an issue. Obviously this statement excludes the million Euro plus houses

Villa05

mazdamps wrote: »

When will the banks be forced to get all there assets/properties of there books?

This year? Next? Years later?

Although NAMA itself prefers take a long term view, and commercially this may make sense, public and political pressure is growing to see some return in the short term for the large amount of taxpayer's money invested. NAMA has responded to this pressure by, for example, promising to make available 2,000 properties for people on social housing lists. Another factor to consider is the reduction in value due to the physical deterioration of properties left idle for long periods.

NAMA has recently announced two incentive schemes to catch the interest of potential buyers,
the negative equity protection plan and a proposed new mortgage product to be offered through AIB, Bank of Ireland and Permanent TSB.

In early 2012, NAMA will test its incentive schemes by offering 750 houses for sale. Based on the sales results of these properties, NAMA will then be in a better position to decide if, and when, to release more residential properties for sale.

http://www.irishhouses.ie/nama/nama-ireland-residential-property-sales.php

A drop in the ocean, but a start. Note also that the troika is putting pressure on the Government to sell off assets. I don't think they will tolerate NAMA hoarding assets for too much longer.

Villa05

ted1 wrote: »

Nama has no houses in Dublin so its not an issue. Obviously this statement excludes the million Euro plus houses

Would you get a million plus for every property on this list:

The list below is a summary of some of the entries on the Properties Enforced list published recently by the National Assets Management Agency. These properties are located in Dublin city and county.
http://www.irishhouses.ie/nama/nama-dublin-residential-property-for-sale.php

Villa05

mazdamps wrote: »

What percentage of property are residential?

Much in Co.Limerick?

http://www.limerickpost.ie/index.php/navigation-mainmenu-30/local-news/3436-nama-swoops-on-limerick-properties-lands-and-sites.html

Note these are only properties NAMA has issued enforcement orders on, may only be the tip of the iceberg.

NAMA’s objective is to obtain the best return for taxpayers. For each of its 850 debtors, it must decide whether its objective is best achieved through working with the debtor or enforcing against him. The decision to support a debtor or enforce against him is determined primarily by the content of the debtor’s business plan. The primary purpose of the plan is to present a comprehensive account of each debtor’s financial affairs and to set out how he proposes to maximise the value of his assets and to repay the amounts due to NAMA.

If NAMA considers that a debtor’s business plan represents a viable way forward, it will work with him to ensure repayment, to the greatest extent feasible, of the loans due. However, where a debtor cannot demonstrate viability or where he is unwilling to reach a reasonable accommodation with NAMA, the Agency will initiate enforcement action to take control of the assets underlying his loans.

http://www.nama.ie/about-our-work/debtor-business-plans/

ted1

Villa05 wrote: »

ted1 wrote: »

Nama has no houses in Dublin so its not an issue. Obviously this statement excludes the million Euro plus houses

Would you get a million plus for every property on this list:

The list below is a summary of some of the entries on the Properties Enforced list published recently by the National Assets Management Agency. These properties are located in Dublin city and county.
http://www.irishhouses.ie/nama/nama-dublin-residential-property-for-sale.php

Go through the list and count Ho many of them are actually houses, most ate apartments

Villa05

ted1 wrote: »

Nama has no houses in Dublin so its not an issue. Obviously this statement excludes the million Euro plus houses

Personally, it would naive to think that in the biggest property bubble and subsequent crash in the world, that NAMA has no significant stock of houses in the capital city of the country where this burst occurred.

Regardless, they have a huge stock of apartments and if when these are released to the market either as rental or sales, it frees up a housing unit elsewhere at a conservative ratio of: 2 apartments = 1 house.

I know quit a few senior citizens who are trying to sell their home to downsize to an apartment as they are not able maintain the cost of keeping a larger home and maintaining a garden. Targeted selling to this group may well resolve the apartment oversupply.

ted1

wouldn't really be niave

very few houses were built in Dublin during the boom. expecially towards the end, what were built were genreally sold. and kept out of Nama.

there might be a few in the pyrite estates that remain unsold.

gurramok

ted1 wrote: »

wouldn't really be niave

very few houses were built in Dublin during the boom. expecially towards the end, what were built were genreally sold. and kept out of Nama.

there might be a few in the pyrite estates that remain unsold.

There are empty houses in Heathfield, Finglas where the developer has gone bust. Perhaps in NAMA?

