Glut of repossessed houses could depress prices ‘by up to 25%’

Galego

Good article on the topic.

Welcome to Ireland, where mortgage payments are apparently optional



http://qz.com/50615/welcome-to-ireland-where-house-payments-are-optional-apparently/

cookie1977

It's an interesting article which rings remarkably true. It's also interesting that the author feels:

Irish banks may also dragging their feet on restructuring or foreclosing. That’s because if they dealt with those problem loans by foreclosing or restructuring them it would, through the magic of accounting, transform hazy “problem” loans into real losses.

This I whole heartedly agree with.

cookie1977

This is also very true:

And it’s not just the homeowners that will feel the pain through necessary foreclosures and repossessions. Banks must fess up to their losses and restructure bad debts.

Galego

cookie1977 wrote: »

This is also very true:

I like this sentence:

"You really owe it to yourself"

Couldn't agree more. We are pretty much the banks so these debts are ultimately every single tax payer's debts.

lima

cookie1977 wrote: »

This is also very true:

The people who took out loans on their own free will are the ones who should pay back every penny, even if that means (god forbid) a family has to rent (ohh nooo, my kids wont have a stable upbringing ohh) in hte ourskirts of Dublin.

You played the game and you lost. Pay up suckers.

Ipso

We are pretty much the banks so these debts are ultimately every single tax payer's debts.

I believe most people don't realise this and where the government gets money for running the country.

Victor

lima wrote: »

The people who took out loans on their own free will are the ones who should pay back every penny, even if that means (god forbid) a family has to rent (ohh nooo, my kids wont have a stable upbringing ohh) in hte ourskirts of Dublin.

You played the game and you lost. Pay up suckers.

Can we ask for more constructive posts please?

Moderator

Villa05

The Troika have there say:

On the issue of distressed loans and crisis mortgages, the report states that progress in resolving non-performing loans has been slow. The “high level of loan defaults on banks’ balance sheet raises concerns about potential future losses. In particular, the high level of mortgages in default is a persistent source of concern.”
Contending that banks must be in a position to collect collateral on non-performing loans and mortgages, it also suggested that some indebted households were prioritising debt such as credit card debt ahead of mortgages.

“Specifically banks report that a significant number of consumers are prioritising unsecured debt over the repayment of their secured mortgage debt . . . It may also reflect the moral hazard generated by legal uncertainty about the banks’ ability to recover the collateral

http://www.irishtimes.com/news/politics/government-has-nothing-to-fear-over-monthly-troika-reports-on-health-spending-1.1347030

Villa05

<Cough>

OVER the past few years an extraordinary development has occurred in Ireland, which has gone broadly unnoticed. Tens of thousands of people have left the labour force due to disability. This has occurred despite the fact that the workforce, in general, has become younger and healthier on most measures and despite the fact that there have been significant positive steps towards reducing discrimination against disabled people in the workforce.
.........................................................
This is not people who have been unfortunate enough to be born with a disability, but people who have developed a disabling condition. This means 55,000 people – bigger than Waterford, the country's fifth largest city. Between 2002 and 2006, the same figure only increased by 1pc which is less than 2,000 people.

So what has happened from 2006 to 2012 to cause 53,000 extra people to leave the labour force due to physical disability?

http://www.independent.ie/opinion/columnists/david-mcwilliams/mystery-of-massive-rise-in-those-quitting-workforce-on-disability-29170473.html

Just putting it out there.......

StillWaters

Villa05 wrote: »

<Cough>


http://www.independent.ie/opinion/columnists/david-mcwilliams/mystery-of-massive-rise-in-those-quitting-workforce-on-disability-29170473.html

Just putting it out there.......

Oh dear Vila, that is a hornets nest. I'm surprised McWilliams doesn't mention Carers Allowance, as of course that has gone up exponentially.

Galego

Villa05 wrote: »

The Troika have there say:


http://www.irishtimes.com/news/politics/government-has-nothing-to-fear-over-monthly-troika-reports-on-health-spending-1.1347030

So the EU Commission internal report discloses concern over level of mortgage distress and high unemployment but the Government has "nothing" to fear!!??

I guess those government lads have no fears then! :cool:

Galego

RTE reporting the same news but with a bit more of reality in it.

http://www.rte.ie/news/business/2013/0403/379597-imf-economy-assessment/

I've already said this before here pages before.........and people still do not want to listen.....


