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

gaius c

cookie1977 wrote: »

Sound familiar?
Buy-to-let fuels house price boom

http://gu.com/p/3hqkm

They have their own currency to debase but it's still not going to help them in the long run as they are replacing debt with more debt.

gaius c

uberalles wrote: »

+1

Ive spoked to Czech natives who say Ireland is a lot more favorable as well.
If you refuse two job offers you loose your Medical card as well as all your payments. Again the unemployment financial slide is way more rapid than Ireland.

On the flip side the Czechs have govt run subsidized creches so working couples can easily have more than one kid. This contrasts with the accidental China Ireland has become for so many hard working couples who really yearn for maybe just two kids but cant afford the creche fees.

There you go again...

Jmayo. Partly agreed with you but anecdotal HAS to be backed up with more concrete evidence too.

cookie1977

gaius c wrote: »

There you go again...

Jmayo. Partly agreed with you but anecdotal HAS to be backed up with more concrete evidence too.

Even if only for a modicum of the time

jmayo

cookie1977 wrote: »

Where were you before? Look back over this entire thread. There has been plenty of times where your above statement could be said by people who disagree with you. What's good for the goose is good for the gander. If you're going to speak about controversial things that you've "heard" then you're going to have to expect that you'll be asked to provide some sort of proof. Otherwise it may just as easily be you making things up just to make your point.

jebus on a stick, is it making things up to say that in certain estates in this country the kids of unemployed have also probably been unemployed even during our celtic and bubble economy ?

People talk of the bubble as this time of "full employment", but get this little fact, there were over 80,000 on the dole during that time.

That is over 80,000 who weren't in employment when we had immigrants from recent EU accession states (Central and Eastern Europe) and immigrants from Asia arriving to fill menial jobs and indeed craft or professional jobs.

We hear of unemployment black spots which were even there in the bubble years.
Then we hear in the next sentence of how these areas are disadvantaged and how the people are disadvantaged.
Yet how come some do manage to finish school, go out and get a job, or not have kids they can't afford and actually make lives for themselves not relying on freebes or criminality.

I say it is becasue they have the will to get off their bloody ar**es.

gaius c wrote: »

There you go again...

Jmayo. Partly agreed with you but anecdotal HAS to be backed up with more concrete evidence too.

I would argue it is hard to get concrete evidence to prove that people are career spongers and that this trait is often passed down from parents to children.
After all will the CSO send out people to do a poll in Southhill, Moyross, Jobstown, knocknaheeny or in the nearest dole office/welfare centre to ask ?

I guess one could make assumptions using the data from multiple census in some areas as to why unemploment levels are always above a certain figure no matter how the wider economy is doing and how the families living in the area have not appreciably changed.
I don't have the data nor the time to do such a task, but it might make an interesting project for some student, preferably not a student of social work but one of economics.

I believe it doesn't suit some in this country to admit to the fact we have created an environment that not alone tolerates career welfare spongers but rewards it.
And when someone does raise this topic, all we will hear is that these are the disadvantaged and they must be helped.

No the disadvantaged are the ones who get nought, but an unescapable tax bill to pay for the merry go round to continue. :mad:

uberalles

gaius c wrote: »

There you go again...

Jmayo. Partly agreed with you but anecdotal HAS to be backed up with more concrete evidence too.

He spoke to a girl (who happens to back up what I said) and she gave her opinion, can he prove what she said? Its also anecdotal.

HAS to be backed up with more concrete evidence> Does it? Im not on trial and this is a discussion forum.

Ive lots of contacts and chat to people frequently. Im quoting people Ive spoken to in person and I cant tape record them to prove what they say. Its their opinion and often its the opinion of several people.

Ok here are some news papers links. If its in the newspapers its got to be true.

Childcare costs in Ireland are the most expensive in the world.
http://www.thejournal.ie/irish-childcare-costs-highest-in-western-world-14021-Aug2010/

Unemployed couples have 0 childcare fees as I presume most cant afford creches.

One in seven people on the dole has never worked a single day
http://www.independent.ie/irish-news/one-in-seven-people-on-the-dole-has-never-worked-a-single-day-29278033.html

Of those, one in three, or 13,222, are aged 35 or older, which makes them far more likely to have children, which Mr Keaveney said is an intolerable situation. "Based on the figures, there is a strong possibility of children growing up with parents who have never contributed to the State."



