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

Mustard1972

Seems to be a lot of desperation from the bears to try to pull a curtain over what is actually happening on the ground.
Reminds me so much of the bulls back in the day.

Its as plain as the nose on yer face whats happening at the moment if you actually went out and looked at the market or even talked to all of the people you know who are in the market at the moment.

OMD

Villa05 wrote: »

It is whats happening at the First time buyer demographic that matters.
The long term unemployed figures are falling a little, it would suggest that any new jobs are going to the experienced older unemployed people.
New Jobs in the public sector are rare, most likely temporary and at lower salary levels. Outside of the exporting companies, the same trend is happening in the private sector. Below Inflation Wage increases and new jobs are going to people who have already been burned by property

Mortgage Interest rates have been rising for the last 3 years, while the ECB rate has been falling. I don't see that changing until the Banks return to significant profitability. The mortgage arrears crisis will probably send 1 or 2 of those banks back into bailout territory, while Ulster Bank will probably wave goodbye.

The State, already paying 20% of its all tax income on the interest on its loans will have to foot yet another bill, meaning tax rises and spending cuts for all and the cycle continues

Unfortunately mortgages are not paid back in 3 or 5 years, the average rate for the duration of the mortgage determines the cost of credit.
There is a property bubble emerging in Germany and you can bet your house that they won't make the same mistakes as us, Expect Rate rises to control demand

What do you believe is first time buyer demographic? 15-30 year olds?

daveirl

This post has been deleted.

Mustard1972

daveirl wrote: »

This post has been deleted.

Im getting the impression from everyone ive spoken to who is in the market to buy or selling at the moment that houses in Dublin in general are going for way above asking nowadays. Especially the last 3 months or so.
I dont think outside of Dublin and possibly Kildare, Wicklow and Meath has any hope of recovery for a long long time though, but thats because all of the demand will be where the jobs are.

daveirl

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riclad

SELLING is a long term solution, BUT if you are in negative equity the bank may not allow you to sell the house.

I know someone,had the house for sale, investment property, the bank stopped her selling the house for 2 years, her negative equity was 20k. after 2 years she sold house, the bank wrote off 20k. SHE was offered a good price,in 2010, bank blocked the sale for 2 years. the price she was offered was more than the original mortgage. but she borrowed 20 k 5 years ago from the bank, increased the mortgage. house was sold in 2012. its a corner house garden twice the normal size in the estate. last house on the corner, no neighbours on the left side of house, just a wall.

SO someone sells, up, in negative equity by 90k, is the bank gonna pursue them for the 90k?

Could they not write off say, 25k? if the client is on a low income, or lost their job.

Villa05

FTB Demographic = 25 to 35 - Note: many in the 30 to 35 range may well have been sucked in during the bubble with 100% mortgages and are ruined and out of the game now

@daveirl How do you go long on irish property and would your bet be short term or long term, I don't think anyone is disputing that property in some Dublin regions and to lesser extent Galway and Cork is rising. The rest of the country is still falling, and the fundamentals would suggest that the uptick is unsustainable. Rises of 10-20% reported by some estate agents in Dublin is more a reflection of a dysfunctional property market and an inability of some Irish people to learn from the mistakes of the past.

@riclad Those that are unemployed or on very low income will have to agree to a voluntary sale, the banks will offer write off of the remaining debt to avoid the cost of going through the courts to repossess

This is the only plausible solution in these cases, of which there are many, I suspect

gaius c

riclad wrote: »

SELLING is a long term solution , BUT
if you are in negative equity the bank may not allow you to sell the house.
I know someone ,had the house for sale,
investment property,
the bank stopped her selling the house for 2 years ,
her negative equity was 20k.
after 2 years she sold house, the bank wrote off 20k.
SHE was offered a good price ,in 2010, bank blocked the sale for 2 years.
the price she was offered was more than the original mortgage.
but she borrowed 20 k 5 years ago from the bank, increased the mortgage.
house was sold in 2012.
its a corner house garden twice the normal size in the estate.
last house on the corner , no neighbours on the left side of house ,just a wall .