The International Monetary Fund has delivered a tough assessment of Ireland's economic situation, highlighting lack of progress by banks and dangers of the country's debt becoming unsustainable if growth forecasts are missed.

cookie1977

Villa05 wrote: »

<Cough>


http://www.independent.ie/opinion/columnists/david-mcwilliams/mystery-of-massive-rise-in-those-quitting-workforce-on-disability-29170473.html

Just putting it out there.......

Ah now here. There's enough heresay without adding opinion with no figures.
Lets look at those CSO figures on diability

http://www.cso.ie/en/statistics/healthandsocialconditions/recipientsofillnessdisabilitycaringpayments/

Compared to pre recession years the recent increase has slowed.

StillWaters

cookie1977 wrote: »

Ah now here. There's enough heresay without adding opinion with no figures.
Lets look at those CSO figures on disability
Compared to pre recession years the recent increase has slowed.]

Regardless, it's a shocking increase. The rate may have slowed somewhat due to the chronic waitlists for approval now (up to a year), and stricter eligibility. It is still an unacceptable % of our working population.

cookie1977

StillWaters wrote: »

Regardless, it's a shocking increase. The rate may have slowed somewhat due to the chronic waitlists for approval now (up to a year), and stricter eligibility. It is still an unacceptable % of our working population.

Perhaps an analysis of why this is happening needs to be done rather than journo's jumping to conclusions to sell papers

Villa05

cookie1977 wrote: »

Perhaps an analysis of why this is happening needs to be done rather than journo's jumping to conclusions to sell papers

Who jumped to a conclusion? just putting the info out there

Villa05

Bloomberg have got hold of that Graph and have put it on their "Single Best Chart" - May scare off those "savy" international investors we hear so much about from estate agents. Ireland Number 1 amongst the PIIGS

http://www.bloomberg.com/video/ireland-leads-piigs-in-mortgage-delinquencies-UHDPvIVyRs6F5hCcGD9yzw.html

Galego

Villa05 wrote: »

Bloomberg have got hold of that Graph and have put it on their "Single Best Chart" - May scare off those "savy" international investors we hear so much about from estate agents. Ireland Number 1 amongst the PIIGS

http://www.bloomberg.com/video/ireland-leads-piigs-in-mortgage-delinquencies-UHDPvIVyRs6F5hCcGD9yzw.html

Yes this graph is all over the international media now. It was obvious that "the brushing the rubbish under the carpet" strategy could not last internationally unnoticed for ever.

My rough calculations in repossessions are:

1- Ireland should be repossessing something between 3-4% of mortgages in arrears per year (as other PIIG countries/Uk).
2- Ireland has a backlog of 4-5 years. Then 16-25% repossession has been missed.
3- Ireland has about 100,000 households in arrears.
4 Repossessions should come close to a 16-25,000 figure.

In fairness, all those arrears over 2 years should be repossessed without further delays. That alone is more than 25,000 households which sort of match my calculations.

Do we then let it roll and see how high that percentage in arrears can get or actions are going to be taken at last?

Villa05

Joe Duffy's show on Friday worth a listen back
http://www.rte.ie/radio/utils/radioplayer/rteradioweb.html#!rii=9%3A10128786%3A53%3A12%2D04%2D2013%3A

Basically Ben Dunne encouraging people in arrears to go to the UK for 15 months to declare bankruptcy and come back clean.

A whole show (which is taxpayer funded) encouraging people to go abroad to avoid paying their debts without any counter view or tax payer perspective.

Joe Duffy, Pat Kenny, Ray Darcy - pure propaganda machine, they really need to put their cards on the table and declare their interests

RATM

Defintely seems that Pat Kenny has something to hide.

When speaking about journalists being required to disclose their vested interests Vincent Brown said this

I think that there should be a register of interests and I think it should be public. I believe there should be a register of interests for all journalists, in fact,

Pat Kenny said this

I think it's nonsense, to be quite honest. Overregulation would lead to vexatious and mischievous complaints

Full article where Kenny calls transparency "nonsense" here
http://www.independent.ie/irish-news/register-of-interests-proposal-for-presenters-nonsense-says-kenny-29188710.html

Bear in mind that Vincent has been very transparent in what his interests are. He was one of the first in the bust to sell his house in Dalkey as he knew he could no longer afford it. He has been open and honest about this and on his TV3 show if he has a vested interest he declares it live on air before the discussion takes place.

