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

lima

gurramok wrote: »

The poster is justified at the frustration by the banks\govt of the holding back of stock in an effort to keep prices high and this is in a country which is in the hands of the IMF at the bankruptcy door. If there was transparency in a truly free market without govt intervention, this thread wouldn't exist.

Also, as I side note, the IMF intervention in our economy was the best thing to happen to us. An international perspective on our affairs will guide us past the current psyche of Irish governments and we may soon find ourselves happy with our chosen democratic leaders!

Galego

lima wrote: »

The sooner stock starts to be released the better. The rest of us non-boomers who have come home from abroad to work in a particular sector of the economy where there is a skills shortage can then get on with our lives and buy our first homes not having to stress about the fact there are freeloaders hanging about in massive houses they were deluded enough to think they could live in in the first place!

Be patience and patience will pay off for you. People are trapped in houses and many of us are trapped renting. If I had to choose I would still choose being in our position. Market will have to stabilize at some point and start working efficiently. Government and bank intervention will not last forever. In the meantime, build up those savings and the cost of borrowing will be cheaper. In the other hand, those in mortgage arrears who park part of their debts, this will be parked at interest (it will not be free of charge) so they will end up paying a mansion but getting a shoe box. Restructuring has ALREADY shown that doesn’t solve the bigger problem, which it is that many of those mortgages in arrears are unsustainable. Why restructure the inevitable? Again kicking the can down the road and let the next one who comes in power deal with the issue.

pburns

Hold on...

It's seems that the consensus on here is always diametrically opposed to what's in the mainstream media - whether it's positive or negative!

Look at today's Indo (positive or negative depending on your circumstances of course). The front page splash is that repossessions will increase with the new legislation being pushed through for banks - even Charlie Weston (who I've long suspected as a cheerleader for property prices) is admitting as much.
Mind you, they continue to emote about banks taking family homes. In reality I'm pretty certain BTLs and investment properties of various kinds will be the low-hanging fruit.

Personally, I think this might stymy the post-MIR dead-cat-bounce that is effecting certain areas of the market but the floor was reached early/mid 2012. Repossessions or even the threat of them could significently cool things down to that level again but some on here would be happy with nothing less than a complete tumble in prices starting all over again.

Galego

Let’s make it clear for those who think that some of us are only chancers who just want to snap a bargain at someone’s cost. The feeling in the ground is not that one. Personally, we have been viewing houses now for few months and so far the quality of the stock is horrendous. Many of them have been sitting in the market for years, they are leftovers which nobody wanted in 2010,11 and 12. Sometimes the price is not bad but the house is in pieces or about to fall down. I’ve viewed some houses which have then gone sale agreed which were in shocking conditions. It is amazing and hard to understand why people would ever buy houses in such a bad conditions. Personally, I’d rather rent than buy a real s**t hole which I would then have to pay for the next 20 years.
So what do I (and many others) want to see happing?
Simple. I want the market to work freely and efficiently, at the moment there are huge inefficiencies and price differences. Market floor or not market floor, I couldn’t care less. I would be more than happy to pay a fair price for a decent family home but please do not expect to pay a manipulated price for a shoe box. It is not my fault that many people did it some years ago.

gurramok

pburns wrote: »

Personally, I think this might stymy the post-MIR dead-cat-bounce that is effecting certain areas of the market but the floor was reached early/mid 2012. Repossessions or even the threat of them could significently cool things down to that level again but some on here would be happy with nothing less than a complete tumble in prices starting all over again.

Seriously disagree with your floor in 2012 analysis.

Explain how this arrears action will boost prices? All we want is a free market from govt interference, if this happens and prices fall, so be it. Its natural.

jmayo

pburns wrote: »

Hold on...

It's seems that the consensus on here is always diametrically opposed to what's in the mainstream media - whether it's positive or negative!

EHHH HELLO.
Ever stop to think who controls and owns the mainstream media ?
Ever stop to think who works in the media and what their vested interests are ?
Ever notice how some very famous old media personalities (Byrne, Kenny, Murphy) are still working past retirement, because they lost shedloads of cash in property bubble investments ?
Ever notice how one of the worse run banks INBS gave out nice generous mortgages to media types ?

Remind me again who really calls the shots in RTE, would it be the government who happen to be the biggest property owner in Ireland ?

And just because asks those questions one doesn't have to be wearing a tin foil hat.

pburns wrote: »

Look at today's Indo (positive or negative depending on your circumstances of course). The front page splash is that repossessions will increase with the new legislation being pushed through for banks - even Charlie Weston (who I've long suspected as a cheerleader for property prices) is admitting as much.

Ahh FFS the indo.
That would be the sister paper and part of the group that allows cretins like willie o'dea, cecilia larkin, eoghan harris, brendan o'connor, etc voice their opinions.
The indo the paper that championed fianna fail, ahern and the property bubble.

Then we have the Irish Times who happen to have blown a wad of cash on a property website and who happened to also make huge revenues from proeprty supplements.

pburns wrote: »

Mind you, they continue to emote about banks taking family homes. In reality I'm pretty certain BTLs and investment properties of various kinds will be the low-hanging fruit.

Personally, I think this might stymy the post-MIR dead-cat-bounce that is effecting certain areas of the market but the floor was reached early/mid 2012.

Care to tell us why you think this please ?

pburns wrote: »

Repossessions or even the threat of them could significently cool things down to that level again but some on here would be happy with nothing less than a complete tumble in prices starting all over again.

I can see why anyone that wants to buy would want the best deal possible.
Also it is about time people copped on that the price of property does not equate to a healthy economy.
It is the other damm way around.

cookie1977

Galego wrote: »

Let’s make it clear for those who think that some of us are only chancers who just want to snap a bargain at someone’s cost. The feeling in the ground is not that one. Personally, we have been viewing houses now for few months and so far the quality of the stock is horrendous. Many of them have been sitting in the market for years, they are leftovers which nobody wanted in 2010,11 and 12. Sometimes the price is not bad but the house is in pieces or about to fall down. I’ve viewed some houses which have then gone sale agreed which were in shocking conditions. It is amazing and hard to understand why people would ever buy houses in such a bad conditions. Personally, I’d rather rent than buy a real s**t hole which I would then have to pay for the next 20 years.
So what do I (and many others) want to see happing?
Simple. I want the market to work freely and efficiently, at the moment there are huge inefficiencies and price differences. Market floor or not market floor, I couldn’t care less. I would be more than happy to pay a fair price for a decent family home but please do not expect to pay a manipulated price for a shoe box. It is not my fault that many people did it some years ago.

Personally I can appreciate where you're coming from. And somewhere in the middle of both points is the right solution. Hence why I favour repossession (immediately if necessary) of BTL's with unworkable mortgages and indepth investigations (followed by suitable punishments) into those who are trying strategic default.

I do not however favour blanket repossessions on the basis of an arbitrary cut off date related to how long a mortgage is in arrears since I dont believe the banks have done enough to facilitate many of those mortgages in arrears that could be fixed (though parking debt, debt for equity swaps etc...) if given time and a workable solution. The mortgages that are unworkable no matter how they are restructured will inevitably have to be repossessed too.

I dont favour mass repossessions just to facilitate a reduction in house prices for those wanting to buy now as I dont believe it's good for the country for a number of reasons including in my opinion, increased burden on the tax payer, potential increases in suicides, increased stresses on families and society as a whole and a major issue where these repossessed families will not be able to contribute to our economy which is in bad need of growth.

To me there is some pain and gain for all. No solution is perfect. All out repossessions of distressed mortgages is bad as is absolutely no repossessions of distressed mortgages. That's where I'm coming from and I dont think it's unreasonable.

Galego

cookie1977 wrote: »

Personally I can appreciate where you're coming from. And somewhere in the middle of both points is the right solution. Hence why I favour repossession (immediately if necessary) of BTL's with unworkable mortgages and indepth investigations (followed by suitable punishments) into those who are trying strategic default.

I do not however favour blanket repossessions on the basis of an arbitrary cut off date related to how long a mortgage is in arrears since I dont believe the banks have done enough to facilitate many of those mortgages in arrears that could be fixed (though parking debt, debt for equity swaps etc...) if given time and a workable solution. The mortgages that are unworkable no matter how they are restructured will inevitably have to be repossessed too.

I dont favour mass repossessions just to facilitate a reduction in house prices for those wanting to buy now as I dont believe it's good for the country for a number of reasons including in my opinion, increased burden on the tax payer, potential increases in suicides, increased stresses on families and society as a whole and a major issue where these repossessed families will not be able to contribute to our economy which is in bad need of growth.

To me there is some pain and gain for all. No solution is perfect. All out repossessions of distressed mortgages is bad as is absolutely no repossessions of distressed mortgages. That's where I'm coming from and I dont think it's unreasonable.

I do not think that you are being unreasonable and from an economic point of view mass repossessions will not help the economy in short term. BUT the current approach is certainly damaging the economy even further than the mass repossession approach – and we will see the consequences in the long term. In years to come, people will understand how serious this stuff is. Personally, for a country which relies on FDI I don’t understand how the government is now advertising write-downs in media. Could anyone explain this one to me? I’d have thought this is sending the wrong message to foreign investors out there.

I come from an EU country which is in pieces, doubles the Irish unemployment rate, had the same (or even bigger) property bubble than Ireland, BUT “only” has 3% of mortgages in arrears over 90 days. How are these numbers not making sense then?

lima

They are just relentless in their agenda!!!

http://www.independent.ie/business/personal-finance/property-mortgages/dublin-house-prices-expected-to-rise-but-repossessions-hike-expected-in-buytolet-market-report-29130655.html

gurramok

lima wrote: »

They are just relentless in their agenda!!!

http://www.independent.ie/business/personal-finance/property-mortgages/dublin-house-prices-expected-to-rise-but-repossessions-hike-expected-in-buytolet-market-report-29130655.html

That is some propaganda piece indeed. (and they don't allow comments on their article)

Somehow the "slowest rate of decline since March 2008" is translated to "the housing market has stabilised and prices are likely to rise in Dublin". One months rise and then the fall the next month and even a rise the following month in the CSO index does not equal to rising prices on a sustainable path. It needs many months of consecutive rises to definitely say in general "prices are rising".

cookie1977

paper never refused ink

feelo

I think that people who believe that the glut of buy-to-let repossessions which will happen will not effect current prices are deluded. It's not the owner occupiers who are the problem. For the most, they will get a retructured loan that will allow them to continue living in their homes. One in five buy-to-lets are in trouble. The only way to deal with these is to take them back sell them on and try and get something back on them. As it stands they are of no value. If and when this happens, how could this not effect prices.

D3PO

feelo wrote: »

I think that people who believe that the glut of buy-to-let repossessions which will happen will not effect current prices are deluded. It's not the owner occupiers who are the problem. For the most, they will get a retructured loan that will allow them to continue living in their homes. One in five buy-to-lets are in trouble. The only way to deal with these is to take them back sell them on and try and get something back on them. As it stands they are of no value. If and when this happens, how could this not effect prices.

I dont believe these people (of which I would be one) are deluded. Clearly there is more than one market but in many rental markets particularly dublin rents are on the rise. This has a significant hand in why I believe the sale of these BTLs will have no negative impact on house prices.

The reason is simple. Selling many of these BTLs by banks at the current market value which would in the main be significantly less than the bank are owed is very very likely. For one simple reason the rental yield makes financial sense to pay the current market value of these houses.

There are many investors out there ready to snap up these BTL's. Good yield, sitting tenants. Clearly every BTL isnt in that category but the ones in the more urban areas are for the most part and I think its fair to assume most BTL's fit that category.

Villa05

D3PO wrote: »

I dont believe these people (of which I would be one) are deluded. Clearly there is more than one market but in many rental markets particularly dublin rents are on the rise. This has a significant hand in why I believe the sale of these BTLs will have no negative impact on house prices.

The reason is simple. Selling many of these BTLs by banks at the current market value which would in the main be significantly less than the bank are owed is very very likely. For one simple reason the rental yield makes financial sense to pay the current market value of these houses.

