Huge negative equity on apartments.

Squ

Squ wrote: »

Ah, yet another after hours tread for those with perfect 20/20 hindsight vision.

Joy.

True, but some of saw it coming and kept out of the way, and, I'm staying of of the way as there is another train coming!!!!

MadsL

pache wrote: »

I really dont think you can compare Irelands property bubble/crash to that of japans.
Both were literally "worlds apart".

No. Totally different as you can see by this graph. Oh, wait.

Monty Burnz

Deleted User wrote: »

True, but some of saw it coming and kept out of the way, and, I'm staying of of the way as there is another train coming!!!!

Yup - the smart money is still on the sidelines. We could still be in for absolute carnage if there is major civil protest when public service pay is finally cut, or we get booted out of the Euro, or the Euro itself collapses. Even if none of those things happen, another 3 or so budgets that cut spending and increase taxes, plus the new property tax are only going to drive prices one way.

Dionysius2

Gauss wrote: »

It was ridiculous 5 years ago? People were socially conditioned to think it wasn't.

Right on, Gauss...this is one of the best points made here. And don't forget that the real estate charlatans, manipulators all....every last one of them....bear a heavy responsibility too for the false value economy which they led so shamelessly ably assisted by their friends in the property media.
The most egregious fault lies unquestionably with the deceiver and not the deceived who has after all been duped.

MadsL

Dionysius2 wrote: »

Right on, Gauss...this is one of the best points made here. And don't forget that the real estate charlatans, manipulators all....every last one of them....bear a heavy responsibility too for the false value economy which they led so shamelessly ably assisted by their friends in the property media.
The most egregious fault lies unquestionably with the deceiver and not the deceived who has after all been duped.

I rented an apartment 'worth' almost a million euro for a rent less than half of the mortgage payment.

That takes 5 minutes to work that the value of the apartment was over-valued.

bnt

Deleted User wrote: »

True, but some of saw it coming and kept out of the way, and, I'm staying of of the way as there is another train coming!!!!

True. I was lucky that I had the "mortgage = 3x salary" mantra explained to me when I was around 18, and never forgot it. A few times over the years I considered buying, in Ireland & elsewhere, but a few minutes playing with Microsoft Excel's "amortization" functions soon brought me down to earth.

https://www.youtube.com/watch?v=mjqXAaQqFqs

PS: that's a low interest figure in the video, compared to rates a few years ago ... and interest compounds. It's a shorter period than was typical, which is also a major factor. When you get a figure for the monthly payment, you can multiply it by the number of months, and then go "they're fecking kidding, right?" At 5% over 30 years, you pay 1.91x the mortgage value i.e. almost double.

PPS: if any of you are thinking "why should I have to do any Maths when I want to buy a house?" ... I'm of the opinion that the housing bubble would have been a lot smaller had more people done the maths for themselves, rather than trusting the banks or mortgage brokers to do it for them. The mortgage sellers didn't necessarily lie ... they didn't have to, they could just neglect to tell you how much they were hoping to make off of you over time.

bnt

bnt wrote: »

True. I was lucky that I had the "mortgage = 3x salary" mantra explained to me when I was around 18, and never forgot it. A few times over the years I considered buying, in Ireland & elsewhere, but a few minutes playing with Microsoft Excel's "amortization" functions soon brought me down to earth.

https://www.youtube.com/watch?v=mjqXAaQqFqs

Yes, that's the size of my mortgage as well and even that takes a sizeable chunk of the income.

Squ

Monty Burnz wrote: »

This is the standard response of those who ignored all the warnings beforehand and now pretend they never heard any.

I actually sold my house in oct 07, one month after my wife sold hers, put the money into an account and have rented since.

But to answer your post, theres plenty of these treads in the boards archive, each reaching more or less the same point as the last, nowt.

Monty Burnz

Squ wrote: »

I actually sold my house in oct 07, one month after my wife sold hers, put the money into an account and have rented since.

Sincere congratulations, but I'm not sure what point you are making here. Either you were ridiculously lucky (according to your version of events) or you heeded the many warnings and got lucky with the timing.

Squ

Squ wrote: »

I actually sold my house in oct 07, one month after my wife sold hers, put the money into an account and have rented since.

Did you see the train wreck on the horizon?

Squ

dolanbaker wrote: »

Did you see the train wreck on the horizon?