Zamboni

gurramok wrote: »

There are empty houses in Heathfield, Finglas where the developer has gone bust. Perhaps in NAMA?

Jesus, talk about the arse of Finglas West.
They could only ever be used for council housing or for local settled travellers.
There will simply never be a buyer for this kind of stock.
If it is in Nama they should just write if off and hand the keys to the council.

gurramok

Yeh, they look like nice houses. Pity the location, you can see the empties as you drive by. http://www.daft.ie/searchsale.daft?id=552617

Also, the developer going bust has caused problems for the main road outside.
http://www.boards.ie/vbulletin/showthread.php?p=76755685

Villa05

Galway County Council unable to sell "affordable Homes"
http://www.galwaynews.ie/25253-affordable-houses-no-one-can-afford

Local Fine Gael councillor Peter Feeney agreed that it wasn’t the ideal situation and believed that Galway County Council should initiate something similar to a rental-purchase scheme so that the houses can be sold.

Auctioneers in the Athenry area have revealed that they are selling three bedroom semi-detached houses for €90,000 or less at the moment – and even that is with a struggle.

2010: Councils all over the Country have over 1,000 unsold properties (hope they will be paying their property tax on these)

The move comes because of the collapse in the housing market which at one point left city and county councils with 3,700 unsold properties.

Developers have offered similar schemes in an attempt to shift unsold stock, but this is the first time a local authority has engaged in a similar process.

New figures show that just over 1,150 remain unsold, with almost half the units in Dublin (423) and Cork (104).

http://www.independent.ie/national-news/council-to-sell-houses-cheaply-2265978.html

ted1

gurramok wrote: »

There are empty houses in Heathfield, Finglas where the developer has gone bust. Perhaps in NAMA?

Houses in finglas are completly undesirable and will have no affect on the market. The only use they have is as stables.

Villa05

Given that the Irish Government (foolishly) dance to the EU/ECB tune. It is intresting to hear what an ECB Banker thinks
http://www.irishtimes.com/newspaper/finance/2012/0413/1224314682846.html?via=mr

He told the audience that Ireland’s economic woes are mostly of its own making. Moving to a sporting metaphor, the country had overindulged and got flabby he said. Although some fitness has been regained, there is along way (and plenty more pain) to go before the economy is back in decent shape.

If Asmussen spoke plainly about how he sees things, he was offering precious little additional assistance. He poured cold water on the prospects of easing the burden of public debt attributable to bailing out the banks

gurramok

ted1 wrote: »

Houses in finglas are completly undesirable and will have no affect on the market. The only use they have is as stables.

What a snobbish comment.

You know there are non-Daily Mail headline areas in Finglas too? Open your eyes and drop the prejudice.

ted1

Snobs don't read the daily mail but I think my comment still stands.

gurramok

ted1 wrote: »

Snobs don't read the daily mail but I think my comment still stands.

No it doesn't, you haven't a clue about Finglas. Finglas East for example is quite a desirable place to live unlike the tabloid headlines of Finglas West.

ProudDUB

Agreed. When was the last time you went to Glasnevin Cemetary and were confronted by local yokals on their horses? That is in Finglas East.

Finglas is huge. Large parts of it are perfectly ok. Finglas East borders Glasnevin/Glasnevin North/Ballygall. All perfectly fine areas.

JuliusCaesar

ProudDUB wrote: »

Agreed. When was the last time you went to Glasnevin Cemetary and were confronted by local yokals on their horses? That is in Finglas East.

Finglas is huge. Large parts of it are perfectly ok. Finglas East borders Glasnevin/Glasnevin North/Ballygall. All perfectly fine areas.

Glasnevin cemetary is in Glasnevin. Finglas is north of there. The Royal Oak pub on the Tolka used to be the border. Finglas East also borders Ballymun, which is why residents of Ballymun Avenue petitioned the Corpo as it was then to change the name to Glasnevin Avenue, despite the fact that it's miles from Glasnevin. :rolleyes:

But yes, Finglas East was always very different to Finglas West. Probably because Finglas East was full of house owners, and Finglas West was predominantly corpo housing.

ProudDUB

My bad. I know that the bulk of Glasnevin Cemetery is in Glasnevin, but I genuinely thought that the entrance to Glasnevin Cemetary was in Finglas, as the Clearwater Tesco that is just down the road, is definitely in Finglas. Didn't know the Royal Oak was the border, but either way, the area is perfectly fine to live in.

