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Glut of repossessed houses could depress prices ‘by up to 25%’
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The rising rents and prices are also going to lift a lot of BTls out of the danger zone. Rents are up and vacancy rates are down. That is going to remain the case and quite likely intensify. Trying to foreclose on BTls is quite often as difficult as on family homes. It is also the case in Dublin that most of the BTL post 2000 were apartments and this is where the the arrears problem lies. there will be no real surge in the numbers of houses coming on the Dublin market as a result of BTLs being repossessed.
I v think your wrong about how hard it will be for banks to foreclose on btls relative to owner occupied. Similar process ie high court application but much stronger case for bank. No constitutional protection for owner etc.0 -
ezra_pound wrote: »I v think your wrong about how hard it will be for banks to foreclose on btls relative to owner occupied. Similar process ie high court application but much stronger case for bank. No constitutional protection for owner etc.
+ 1
These are recent articles.
Government to consider fast-track repossession process
http://www.rte.ie/news/2013/0926/476679-troika-government/
http://www.irishtimes.com/news/politics/troika-imposes-new-conditions-to-fast-track-property-repossessions-1.15414810 -
Examiner reporting that a third of arrears cases are 2 years or more in arrears0
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+ 1
These are recent articles.
Government to consider fast-track repossession process
http://www.rte.ie/news/2013/0926/476679-troika-government/
http://www.irishtimes.com/news/politics/troika-imposes-new-conditions-to-fast-track-property-repossessions-1.1541481
These are the actual quotes from the government's MOU with the troika regarding the potential to fast-track BTL repossessions:
“We will examine by end-October the merits of assigning additional functions to Specialist Judges appointed to deal with personal insolvency cases which will enable them to deal with repossession cases as needed.”
“We will examine the possibility of introducing tight deadlines on plenary repossession proceedings for non-principal private residences by end-October”.
They are 2 of 28 actions to be completed by the end of Q4 - I wouldn't hold my breath that these "examining of the possibilities" will lead to anything concrete in the near term. And coming from just 15 court ordered BTL repossessions in the whole of Q2 vs 10,000+ BTL mortgages in arrears of over 2 years.
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And meanwhile rents and house prices rise in Dublin .....
http://m.boards.ie/vbulletin/showthread.php?threadid=2057052179
Sent from my iPhone0 -
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Examiner reporting that a third of arrears cases are 2 years or more in arrears
Except the Central Bank stats do not show that:
http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/Data.aspx
June 2013 figures
Total PDH and BTL mortgages in arrears = 182,840
Total PDH and BTL mortgages in arrears over 720 days = 39,093
as a % = 21%
If you separate out the the two type of mortgages it's 20% PDH and 25% BTL in arrears over 2 years.
But sure why let facts get in the way of a good story.0 -
ezra_pound wrote: »Yes. The rest of the country has further to fall. But how much of an impact will repos have?
The markets there are so oversupplied relative to demand that any incremental increase in supply is going to have a questionable effect on prices. It will however increase the duration of the downturn in rural areas.
I think you're overestimating significance of clearing prices. The biggest issue is lack of demand rather than an unwillingness to sell at the right price.
Quite a lot actually. Nobody in their right mind would buy in Gorey now as the houses are likely to drop further in value. You're paying over the odds AND giving yourself a hellish commute.
Now take away the floor in the market and those houses will sell for credit card money (happens in other property busts). The buyer will still have a hellish commute to Dublin for work but unlike the NE generation, they'll have a nice small mortgage.
This will take pressure off housing in Dublin because right now, everybody is piling into Dublin, renters & buyers alike. It's a flight to quality and part of the reason is that folk know that if you're going to overpay to put a roof over your head, you may as well overpay and be close to work.The price of fuel has increased substantially since the boom years. Commuting is much more expensive than it was. Running two cars, each doing high mileage is a strain most people will not be able to afford.
Hence why commuter belt property needs to drop even further in price.ezra_pound wrote: »Yes rents are up. Yes vacancies are down. However there will still be Dublin btl repos. I think only the banks and central bank have any idea how much. Btl repos will be function of ability to repay mortgage. Notwithstanding increase in rents there will still be many in trouble because people have lower pay or no pay. People got interest only mortgages and bought property at negative yields where rent would make a loss on mortgage etc. Etc.
Think you MAY be considerably overestimating btl concentration on apartments also.
Either way we are all in agreement that btl repos will not have a cataclysmic effect on Dublin prices.
What about the people living in Dublin who cannot afford to live there but who remain there because there's no repos?
They are preventing people who could afford to live there from doing so.
There's no point in making statements until transaction volume is back. Right now the toilet is completely blocked and ****e is flowing onto the floor. Arguing about how much extra ****e will be unleashed onto the floor by fixing the toilet and thus delaying fixing the toilet is pointless. Just fix it and get on with it.0 -
cookie1977 wrote: »Except the Central Bank stats do not show that:
http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/Data.aspx
June 2013 figures
Total PDH and BTL mortgages in arrears = 182,840
Total PDH and BTL mortgages in arrears over 720 days = 39,093
as a % = 21%
If you separate out the the two type of mortgages it's 20% PDH and 25% BTL in arrears over 2 years.
But sure why let facts get in the way of a good story.
It's by value, and just for PDH. €6,037m/€18,550m.
There's little new info from the Central Bank - it's still Q2 data, but with some added colour. A chance for another headline though and to fill some column inches.0 -
Quite a lot actually. Nobody in their right mind would buy in Gorey now as the houses are likely to drop further in value. You're paying over the odds AND giving yourself a hellish commute.
Now take away the floor in the market and those houses will sell for credit card money (happens in other property busts). The buyer will still have a hellish commute to Dublin for work but unlike the NE generation, they'll have a nice small mortgage.
This will take pressure off housing in Dublin because right now, everybody is piling into Dublin, renters & buyers alike. It's a flight to quality and part of the reason is that folk know that if you're going to overpay to put a roof over your head, you may as well overpay and be close to work.
Hence why commuter belt property needs to drop even further in price.
What about the people living in Dublin who cannot afford to live there but who remain there because there's no repos?
They are preventing people who could afford to live there from doing so.
There's no point in making statements until transaction volume is back. Right now the toilet is completely blocked and ****e is flowing onto the floor. Arguing about how much extra ****e will be unleashed onto the floor by fixing the toilet and thus delaying fixing the toilet is pointless. Just fix it and get on with it.
I'm not disputing the downward pressure on rural property prices or that there is further to fall. In that sense I agree with your post. However I'm doubtful of the extent to which btl repos will have.
With or without btl repos there will be similar downward pressure. However I believe that the repo effect will draw out the duration of the fall.0 -
It's by value, and just for PDH. €6,037m/€18,550m.
There's little new info from the Central Bank - it's still Q2 data, but with some added colour. A chance for another headline though and to fill some column inches.
That's only on the btl properties though where the total value of mortgages in arrears over 2 years equates to 30% of total value of all mortgages in arrears.
For PDH the total value of mortgages in arrears over 2 years equates to 23% of total value of all mortgages in arrears.
Q3 data is what I think the examiner have early access to but I suspect it'll be on line on the CB website any time now. They really are reaching in to the numbers to find headlines though. The value they're comparing is the total value of the BTL mortgage and not the total value of arrears component.
On a lighter note, unemployment is down again:
http://www.cso.ie/en/media/csoie/releasespublications/documents/labourmarket/2013/lreg_sep2013.pdf?utm_source=twitterfeed&utm_medium=twitter0 -
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Quite a lot actually. Nobody in their right mind would buy in Gorey now as the houses are likely to drop further in value. You're paying over the odds AND giving yourself a hellish commute.
Now take away the floor in the market and those houses will sell for credit card money (happens in other property busts). The buyer will still have a hellish commute to Dublin for work but unlike the NE generation, they'll have a nice small mortgage.
This will take pressure off housing in Dublin because right now, everybody is piling into Dublin, renters & buyers alike. It's a flight to quality and part of the reason is that folk know that if you're going to overpay to put a roof over your head, you may as well overpay and be close to work.
Hence why commuter belt property needs to drop even further in price.
What about the people living in Dublin who cannot afford to live there but who remain there because there's no repos?
They are preventing people who could afford to live there from doing so.
There's no point in making statements until transaction volume is back. Right now the toilet is completely blocked and ****e is flowing onto the floor. Arguing about how much extra ****e will be unleashed onto the floor by fixing the toilet and thus delaying fixing the toilet is pointless. Just fix it and get on with it.
What do you mean by people over paying for property in Dublin? Are they?
Also why would dubs buy into a sinking commute r market just because it's cheaper?0 -
First question.ezra_pound wrote: »What do you mean by people over paying for property in Dublin? Are they?
Also why would dubs buy into a sinking commute r market just because it's cheaper?
It's not a functioning market because transaction volume is pitiful. If transaction volume was higher, prices would almost certainly be lower because right now, FTB's are still locked out of the market and contributing to the explosion in the numbers renting instead.
Second question.
I don't think you get me. Of course Dubs won't buy into houses in Gorey while they are still high & dropping but if they bottom at a low level (and they will), then Dubs will buy houses there for exactly the same reasons they bought there during the bubble...because the houses are cheaper and they can't afford anything closer to the city/or make a decision that the lower price there balances out the horrendous commute.0 -
First question.
It's not a functioning market because transaction volume is pitiful. If transaction volume was higher, prices would almost certainly be lower because right now, FTB's are still locked out of the market and contributing to the explosion in the numbers renting instead.
Second question.
I don't think you get me. Of course Dubs won't buy into houses in Gorey while they are still high & dropping but if they bottom at a low level (and they will), then Dubs will buy houses there for exactly the same reasons they bought there during the bubble...because the houses are cheaper and they can't afford anything closer to the city/or make a decision that the lower price there balances out the horrendous commute.
Point 1
Just because the Dublin market is not properly functioning does not mean prices are too high. How could an increase in demand decrease prices?That is what you're suggesting.
Point 2
Yeah sure but when will they bottom out?0 -
Segments of the Dublin market are seeing demand from people who have cash saved, i.e. people who are not FTB's. The numbers renting have exploded since the popping of the bubble. Those are the "should have been FTB's" of the last few years. When they are able to buy FTB-type houses, you will start to see a reasonable level of transactions again and in the absence of increased lending to them, prices will have to drop to their level. There'll be no increase in demand. It's already there. Increase in supply is another matter altogether.ezra_pound wrote: »Point 1
Just because the Dublin market is not properly functioning does not mean prices are too high. How could an increase in demand decrease prices?That is what you're suggesting.Point 2
Yeah sure but when will they bottom out?
Million dollar question really. Authorities seem determined to drag it out as long as possible and we're probably going to go Japanese (or even Berlin-ese) at this stage but it's just a longer route to the same destination. Houses in outer commutersville are only going to sell at very low prices and when they eventually do, they'll reduce the pressure on more central areas that everybody is trying to cram into at the moment.0 -
Segments of the Dublin market are seeing demand from people who have cash saved, i.e. people who are not FTB's. The numbers renting have exploded since the popping of the bubble. Those are the "should have been FTB's" of the last few years. When they are able to buy FTB-type houses, you will start to see a reasonable level of transactions again and in the absence of increased lending to them, prices will have to drop to their level. There'll be no increase in demand. It's already there. Increase in supply is another matter altogether.
Million dollar question really. Authorities seem determined to drag it out as long as possible and we're probably going to go Japanese (or even Berlin-ese) at this stage but it's just a longer route to the same destination. Houses in outer commutersville are only going to sell at very low prices and when they eventually do, they'll reduce the pressure on more central areas that everybody is trying to cram into at the moment.
FTB numbers though are increasing at present. Rents are rising not necessarily due to people not buying but more to do with lack of supply and increases in demand due to other factors such as job location. What are FTB type houses in Dublin to you? Mortgage approvals are increasing year on year (see earlier post on IBF figures). While it's not a "normal" market it's certainly more active then we've seen it in the past 5 years in Dublin.
What do you classify as "outer commutersville"?0 -
cookie1977 wrote: »That's only on the btl properties though where the total value of mortgages in arrears over 2 years equates to 30% of total value of all mortgages in arrears.
For PDH the total value of mortgages in arrears over 2 years equates to 23% of total value of all mortgages in arrears.
Q3 data is what I think the examiner have early access to but I suspect it'll be on line on the CB website any time now. They really are reaching in to the numbers to find headlines though. The value they're comparing is the total value of the BTL mortgage and not the total value of arrears component.
On a lighter note, unemployment is down again:
http://www.cso.ie/en/media/csoie/releasespublications/documents/labourmarket/2013/lreg_sep2013.pdf?utm_source=twitterfeed&utm_medium=twitter
Central Bank note is here:
http://www.centralbank.ie/publications/Documents/Mortgage%20Arrears%20in%20Ireland%20Introducing%20the%20Enhanced%20Quarterly%20Statistics.pdf
It's all Q2 data. Q3 won't be available until end-October/early November. Just to clarify, the 33% relates to PDH mortgages in arrears over 720 days as a proportion of total PDH mortgages in arrears of at least 90 days.0 -
I've read through Q2. Q3 should be out around now based on previous releases:
http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/releases.aspx0 -
cookie1977 wrote: »I've read through Q2. Q3 should be out around now based on previous releases:
http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/releases.aspx
A bit optimistic I'd say!
Q1 out 12 weeks after Q1 ends.
Q2 out 8 weeks after Q2 ends.
Yes, the last one was quicker but it's only 2 days since the end of Q3!0 -
cookie1977 wrote: »FTB numbers though are increasing at present. Rents are rising not necessarily due to people not buying but more to do with lack of supply and increases in demand due to other factors such as job location. What are FTB type houses in Dublin to you? Mortgage approvals are increasing year on year (see earlier post on IBF figures). While it's not a "normal" market it's certainly more active then we've seen it in the past 5 years in Dublin.
What do you classify as "outer commutersville"?
Couple of things. The FTB numbers referred to in that article are for all of Ireland. The Dublin market however is not so FTB friendly. It's mainly cash buyers now. "Normal" FTB's are not cash buyers.
Secondly mortgage approval does not equal mortgage draw down. There's plenty of anecdotal evidence suggesting that the banks are reducing the loan amounts when it comes to draw down.
Thirdly, it's a fraction of bubble level approvals/draw downs. It could well be bouncing-along-the-bottom volatility in that you have 1 apple and I give you another apple, thus doubling the number of apples you have. More data is required.
I don't think you can point to the current rental market as any sort of indicator as to overall supply/demand. As long as you leave a certain segment of the overall housing market live in their houses for cheap/free, they are depriving folk who would actually pay for their house a chance to do so.
The market is indeed more active but I know amongst my age group that there's a certain amount of resignation to the fact that they are buying too high but they can't stay renting forever. Others have their big cash wodge saved from the bubble era and are happy enough to go now and are not overly concerned about smaller price drops.
FTB houses in Dublin to me?
Outside M50 - Firhouse, Ballycullen, Tallaght, Stepaside, Clondalkin, Lucan, Clonsilla-Blanch, Swords, etc. Lots of newer estates with smaller starter homes that are not apartments.
Inside M50 - doer-uppers or west Dublin
Outer commutersville, a little dependent on where you're traveling to work: Wexford, Athy/Carlow, anything past Kildare town on M7, anything past Enfield/Kinnegad on M4, beyond Navan on M3, beyond Drogheda.0 -
It depends on what your income is. Prices will be limited by the ability of people to get mortgages. There aren't that many people able to get mortgages over 250k as lending has been tightened. It would also expose them to interest rate hikes. If commuter belts keep dropping they will eventually attract more people.0
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Couple of things. The FTB numbers referred to in that article are for all of Ireland. The Dublin market however is not so FTB friendly. It's mainly cash buyers now. "Normal" FTB's are not cash buyers.
