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

OMD

Frank Lee Midere wrote: »

Rent fell for a while. In any case this benefit of buying in 2006 is illusionary. Things will get worse pretty soon.

Rent also rose for a while too. I think 2006 was a bad time to buy but what about 2004 or 2003? Definitely 2002 or earlier were good times to buy unless house prices fall a lot further from where they are now.

jay0109

RATM wrote: »

Without doubt this is our dead cat bounce, the media are all talking up property and many people are biting. 2014 will put a stop to further rises as the news agenda will be full of repossessions and market sentiment gets hit yet again.

This dead cat bounce has being going on since late 2011 (in SCD area, where I'm looking at). That's 1 hell of a bounce.
But I hope your right about 2014 as I can't hold off any longer than that due to school starting time

Villa05

cookie1977 wrote: »

But if that is what's repossessed then 30-40,000 represents about 4-5% of total stock (total stock is about 923,000). Hardly a glut now?

The property market is not made up of the total stock. It is the stock that is for sale.

@ D3PO my post was in response Cookies assertion that 30 to 40k repossessions was "hardly a glut". Something has to give when there are so many are paying nothing. The IMF want the repossession procedure to speed up. Funny how the figure touted of 30 to 40k repossessions is similar to my calculations on this thread back in March
http://www.boards.ie/vbulletin/showthread.php?t=2056898823&page=10

@ Cookie I said it would double the amount of properties on Daft, not "Dublin"
Threat may be a strong word, I'm not as politically correct as big business.
Business is not just about playing to your strengths, it's also about exploiting you competitors weaknesses. Irish Banks/Gov are reluctant to repossess, UB have loads of distressed assets. There is a little pent up demand. What would you do?

@ The_Conducter, I stand corrected RBS's largest shareholder the UK Gov wants them to offload loss making subsidiaries -of which UB is near the top of the list. The proposal to swap with NAMA assets was from a treasury official and not actually put to the Irish Gov

beeno67

To villa05. As far as I can see the only one who gave a figure of 30-40000 repossessions was you. So it is not really funny that the figures match your previous calculations since the source in both cases is you.


We need to look at how distressed these mortgages are and how much us being paid on them. The average value of residential mortgage 90 days in arrears is only 190,000.

gurramok

If you bought a 300k gaff in 2006 in Dublin, it was more than likely an apartment in a desirable area or a house in an undesirable area. The minimum price for a house was about 300k in Dublin in 2006.

Just look what 300k can get you now, definitely a house in a desirable area or 2 apartments in that undesirable area. Point being you have larger accommodation available to you now than there was in 2006.

cookie1977

gurramok wrote: »

If you bought a 300k gaff in 2006 in Dublin, it was more than likely an apartment in a desirable area or a house in an undesirable area. The minimum price for a house was about 300k in Dublin in 2006.

Just look what 300k can get you now, definitely a house in a desirable area or 2 apartments in that undesirable area. Point being you have larger accommodation available to you now than there was in 2006.

Depends on your definition of a desirable area.

cookie1977

Villa05 wrote: »

The property market is not made up of the total stock. It is the stock that is for sale.

@ D3PO my post was in response Cookies assertion that 30 to 40k repossessions was "hardly a glut". Something has to give when there are so many are paying nothing. The IMF want the repossession procedure to speed up. Funny how the figure touted of 30 to 40k repossessions is similar to my calculations on this thread back in March
http://www.boards.ie/vbulletin/showthread.php?t=2056898823&page=10

@ Cookie I said it would double the amount of properties on Daft, not "Dublin"
Threat may be a strong word, I'm not as politically correct as big business.
Business is not just about playing to your strengths, it's also about exploiting you competitors weaknesses. Irish Banks/Gov are reluctant to repossess, UB have loads of distressed assets. There is a little pent up demand. What would you do?