I was finishing my apprenticeship, and my wife was miserable in her job. At the time employment was sky high, so we thought we'd just head off to oz, and jump back into jobs when we got back!

and we didn't want the hassle of renters from that distance..

My folks wouldn't talk to me when i told them we were selling both, as for the previous 10 years they'd seen their friends cashing in on the equity on their houses and moving to portlaoise etc, and not being able to afford to move back when they got sick of the commute.

dotsman

bnt wrote: »

True. I was lucky that I had the "mortgage = 3x salary" mantra explained to me when I was around 18, and never forgot it. A few times over the years I considered buying, in Ireland & elsewhere, but a few minutes playing with Microsoft Excel's "amortization" functions soon brought me down to earth.

https://www.youtube.com/watch?v=mjqXAaQqFqs

PS: that's a low interest figure in the video, compared to rates a few years ago ... and interest compounds. It's a shorter period than was typical, which is also a major factor. When you get a figure for the monthly payment, you can multiply it by the number of months, and then go "they're fecking kidding, right?" At 5% over 30 years, you pay 1.91x the mortgage value i.e. almost double.

PPS: if any of you are thinking "why should I have to do any Maths when I want to buy a house?" ... I'm of the opinion that the housing bubble would have been a lot smaller had more people done the maths for themselves, rather than trusting the banks or mortgage brokers to do it for them. The mortgage sellers didn't necessarily lie ... they didn't have to, they could just neglect to tell you how much they were hoping to make off of you over time.

From the sounds of things, you are never going to own your own home.

dotsman

dotsman wrote: »

From the sounds of things, you are never going to own your own home.

By the time this shakedown is complete, anyone with a decent income and savings will be able to afford a house with a mortgage valued at 3 times income.

take everything

Noel Dempseys Den wrote: »

That is so, but doesn't stop you from being a non-empathic bollocks with moral superiority issues.

So much for personal abuse being bannable.

take everything

take everything wrote: »

So much for personal abuse being bannable.

Hit the report button if you have a complaint!

Jumboman

What if someone leaves their property and refuses to pay the bank ? what can the bank do break their legs for not paying ? If it was me I'd tell the bank where to go.

PC CDROM

Jumboman wrote: »

What if someone leaves their property and refuses to pay the bank ? what can the bank do break their legs for not paying ? If it was me I'd tell the bank where to go.

Sadly you can't You still owe the money.

I don't see what the problem is tbh. You borrowed money... you pay it back.

The value of your asset doesn't matter. Anyways they will regain their value but it will be about another 10-15 years.

Scanlas The 2nd

PC CDROM wrote: »

Sadly you can't You still owe the money.

I don't see what the problem is tbh. You borrowed money... you pay it back.

The value of your asset doesn't matter. Anyways they will regain their value but it will be about another 10-15 years.

Wouldn't be so sure about that, maybe 40 or 50 years time.

Jumboman

PC CDROM wrote: »

Sadly you can't You still owe the money.

I don't see what the problem is tbh. You borrowed money... you pay it back.

The value of your asset doesn't matter. Anyways they will regain their value but it will be about another 10-15 years.

I dont owe the bank a penny and I dont support usury.

But if I was one of these negative equity people I would simply walk away. I dont know what people are afraid of its not like the bank will send around heavies to beat them up.

Also the banks should have to pay a price for their insane lending practices.

dotsman

Deleted User wrote: »

By the time this shakedown is complete, anyone with a decent income and savings will be able to afford a house with a mortgage valued at 3 times income.

Not at 3 times a person's income. There is far too much demand for decent housing in Ireland.

And anyway, good lending practices don't use a "certain multiple of the person's income". DSR, job stability, income stability, likely income increases, children, marital status and a host of other factors are a far better way of determining how much of a loan a person can afford.

PC CDROM

PC CDROM wrote: »

The value of your asset doesn't matter. Anyways they will regain their value but it will be about another 10-15 years.

It may regain its value (in Euros (An Punt núa)) but by then the currency will have devalued by a greater amount than the rise in the house price, in other words the price tag may show a figure similar to 2006 levels but in real terms it'll be worth less than it is now.

dotsman

dotsman wrote: »

Not at 3 times a person's income. There is far too much demand for decent housing in Ireland.