SO someone sells, up ,
in negative equity by 90k,
is the bank gonna pursue them for the 90k?

Could they not write off say , 25k,?
if the client is on a low income, or lost their job.

Your posts are impossible to read.

Villa05

Former IBRC chairman Alan Dukes believes the Irish banks have no idea how much the mortgage arrears crisis will cost them.

With almost 143,000 borrowers in mortgage arrears, the banks are coming under increasing pressure to write off mortgage debt.

"Have the banks really got a handle on how big a hit they can expect to take on mortgage writedowns? I suspect not," Mr Dukes told the Sunday Independent last week...................
Separately, distressed homeowners who are told by their banks to sell up have nowhere to go to appeal their lender's decision apart from the bank itself – unless they can afford a costly court action.

In a recent statement, the Financial Services Ombudsman, who investigates complaints against financial institutions, said it would not probe any decision made by a bank when dealing with a homeowner in arrears, as long as the bank conducted itself in a way which followed Central Bank rules.

This leaves a borrower with no option but the bank itself if they wish to appeal the decision. "People now are more likely to lose their home – without any right to a proper appeal," said Paul Joyce, a senior policy analyst with Free Legal Advice Centres.

http://www.independent.ie/business/irish/banks-clueless-on-cost-of-mortgage-crisis-says-dukes-29561253.html

All pointing towards more Voluntary sales/repossessions, increased bank costs, lower funds available for future mortgages

Mustard1972

Villa05 and Gaius c are like on 2 man bear strike force.
You guys would even look into the tea leaves and find a way to interpret them into telling us the sky is falling.
Entertaining though.

who_ru

Mustard1972 wrote: »

Villa05 and Gaius c are like on 2 man bear strike force.
You guys would even look into the tea leaves and find a way to interpret them into telling us the sky is falling.
Entertaining though.

the opinion expressed by others on future house prices are as valid as yours, attempting to label them 'doom and gloom' reminds me of comments made by an ex Taoiseach.

luckyboy

I expect to see a far more divergent Irish property market in the future, which will resemble what you see in other countries where prices can be falling in one area and rising in another.

I would agree with this. I notice that properties in the more desirable parts of Limerick City are also achieving good prices ...

daveirl

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Mustard1972

who_ru wrote: »

the opinion expressed by others on future house prices are as valid as yours, attempting to label them 'doom and gloom' reminds me of comments made by an ex Taoiseach.

I have no opinion on the future value of houses. I dont know.
But I can see whats going on at the moment. Anyone can.
I just find it entertaining watching bears trying to twist all news into a glut of properties to come. Its exactly the same as the bulls twisting every bit of news in the past.

The Spider

Mustard1972 wrote: »

I have no opinion on the future value of houses. I dont know.
But I can see whats going on at the moment. Anyone can.
I just find it entertaining watching bears trying to twist all news into a glut of properties to come. Its exactly the same as the bulls twisting every bit of news in the past.

Agree completely with this, it's the exact same as the bulls screaming there is no bubble in 2007, 2013 will go down as the year the bears screamed there is no recovery.

Irony is, you look over on the property pin on the introductions thread from 2007, the vast majority of all the bears predicted a 5 year crash, as in recovery in 2012, which is what's happening, but there are still people in denial, recommend they be a bit honest with themselves, this isn't a dead cat bounce, recovery is under way.

Mustard1972

The Spider wrote: »

Agree completely with this, it's the exact same as the bulls screaming there is no bubble in 2007, 2013 will go down as the year the bears screamed there is no recovery.

Irony is, you look over on the property pin on the introductions thread from 2007, the vast majority of all the bears predicted a 5 year crash, as in recovery in 2012, which is what's happening, but there are still people in denial, recommend they be a bit honest with themselves, this isn't a dead cat bounce, recovery is under way.