Pat Kenny on the other hand would far prefer his vested interests are kept secret yet still have the ability to influence public opinion. I think we all remember what happened the last time Pat Kenny's interests were kept secret- he ended up taking his elderly neighbours garden and claiming it for himself.

Why is Pat afraid of transparency here ?

Villa05

Research from Davy Stockbrokers has found that 33,000 owner-occupier homes would have been seized by lenders in the last three years alone if the banks became as aggressive as their British counterparts when it comes to dealing with struggling homeowners.

http://www.independent.ie/irish-news/uk-rules-would-spark-33000-home-seizures-29209194.html

11,000 repossessions per year - in line with estimates from some here

uberalles

Villa05 wrote: »

http://www.independent.ie/irish-news/uk-rules-would-spark-33000-home-seizures-29209194.html

11,000 repossessions per year - in line with estimates from some here

Any update on repros arriving on the market any time soon and in any qty?

A lot of people are wondering.
http://www.thepropertypin.com/viewtopic.php?f=10&t=59546

The_Conductor

On a related note- a fresh warning was issued today by Fitch that both BOI and AIB will have to be significantly recapitalised (yet again) if they are to book losses on their mortgage books. The economist Jim Power reckons between them they require and additional 20-25 billion, most probably over the next 2-3 years.

If we are to precipitate the losses on lenders books- the other side of the coin is we are going to have to make good those losses.

Villa05

uberalles wrote: »

Any update on repros arriving on the market any time soon and in any qty?

A lot of people are wondering.
http://www.thepropertypin.com/viewtopic.php?f=10&t=59546

I suspect too much dithering by the Irish banks, I reckon it may be forced upon them due to people leaving the country to obtain bankruptcy in the UK.

Ulster Bank and NIB will probably be the first out of the blocks, hovering up what cash remains. Irish banks will act when it is too late and this will happen

http://cormaclucey.blogspot.ie/2013/06/normal-0-false-false-false-en-ie-x-none.html

Conclusion
Making predictions about the future of Irish property prices is a necessarily hazardous undertaking. But, despite a recent apparent stabilisation, I believe that Irish residential property prices are still far from an enduring bottom.

It would not surprise me to see them drop by a further 30-40% from current levels. If recent rent increases were to tail off, the resulting residential property price fall might even head towards 50%

June 9th 2013.

El_Dangeroso

Villa05 wrote: »

I suspect too much dithering by the Irish banks, I reckon it may be forced upon them due to people leaving the country to obtain bankruptcy in the UK.

Ulster Bank and NIB will probably be the first out of the blocks, hovering up what cash remains. Irish banks will act when it is too late and this will happen

http://cormaclucey.blogspot.ie/2013/06/normal-0-false-false-false-en-ie-x-none.html

Superb article, thanks for posting!

lOWCOUNTRY

El_Dangeroso wrote: »

Superb article, thanks for posting!

He makes no mention of the Bacon effect when interest relief for investment properties was stopped causing a rise in rents, only to be reversed three years later. The effects of this are only now gone from the market.

El_Dangeroso

lOWCOUNTRY wrote: »

He makes no mention of the Bacon effect when interest relief for investment properties was stopped causing a rise in rents, only to be reversed three years later. The effects of this are only now gone from the market.

What would that mean for property prices then?

lOWCOUNTRY

El_Dangeroso wrote: »

What would that mean for property prices then?

Who knows? He is basing his projections on the basis of the historical rental yield. He is ignoring the fact that the yield was severely distorted between 1998 and 2001.

lima

http://www.irishtimes.com/news/crime-and-law/moratorium-on-legal-action-to-repossess-homes-cut-as-part-of-central-bank-code-1.1437487

Ahh, this should get the ball rolling nicely

cookie1977

It is good to see this happening to the extent that it is necessary for some borrowers to realise they have no other option then to loose their house but whether the repossessed properties will be A) in good locations to sell or the type of property people want to buy (Apt/House) and C) put back on the market quickly, is another thing altogether. I also saw that...

Allied Irish Banks confirmed that it has written off mortgage debt owed by some struggling customers.

http://www.independent.ie/business/irish/aib-admits-writing-off-mortgage-debt-for-struggling-homeowners-29361545.html