Secondly mortgage approval does not equal mortgage draw down. There's plenty of anecdotal evidence suggesting that the banks are reducing the loan amounts when it comes to draw down.
Thirdly, it's a fraction of bubble level approvals/draw downs. It could well be bouncing-along-the-bottom volatility in that you have 1 apple and I give you another apple, thus doubling the number of apples you have.
I don't think you can point to the current rental market as any sort of indicator as to overall supply/demand. As long as you leave a certain segment of the overall housing market live in their houses for cheap/free, they are depriving folk who would actually pay for their house a chance to do so.
The market is indeed more active but I know amongst my age group that there's a certain amount of resignation to the fact that they are buying too high but they can't stay renting forever.
FTB houses in Dublin to me?
Outside M50 - Firhouse, Ballycullen, Tallaght, Stepaside, Clondalkin, Lucan, Clonsilla-Blanch, Swords, etc. Lots of newer estates with smaller starter homes that are not apartments.
Inside M50 - doer-uppers
Outer commutersville, a little dependent on where you're traveling to work: Wexford, Athy/Carlow, anything past Kildare town on M7, anything past Enfield/Kinnegad on M4, beyond Navan on M3, beyond Drogheda.
Ah here now. If we're saying that the only place growing sales is Dublin where as the rest of the country is stagnant then you have to say that a significant portion of the Dublin market has to be FTB's. As I said and posted already. Year on year there has been a 14.6% increase in mortgage approvals. So the market is not solely dominated by cash buyers as you seem to suggest. Mortgage approval does not equate to draw down as you suggest BUT if there's a 14.6% increase in approvals then you have to admit there's also a similar increase in draw downs too. Especially as we're a year further on with signs of improvement in the economy everywhere. Forget fractions of bubbles or what ever. We're talking about you saying that FTB's are holding out still in significant numbers and that the only activity is primarily cash buyers. The referable evidence to date does not agree with your anecdotal evidence.
I dont know your age group or who your friends and acquaintances are so I cannot comment on your point here.0 -
A bit optimistic I'd say!
Q1 out 12 weeks after Q1 ends.
Q2 out 8 weeks after Q2 ends.
Yes, the last one was quicker but it's only 2 days since the end of Q3!
This appears to be it.
http://www.centralbank.ie/publications/Documents/Quarterly%20Bulletin%20Q4%202013.pdf
The banks are completely boxed in on this. They simply don't have the capital to deal with this level of default, and the Troika are repeatedly making it clear that there will be no help for this.0 -
This appears to be it.
http://www.centralbank.ie/publications/Documents/Quarterly%20Bulletin%20Q4%202013.pdf
The banks are completely boxed in on this. They simply don't have the capital to deal with this level of default, and the Troika are repeatedly making it clear that there will be no help for this.
This is more to do with fiscal quarters. As roro said, we'll be waiting a while for the figures.0 -
Examiner reporting that a third of arrears cases are 2 years or more in arrears
Just going through the examiner article, that's actually not what it says.
So it's a subset of a subset.A review of the most up-to-date data has found that a third of accounts for primary homes that are in arrears for more than 90 days are actually behind in repayments for almost two years.0 -
Really? Don't think you can suppose that at all. We're hearing that half the market is cash. How many FTB's do you know that can buy houses in cash?cookie1977 wrote: »Ah here now. If we're saying that the only place growing sales is Dublin where as the rest of the country is stagnant then you have to say that a significant portion of the Dublin market has to be FTB's.
No I don't have to "admit" any such thing.As I said and posted already. Year on year there has been a 14.6% increase in mortgage approvals. So the market is not solely dominated by cash buyers as you seem to suggest. Mortgage approval does not equate to draw down as you suggest BUT if there's a 14.6% increase in approvals then you have to admit there's also a similar increase in draw downs too.