And anyway, good lending practices don't use a "certain multiple of the person's income". DSR, job stability, income stability, likely income increases, children, marital status and a host of other factors are a far better way of determining how much of a loan a person can afford.

Can't argue with that, so it's likely that the multiples will be even lower in the future, given the collapse in disposable income caused by ever increasing cost of taxes, fuel & food.

Monty Burnz

Jumboman wrote: »

I dont owe the bank a penny and I dont support usury.

But if I was one of these negative equity people I would simply walk away. I dont know what people are afraid of its not like the bank will send around heavies to beat them up.

They will take the property and then come after you for the shortfall, perhaps garnishing your salary or whatever for decades.

Jumboman wrote: »

Also the banks should have to pay a price for their insane lending practices.

'The banks' is very abstract. Do you mean the staff in the banks, or the owners of the banks? The owners lost all their money. Who should be punished?

dotsman

Deleted User wrote: »

Can't argue with that, so it's likely that the multiples will be even lower in the future, given the collapse in disposable income caused by ever increasing cost of taxes, fuel & food.

Or a lot higher than 3 times. For example, my outstanding home loan is 5.3 times my salary (and was higher again when I took out the loan), yet I have no problem making my repayments, have plenty of disposable income to still live a normal life and have surplus income to contribute to savings. My point is that it is different for different people and that there is no valid "rule" with regards a "multiple of income" than can be applied across the board.

Jumboman

Monty Burnz wrote:

They will take the property and then come after you for the shortfall, perhaps garnishing your salary or whatever for decades.

Let them take the property but If they went after my salary I would either go on the dole or leave the country.

Monty Burnz wrote:

'The banks' is very abstract. Do you mean the staff in the banks, or the owners of the banks? The owners lost all their money. Who should be punished?

The banksters are still rolling in it! just look at sean fitzpatrick he was staying in a 500euro a night hotel in poland. I would go after all the banksters assets.

What do think happend to all the billions put into the banks ? If I were the government I would try get back as much as that money as possible and let the banks collapse but guarantee peoples accounts up 100k.

Nate--IRL--

Jumboman wrote: »

If I were the government I would try get back as much as that money as possible and let the banks collapse but guarantee peoples accounts up 100k.

Since you have it all figured out - how much would that cost the government to pay out?

Nate

dotsman

Jumboman wrote: »

Let them take the property but If they went after my salary I would either go on the dole or leave the country.

This really says a lot about you (and not in a good way)

Jumboman wrote: »

let the banks collapse but guarantee peoples accounts up 100k.

Are you fcukin serious? Where the hell would we get the money to do all that? And, more importantly, why would we want to do that???

Jumboman

Nate--IRL-- wrote: »

Since you have it all figured out - how much would that cost the government to pay out?

Nate

Alot less than they have already payed out.

Do you know if would only cost 15 billion to wipe out everyones mortgage.

Think of what that 15 billion would do for the economy compared with paying the bondholders 30 plus billion and getting nothing for it.

AlmightyCushion

Jumboman wrote: »

Alot less than they have already payed out.

Do you know if would only cost 15 billion to wipe out everyones mortgage.

Think of what that 15 billion would do for the economy compared with paying the bondholders 30 plus billion and getting nothing for it.

So not only should we kill the banks and guarantee everyone's savings, we should also pay everyone's mortgage as well. Also, your figure is way out. Total mortgage debt is about €115 billion according to this (http://www.ronanlyons.com/2011/08/30/top-ten-facts-in-relation-to-ireland%E2%80%99s-mortgage-debt-arrears/). That figure is from June 2011 so it is probably different now but not €100 billion less.

Nate--IRL--

Jumboman wrote: »

Alot less than they have already payed out.

How Much less?

Nate

AlmightyCushion

Jumboman wrote: »

Alot less than they have already payed out.

Are you sure about that? Total deposits at Irish guaranteed banks is about €150 billion.

http://www.irishtimes.com/newspaper/finance/2012/0501/1224315407049.html

Jumboman

dotsman wrote: »

This really says a lot about you (and not in a good way)

The fact I would not spend the rest of life being a death slave for the banks I am some how a bad person:rolleyes:

dotsman wrote: »

Are you fcukin serious? Where the hell would we get the money to do all that? And, more importantly, why would we want to do that???