Sometimes its hard to change the tune you've been humming though.

jay0109

"recovery is under way"

It sure is...and why would'nt it be. Our national debt is decreasing, there's no more austerity budgets to come.....oh wait, I have that wrong don't I:rolleyes:

The Spider

jay0109 wrote: »

"recovery is under way"

It sure is...and why would'nt it be. Our national debt is decreasing, there's no more austerity budgets to come.....oh wait, I have that wrong don't I:rolleyes:

And are prices rising in Dublin? Pay attention to what's in front of you instead of speculating on what may happen in the future. Bust has happened prices are now in recovery phase, lack of supply, and paradoxically the only way supply will increase is for prices to continue to rise.

uberalles

The banks appear to be playing hard ball with those in difficulty,

Will there be more supply of houses?

Whats your opinion?

jay0109

The Spider wrote: »

And are prices rising in Dublin? Pay attention to what's in front of you instead of speculating on what may happen in the future. Bust has happened prices are now in recovery phase, lack of supply, and paradoxically the only way supply will increase is for prices to continue to rise.

Do you think 10 to 20% annual price rises is indicative of a housing market thats in 'recovery phase' !!! Because thats whats happening in SCD and parts of the north side right now.

And as for the 'future'....our national debt is very much the present and it's increasing daily, not decreasing.
And austerity budgets continuing are guaranteed....there's 1 coming only next month. Or do you consider a month ahead to be too far into the future

jay0109

uberalles wrote: »

The banks appear to be playing hard ball with those in difficulty,

Will there be more supply of houses?

Whats your opinion?

yes, I think there will be increased supply. But how much and where they will be located are total unknowns.
It'll be the guts of a year most likely though before any of it starts to trickle on to the market

The Spider

uberalles wrote: »

The banks appear to be playing hard ball with those in difficulty,

Will there be more supply of houses?

Whats your opinion?

Banks are playing hardball with people they perceive as having the ability to pay their mortgage, but that doesn't mean they'll reposess their houses, more likely court orders to garnish their wages.

The people who can't pay may have their houses repossessed, but if they do the remaining debt will have to be written off, you can't get blood from a stone.

As soon as any involuntary repos happen in any significant to people who have
ordinary jobs, there will be a political outcry and then government will be fubarred.

For what it's worth I don't think there's enough repos possible in Dublin to meet the demand, especially in the areas people want to live.

The Spider

jay0109 wrote: »

Do you think 10 to 20% annual price rises is indicative of a housing market thats in 'recovery phase' !!! Because thats whats happening in SCD and parts of the north side right now.

And as for the 'future'....our national debt is very much the present and it's increasing daily, not decreasing.
And austerity budgets continuing are guaranteed....there's 1 coming only next month. Or do you consider a month ahead to be too far into the future

Irregardless of the percentage of rises it's exactly what the government, the banks and the people in negative equity need right now. It'll take on it's own momentum confidence will improve even more and people will spend in the economy.

Villa05

The Spider wrote: »

Irregardless of the percentage of rises it's exactly what the government, the banks and the people in negative equity need right now. y.

Oh so we all gave to take on massive mortgages to bailout the few that bankrupt the country. Cunning plan !

jay0109

The Spider wrote: »

Irregardless of the percentage of rises it's exactly what the government, the banks and the people in negative equity need right now. It'll take on it's own momentum confidence will improve even more and people will spend in the economy.

la la land stuff

The Spider

Villa05 wrote: »

Oh so we all gave to take on massive mortgages to bailout the few that bankrupt the country. Cunning plan !

Not really, if you don't have a mortgage then you don't have a problem, it's up to you whether you buy or rent but as it stands you don't actually have a massive debt.

The actual problem as opposed to an existential problem is that lots of people borrowed too much from the banks, after it has to be said being encouraged by the banks, maybe both sides should have looked harder, either way they didn't.

The only way the actual problem can be solved is by higher house prices, people can sell their houses at a profit and they're not in debt, the banks loans are backed by assets that match the amount borrowed.

The taxpayer makes more money from NAMA, people are more confident they spend in the economy, and put their houses on the Market increasing supply.

