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

tigershould

^^^
This all makes sense

flintash

no it doesnt. I dont know how martgages works in real world, but having any sort of haircut to investor (aka debt write-down) should lead to increase of interest rates. While I agree that higher interest rates are the future, the rest is just speculation how it will happens.
Just my two pence....

Piriz

flintash wrote: »

no it doesnt. I dont know how martgages works in real world, but having any sort of haircut to investor (aka debt write-down) should lead to increase of interest rates. While I agree that higher interest rates are the future, the rest is just speculation how it will happens.
Just my two pence....

when interest rates increase house prices fall!

flintash

Sometimes its true. But mostly irrelevant in country like this. I cant see another crash in near future, maybe soft landing

The_Conductor

Piriz wrote: »

when interest rates increase house prices fall!

Providing people are predominantly borrowing to fund the purchase of houses. At the moment- in our non-functioning market- almost half of sales are cash sales- which presumably wouldn't be impacted on by interest rate fluctuations.

The government initiative announced yesterday (lowering VAT to 9% for builders- and introducing new incentives for current owners to upgrade current properties- providing registered builders/contractors are used)- may have a bigger impact. Time will tell......

ezra_pound

The_Conductor wrote: »

Providing people are predominantly borrowing to fund the purchase of houses. At the moment- in our non-functioning market- almost half of sales are cash sales- which presumably wouldn't be impacted on by interest rate fluctuations.

The government initiative announced yesterday (lowering VAT to 9% for builders- and introducing new incentives for current owners to upgrade current properties- providing registered builders/contractors are used)- may have a bigger impact. Time will tell......

Interest rates do impact on btl cash buyers.

Kerry Gooner

ezra_pound wrote: »

Interest rates do impact on btl cash buyers.

Think of the opportunity cost, if interest rates higher then investors may prefer the guranteed return available in financial institutions rather than the return from buy to let. Inflation and tax rates will have significant impact on investing decision.

gaius c

Kerry Gooner wrote: »

Think of the opportunity cost, if interest rates higher then investors may prefer the guranteed return available in financial institutions rather than the return from buy to let. Inflation and tax rates will have significant impact on investing decision.

That's actually part of the reason the boom in London is still going. There is no better RoI available anywhere else so you may as well stick it into property.

ezra_pound

Kerry Gooner wrote: »

Think of the opportunity cost, if interest rates higher then investors may prefer the guranteed return available in financial institutions rather than the return from buy to let. Inflation and tax rates will have significant impact on investing decision.

Exactly

ezra_pound

Kerry Gooner wrote: »

Think of the opportunity cost, if interest rates higher then investors may prefer the guranteed return available in financial institutions rather than the return from buy to let. Inflation and tax rates will have significant impact on investing decision.

Exactly

skirt_hunter

ive been enquiring about several houses in Dublin 3 and Dublin 14 this past while and one thing is abundantly clear , houses are making well in excess of asking price , the desired locations in Dublin are up at least 20% in the past eighteen months

gaius c

Small sample size on the survey but if it's in any way representative of the BTL arrears, the banks are in serious doo doo.

I emailed them with one simple question : what, typically, is the security on your BTL properties?

Have a look at the url of the image for a cheap laugh.

Edit: fecking swear filter!

Edit2: report is here.

Thargor

Put one letter in the swearword in italics to get around the boards swear filter:

http://brianmlucey.files.wordpress.com/2013/10/ohfuck.png?w=640

EDIT: Bah still breaks the link.

cookie1977

This should work:
http://goo.gl/ILihBX

gaius c

Villa05 wrote: »

It is not a political decision.

It will be voluntary sales in return for partial debt write-off (the extent of which will be determined by the mortgage holders income). This will be the predominant solution in areas of high demand such as the main cities and areas of high employment. If a reasonable solution is declined it will go to court.

In areas of low demand other solutions such as split mortgages, possibly multi generational mortgages, reduced payments with term extensions, even interest only

This is about loss minimization, whatever happens the losses will be substantial and further interest rate hikes are inevitable for those paying their mortgages and new entrants.

There is no solution that will be positive for house prices in the medium to long term. If we leave non payers in their home with no consequences, more will follow and we will have a cash only market.

"They'll never repo because it will crash the market" has become the new "soft landing".