The same place we are getting the money at the moment. Its funny they dont have money to fund public services yet are able to pour money into the banks.

Do you realise the state is still spending the same amount of money as it did in 2007 ? there has been no real cut backs in over all spending.

dotsman

dotsman wrote: »

Or a lot higher than 3 times. For example, my outstanding home loan is 5.3 times my salary (and was higher again when I took out the loan), yet I have no problem making my repayments, have plenty of disposable income to still live a normal life and have surplus income to contribute to savings. My point is that it is different for different people and that there is no valid "rule" with regards a "multiple of income" than can be applied across the board.

Just pray that it's deflation the banks concentrate on and not inflation, could you still comfortably keep up the repayments with interest rates in the region of 15% (been there done that )

Monty Burnz

Jumboman wrote: »

Let them take the property but If they went after my salary I would either go on the dole or leave the country.

Leaving the country would not necessarily guarantee you aren't held to the debt.

Jumboman wrote: »

The banksters are still rolling in it! just look at sean fitzpatrick he was staying in a 500euro a night hotel in poland. I would go after all the banksters assets.

He's bankrupt - his wife has money (that he gave her in the good times). It stinks, but those are the laws for both rich and poor. Mrs. Ordinary Joe doesn't have to give up all her goodies just because Mr. Joe goes bust.

Jumboman wrote: »

What do think happend to all the billions put into the banks ? If I were the government I would try get back as much as that money as possible and let the banks collapse but guarantee peoples accounts up 100k.

It's sitting on their balance sheets. Have you calculated how much this guarantee would cost the taxpayer? There's an element of 'robbing Peter to pay Paul' about guaranteeing people's savings with their own taxes. But I agree, in spite of the economic bloodbath that would ensue, letting the banks go should be investigated.

Jumboman

AlmightyCushion wrote: »

Are you sure about that? Total deposits at Irish guaranteed banks is about €150 billion.

http://www.irishtimes.com/newspaper/finance/2012/0501/1224315407049.html

Do you know how banking works ? worst case scenario the government would have to pay out 10% of that money.

Nate--IRL--

Jumboman wrote: »

Do you know how banking works ? worst case scenario the government would have to pay out 10% of that money.

1 - you have no clue of the true figure
2 - I'm sure the rest disappearing in an instant will have absolutely no effect on the country.

Nate

AlmightyCushion

Jumboman wrote: »

Do you know how banking works ? worst case scenario the government would have to pay out 10% of that money.

I'm not sure what you mean. I understand how deposits work. People have close to €150 billion in Irish guaranteed banks. If the banks collapse then the government have to pay up. Now obviously they won't have to pay the full €150 billion as some people may have more than €100,000 but how will they only have to pay 10% of the amount.

Jumboman

Monty Burnz wrote: »

Leaving the country would not necessarily guarantee you aren't held to the debt.

So what I coundnt care less their is nothing they can do about it that would make me pay them.

Monty Burnz wrote: »

He's bankrupt -

Maybe on paper but the guy is still living like a millionaire. I'm sure if he was investigated properly you would find that he has a lot of money hidden away.

dotsman

Deleted User wrote: »

Just pray that it's deflation the banks concentrate on and not inflation, could you still comfortably keep up the repayments with interest rates in the region of 15% (been there done that )

Deflation? Surely you mean inflation. Inflation is brilliant for debt.

With regards the interest rates. I can afford realistic interest rate increases. With regards the 15%, if we ever come anywhere near there again, then this country will have much bigger troubles than my mortgage!

Jumboman wrote: »

The fact I would not spend the rest of life being a death slave for the banks I am some how a bad person:rolleyes:

How are you a "death slave"? Did you or did you not borrow this money? It doens't matter how much your property is worth today - that has no direct bearing on whether you can repay your mortgage or not.

As a matter of interest, if the price had quadrupled, would you happy to let the banks quadruple your repayments?

Jumboman wrote: »

The same place we are getting the money at the moment.

You want us to go back to the IMF and borrow another sh!tload of money - just to undo all the work that has been done to date?

What has been done to date has not been how I would have done it, but the last thing I would want now is to stop everything and start over.

Jumboman wrote: »

Its funny they dont have money to fund public services yet are able to pour money into the banks.

It's not funny - it is extremely serious. However, the government do have plenty of money to fund public services. It's just that trade unions and left wing groups are ensuring that the money is going to their people and not services.