What I do know (fer shizzles this time ) is that the Old Finglas Road (that connects Finglas to Glasnevin) has some of the nicest, biggest and most expensive houses in all of Glasnevin, and it has *gasp* Finglas in its name. Oh the horror !

This 7 bedroom house called Cremore Lodge is going for half a mill. Gorgeous Alexander Strain house built in the 30's.

http://www.daft.ie/searchsale.daft?id=573481

The main blurb in the ad cleverly says it is off Cremore Avenue. No its not. Look at the map. It is on Old Finglas Rd. I know. I drove by it yesterday.

So the moral of the story kids, is that you can have the words Finglas or Ballymun as part of your address, and you are very, very far away from living in a kip, or in a crap neighbourhood. Don't be so quick to judge an area based just on what you hear/see/read on the news.

Thus concludeth the lesson of the day.

Villa05

Further €13bn in tax hikes and cuts are needed, warns OECD

IRELAND needs to find a further €13 billion in tax and spending cuts to start its debt burden on a downward path, new calculations from the OECD find.

This is one of the largest adjustments required among advanced economies, although Britain's gap is almost as big, the OECD study* says.

Even with an adjustment this size, it would take almost 30 years to get debt down to the 60pc of output (GDP) laid down in the the new eurozone fiscal compact which will be the subject of the referendum to be held in May.

http://www.independent.ie/business/irish/further-13bn-in-tax-hikes-and-cuts-are-needed-warns-oecd-3080157.html

ted1

Villa05 wrote: »

Further €13bn in tax hikes and cuts are needed, warns OECD

IRELAND needs to find a further €13 billion in tax and spending cuts to start its debt burden on a downward path, new calculations from the OECD find.

This is one of the largest adjustments required among advanced economies, although Britain's gap is almost as big, the OECD study* says.

Even with an adjustment this size, it would take almost 30 years to get debt down to the 60pc of output (GDP) laid down in the the new eurozone fiscal compact which will be the subject of the referendum to be held in May.

http://www.independent.ie/business/irish/further-13bn-in-tax-hikes-and-cuts-are-needed-warns-oecd-3080157.html

What's your point, if your going to make a statement you need to explain its relevance.

daltonmd

Villa05 wrote: »

Further €13bn in tax hikes and cuts are needed, warns OECD



http://www.independent.ie/business/irish/further-13bn-in-tax-hikes-and-cuts-are-needed-warns-oecd-3080157.html

I wonder is that after the property Tax and water charges are accounted for?

That'll certainly put a dent in disposable income.

Villa05

The Central Bank's new deputy governor delivers stark warning over the effects of crash

HOUSE prices could take decades to recover from the property crash even if the economy starts growing, the new deputy governor of the Central Bank of Ireland warned last night...............
Last night in Galway, Mr Gerlach said Ireland had experienced a classic housing boom. House prices here rose faster and higher than in most booms but the bubble and burst is in line with the pattern seen around the world, he said.

It means experience elsewhere could help forecast the likely trend here over the coming years.

That evidence points to a sustained housing slump, because credit-fuelled booms are typically worse than other booms and the combination of a housing crash with a financial crisis is especially damaging.

"Recessions that coincide with a housing bust are, on average, longer and more pronounced that others," he noted.

http://www.independent.ie/business/irish/property-prices-could-take-decades-to-recover-3087840.html

@ted1

I'm just putting the info out there in one thread so that people can be informed of the potential risks that lie ahead following (preferably prior to) a property purchase.

The "Buying in 2012" thread shows that people need some basic financial education prior to making what will likely be their largest and most life impacting decision of their lives.

I find this very disturbing considering our recent history with property.

Villa05

THE National Asset Management Agency (NAMA) said yesterday it would not change its sales strategy despite new research which showed Ireland is lagging other countries when it comes to selling property to pay off government debt.

Research by property advisors CBRE has revealed that Ireland is well behind the likes of Sweden, Germany and the UK in terms of selling State-owned properties to clear debts.

CBRE said its research showed debt-laden countries such as Ireland and Greece must cut prices and establish more transparent sales programmes to boost the slow trickle of transactions to date. Last night a spokesman for NAMA dismissed the call for faster Irish sales.

http://www.independent.ie/business/irish/nama-sticks-to-guns-as-country-lags-behind-in-debtclearing-sales-3087837.html