A mortgage is the biggest debt to be considered before leaping and adding in childcare
onto the spreadsheet of outgoings is frightening.

Someone I know working in social services said a very large proportion of the baby boomers were born to non productive members of society here.

Some couples get to free load their way through life and have relatively more kids than those working and busting them selves.

How can that be right?

If there is no stick for presently unemployed couples having huge families (who lets say have never paid a bean into the tax system) At least give working parents a tax subsidy on Creche payments.

Even better than this would be state run Creches for working parents. These kids are more likely to be the future tax payers of Ireland as they are born into a work ethic so we need as many of them as possible.


Can I add that I wish those genuinely looking for work the very best.

OMD

jmayo wrote: »

People talk of the bubble as this time of "full employment", but get this little fact, there were over 80,000 on the dole during that time.

That is over 80,000 who weren't in employment when we had immigrants from recent EU accession states (Central and Eastern Europe) and immigrants from Asia arriving to fill menial jobs and indeed craft or professional jobs.

But we're these the same 80,000 that remained unemployed throughout the boom. Of course they were not. Most of these were unemployed for less than 1 year ie they were not classed as long term unemployed. Less than 1 in 4 unemployed during the boom were classed as long term.( long term unemployment was 1.4% in 2004 compared to EU average if 4.1%). That means less than 20,000 were unemployed for more than 12 months. Now what proportion if that 20,000 never worked and then had children who never worked?

Answer: Fcuk all.

Yet this rubbish is bandied about like it is some fact. I have no doubt you will get some people who do not want to ever work but implying it is some huge figure when the facts do not support it is quite annoying.

cookie1977

uberalles wrote: »

Childcare costs in Ireland are the most expensive in the world.
http://www.thejournal.ie/irish-childcare-costs-highest-in-western-world-14021-Aug2010/

A more up to date study from the OECD. Both the UK and Switzerland cost more.
http://www.theguardian.com/news/datablog/2012/may/21/child-care-costs-compared-britain

uberalles wrote: »

One in seven people on the dole has never worked a single day
http://www.independent.ie/irish-news/one-in-seven-people-on-the-dole-has-never-worked-a-single-day-29278033.html

Of those, one in three, or 13,222, are aged 35 or older, which makes them far more likely to have children, which Mr Keaveney said is an intolerable situation. "Based on the figures, there is a strong possibility of children growing up with parents who have never contributed to the State."

The figures above amount to 3% of the total number of unemployed people who are 35 years or older have never (legally) worked a day in their life. Not exactly massive now to be honest. When you consider some of these have valid reasons for not doing so. Certainly target the scroungers but lets not rush for hyperbole.

In relation to the rest of the 1:7 figures, how many of those are graduates/school leavers who've been unable to get work since they left school or college due predominantly to the recession? Why must you assume that the 1:7 are lazy no good for nothings?

Snakeblood

This has really very little to do with the thread.

jay0109

OMD wrote: »

But we're these the same 80,000 that remained unemployed throughout the boom. Of course they were not. Most of these were unemployed for less than 1 year ie they were not classed as long term unemployed. Less than 1 in 4 unemployed during the boom were classed as long term.( long term unemployment was 1.4% in 2004 compared to EU average if 4.1%). That means less than 20,000 were unemployed for more than 12 months. Now what proportion if that 20,000 never worked and then had children who never worked?

Answer: Fcuk all.

Yet this rubbish is bandied about like it is some fact. I have no doubt you will get some people who do not want to ever work but implying it is some huge figure when the facts do not support it is quite annoying.

A question on this even though we're all gone way off topic...if your on single mother's allowance, do you show up on the dole numbers?

Also, were those on FAS courses counted on the dole numbers....I think I read somewhere that they are'nt?

Perhaps someone more knoweldgable than myself can answer those 2 question.

El_Dangeroso

Snakeblood wrote: »

This has really very little to do with the thread.

Yes, can ye take it to AH or politics or something and get back to talking about property?

Snakeblood

Actually, I see where KBC have claimed 25% of their mortages are in arrears of 90 days or more.

Well, 24.9% up from 24% the previous quarter, and 20% last year.