Who loses? Potential buyers have to pay more, but as I said that isn't a problem until someone buys.

jmayo

jay0109 wrote: »

"recovery is under way"

It sure is...and why would'nt it be. Our national debt is decreasing, there's no more austerity budgets to come.....oh wait, I have that wrong don't I:rolleyes:

Add to the above the fact the government now need to take hard decisions on over 5 billion odd of cuts over the next two years.
The easy ones were taken over the last few years.
There is no capital projects to cut, there is no low hanging fruit.
From here on in it is ones that will really hurt.

Then just look at the banks and their mortgage debt.
AFAIK this morning on radio another independent hack, brendan keenan, was touting the rags line about debt forgiveness and if the banks went bust then so be it.
He claimed it would be trichets problem and they would have to bail out the banks.
What the interviewer didn't have the balls to remind him was that EU/ECB would just instigate the Cyrpus plan where they would hit depositors to cover the bailout.

If the banks are going to write off massive chunks of debt as people like "spider boy" above always claim, then maybe they can answer richie boucher's question to the Dail committee and in particular the likes of richard boyd barrett (firm believer in the magic money tree) ?
Where is the money going to come from ?

And as for those above of the mindset that Ireland's bubble buirst would be 5 years and shure everything would be hunky dory, I just say Japan.

Yes there is money in this country.
You can see any weekend that you go visit places like Avoca.

But then take a trip around any small town in Ireland and see the real devastation.
It is less obvious in Dublin but still the shut shops, the shut warehouses for rent are there.

As for the post above me, I can't believe someone is seriously saying the solution to our problems is to reinflate a property bubble.
Have we learned nothing.:rolleyes:

who_ru

The Spider wrote: »

Not really, if you don't have a mortgage then you don't have a problem, it's up to you whether you buy or rent but as it stands you don't actually have a massive debt.

The actual problem as opposed to an existential problem is that lots of people borrowed too much from the banks, after it has to be said being encouraged by the banks, maybe both sides should have looked harder, either way they didn't.

The only way the actual problem can be solved is by higher house prices, people can sell their houses at a profit and they're not in debt, the banks loans are backed by assets that match the amount borrowed.

The taxpayer makes more money from NAMA, people are more confident they spend in the economy, and put their houses on the Market increasing supply.

Who loses? Potential buyers have to pay more, but as I said that isn't a problem until someone buys.

unbelievable analysis.

high house prices, which caused the problems for so many, will solve their problems, but not create more problems.

Cuddlesworth

daveirl wrote: »

This post has been deleted.

If repossessions start then there is the possibility of a increase in supply in Dublin, since that is where it makes the most sense to start. Considering the really low volumes of actual sales, hundreds of property released could have a substantial effect on the market. Or it could have no effect either way. Its not the certainty of the effect that actually dealing with out crippling mortgage arrears issue would have. Its the uncertainty, there are simply too many factors at play.

Our property market is still crippled and because the can has been kicked down the road for so long now, nobody is sure what could happen. And since buying and selling property is such a long term decision, uncertainty will continue to threaten the death of any return.

But there is one thing that I am certain of, since I come from a faux rich area that invested heavily into property and personally know of around 20 cases of 2+ years non payment. There are huge numbers of people in South County Dublin who will never be able to service their mortgages and the interest that is accruing on them. Nothing has been done so far, but that can't continue for ever.

The Spider

who_ru wrote: »

unbelievable analysis.

high house prices, which caused the problems for so many, will solve their problems, but not create more problems.

Yup, only way to solve the immediate problem is with high house prices, I'm aware that it isn't good for the people who have yet to buy, but then again they're not in debt.

If the banks repossess they have to sell at a loss, so we all know that the taxpayer is up to their neck in the banks and it's in their interest that the banks not be at a loss.

Do you suggest that people even when they've had their house repossessed continue to pay the bank for the remainder over thirty years as well as pay to rent a home?

That isn't possible in any scenario, especially if they've lost jobs etc. The state ends up picking up the tab as well as the tab for the loss on the house.