Not only will they repo, they are almost certain to be rather harsh with the initial batch to intimidate any other potential chancers back into line.
http://www.independent.ie/business/personal-finance/property-mortgages/borrowers-accused-of-deliberately-not-paying-mortgages-by-honohan-29651455.html

Snakeblood

gaius c wrote: »

"They'll never repo because it will crash the market" has become the new "soft landing".

Not only will they repo, they are almost certain to be rather harsh with the initial batch to intimidate any other potential chancers back into line.
http://www.independent.ie/business/personal-finance/property-mortgages/borrowers-accused-of-deliberately-not-paying-mortgages-by-honohan-29651455.html

That article said Honohan objected to the use of the term 'strategic defaulter' because you can't simply drop your debts like in the states, but that's what peopel are trying to do, it doesn't really matter if they can or not.

gaius c

€84,000 in arrears but is able to turn up in court with €10,000 in his pocket.

renting out the apartment in West Gate, St Augustine Street, Dublin 8 for €750 a month

Clearly pulling the piss because here's one that's just gone for €1200. You wouldn't even get an illegal bedsit for €750.

Villa05

Local Authorities become the kings of bad loans to property with a third of mortgages in arrears of 90 days or more
http://www.independent.ie/irish-news/a-third-of-local-authority-homes-loans-are-in-arrears-29696111.html

Statistics by County
http://cdn4.independent.ie/incoming/article29696269.ece/binary/house-arrears.png
.........................................................................................

NAMA states that flooding the property market makes no sense at Northern Ireland Conference, Does this imply that NAMA has the capacity to flood the market

He said Nama was a minor player in the North’s residential property market and the agency was working with debtors on both sides of the border to plug gaps.

http://www.irishexaminer.com/business/cweyqleygbey/rss2/

..............................................................................................
I remember this story doing the rounds in the mid 00''s but it appears to have surfaced again in relation to Hungarian property.
It shows how the Irish have no clue on how to value property and sellers know this. This makes them easy pickings to extort the maximum price from naive buyers who have not done their research.

In Hungary property had one price for locals, a higher price for foreigners and an even higher price for the Irish

http://www.rte.ie/news/player/1022/2013/20459448-irish-reportedly-paid-up-to-30-premium-for-hungarian-property/

Mustard1972

As a tax payer I expect NAMA to do as much as they can to make as much money as they can from the property on their books.
Flooding the market and driving down the price of property is not in the best interest of the tax payer. It might be in the best interest of those wishing to buy property, but its not in the best interest of the tax payer in general if they flood the market.

Bob24

I think as a public body Nama should act in the general interest of the public, not necessarily as a traded company maximising profit to please shareholder.

Of course the interest of the public is for Nama to get decent return on the properties they own and not to sell them at discounted prices. But on the other hand a conflicting interest is to not completely dry-up the market to ensure that new entrants can purchase property, that we don't create another bubble/crisis, and hat we can become a normal country again where a large part of the property market is not controlled and influenced by the government.

If I was talking as a shareholder of a private entity I probably won't care about the second goal; but as a taxpayer I think a right balance between the 2 has to be found.

The_Conductor

I would like to reiterate the point made in the interview- these residential properties that are being referred to- are in Northern Ireland, not in the Republic. So whatever public good you're talking about- is towards the people of Northern Ireland- and not us plebs down south of the border.

The vast bulk of NAMA's property in the Republic is commercial in nature- not residential.

techdiver

Mustard1972 wrote: »

As a tax payer I expect NAMA to do as much as they can to make as much money as they can from the property on their books.
Flooding the market and driving down the price of property is not in the best interest of the tax payer. It might be in the best interest of those wishing to buy property, but its not in the best interest of the tax payer in general if they flood the market.

Have you been asleep for the last decade? High property prices are detrimental to the economy i.e. the tax payer.

The economy and tax payer would be in a much better long term footing with lower property prices even if NAMA realises losses. If people have to put an enormous chunk of their income into servicing a mortgage then they have less to spend, thus depressing the domestic econmy!

Mustard1972

techdiver wrote: »

Have you been asleep for the last decade? High property prices are detrimental to the economy i.e. the tax payer.

The economy and tax payer would be in a much better long term footing with lower property prices even if NAMA realises losses. If people have to put an enormous chunk of their income into servicing a mortgage then they have less to spend, thus depressing the domestic econmy!

