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

McDook

who_ru wrote: »

Without any increase in credit supply of course. You say supply will be tightened up, so will banks be able to prevent vendors not in negative equity from selling their homes too?

I think over the next year or so we're going to see huge increases in loans.
Its already happening, but is just not being pushed so as not to offend some people.
A couple, both working, and who have been working over the last 5 years are quite a good bet to a bank.
Remember, there have been over 80% of the population working away quite happily during the last 5 years. And now you even have politicians calling for an increase in salary for the common man. Theres a recovery going on across the board here. I can see it everywhere. Its under way. Or maybe im just imagining it and its wishful thinking. Time will tell.

McDook

who_ru wrote: »

outstanding economic analysis there. Basically societies should ignore the past, hope it all works out okay somehow, allow all mistakes to happen again, ignore the plight of others.
I mean look at the German economic miracle of the post war era. After the hyperinflation of the 1920s that saw mass unemployment and worthless currency they decided to do it all again the same way, er but no they didn't, inflation to this day is a no go area, they built their economy on productive output, efficiency etc. But here in plucky Ireland sure with the troika gone begorra we'll bounce all that property back up again wha!

In a nutshell, even though ive had a few pints and shouldnt be posting in my state, yes.

Things change but they stay the same. Unless Ireland is different from every other country. But I dont think it is somehow. Time for bed.

The Spider

MythicalMadMan wrote: »

When you refer to this bottom you predicted are you talking about Ireland, Irish cities, dublin or scd

I wouldn't take credit for predicting the bottom, there's far more economically literate people than me who reckon it was last year.

I think SCD is done, no more mega cheap properties, although in comparison to the top there's still value to be had. Spreading to the rest of Dublin already, although I think commuter towns on the coast will recover faster than West Dublin, not too sure West Dublin is anybody's first choice.

I reckon commuter towns will see more of a recovery before it hits the other cities, but hit them it will, Galways already on the way, Cork is next, Limerick maybe after that, Waterford may surprise you.

Basically the east coast first and any towns within an hours drive to Dublin.

gaius c

Zamboni wrote: »

In other words...a massive house of cards built upon the hope that the idiots that are actually paying their mortgages don't cop on en masse and strategically default.

And that the even bigger idiots entering the market after them don't try the same tricks.

El_Dangeroso

Sorry to be blunt McDook, but why should we believe you.

You seem to be making very bold predictions, and I think even the higher ups in government wouldn't be making the bold predictions you have elicited on this thread.

Forgive my skeptism but when a brand new poster to boards that professes to work 'in something to do with repossessions' says they can propose the rather incredulous statement that the banks are more than happy to accept a tuppence on the euro for payment of substantial loans is going to need some better evidence than hearsay.

The banks still have SERIOUS capital issues and that somehow you think we can happily continue with this weird low number of transactions and we'll magically never have to deal with arrears mess that has accumulated?

Respectfully, that really doesn't have the ring of truth about it at all.

The Spider

El_Dangeroso wrote: »

Sorry to be blunt McDook, but why should we believe you.

You seem to be making very bold predictions, and I think even the higher ups in government wouldn't be making the bold predictions you have elicited on this thread.

Forgive my skeptism but when a brand new poster to boards that professes to work 'in something to do with repossessions' says they can propose the rather incredulous statement that the banks are more than happy to accept a tuppence on the euro for payment of substantial loans is going to need some better evidence than hearsay.

The banks still have SERIOUS capital issues and that somehow you think we can happily continue with this weird low number of transactions and we'll magically never have to deal with arrears mess that has accumulated?

Respectfully, that really doesn't have the ring of truth about it at all.

Actually it sounds more true than some of the wish fulfilment being posted here. This boils down to one simple fact, and that is the banks will not crystallise losses on the asset, that simple.

Prices rise you may see some movement, the arrears mess as you put it, can be dealt with when prices rise, other wise the banks still have the arrears mess, and an outstanding Debt in hundreds of thousands of euros, a lot of
these loans aren't that old and still have substantial amounts owed. The bank sells the house all it gets is debt.

If the asset increases in value then the bank has less to worry about, conversely the person seeing it increase begins to pay their debts.

Nothing anyone says about the banks selling repo'd houses at a massive discount makes sense.

cookie1977

I think comments like this from the banks:
http://www.businesspost.ie/#!story/Home/News/AIB%2C+BOI+say+Central+Bank+tests+show+they+have+adequate+capital/id/87198161-2385-29c3-9522-49de89213430

support McDooks points entirely. As long as they don't pursue to repossession and crystalise the debts on their books they can continue to come up with wonderful comments like this:

AIB "it continues to be well capitalised and in excess of minimum regulatory requirements".

Daith

The Spider wrote: »

Nothing anyone says about the banks selling repo'd houses at a massive discount makes sense.

Massive discount? Compared to what? Boom time pricing? It is unfortunate that property will continue to be propped up and manipulated by VI's in an attempt to return to the lunacy of that era.

Zamboni

I'm off to get mortgaged to the hilt on multiple properties and ride this roller-coaster.
Sure what's the worst that can happen?

Clearly sweet FA.

cookie1977

Daith wrote: »

Massive discount? Compared to what? Boom time pricing? It is unfortunate that property will continue to be propped up and manipulated by VI's in an attempt to return to the lunacy of that era.

To be honest I dont believe this is the purpose at all. I see it as a way to for some of the VI's (since we're all VI's) namely the banks and the government to put off dealing with a significant problem. Call it an attempt at a second soft landing.

Daith

cookie1977 wrote: »

To be honest I dont believe this is the purpose at all. I see it as a way to for some of the VI's (since we're all VI's) namely the banks and the government to put off dealing with a significant problem. Call it an attempt at a second soft landing.

Yet they put of dealing with it by basically creating a second set of social housing.

cookie1977

Daith wrote: »

Yet they put of dealing with it by basically creating a second set of social housing.

They're not even creating that:
http://www.rte.ie/news/2013/1201/490262-nama-disappointed-over-social-housing-take-up/

A senior NAMA official has said the agency is "disappointed" at the level of demand from local authorities for the 4,500 homes it has made available for social housing.

Focus Ireland chief executive Joyce Loughnan said the system was complex and overly bureaucratic and she said her charity had not received any of the 2,000 units promised by NAMA over two years ago.

gaius c

McDook wrote: »

Myself and my wife work in two different fields that deal with repossessions. I wont say what we do.

Seems legit.

Daith

cookie1977 wrote: »

They're not even creating that:
http://www.rte.ie/news/2013/1201/490262-nama-disappointed-over-social-housing-take-up/

That's actually worrying on a different level though.

cookie1977

Daith wrote: »

That's actually worrying on a different level though.

It depends on their location to be honest. We dont have much details on the NAMA offer.

Villa05

The Spider wrote: »

Actually it sounds more true than some of the wish fulfilment being posted here.

Thats very funny....

The Spider

Daith wrote: »

Massive discount? Compared to what? Boom time pricing? It is unfortunate that property will continue to be propped up and manipulated by VI's in an attempt to return to the lunacy of that era.

At A massive discount to the amount owed on the mortgage, regardless of boomtime or not, I've said before mortgages are a marathon not a sprint, by the time a lot of the mortgages taken out in 2006 are due to be finished it'll be 2036, going on a thirty year mortgage, that's the difference between 1976 and 2006, how much had changed in the country in that timeframe?

The banks aren't going to repossess thousands of houses and dump them on the market, this is a long game, the asset may not be worth what it was in 2006 now, but will it be worth close to it in 10 years time?

I don't know, but I do know selling everything at a loss would not be very bright.

jmayo

cookie1977 wrote: »

The banks will be taken private eventually again and as I already posted AIB are saying they're in line to return to profit next year. Why cant we penalise them through fines (like the US has done and they bailed out their entire sector). The UK is contemplating this too.

Would you like to buy shares in my Mayo ski resort ?
Once global warming trully kicks in, the gulf stream is diverted then we are goign to be in clover or rather up to our necks in snow.
So get in early.

Why do people compare us to the US or UK.
Look at the size of their markets and for God's sake check out how they actually moved on from the mess whereas we are still in it with heads buried in the sand.
Comparing our puny AIB to major US or UK multinational banks is like comparing a guy down the park on a sunday to Lionel Messi.

cookie1977 wrote: »

Inflation will eat into the debt (what ever that debt is) not to mention that growth in the economy should also improve our national prospects if we get delas sorted. Ever major financial organisation is calling for this to be sorted and none of them are saying lets saddle people with their debts until they're paid in full no matter what.

It is easy to sort something, ala bertie, if you have wads of cash to throw at it.
The only thing at the moment and for the foreseeable future is we are skint.
Oh and the Germans, the ones in charge in Europe, are inflation averse.

cookie1977 wrote: »

You're hung up on aib here. They're not the only bank in the country. Aside from that you can levy a fine on aib to be collected at a later stage.

I know we are forgetting the PTSB, IBRC, and BOI.
Now aren't PTSB and IBRC 99% odd owned by us taxpayers as well ?

I suppose Ulster's parent RBS will get a laugh when they hear their bank may be levied even though they were not part of the Irish bailout.