It's kind of interesting that unemployment went down from 15% to 13.5% while mortgage arrears went up from 20% to 24%. You'd think that if there were very few strategic defaulters and with however minor an improvement in unemployment (taking into account that the jobs people get now might not be the jobs they had in the bubble), that the default rate would stay static instead of deteriorating so rapidly.

Just under one-in-three of its €3.1 billion buy-to-let mortgage book is in arrears and 18.8 per cent of its €9.2 billion book of owner-occupied home loans.

http://www.irishtimes.com/business/sectors/financial-services/kbc-reports-increase-in-problem-loans-1.1488766

beeno67

http://www.independent.ie/business/irish/mortgage-arrears-to-peak-next-year-says-kbc-chief-29485380.html

Interesting independent reports the same news differently.

On the vexed question of whether large numbers of people were "strategically defaulting" on mortgages, KBC's John Reynolds said it was simply impossible to know the true situation.

KBC expects its total number of mortgages in long-term arrears to peak in the first half of next year, not late 2013 as previously indicated. That's because people are still moving from short-term to long- term arrears, even as the figures for borrowers falling into arrears for the first time has slowed, Mr Reynolds said.

jmayo

Well I have seen the light when I sit back and view the figures.

There obviously are no real long term unemployed who have never worked a day in their lives.
There are no families who have passed the unemploymemt welfare sponger gene down to their kids.
There are no areas where historically people do not work and young girls get pregnant to avail of social welfare housing, etc.
All the people I have ever met who have supposedly real life experience of such things obviously do not count as they haven't appeared, or the people they have known, haven't appeared as a figure on a CSO or government statistical table.

And anyway so what if there are a few thousand of these long term welfare spongers since in the grand scheme of things who cares.

Oh and all those lying on trolleys in hospital corridors and day wards never existed since the HSE has been able to produce stats that plainly says so.

Oh and to put this back on topic I am now sure there are no strategic defaulters out there at the moment and property prices are going back to the bubble in some areas according to some people, and because they can find some figures to back it up then obvously they must be correct.
I am glad I came here so that my life experiences can be correctly set straight.

cookie1977

Snakeblood wrote: »

Actually, I see where KBC have claimed 25% of their mortages are in arrears of 90 days or more.

Well, 24.9% up from 24% the previous quarter, and 20% last year.

It's kind of interesting that unemployment went down from 15% to 13.5% while mortgage arrears went up from 20% to 24%. You'd think that if there were very few strategic defaulters and with however minor an improvement in unemployment (taking into account that the jobs people get now might not be the jobs they had in the bubble), that the default rate would stay static instead of deteriorating so rapidly.




http://www.irishtimes.com/business/sectors/financial-services/kbc-reports-increase-in-problem-loans-1.1488766

If you read it correctly it's that arrears of 90 days or more went up. So when those on less then 90 days in arrears exceeded the 90 days they joined the stats. It's not connected to employment. These <90 days were are ready in arrears, just waiting in the wings to exceed 90 days.

Snakeblood

cookie1977 wrote: »

If you read it correctly it's that arrears of 90 days or more went up. So when those on less then 90 days in arrears exceeded the 90 days they joined the stats. It's not connected to employment. These <90 days were are ready in arrears, just waiting in the wings to exceed 90 days.

Problematically, I think I am reading it correctly. If more people have jobs than last year, it's somewhat difficult to see on a surface reading why arrears have increased so much. Edit: To explain further. Given that slightly more people have jobs, how can the people who are slightly in arrears (Less than 3 months) have gone three month in arrears, if they managed not to be in arrears for the previous 6 years. What's changed for them if they haven't (presumably) lost their jobs? What made the 90day+ arrears situation 25% worse for KBC?

I agree it's not connected to employment. That was rather my point.

cookie1977

Snakeblood wrote: »

Problematically, I think I am reading it correctly. If more people have jobs than last year, it's somewhat difficult to see on a surface reading why arrears have increased so much.

I agree it's not connected to employment. That was rather my point.

Arrears have increased because the stats you quoted don't count people until they exceed 3 month arrears. Those already in arrears quite probably have jobs but are still struggling. Those who were unemployed may also have just got a job but still crossed over into 90 days arrears as they couldn't catch up.

StillWaters

Snakeblood wrote: »

I agree it's not connected to employment. That was rather my point.

It's never been connected to employment, that was established ages ago.

Snakeblood

StillWaters wrote: »

It's never been connected to employment, that was established ages ago.

By whom? I would have thought paying money for things should be related to having a job which earns money.

Villa05

El_Dangeroso wrote: »

This thread has gone annoyingly off-topic.

It may seem so but if you join the dots, you will see that nearly every major problem in Ireland is linked to high priced property.

We have cookie and the_conductor admitting that they struggle when doctors, dentist or car insurance bills come in(all essentials to living). We still have, at a minimum 2 more austerity budgets to come.

We have people saying they cant afford to have children, so property prices have sterilised a significant portion of our population. This is probably the most tragic outcome of the property bubble.

People can't afford high childcare costs, Employee's in childcare are close to minimum wage, Most business today cut there costs to the bone to survive. So what could be the driver of the high cost, yes, you guessed it, The price of the property the creche facilities are.

Welfare costs, Social welfare was increased above the rate of inflation during the bubble, this was driven by one off taxes from property sales and greedy politicians buying votes. The balance between Social welfare and the cost of working has created a terrible poverty trap
Similar situation in the public sector, bench-marking paid out from one off taxes from property. Public Servants now on salaries we cannot afford and have made 35 year commitments on these salaries at a time when banks were giving more to PS's than employees in the private sector.

The high cost of everything in Ireland is down to property, every time you buy a coffee, lunch, you are paying for someones extortionate mortgage. Many have turned to buying online form the EU rather than going to their local shopping centre.

It still cost the same in the summer months to get 2 week self catering accommodation on the West coast of Ireland as it did in 2002, despite the fact that supply of houses on the west coast for this purpose has ballooned. Do you think this is because demand increased or supply is being kept off the market.

Ireland will never recover as long as the powers that be continue to prevent property prices from falling to their natural floor

gurramok

Snakeblood wrote: »

By whom? I would have thought paying money for things should be related to having a job which earns money.

Stillwaters may be right. I remember reading some top bank official saying recently that 66% of those in arrears actually have jobs.

Also, the numbers in employment slightly rose but look deeper, the rise was attributed to part-time employment not full-time which actually fell slightly.

gaius c

StillWaters wrote: »

It's never been connected to employment, that was established ages ago.

The start of the big "take off" in that arrears graph comparing us with the rest of the EU appears to coincide with the Dunne judgement but it could also be down to a lag caused by people exhausting savings, which they had been using to maintain repayments after their income had taken a hit a year or two previously.

There's so little public information available on the arrears problem that we need to be careful not to draw "too much" from the limited data that we do have.

cookie1977

gaius c wrote: »

The start of the big "take off" in that arrears graph comparing us with the rest of the EU appears to coincide with the Dunne judgement but it could also be down to a lag caused by people exhausting savings, which they had been using to maintain repayments after their income had taken a hit a year or two previously.

There's so little public information available on the arrears problem that we need to be careful not to draw "too much" from the limited data that we do have.

So true and it's a pity the CB isn't demanding and/or publishing more info on arrears.

Villa05

AIB's Loan Book is absolutely toxic
http://www.independent.ie/business/personal-finance/property-mortgages/aib-lost-4m-on-the-sale-of-just-17-homes-29497320.html

The Mortgage Bank's core function is to borrow on the bond markets for AIB using its stock of home loans as collateral. The need to attract those lenders means its accounts contain very detailed breakdowns about the home loans – including the figures on repossessions.

The accounts also show that 46pc of owner-occupied homes and two-thirds of "buy-to-lets" were in negative equity at the end of last year. Those numbers mean AIB could expect to take a major financial hit if it repossesses more homes

cookie1977

Villa05 wrote: »

AIB's Loan Book is absolutely toxic
http://www.independent.ie/business/personal-finance/property-mortgages/aib-lost-4m-on-the-sale-of-just-17-homes-29497320.html

I think his is the key to that whole article:

As a result the bank was left nursing losses of €4m on the sales. The worst losses were on the so called buy-to-lets....The bank took a €3m hit when it sold nine properties secured by buy-to-let mortgages for a combined total that amounted to just a quarter of the €4m owed on the properties. It fared better from the sale of "owner-occupied" homes. Sales of eight repossessed family homes raised €1m, exactly half the debt owed.

All the BTL's that have unworkable arrears should be quickly repossessed but lets be honest most of these are not the desirable properties that buyers want. Most of these are apartments.

Leaving the BTL issue aside for the moment do you not think that this points the banks to try to establish long term deals that avoid repossession of PPR/PDH but maintain some sort of payment (split, reduced interest rate, reduced capital payments etc...) in the hope that in the long term they get the cash back through an agreed sale in a set period of time or circumstances change for the mortgagee. Now of course this wont work out for all arrears cases but for a percentage it could do if they were offered a decent deal (like some of the deals the banks are trying to keep quiet about).

Lets be honest, from some of the information that we've gleamed from repossessions the banks have not managed the sale of repossessed properties very well. Either through poor management of repossessed properties or lazy sales (waiting too long before selling the property).

We may not see the glut of repossessions that some are hoping for.

It suggested the beginning of a surge in repossessions. However, news the bank has suffered big losses when it has managed to take control of homes indicates the surge could be far less than many analysts are predicting.
Those numbers mean AIB could expect to take a major financial hit if it repossesses more homes.

That tallies with a warning from ratings agency Fitch earlier this month. It said repossessions will be the final resort for banks, because negative equity means lenders may not want to crystallise losses.

jay0109

cookie1977 wrote: »

..... in the hope that in the long term they get the cash back through an agreed sale in a set period of time or circumstances change for the mortgagee....

Your forgot to mention adding a few novena's into the mix as well....that'd surely help the banks in the long term also:o

This zombie state of affairs has gone on now since 2008....when is the message going to hit home. We need to crystalise the losses asap, hit the reset button and start afresh.
What foreign investor is going to buy into AIB if the nod and the wink is extended for 20 more years in the hope of the various recoveries you mention. If none come in, the state will never get any sort of cash back. People in these houses (in the main) will never fully get back on their feet...and the zombie economy will rumble on with all the associated doom and gloom thats weighing us down

cookie1977

jay0109 wrote: »

Your forgot to mention adding a few novena's into the mix as well....that'd surely help the banks in the long term also:o

This zombie state of affairs has gone on now since 2008....when is the message going to hit home. We need to crystalise the losses asap, hit the reset button and start afresh.
What foreign investor is going to buy into AIB if the nod and the wink is extended for 20 more years in the hope of the various recoveries you mention. If none come in, the state will never get any sort of cash back. People in these houses (in the main) will never fully get back on their feet...and the zombie economy will rumble on with all the associated doom and gloom thats weighing us down

It's not all doom and glum:

Prem Watsa, the boss of Toronto-based Fairfax Financial Holdings

...[sic] has made his fortune from championing apparently lost causes, having left his home for Canada with $8 to his name. Fairfax was one of a small group of institutions that bought a 35% stake in Bank of Ireland from the Irish government during the height of the eurozone crisis, and has earned a positive return on its investment.

http://www.theguardian.com/technology/2013/aug/13/prem-watsa-blackberry-leading-bidder

Villa05

Or if we look at the other side of the coin, If the losses are less on PPR's, would they be more likely to repossess these and appoint rent receivers to BTL.
Another point, how are these losses calculated, Does the mortgage balance include charges for late payment, penalty interest etc thereby making the loss look greater. The sample size is also too small to to see any trend.
I can't see how repossession can be avoided where nothing is being paid as is the case with 1 in 3 of Ulster Banks Mortgage Customers in arrears

The_Conductor

Villa05 wrote: »

Or if we look at the other side of the coin, If the losses are less on PPR's, would they be more likely to repossess these and appoint rent receivers to BTL.
Another point, how are these losses calculated, Does the mortgage balance include charges for late payment, penalty interest etc thereby making the loss look greater. The sample size is also too small to to see any trend.
I can't see how repossession can be avoided where nothing is being paid as is the case with 1 in 3 of Ulster Banks Mortgage Customers in arrears

Well- its not so much that the losses are less on PPRs- rather the equity in the PPRs is higher than in the BTLs. However- given the enormity of the issue- the big issue is what to do with the lending institutions if we do percipitate these losses. I can see civil war erupting- if we suggest the banks need another 30 billion- yet, if they are to meet their internationally agreed capital ratios- they would need this further bailout, if they are forced to percipitate the losses.

I'd suggest that rather than look at PPRs or BTLs as distinct property categories- that banks and other lenders will instead do an inventory of their loans- and repossess those that they can easily sell.

We already have companies springing up to offer rent-receiver and tenancy management services to banks and other lending institutions (there are at least 3 in Dublin alone at this stage).

So- clear out the low lying fruit- and then start pruning the dead wood- all the time trying to continually extract whatever income the assets can generate?

gaius c

cookie1977 wrote: »

I think his is the key to that whole article:


All the BTL's that have unworkable arrears should be quickly repossessed but lets be honest most of these are not the desirable properties that buyers want. Most of these are apartments.

Leaving the BTL issue aside for the moment do you not think that this points the banks to try to establish long term deals that avoid repossession of PPR/PDH but maintain some sort of payment (split, reduced interest rate, reduced capital payments etc...) in the hope that in the long term they get the cash back through an agreed sale in a set period of time or circumstances change for the mortgagee. Now of course this wont work out for all arrears cases but for a percentage it could do if they were offered a decent deal (like some of the deals the banks are trying to keep quiet about).

Lets be honest, from some of the information that we've gleamed from repossessions the banks have not managed the sale of repossessed properties very well. Either through poor management of repossessed properties or lazy sales (waiting too long before selling the property).

We may not see the glut of repossessions that some are hoping for.

I can see where you are coming from but be careful of the Indo's obvious agenda on this one.
1. They don't cover how much the bank has already lost on the loan so far and how much they will continue to lose if they leave the original occupants sit there in arrears.
2. They don't consider that crystalising the loss now and making a new loan to a customer with good credit will lower the bank's borrowing costs.
3. They also fail to note that not taking the losses and repo'ing now will ensure moral hazard and further contagion in mortgage arrears.

The Indo has been banging the "no repo" drum for quite a while and this article is a pretty transparent effort to twist facts in favour of that agenda. The presentation of "facts" in that article is entirely one-sided. After all, this is the same paper that told us "smart & ballsy" people were out buying property while it was falling like a stone and you'd have to wonder if their journalists might have an interest in this particular topic...

Muahahaha

Villa05 wrote: »

It may seem so but if you join the dots, you will see that nearly every major problem in Ireland is linked to high priced property.

We have cookie and the_conductor admitting that they struggle when doctors, dentist or car insurance bills come in(all essentials to living). We still have, at a minimum 2 more austerity budgets to come.

We have people saying they cant afford to have children, so property prices have sterilised a significant portion of our population. This is probably the most tragic outcome of the property bubble.

People can't afford high childcare costs, Employee's in childcare are close to minimum wage, Most business today cut there costs to the bone to survive. So what could be the driver of the high cost, yes, you guessed it, The price of the property the creche facilities are.

Welfare costs, Social welfare was increased above the rate of inflation during the bubble, this was driven by one off taxes from property sales and greedy politicians buying votes. The balance between Social welfare and the cost of working has created a terrible poverty trap
Similar situation in the public sector, bench-marking paid out from one off taxes from property. Public Servants now on salaries we cannot afford and have made 35 year commitments on these salaries at a time when banks were giving more to PS's than employees in the private sector.

The high cost of everything in Ireland is down to property, every time you buy a coffee, lunch, you are paying for someones extortionate mortgage. Many have turned to buying online form the EU rather than going to their local shopping centre.

It still cost the same in the summer months to get 2 week self catering accommodation on the West coast of Ireland as it did in 2002, despite the fact that supply of houses on the west coast for this purpose has ballooned. Do you think this is because demand increased or supply is being kept off the market.

Ireland will never recover as long as the powers that be continue to prevent property prices from falling to their natural floor

This is a really excellent post and I really wish Irish people would come around to this understanding. We can't move on in this country until people realise that property prices going up beyond inflation is bad for the economy as it takes disposable income out of peoples pockets when they have to pay more for their restaurant meal, cup of coffee, car parking, etc.

But it is pretty obvious that the media have learnt zero lessons from the crash and they are already cheer-leading another bubble and quoting estate agents as reliable sources of information.