The IrelandafterNAMA blog has a piece on where actual drawdowns are.
http://irelandafternama.wordpress.com/2013/08/17/more-negative-evidence-re-the-supposed-pick-up-in-the-housing-market/
Davy have a piece on how actual drawdowns were way way down in Q1 and in Q2 were well down on the MIR spike too.
http://www.davyselect.ie/news/article_5206.html0 -
Really? Don't think you can suppose that at all. We're hearing that half the market is cash. How many FTB's do you know that can buy houses in cash?
No I don't have to "admit" any such thing.
The IrelandafterNAMA blog has a piece on where actual drawdowns are.
http://irelandafternama.wordpress.com/2013/08/17/more-negative-evidence-re-the-supposed-pick-up-in-the-housing-market/
Davy have a piece on how actual drawdowns were way way down in Q1 and in Q2 were well down on the MIR spike too.
http://www.davyselect.ie/news/article_5206.html
Either way mortgage derived prices have increased by over 10.6% over last year. This is completely at odds with your suggestion that mortgages will not fund current prices in Dublin.0 -
Really? Don't think you can suppose that at all. We're hearing that half the market is cash. How many FTB's do you know that can buy houses in cash?
No I don't have to "admit" any such thing.
The IrelandafterNAMA blog has a piece on where actual drawdowns are.
http://irelandafternama.wordpress.com/2013/08/17/more-negative-evidence-re-the-supposed-pick-up-in-the-housing-market/
Davy have a piece on how actual drawdowns were way way down in Q1 and in Q2 were well down on the MIR spike too.
http://www.davyselect.ie/news/article_5206.html
But how is Ireland NAMA assessing Dublin IBF data since there's no breakdown in the IBF figures for Dublin mortgage numbers? Davy also is taking the country as a whole. We're all taking about Dublin here.0 -
cookie1977 wrote: »But how is Ireland NAMA assessing Dublin IBF data since there's no breakdown in the IBF figures for Dublin mortgage numbers? Davy also is taking the country as a whole. We're all taking about Dublin here.
Agreed. And we know that mortgage derived prices for Dublin are up. 10.6 %.0 -
And Q4 2012 figures were artificially high due to the last of the MIR so the next quarter was always going to be down. A few more quarters will tell us more but even Ireland NAMA states: "The IBF PwC data reveals a similar pattern of purchasing, including the Q4 2012 spike. If we compare Q2 volumes from 2010-2013, the volumes are Q2 2010 – 7,827; 2011 – 3,551; 2012 – 3,225; 2013 – 3,229. " so there is certainly a stabilisation and if we hadn't got the MIR Q4 2012 spike then we may be looking at a bigger increase then we currently are since 2013 isn't even over.0
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Price per transaction is up. Overall Q1 + Q2 drawdown volumes are the lowest ever. I'll let you work out the relationship between the two!ezra_pound wrote: »Agreed. And we know that mortgage derived prices for Dublin are up. 10.6 %.
That's a bit of a rowback from your previous position (without any proof at all) that "drawdowns were up 14% simply because approvals were up 14%". The devil is in the details and frankly, you're being a speculative above as people claiming that NAMA have a secret hoard of empty apartments.cookie1977 wrote: »And Q4 2012 figures were artificially high due to the last of the MIR so the next quarter was always going to be down. A few more quarters will tell us more but even Ireland NAMA states: "The IBF PwC data reveals a similar pattern of purchasing, including the Q4 2012 spike. If we compare Q2 volumes from 2010-2013, the volumes are Q2 2010 – 7,827; 2011 – 3,551; 2012 – 3,225; 2013 – 3,229. " so there is certainly a stabilisation and if we hadn't got the MIR Q4 2012 spike then we may be looking at a bigger increase then we currently are since 2013 isn't even over.
Oh and I nearly forgot, that report saying FTB's are "up" is an industry VI spinning folksy anecdotes. The numbers don't back up his spin.
Sorry lads. You're all over the shop.0
This discussion has been closed.
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