Jumboman wrote: »

Do you realise the state is still spending the same amount of money as it did in 2007 ? there has been no real cut backs in over all spending.

You're absolutely right. There has been very little roll-backs of the ridiculous increases that were funded by the property boom. Every day that goes by that we allow trade unions and other interest groups dictate what our tax money should be spent on is reducing the quality of public services, driving us further and further into debt and forcing people to emigrate. But hey, we can blame it on the banks, right?

Monty Burnz

Jumboman wrote: »

Do you know how banking works ? worst case scenario the government would have to pay out 10% of that money.

Yikes. You have fractional reserve banking slightly arseways there. They would have to pay out the money to people via another (new?) bank, and even if they set up a new government bank they would still have a €150 billion liability.

Monty Burnz

Jumboman wrote: »

So what I coundnt care less their is nothing they can do about it that would make me pay them.

If they garnished your salary in whatever country you fled to, you would still end up paying.

Jumboman

Monty Burnz wrote: »

If they garnished your salary in whatever country you fled to, you would still end up paying.

So the Irish government has world wide jurisdiction ?:rolleyes:

Jumboman

Monty Burnz wrote: »

Yikes. You have fractional reserve banking slightly arseways there. They would have to pay out the money to people via another (new?) bank, and even if they set up a new government bank they would still have a €150 billion liability.

They may have a €150 billion liability but they would never have to pay out anything close to that amount. Also I wouldnt cover accounts that are over 100k.

Jumboman

dotsman wrote: »

How are you a "death slave"? Did you or did you not borrow this money? It doens't matter how much your property is worth today - that has no direct bearing on whether you can repay your mortgage or not.

I didnt borrow any money I'm saying that the people who did many were pushed into it by the banksters. They should not have to spend the rest of their life being a death slave.

dotsman wrote: »

As a matter of interest, if the price had quadrupled, would you happy to let the banks quadruple your repayments?

I'm not sure what your point is ?

dotsman wrote: »

You want us to go back to the IMF and borrow another sh!tload of money - just to undo all the work that has been done to date?

No I wouldnt go near the IMF they are gangsters who are only here to asset strip the country like they have done all over the world.

The money we are paying bond holders could be used for much more productive purposes.

dotsman wrote: »

It's not funny - it is extremely serious. However, the government do have plenty of money to fund public services. It's just that trade unions and left wing groups are ensuring that the money is going to their people and not services.

So the trade unions are the reason the country is f**ked ?
Are you forgeting that the public sector workers have already had two massive pay cuts ? why target them again and depress the economy further when we are giving billions to the banks.

dotsman wrote: »

You're absolutely right. There has been very little roll-backs of the ridiculous increases that were funded by the property boom. Every day that goes by that we allow trade unions and other interest groups dictate what our tax money should be spent on is reducing the quality of public services, driving us further and further into debt and forcing people to emigrate. But hey, we can blame it on the banks, right?

Im not a fan of the unions but I dont agree with cutting peoples pay when they have already had massive cuts. The bankters were what drove this country over the edge you cant deny that.

Monty Burnz

Jumboman wrote: »

They may have a €150 billion liability but they would never have to pay out anything close to that amount. Also I wouldnt cover accounts that are over 100k.

Why do you think they would not have to pay out that amount? Do you know what a bank run is? Do you think people would have faith in the (bankrupt) Irish government to stump up their money, or would they try to get their money out and into a safe bank somewhere else?

I'm also amused by the idea that someone will keep lending us money to keep paying the PS workers waaaaay more than our taxes can cover.

By the way, what is a "death slave"?

bnt

dotsman wrote: »

Not at 3 times a person's income. There is far too much demand for decent housing in Ireland.

And anyway, good lending practices don't use a "certain multiple of the person's income". DSR, job stability, income stability, likely income increases, children, marital status and a host of other factors are a far better way of determining how much of a loan a person can afford.

I didn't say that was the only criterion used by banks, but it's used by banks in the initial stage of the enquiry, and it's also a handy rule of thumb for anyone looking to take out a mortgage.

Besides, look at the other criteria you mention ... "income stability"? Really? :pac:

MadsL

One of the criteria the banks took into account when I thought about buying in early 2000 was the future value of my dot com share options. :eek: