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

moxin

JohnFalstaff wrote: »

Credit is more available than you might think, especially compared to this time two years ago. The banks are lending if they deem the loan application is worthwhile.

You can get a mortgage if you fit the criteria indeed, that's not denied.

Mortgage lending by the banks is flat year on year. In the latest analysis by the IBF they themselves are sceptical than mortgage lending will finish 2013 above the 2012 total. Cash is driving the latest mania, the govt nearly doubling the DIRT savings rate is one of the factors driving it.

The Spider

moxin wrote: »

You can get a mortgage if you fit the criteria indeed, that's not denied.

Mortgage lending by the banks is flat year on year. In the latest analysis by the IBF they themselves are sceptical than mortgage lending will finish 2013 above the 2012 total. Cash is driving the latest mania, the govt nearly doubling the DIRT savings rate is one of the factors driving it.

Not denying there's a lot of cash buyers, but this is simple supply and demand, and at the moment there is a massive demand versus restricted supply all those ðemanding must have access to cash, it will take a long time to work through current demand.

moxin

The Spider wrote: »

Not denying there's a lot of cash buyers, but this is simple supply and demand, and at the moment there is a massive demand versus restricted supply all those ðemanding must have access to cash, it will take a long time to work through current demand.

Massive is an overstated word when related to the supply which is quite low.

Some of the cash buyers are investors as they see feck all return on their savings accounts, even RTE's reporter admitted this for apartments detailing 10%+ yields(before he was interrupted by Dobson, thread in After Hours)
http://www.boards.ie/vbulletin/showthread.php?t=2057092527
http://www.rte.ie/player/ie/show/10227531/ 24min mark

cookie1977

moxin wrote: »

You can get a mortgage if you fit the criteria indeed, that's not denied.

Mortgage lending by the banks is flat year on year. In the latest analysis by the IBF they themselves are sceptical than mortgage lending will finish 2013 above the 2012 total. Cash is driving the latest mania, the govt nearly doubling the DIRT savings rate is one of the factors driving it.

I don't know where you got that from but as I quoted earlier the IBF say mortgage lending is up 10% year on year in September.

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Mortgage_Approvals_publication_Oct2013_FINAL.sflb.ashx

Year on year to october it's up 12%. Nothing huge numbers wise but all moving in the right direction. What it means in the long run after an analysis of the banks next year hard to tell.

The_Conductor

delthedriver wrote: »

Irish House Prices up 15% in Dublin; Mortgages issued at 1974 level
FinFacts Ireland ‎- 7 hours ago
Irish House Prices rose 15% in Dublin in the year to October 2013 while residential property prices at a national level increased by 6.1%.;)

However- and what it doesn't elucidate on- the market is still handicapped, and just under 45% of all sales in the Dublin area are executor sales of properties where the owner is deceased. Helpfully- these are likely to be family homes- which is precisely what is driving the Dublin market- however, its a finite market too........

Dublin, a badly malfunctioning market, is dragging the statistics out of kilter, and presenting an irrationally rosy picture- when the true picture is that the lack of a functioning market is a continuing trend, and not going to change.

44% of all Dublin property sales are executor sales? If you'll excuse the pun- the market is like a house built of straw..........

moxin

cookie1977 wrote: »

I don't know where you got that from but as I quoted earlier the IBF say mortgage lending is up 10% year on year in September.

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Mortgage_Approvals_publication_Oct2013_FINAL.sflb.ashx

Year on year to october it's up 12%. Nothing huge numbers wise but all moving in the right direction. What it means in the long run after an analysis of the banks next year hard to tell.

October is only month 1 of 3 for Q4. See below.

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Housing_Market_Monitor_Q3_2013_FINAL.sflb.ashx

IBF wrote:

Partly due to the MIR factor noted above, the total value of mortgage drawdowns for 2013 is unlikely to exceed the €2.6bn seen last year. Between Q1 and Q3 of this year some 9,800 mortgages (8,711 of which were for house purchase) were drawn down with a total value of €1.6 billion (€1.5 billion of which was for house purchase).
Investec Ireland has previously estimated that the mortgage market could recover to €8-10 billion per annum over the medium term, so we are clearly far from ‘normal service' where the mortgage market is concerned.

lima

The_Conductor wrote: »

However- and what it doesn't elucidate on- the market is still handicapped, and just under 45% of all sales in the Dublin area are executor sales of properties where the owner is deceased. Helpfully- these are likely to be family homes- which is precisely what is driving the Dublin market- however, its a finite market too........

Dublin, a badly malfunctioning market, is dragging the statistics out of kilter, and presenting an irrationally rosy picture- when the true picture is that the lack of a functioning market is a continuing trend, and not going to change.

44% of all Dublin property sales are executor sales? If you'll excuse the pun- the market is like a house built of straw..........

In fairness my bank keep hounding me to continue with my new mortgage application after my last one expired last year.

Regarding executor sales, I personally am looking for something to move into immediately, however the executor sales all need to be gutted (unless you're into the 60'/70'). Unfortunately that leaves me with a tiny tiny amount of stock to look at and most of it is still far overpriced. Any place I've seen is just full of old people in their 60's wanting a 'retirement project' and somewhere to put their under performing cash.

So even people like me who can get a mortgage have even less stock to play with. And a lot of that is to do with people who refuse to pay their mortgage while at the same time refuse to surrender the property that they are in (that the bank owns the deeds to).

Again I came home from abroad to take on a good career role in the private sector and this is how I get treated. Yes it's a first world problem but nonetheless I deserve cheaper prices compared to someone who gambled and lost and refuses to get out of their boom home.

cookie1977

moxin wrote: »

October is only month 1 of 3 for Q4. See below.

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Housing_Market_Monitor_Q3_2013_FINAL.sflb.ashx

Value of drawdowns is one metric but the total approvals from your link are up 13.4% year on year and mortgage drawdowns are up 14.7%. In other words compared to last year there is more mortgage activity in the irish market this year. We'll wait till the end of the year to see total value of the mortgages but these could be down due to price decreases, more stringent lending etc...

moxin

cookie1977 wrote: »

Value of drawdowns is one metric but the total approvals from your link are up 13.4% year on year and mortgage drawdowns are up 14.7%. In other words compared to last year there is more mortgage activity in the irish market this year. We'll wait till the end of the year to see total value of the mortgages but these could be down due to price decreases, more stringent lending etc...

December 2012 was very high for mortgage lending when it traditionally is not that high, the end of MIR was the cause for that. We'll see if there is a repeat this Dec '13 but the IBF reckon not.

abbeyrock

Its a case of De ja Vu, last time round Mcreevey had to introduce a cut in capital gains to free up development land as there simply was not enough houses or apartments to cope with the demand. Fair enough we did go mad buying 2/3 houses each. The situation there is now in south dublin where property prices are going to continue to rise at a rapid rate is there is simply not enough houses to facilitate and not enough rezoned land left

All the baby boomers who bought apartments during the boom are now reaching the point of settling down and having babies, I personally have 4 friends who are living in apartments with children and need to move asap due to lack of space, the problem they are facing is that they can't afford to sell as they are in negative equity so will probably have to rent, which is not a problem for them, but as there are very few houses to go around and they are finding that rents are going up as well.

What will happen is a similar situation to the last boom, it will be cheaper to buy than it is to rent and no doubt the developers and banks will advertise this fact and lending will start again, possibly with a new bank(s) entering the market.

Forget about ghost estates as half of them should never have been built in the first place, there are literally thousands of empty properties in longford and leitrim that will never be finished or occupied as they were built with section tax reliefs which were then scrapped.

Landlords do not want to enter the marker under current conditions as property taxes are going to rise and capital gains has already increased. The only other option will be another social housing experiment by the government which has in the past brought its own fair share of problems.

cookie1977

moxin wrote: »

December 2012 was very high for mortgage lending when it traditionally is not that high, the end of MIR was the cause for that. We'll see if there is a repeat this Dec '13 but the IBF reckon not.

That's kinda my point. If we take it that there was a pressure last year that was unusual, pushing people to get mortgages and this year we dont have the same pressure yet we're still seeing both an increase in mortgage approvals and mortgage drawdowns over last year then for the moment things are moving in the right direction economy wise.

roro2

The_Conductor wrote: »

just under 45% of all sales in the Dublin area are executor sales of properties where the owner is deceased.