@ The_Conducter, I stand corrected RBS's largest shareholder the UK Gov wants them to offload loss making subsidiaries -of which UB is near the top of the list. The proposal to swap with NAMA assets was from a treasury official and not actually put to the Irish Gov

Yes you did say daft.

gurramok

cookie1977 wrote: »

Depends on your definition of a desirable area.

Lets not beat about the bush on this, i'll give you an example. I lived in a house in Finglas in 2006 whereby identical houses on the estate were asking and sold for about 300k, this was the minimum price in Dublin at the time for a house as Finglas was on the lowest of the price list. The estate I lived in was undesirable, no quibbs about it. I would live in Finglas again but never in that estate again.

If you wanted a house next door in Glasnevin or Castleknock or down the road in Santry, easily 400k and upwards was the price. Alternatively, you had to spend about 300k to get an apartment in the above areas, no more than a 2bed was available.

Fast forward to 2013, 300k would get you a house in either of the above 3 areas. That's larger accommodation available to the buyer.

OMD

gurramok wrote: »

Lets not beat about the bush on this, i'll give you an example. I lived in a house in Finglas in 2006 whereby identical houses on the estate were asking and sold for about 300k, this was the minimum price in Dublin at the time for a house as Finglas was on the lowest of the price list. The estate I lived in was undesirable, no quibbs about it. I would live in Finglas again but never in that estate again.

If you wanted a house next door in Glasnevin or Castleknock or down the road in Santry, easily 400k and upwards was the price. Alternatively, you had to spend about 300k to get an apartment in the above areas, no more than a 2bed was available.

Fast forward to 2013, 300k would get you a house in either of the above 3 areas. That's larger accommodation available to the buyer.

What's your point? Prices have fallen. We all know that.

cookie1977

gurramok wrote: »

Lets not beat about the bush on this, i'll give you an example. I lived in a house in Finglas in 2006 whereby identical houses on the estate were asking and sold for about 300k, this was the minimum price in Dublin at the time for a house as Finglas was on the lowest of the price list. The estate I lived in was undesirable, no quibbs about it. I would live in Finglas again but never in that estate again.

If you wanted a house next door in Glasnevin or Castleknock or down the road in Santry, easily 400k and upwards was the price. Alternatively, you had to spend about 300k to get an apartment in the above areas, no more than a 2bed was available.

Fast forward to 2013, 300k would get you a house in either of the above 3 areas. That's larger accommodation available to the buyer.

Here's a street in Terenure, Dublin 6W. You'd call that a desirable area yes? All the houses are pretty much the same (3 bed terraced maybe some with extensions).
http://goo.gl/FPdq2w It's a long road: http://goo.gl/HBIHKc

In 2010 6 houses sold for between 150K and 355K (Ave: 288K)
In 2011 5 houses sold for between 225K and 330K (Ave: 270K)
In 2012 3 houses sold for between 315K and 340K (Ave: 323K)

See a pattern?

gurramok

OMD wrote: »

What's your point? Prices have fallen. We all know that.

The benefit of waiting? It was mentioned that a mortgage now might be more expensive than one in 2006 due to interest rates.

If a person had a 300k price range and wanted to live in lets say Santry in 2006, apartments in Northwood were only available back then. Waiting to 2013(or even 2011), the vast majority of houses now there are selling sub 300k. The buyer by waiting has much larger accommodation available than he did in 2006 and thats taking into account some of the larger apartments(a small number were) that were built in Northwood.

OMD

gurramok wrote: »

The benefit of waiting? It was mentioned that a mortgage now might be more expensive than one in 2006 due to interest rates.

If a person had a 300k price range and wanted to live in lets say Santry in 2006, apartments in Northwood were only available back then. Waiting to 2013(or even 2011), the vast majority of houses now there are selling sub 300k. The buyer by waiting has much larger accommodation available than he did in 2006 and thats taking into account some of the larger apartments(a small number were) that were built in Northwood.

But you totally missed the point of the cost of the mortgage. A person getting a mortgage now will pay a hell of a lot more for a mortgage now than they would have a few years ago.