There are many investors out there ready to snap up these BTL's. Good yield, sitting tenants. Clearly every BTL isnt in that category but the ones in the more urban areas are for the most part and I think its fair to assume most BTL's fit that category.

- In arrears 261 to 720 days 27,829 (Q3 2012 26,453) Recovery unlikely 80% danger of repossession
- In arrears over 720 days 23,523 (Q3 2012 20,622) Repossession

Can someone propose an acceptable solution for those residential mortgages that have over a year in arrears accumulated. The stock in this category is over 50,000. What would that level of supply do to a market with 14% unemployment, extreme difficulty in obtaining a mortgage and a dwindling cash buyer market.

If they cannot pay anything, then there is no other solution other than repossession

Is ignoring this issue not delusion

cookie1977

Villa05 wrote: »

- In arrears 261 to 720 days 27,829 (Q3 2012 26,453) Recovery unlikely 80% danger of repossession
- In arrears over 720 days 23,523 (Q3 2012 20,622) Repossession

Can someone propose an acceptable solution for those residential mortgages that have over a year in arrears accumulated. The stock in this category is over 50,000. What would that level of supply do to a market with 14% unemployment, extreme difficulty in obtaining a mortgage and a dwindling cash buyer market.

If they cannot pay anything, then there is no other solution other than repossession

Is ignoring this issue not delusion

You're making a number of assumptions on this. Why would debt for equity swap not work in many of these cases. There is no real answer as there hasn't been an in depth analysis of these arrears.

Villa05

cookie1977 wrote: »

You're making a number of assumptions on this. Why would debt for equity swap not work in many of these cases. There is no real answer as there hasn't been an in depth analysis of these arrears.

How does that work when nothing is being paid for more than a year

The_Conductor

Villa05 wrote: »

How does that work when nothing is being paid for more than a year

In most cases 'a' payment could have been made. Perhaps not a full payment, but 'a' payment nonetheless. People see that there has been no reprecussions for other people- and in some cases are made feel fools for continuing to pay- and indeed, why would you pay- when your next door neighbour has a significantly higher standard of living than you do, on the back of not paying their mortgage.

Its debatable how many of the strategic defaulters could pay their mortgages in part, or full- and is something we may never know. One thing we do know is, regardless, a token payment could be made by most of these people- and if their circumstances are as bad as many will lead you to believe, they probably would qualify for Mortgage Interest Supplement- which would cover the interest component of the loan?.........

StillWaters

Villa05 wrote: »

How does that work when nothing is being paid for more than a year

That would only be a small proportion of those figures, nothing near 50,000

feelo

50,000 buy to lets in trouble and people think the fact that LL's are willing to snap them up! 14% unemployment, we are riddled with debt which will ensure a long and painful road still ahead of us. I can only see one way house prices going!

D3PO

Villa05 wrote: »

- In arrears 261 to 720 days 27,829 (Q3 2012 26,453) Recovery unlikely 80% danger of repossession
- In arrears over 720 days 23,523 (Q3 2012 20,622) Repossession

Can someone propose an acceptable solution for those residential mortgages that have over a year in arrears accumulated. The stock in this category is over 50,000. What would that level of supply do to a market with 14% unemployment, extreme difficulty in obtaining a mortgage and a dwindling cash buyer market.

If they cannot pay anything, then there is no other solution other than repossession

Is ignoring this issue not delusion

If you reread my reply and the quoted post I was replying to it was I specifically regarding BTL's. Nobody is ignoring this issue, they are taking a realistic look at whats likely to happen.

It is easier for banks to gain posession of a BTL than a PPR, as a result underwater BTL's will be repossesed first. Thats just logic, so in terms of looking at house price impact from repos that should be the first port of call as to how do people see that impacting the market.

Ive outlined my thought process as to why this will have very little to no impact in that regard.

That process alone will take a significant amount of time to do for those than dont surrender the property. We have a finite number of courts and court hours to hear any such reposession hearings meaning weather we like it or not PPR repos are very much likey to take a number of years to actually start to come on stream.

In the mean time you have a large pool of young professionals waiting and sitting on their hands to jump at these bargains they expect to crop up when these large firesales they believe will occur.