That's an interesting stat. Have you got a link?

cookie1977

The IBF reports about 40% of dublin sales are executor sales. They do not stat how they calculated that but it;s probably from an assessment of daft and myhome websites so I suspect there a decent enough std dev here:

here I would point to reports that 40% of recent Dublin
transactions involved executor sales

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Housing_Market_Monitor_Q3_2013_FINAL.sflb.ashx

cookie1977

Lisney also estimated that the dublin market was about 40% executor sales too in 2012:

http://www.lisney.com/files/publications/Lisney%20Review%202012%20Outlook%202013_16113111111.pdf

. Of those properties that are on the market, we estimate that up to 40% of them are executor sales.

moxin

cookie1977 wrote: »

That's kinda my point. If we take it that there was a pressure last year that was unusual, pushing people to get mortgages and this year we dont have the same pressure yet we're still seeing both an increase in mortgage approvals and mortgage drawdowns over last year then for the moment things are moving in the right direction economy wise.

And the value of mortgage drawdowns has hardly leapt high either. Cash is making up the difference either as part of a combined mortgage\cash purchase or a 100% cash purchase.

roro2

cookie1977 wrote: »

The IBF reports about 40% of dublin sales are executor sales. They do not stat how they calculated that but it;s probably from an assessment of daft and myhome websites so I suspect there a decent enough std dev here:


http://www.ibf.ie/Libraries/Research_Statistics/IBF_Housing_Market_Monitor_Q3_2013_FINAL.sflb.ashx

Cheers, missed that. The IBF data is compiled directly from bank databases so should be very accurate. But this reference is just in the commentary and it refers to "reports" of 40%, which sounds like it may refer to the Lisney report which is an estimate of "up to 40%" in 2012.

The Spider

lima wrote: »

In fairness my bank keep hounding me to continue with my new mortgage application after my last one expired last year.

Regarding executor sales, I personally am looking for something to move into immediately, however the executor sales all need to be gutted (unless you're into the 60'/70'). Unfortunately that leaves me with a tiny tiny amount of stock to look at and most of it is still far overpriced. Any place I've seen is just full of old people in their 60's wanting a 'retirement project' and somewhere to put their under performing cash.

So even people like me who can get a mortgage have even less stock to play with. And a lot of that is to do with people who refuse to pay their mortgage while at the same time refuse to surrender the property that they are in (that the bank owns the deeds to).

Again I came home from abroad to take on a good career role in the private sector and this is how I get treated. Yes it's a first world problem but nonetheless I deserve cheaper prices compared to someone who gambled and lost and refuses to get out of their boom home.

You don't seem to understand the simple fact that no one is going to sell their house in negative equity, and walk around with a massive debt and no asset, on the one hand you want people to surrender their homes if not paying the mortgage, but on the other hand you don't want debt forgiveness, you can't have it every way.

The only way that anyone would surrender their home, whether they're paying the mortgage or not, is with debt forgiveness.

And I can guarantee you that the only houses that would become available will be in Dublin West, Blanchardstown, Lucan and so on. That's where most of the tradesmen would have bought, and they're the ones who've lost their jobs.

You won't have massive repos in SCD, that's where the proffessional classes live and even if they lost their jobs, they more than likely would have no problem getting another one.

So yeah if you want a house look west young man.

cookie1977

roro2 wrote: »

Cheers, missed that. The IBF data is compiled directly from bank databases so should be very accurate. But this reference is just in the commentary and it refers to "reports" of 40%, which sounds like it may refer to the Lisney report which is an estimate of "up to 40%" in 2012.

Looks to me that the IBF are compiling that data solely from DAFT:

The sources used for compiling the report are as follows:
• the Department of the Environment, Community & Local Government [dwelling completions and commencements]
• the Central Statistics Office [transactions price index]
• the Central Bank of Ireland [average percentage rate of charge for credit]
• the Property Price Register [number of transactions]
• daft.ie [properties listed for sale and asking price index]
• the Irish Banking Federation [mortgage approvals and drawdowns]

jay0109

The Spider wrote: »

You don't seem to understand the simple fact that no one is going to sell their house in negative equity, and walk around with a massive debt and no asset, on the one hand you want people to surrender their homes if not paying the mortgage, but on the other hand you don't want debt forgiveness, you can't have it every way.

The only way that anyone would surrender their home, whether they're paying the mortgage or not, is with debt forgiveness.

And I can guarantee you that the only houses that would become available will be in Dublin West, Blanchardstown, Lucan and so on. That's where most of the tradesmen would have bought, and they're the ones who've lost their jobs.

You won't have massive repos in SCD, that's where the proffessional classes live and even if they lost their jobs, they more than likely would have no problem getting another one.

So yeah if you want a house look west young man.

It's not the only way...they could be made 'surrender' their home following a legal process such as bankruptcy.
Not happening much and not likely to happen much in future in this screwed up country

The Spider

jay0109 wrote: »

It's not the only way...they could be made 'surrender' their home following a legal process such as bankruptcy.
Not happening much and not likely to happen much in future in this screwed up country

I've always said it's fine as lng as the debt is wiped out, if the debt isn't wiped out, anyone would dig their heels in and drag it out for as long as possible.

Wipe out the debt with the house being surrendered and you'd be surprised, you might free up a lot of supply as people look to get out.

Banks won't repossess, until the value of the asset reaches close to the price bought for, then the banks can swap bad debt for good debt, ie repossess at no loss and sell the house to someone who can pay the mortgage.

Listening to George Hook the other night and commentators reckon it's impossible for prices in Dublin to stabilise let alone drop because there's no supply, and any new supply is going to either be in North Dublin or Wicklow, and I have to say I agree, there are no houses available in SCD or other desirable addresses unless you pay for them.

lima

The Spider wrote: »

So yeah if you want a house look west young man.

The west is the worst part of Dublin so yeah that and finglas will stay low for forseeable future.

I am a northsider so thankfully I'm not affected by the SCD 'boom' in terms of prices flying up where I would live

jmayo

cookie1977 wrote: »

Written off via profits of the company or as a loss by the company in a normal functioning economy or via the tax payer in our economy. Possibly to be recouperated via a sale of the bank or levies applied to the bank upon return to profitability by said bank.

Note AIB expects to return to profit next year:
http://www.independent.ie/business/irish/aibs-duffy-says-bank-will-be-back-in-profit-next-year-29783506.html

What profits ?
If there were such future profits to be made in Irish banking then why has Rabo and Danske pulled the plug ?
Why have there been rumours about RBS trying to offload Ulster ?

And do you even realise the state of the Irish banks.
They are affectively in state ownership or need the taxpayer to guarantee their survival.

And where do banks make profits from but from charges to customers.
Where do they get the money to pay levies, but from customers.
Either way the ordinary people end up fooking paying for it.

The Spider wrote: »

The taxpayer, just as the taxpayer pays for alcoholics, drug addicts through hospital care and treatment.

The taxpayer pays for a lot of things that various groups mightn't want taxes spent on.

The debts are being written off anyway so it doesn't matter, I will absolutely guarantee you that any house that's repossessed will have the debt written off, and that's just as it should be.

And who ends up paying for these written off debts.
Ah shure the taxpayer does so it is all right.
This fooking mentality in this country will ensure we will always be a sh**hole needing foreigners to give us a few quid.

Woodville56 wrote: »

TV3 show Midweek joining the "talk it up " house price increase frenzy !! Just now

I thought they dismissed the effects of repossessions out of hand.
They just said it was a zero sum game since people have to live somewhere.

How can they so easily dismiss the effect that a whole slew of repossessed properties hitting the market would have on prices ?

The Spider wrote: »

You don't seem to understand the simple fact that no one is going to sell their house in negative equity, and walk around with a massive debt and no asset, on the one hand you want people to surrender their homes if not paying the mortgage, but on the other hand you don't want debt forgiveness, you can't have it every way.

The only way that anyone would surrender their home, whether they're paying the mortgage or not, is with debt forgiveness.

It shouldn't be a fooking option.
If you have not been paying your mortgage then it shouldn't be up to you whether or not you get to keep your property.

This the problem in this country where not paying your mortgage and expecting to yet keep your property is seen as fooking right.

Dear God when the hell are we going to start functioning as a normal market again.

_Kaiser_

jmayo wrote: »

Dear God when the hell are we going to start functioning as a normal market again.

Unfortunately first we need to start functioning as a normal society where grown adults take RESPONSIBILITY for the choices and decisions they made, rather than expecting "someone else" to pick up the tab for them because they don't like how it turned out.

No wonder this country is the basket case it is with attitudes like that being not only seen as acceptable but actively encouraged as a solution.

The Spider

jmayo wrote: »

It shouldn't be a fooking option.
If you have not been paying your mortgage then it shouldn't be up to you whether or not you get to keep your property.

This the problem in this country where not paying your mortgage and expecting to yet keep your property is seen as fooking right.

Dear God when the hell are we going to start functioning as a normal market again.

What you don't seem to understand is that the banks want house prices to go higher, so does NAMA, they're not going to move on anyone until it makes sense in terms of the return they'll get for the asset, the country wants prices to go up, it improves consumer sentiment and people start spending in the economy creating jobs.

Sure it's not great for those looking to buy, but for those who bought it is great, they don't feel they have to save every penny, just in case they lose their job, they see more jobs being created, and if they have to move they can sell their house and not be in debt.

Like I say repossess but wipe out the debt, and as for the taxpayer picking up the tab, there's plenty of things the taxpayer picks up the tab for that some group or other mightn't agree with like funding fee paying schools, or the banks, that's the big one, I have no problem with my taxes being used to help out a family who's house has been repossessed and as I'm a taxpayer too, my point of view is every bit as valid as yours, and I pay a lot of tax, believe me.

lima

The Spider wrote: »

What you don't seem to understand is that the banks want house prices to go higher, so does NAMA, they're not going to move on anyone until it makes sense in terms of the return they'll get for the asset, the country wants prices to go up, it improves consumer sentiment and people start spending in the economy creating jobs.

Sure it's not great for those looking to buy, but for those who bought it is great, they don't feel they have to save every penny, just in case they lose their job, they see more jobs being created, and if they have to move they can sell their house and not be in debt.

Like I say repossess but wipe out the debt, and as for the taxpayer picking up the tab, there's plenty of things the taxpayer picks up the tab for that some group or other mightn't agree with like funding fee paying schools, or the banks, that's the big one, I have no problem with my taxes being used to help out a family who's house has been repossessed and as I'm a taxpayer too, my point of view is every bit as valid as yours, and I pay a lot of tax, believe me.

Only in Ireland - really and truly, does someone have so much confidence in this opinion. This thread should be used as a study into the Irish psyche. Wow.

moxin

In that case of wiping the debt, every mortgage holder will jump on the boat. Why bother paying your mortgage when your neighbour gets a great deal for his mistake?

cookie1977

moxin wrote: »

In that case of wiping the debt, every mortgage holder will jump on the boat. Why bother paying your mortgage when your neighbour gets a great deal for his mistake?

The debt that is spoken of is the debt remaining on the mortgage after the property has been repossessed and sold by the bank. I seriously doubt that "every mortgage holder will jump on the boat".

The Spider

cookie1977 wrote: »

The debt that is spoken of is the debt remaining on the mortgage after the property has been repossessed and sold by the bank. I seriously doubt that "every mortgage holder will jump on the boat".

Exactly, I'm not going to stop paying my mortgage because people lost their houses and had the remaining debt forgiven.

I want to keep my house and believe it or not so do the vast majority of people who bought, also I'd imagine it'd be hard to get another mortgage after your house was repossessed.

DebDynamite

The Spider wrote: »

You don't seem to understand the simple fact that no one is going to sell their house in negative equity, and walk around with a massive debt and no asset, on the one hand you want people to surrender their homes if not paying the mortgage, but on the other hand you don't want debt forgiveness, you can't have it every way.

The only way that anyone would surrender their home, whether they're paying the mortgage or not, is with debt forgiveness.

In that case so, what's to stop me taking a loan out on a Porche, driving it for 1/2 years and not pay a penny on it? Eventually they will repossess it, but I've had 1/2 years of looking good, driving a sweet sports car that cost me nothing. Do you think that's ok?

cookie1977

DebDynamite wrote: »

In that case so, what's to stop me taking a loan out on a Porche, driving it for 1/2 years and not pay a penny on it? Eventually they will repossess it, but I've had 1/2 years of looking good, driving a sweet sports car that cost me nothing. Do you think that's ok?

Really, we're down at this level of discussion now.