In the previous example a property bought in 2005 would have the same mortgage repayment as a mortgage repayment in the same house now despite the cut in price of the house. This is because the poster got a tracker mortgage.

Villa05

beeno67 wrote: »

To villa05. As far as I can see the only one who gave a figure of 30-40000 repossessions was you. So it is not really funny that the figures match your previous calculations since the source in both cases is you..

A new report estimates that lenders have issued legal proceedings to take properties off up to 44,000 borrowers.

These are made up of residential and buy-to-let properties, according to calculations contained in a new report by Davy Stockbrokers.

http://www.independent.ie/business/personal-finance/property-mortgages/thousands-of-homes-targeted-for-seizure-by-banks-29458021.html

I neither work for Davy's or as you might have guessed, I am not Charlie Weston

gurramok

OMD wrote: »

But you totally missed the point of the cost of the mortgage. A person getting a mortgage now will pay a hell of a lot more for a mortgage now than they would have a few years ago.

In the previous example a property bought in 2005 would have the same mortgage repayment as a mortgage repayment in the same house now despite the cut in price of the house. This is because the poster got a tracker mortgage.

That might be the case if the numbers are crunched(amount borrowed, rates, mortgage term). The person in 2005 who only could afford an apartment to buy is probably stuck there now in negative equity(unless they move and rent it out), today's buyer has a plethora of houses to choose from when buying and can stay in a house with their family for life.(apartments are not catered for families)

Villa05

The Central Bank's Fiona Muldoon has warned that the country is set for a turbulent time over the next few months as the issue of mortgage arrears are dealt with.
The bank's Director of Credit Institutions and Insurance Supervision, Fiona Muldoon, made her comments at the MacGill Summer School in Donegal today.
Ms Muldoon said that households which are simply not able to pay their mortgages will need to confront that difficult fact and engage actively with their banks.
''There will be some who will unfortunately lose their homes, and some who will need to enter insolvency proceedings,'' she stated.
But she added that there are many people who will have to continue to face the consequences of bad investment or financial decisions and who will still have to pay up.

http://www.rte.ie/news/business/2013/0802/466088-fiona-muldoon-arrears/

D3PO

gurramok wrote: »

The benefit of waiting? It was mentioned that a mortgage now might be more expensive than one in 2006 due to interest rates.

If a person had a 300k price range and wanted to live in lets say Santry in 2006, apartments in Northwood were only available back then. Waiting to 2013(or even 2011), the vast majority of houses now there are selling sub 300k. The buyer by waiting has much larger accommodation available than he did in 2006 and thats taking into account some of the larger apartments(a small number were) that were built in Northwood.

where your argument falls flat on its arse is that somebody who could only get approval for a 300k house in 2006 would be very unlikely to be approved for 300k in 2013.

some peoples circumstances and salaries will have improved to allow it but it would be the exception and not the rule.

gurramok

cookie1977 wrote: »

Here's a street in Terenure, Dublin 6W. You'd call that a desirable area yes? All the houses are pretty much the same (3 bed terraced maybe some with extensions).
http://goo.gl/FPdq2w It's a long road: http://goo.gl/HBIHKc

In 2010 6 houses sold for between 150K and 355K (Ave: 288K)
In 2011 5 houses sold for between 225K and 330K (Ave: 270K)
In 2012 3 houses sold for between 315K and 340K (Ave: 323K)

See a pattern?

Firstly, Terenure which i'm not quite familiar with but know where it is(:P) is probably a desirable area. Secondly, you quote back to 2010, that was the crash era. Why haven't you quoted the bubble price in 2006? Yes, it was probably over half a million.

Local knowledge counts and in my example previously, that was the case for buyers in those areas.

Villa05

Has anyone got a copy of this report, or a county by county breakdown. It would answer alot of questions on this thread

DONAL O'DONOVAN – 20 SEPTEMBER 2012
That's according to a wide-ranging report on the mortgage market from rating agency Moody's, published yesterday. The research includes the first county-by-county breakdown of mortgage arrears since the economic crisis began in 2008.

Cavan and Laois have the highest rate of mortgage defaults -- not paying their home loan for more than 90 days.

The cities of Cork and Dublin have the lowest default rates.

http://www.independent.ie/business/personal-finance/property-mortgages/one-in-five-mortgages-now-in-big-trouble-according-to-ratings-agency-28811933.html

cookie1977

gurramok wrote: »

Firstly, Terenure which i'm not quite familiar with but know where it is(:P) is probably a desirable area. Secondly, you quote back to 2010, that was the crash era. Why haven't you quoted the bubble price in 2006? Yes, it was probably over half a million.

Local knowledge counts and in my example previously, that was the case for buyers in those areas.

I'm just giving you an example backed by proof you can check. Yours is just hearsay which we have to take your word on. I cant go back to 2006 as I dont have data but I can say that in 2008 and paid 475K for mine.

gurramok

D3PO wrote: »

where your argument falls flat on its arse is that somebody who could only get approval for a 300k house in 2006 would be very unlikely to be approved for 300k in 2013.

some peoples circumstances and salaries will have improved to allow it but it would be the exception and not the rule.

Well, the only way for a person to negate this was to save for that big deposit. If they haven't in all those years, they've only themselves to blame.

cookie1977 wrote: »

I'm just giving you an example backed by proof you can check. Yours is just hearsay which we have to take your word on. I cant go back to 2006 as I dont have data but I can say that in 2008 and paid 475K for mine.

Well, that was what it was like in 2006. For houses, the minimum prices were about 300k in Finglas, 350k in Blanch and 400k in Santry, more than this for the likes of Castleknock\Glasnevin. I'm sure there must be threads(and other sites) about prices back then and what people could afford in Dublin.

Cuddlesworth

gurramok wrote: »

Firstly, Terenure which i'm not quite familiar with but know where it is(:P) is probably a desirable area. Secondly, you quote back to 2010, that was the crash era. Why haven't you quoted the bubble price in 2006? Yes, it was probably over half a million.

Local knowledge counts and in my example previously, that was the case for buyers in those areas.

Not that desirable. Crappy small mostly ex-council housing. Its the wrong side of Terenure road west.

cookie1977 wrote: »

I'm just giving you an example backed by proof you can check. Yours is just hearsay which we have to take your word on. I cant go back to 2006 as I dont have data but I can say that in 2008 and paid 475K for mine.

You gave a example across a tiny amount of purchases. Quite a few of those property's had large side gardens, meaning they have the possibility of large extensions or second houses to be built. Or they all ready had extensions built.


The overall stats, even in South Dublin show only minor increases. TBH, until actual sales volumes pick up to a normal level through release of stock any figures or statistics are pretty flawed as they can be skewed heavily by a small number of purchases.

cookie1977

Cuddlesworth wrote: »

Not that desirable. Crappy small mostly ex-council housing. Its the wrong side of Terenure road west.



You gave a example across a tiny amount of purchases. Quite a few of those property's had large side gardens, meaning they have the possibility of large extensions or second houses to be built. Or they all ready had extensions built.


The overall stats, even in South Dublin show only minor increases. TBH, until actual sales volumes pick up to a normal level through release of stock any figures or statistics are pretty flawed as they can be skewed heavily by a small number of purchases.

None are ex council. They're former guinness houses. What's a side garden, they're terraced houses. Comeback when you know what you're taking about.

roro2

Villa05 wrote: »

http://www.independent.ie/business/personal-finance/property-mortgages/thousands-of-homes-targeted-for-seizure-by-banks-29458021.html

I neither work for Davy's or as you might have guessed, I am not Charlie Weston

An important point, that is seemingly being missed, is that sending a legal letter to 44,000 people (if accurate) will not lead to 30-40k repossessions. It is a tactic to get an "uncooperative" borrow to "engage" with the bank, in the language of the banks themselves. The banks don't want to repossess every property in arrears, but if threatening legal action or starting legal action will get a borrower who is ignoring the bank to the negotiating table, then of course that's what they'll do. As pointed out by David Duffy yesterday, that's what AIB are doing for the 20% of cases they estimate are strategic defaulters.