This pool of people waiting grows and grows, and unless the housing stock does too which I do not believe it will do certainly in sufficent numbers, then demand outstrips supply. Demand outstripping supply will absolutly postively mean that rather than downward pressure on house prices you will see upward pressure on them.

Im not saying we will see huge gains but these factors will negate house prices falling off a cliff. I dont think that thought process is delusional, I think its well thought out and rational.

Im not saying people should buy now, im not saying prices wont drop a little more, but I am saying that people who think prices are going to nose dive further specifically in many urban areas (which is where the majority of buyers are) are likely to be sorely dissapointed.

gurramok

How do you know that there is large pool of young professionals waiting and sitting on their hands to jump at these bargains? (I assume you are referring to these people as investors of repossessed BTL's)
Where is their finance coming from seeing as nearly 50% of all sales were by cash buyers last year, can't be all through savings\shares\inheritance\lotto win! ?!

StillWaters

gurramok wrote: »

How do you know that there is large pool of young professionals waiting and sitting on their hands to jump at these bargains? (I assume you are referring to these people as investors of repossessed BTL's)
Where is their finance coming from seeing as nearly 50% of all sales were by cash buyers last year, can't be all through savings\shares\inheritance\lotto win! ?!

Demographics would indicate that there is a large cohort of people in their late 20s/30s who have not bought and have continued to rent (hence the pressure on rental prices). Many of these are finance approved or could access mortgage finance.

gurramok

StillWaters wrote: »

Demographics would indicate that there is a large cohort of people in their late 20s/30s who have not bought and have continued to rent (hence the pressure on rental prices). Many of these are finance approved or could access mortgage finance.

Source?

lima

gurramok wrote: »

Source?

Me. I am one of them. I have a circa. 35% deposit and I'm waiting in the sidelines for a cheap repossessed house or apartment.

gurramok

lima wrote: »

Me. I am one of them. I have a circa. 35% deposit and I'm waiting in the sidelines for a cheap repossessed house or apartment.

So am i but we're just two posters on boards. I wonder is there any source that there is a large pool of buyers in their 20s\30s?
One thing, there has been emigration of Irish nationals in their 20's recently while immigrants in general rent rather than buy(source CSO 2006).

D3PO

gurramok wrote: »

Source?

the latest census figures. Why is it that some people need everything in black and white. Have people lost all ability to apply rational thought process to things.

D3PO

gurramok wrote: »

So am i but we're just two posters on boards. I wonder is there any source that there is a large pool of buyers in their 20s\30s?
One thing, there has been emigration of Irish nationals in their 20's recently while immigrants in general rent rather than buy(source CSO 2006).

Love how you decimated a large part of your argument in one sentence. 40% of people leaving the country are immigrants. So for your argument they were never likely to buy and thefore their emigration from the county has no impact at all on the buying pool. :cool:

lima

D3PO wrote: »

Love how you decimated a large part of your argument in one sentence. 40% of people leaving the country are immigrants. So for your argument they were never likely to buy and thefore their emigration from the county has no impact at all on the buying pool. :cool:

You have to aslo consider the large amount of Irish in Australia earning serious $$$ and saving it who will eventually return.

D3PO

lima wrote: »

You have to aslo consider the large amount of Irish in Australia earning serious $$$ and saving it who will eventually return.

Certain to have some impact. Im trying to be as concervative at possible in my thought process though using the here and now, but even with that I believe my thought process stands up pretty well.

Now only time will tell, but at least mine is the opinion of somebody ouside of the media with no vested interest in what happens to house prices (yes I own a house thats in NE, but I dont care I can pay my mortgage and I didnt buy a starter home but one I expect to be in for the next twenty years plus) so Ive no reason to talk up the market.

StillWaters

gurramok wrote: »

So am i but we're just two posters on boards. I wonder is there any source that there is a large pool of buyers in their 20s\30s?
One thing, there has been emigration of Irish nationals in their 20's recently while immigrants in general rent rather than buy(source CSO 2006).

If you are one of them you surely know many others in your peer group in this situation.
If you want hard data CSO is your friend.