I think you've been asleep for a few years. We don't have high property price anymore. We have property prices and rents that are lower than they were 10 years ago.
People seem to think that everyone has a right to buy a house. There will always be a large proportion if the population that cannot afford to buy a house. Its always been like that. Witness what happened when anyone who wanted could get enough money from the banks to buy a house. Oh, you must have been asleep for that one.

Mustard1972

techdiver wrote: »

Have you been asleep for the last decade? High property prices are detrimental to the economy i.e. the tax payer.

The economy and tax payer would be in a much better long term footing with lower property prices even if NAMA realises losses. If people have to put an enormous chunk of their income into servicing a mortgage then they have less to spend, thus depressing the domestic econmy!

I think you've been asleep for a few years. We don't have high property price anymore. We have property prices and rents that are lower than they were 10 years ago.
People seem to think that everyone has a right to buy a house. There will always be a large proportion if the population that cannot afford to buy a house. Its always been like that. Witness what happened when anyone who wanted could get enough money from the banks to buy a house. Oh, you must have been asleep for that one.

Piriz

Mustard1972 wrote: »

I think you've been asleep for a few years. We don't have high property price anymore. We have property prices and rents that are lower than they were 10 years ago.
People seem to think that everyone has a right to buy a house. There will always be a large proportion if the population that cannot afford to buy a house. Its always been like that. Witness what happened when anyone who wanted could get enough money from the banks to buy a house. Oh, you must have been asleep for that one.

Then in this vein do you feel that unperforming mortgages should lead to repossessions?

ezra_pound

Mustard1972 wrote: »

I think you've been asleep for a few years. We don't have high property price anymore. We have property prices and rents that are lower than they were 10 years ago.
People seem to think that everyone has a right to buy a house. There will always be a large proportion if the population that cannot afford to buy a house. Its always been like that. Witness what happened when anyone who wanted could get enough money from the banks to buy a house. Oh, you must have been asleep for that one.

Face palm moment.

Villa05

Mustard1972 wrote: »

As a tax payer I expect NAMA to do as much as they can to make as much money as they can from the property on their books.
Flooding the market and driving down the price of property is not in the best interest of the tax payer. It might be in the best interest of those wishing to buy property, but its not in the best interest of the tax payer in general if they flood the market.

You may well be a taxpayer, however it will be your children and their children that will be paying for the vast majority of this mess. We, after 5/6 years of austerity are still adding to the bill.

So I ask you, is it fair to pass massive mortgages as well as substantially increased taxes to pay for a mess left by our generation to your children.

Villa05

The_Conductor wrote: »

I would like to reiterate the point made in the interview- these residential properties that are being referred to- are in Northern Ireland, not in the Republic. So whatever public good you're talking about- is towards the people of Northern Ireland- and not us plebs down south of the border.

The vast bulk of NAMA's property in the Republic is commercial in nature- not residential.

They don't have any in Northern Ireland either apparently!

He said Nama was a minor player in the North’s residential property market

If NAMA is a minor player in Residential properties in the Republic and the North, why comment on flooding the market and its consequences if you do not possess the capacity to do so.

Have you any link to a breakdown of NAMA Assets

There claim from the article

Nama’s approach to asset divestment was to gauge market appetite and create supply where there is demand, he told the Belfast Chamber of Commerce.

Now we are all of the belief that there is significant demand in Dublin. NAMA has a database of distressed assets. This is only a small proportion of their assets that they have chosen to foreclose on due to borrower non co-operation
http://www.nama.ie/about-our-work/properties-enforced/
In Dublin
They have 17 development sites not yet commenced with only 1 on the market
They have 38 residential listings (Most with multiple units) with only six on the market.

So i'm calling their claim to create supply where demand is as bull and as they operate behind a veil of secrecy, can we believe anything they say?

El_Dangeroso

Mustard1972 wrote: »

We have property prices and rents that are lower than they were 10 years ago.

Are they? Do you have a source for that?

Mustard1972

El_Dangeroso wrote: »

Are they? Do you have a source for that?

Yes they are. And Google is your friend. Knock yourself out. I'm.not going to go looking for links for that say the sky is blue if someone asks me do I have links for it. Put in some effort yourself. Or if you are feeling really lazy just type in daft.ie into a browser and follow the trail.

Let me guess you weren't paying rent in 2003.