Cuddlesworth

cookie1977 wrote: »

None are ex council. They're former guinness houses. What's a side garden, they're terraced houses. Comeback when you know what you're taking about.

I had always figured they were council, has that feel. I've been in a few of them, horrible depressing small houses, with much better property's withing spitting distance.

I like the deflection though, care to answer the fact that 6 property's sold in 2010( a year of horrible sales in the middle of our largest recession), followed by 5 in 2011, 3 in 2012, none so far this year. That's not a functioning market its a dying one.

cookie1977

Cuddlesworth wrote: »

I had always figured they were council, has that feel. I've been in a few of them, horrible depressing small houses, with much better property's withing spitting distance.

I like the deflection though, care to answer the fact that 6 property's sold in 2010( a year of horrible sales in the middle of our largest recession), followed by 5 in 2011, 3 in 2012, none so far this year. That's not a functioning market its a dying one.

Hmmm. The point of the post was more to do with gurramok post on desirable houses being 300k in desirable locations. I was saying that desirable is a point of view. One which you've proved. It was nothing to do with value. But thanks for backing up my point on desirability.

gurramok

cookie1977 wrote: »

Hmmm. The point of the post was more to do with gurramok post on desirable houses being 300k in desirable locations. I was saying that desirable is a point of view. One which you've proved. It was nothing to do with value. But thanks for backing up my point on desirability.

Ah here, houses in Terenure were not going for 300k in 2006. If you're saying that, you are misleading us. Otherwise we are in agreement

cookie1977

gurramok wrote: »

Ah here, houses in Terenure were not going for 300k in 2006. If you're saying that, you are misleading us. Otherwise we are in agreement

Good god no I'm not saying that.

Cuddlesworth

cookie1977 wrote: »

Hmmm. The point of the post was more to do with gurramok post on desirable houses being 300k in desirable locations. I was saying that desirable is a point of view. One which you've proved. It was nothing to do with value. But thanks for backing up my point on desirability.

Ohh sorry, in that case he is wrong. Desirable 3-4 bed houses in south county Dublin would be 400k plus at the moment in the traditional "middle to upper" class areas. Don't think any of them went below that.

gurramok

Cuddlesworth wrote: »

Ohh sorry, in that case he is wrong. Desirable 3-4 bed houses in south county Dublin would be 400k plus at the moment in the traditional "middle to upper" class areas. Don't think any of them went below that.

You're being mired up in the SCD bubble mind

There are now in 2013 desirable areas outside SCD where houses can be bought for 300k, some even lower. What I said was this was not possible in 2006.

RATM

roro2 wrote: »

An important point, that is seemingly being missed, is that sending a legal letter to 44,000 people (if accurate) will not lead to 30-40k repossessions. It is a tactic to get an "uncooperative" borrow to "engage" with the bank, in the language of the banks themselves. The banks don't want to repossess every property in arrears, but if threatening legal action or starting legal action will get a borrower who is ignoring the bank to the negotiating table, then of course that's what they'll do. As pointed out by David Duffy yesterday, that's what AIB are doing for the 20% of cases they estimate are strategic defaulters.

That's a very good point, the threatening letters being sent out are only designed to flush out those who are strategically defaulting. You could probably draw a comparison to the recent property tax- about 35% of people hadn't paid it by the first deadline but after a few threatening letters from Revenue the compliance rate went up to 95%. But that is where the comparisons end because there is a big difference between the monetary value of the property tax and the value of strategically defaulting.

There are defintely going to be some people who have tens of thousands squirreled away in off shore accounts in the hope a forensic accountant won't be able to find the paper trail. If these people get caught it could be a triple whammy- house repossessed but mortgage still owed, criminal charges for fraud and then on top of that a tax bill from Revenue.