The Spider wrote: »

Nope what I have said is that there'll he no repossessions but if they were the banks would have to wipe out the debt, and that's one reason there won't bd repossessions, yet anyway.

The other reason is that if the banks repossess and sell they crystallise losses, it's better to wait while prices continue to rise, send out the odd letter about repaying debt, but make no move, leave the family in the house, this is a long game after all mortgages at 25-35 years. Prices start to look like the banks loss will be minimal or far fetched as it sounds exceed the purchase price, then they can gradually start repossessing, family doesn't end up in debt.

The trend of some recent posts around here seems to be that the banks are just going to park the mortgage debts, happy to get a few cent in the euro as repayment and shure everything will move on.
The banks can try this, but who is going to lend to them at decent rates in the meantime.
Where are they going to get the funds to lend to others to help push prices up ?
Who is going buy these banks when the state tries to privatise them if they have mountains of debt ?

This type of thing was done in the Uk in the late 80s where repossessions really began to kick in when there was an upturn in the market.
But that was the UK where they had a proper economy, a much bigger market and the crash was much smaller in relative terms.
Oh and I don't recall all the UK banks going into state ownership due to the crash.
We have had one of the biggest crashes in history which affectively wiped out our entire indigenous banking system.
Yet we are going to bounce back in a few years ?

McDook wrote: »

The banks will be fine. Dont shed a tear for them.

Except who are the banks ?
Are the banks the employees ?
Are the banks some mythical creature that lives in big stone buildings and forces people to do things that they can be excused for later ?
Are the banks the owners i.e. us taxpayers and citizens ?

Whilst I can agree that a lot of what you are saying can indeed be true since this is good old Ireland where some think somehow we are immune from normal economics and a nod and a wink are the way to do business, I think you have an overly rosey picture of how things may work out.

McDook wrote: »

And the good news is that life will go on.
People will give out about banks, politicians and so on.
Politicians and banks will say they are doing this and that.

And the market will slowly but surely move on.

If anyone was in the UK in the 80's it was like the end of the world.
It was also the end of the world there a few years ago.
And guess what. The world didnt end and life continued.

While it may sicken some of us to see people getting away without paying their debts, its nothing different to what goes on all over the world for hundreds of years. Ireland has some of the harshest bankruptcy laws in the world. So its not surprising to me that people are trying to bite back instead of going bankrupt.

When you go bankrupt you should be stripped of what you have at the moment of bankruptcy and have a short period of reflection and then the counter goes back to zero. But here the counter goes to minus hundreds of thousands. Thats never going to work as far as i can see.

Anyway, as I said before, just get on with your life and dont worry about other peoples problems. Better off concentrating on your own life tbh. And in 10 years everybody will have forgotten there ever was a housing crash, or an economic tsunami for that matter.

Since you are so fond of comparing us to other countries with property crashes, why not check out if the Japanese have so easily forgotten and moved on from their property crash ?
And yes we are not Japan and we certainly are not the UK either.

We are a backwater dependent on FDI and the good graces of foreigners.
Foreigner who thankfully are not going to wait around putting up with our sh** indefinitely.

BTW when you say you involved with or conversant with repossessions would you be involved in procurring help for the mortgage holders ?

gaius c wrote: »

Seems legit.

And I may be a Leonardo di Caprio lookalike who drives a Ferrari in the South of France and has slong like Michael Fassbender.
PS the Mayo ski resort is one of my long term investments.

cookie1977

How to say so much yet say so little.

cookie1977

Thought this was interesting:

Iceland has announced plans to write down mortgages linked to inflation by 150 billion kronur ($1.25 billion) to speed the nation’s recovery after economic collapse in 2008.
The government plans to provide homeowners with as much as 80 billion kronur in direct writedowns of home-loan debt and give 70 billion kronur of tax exemptions over three years, according to a statement handed out in Reykjavik. The deal is equivalent to 9 percent of Iceland’s $14 billion economy.

http://mobile.bloomberg.com/news/2013-11-30/iceland-reveals-1-25-billion-in-mortgage-cuts-to-aid-recovery.html

Will be interesting to see how they get on with this.

McDook

El_Dangeroso wrote: »

Sorry to be blunt McDook, but why should we believe you.

You seem to be making very bold predictions, and I think even the higher ups in government wouldn't be making the bold predictions you have elicited on this thread.

Forgive my skeptism but when a brand new poster to boards that professes to work 'in something to do with repossessions' says they can propose the rather incredulous statement that the banks are more than happy to accept a tuppence on the euro for payment of substantial loans is going to need some better evidence than hearsay.

The banks still have SERIOUS capital issues and that somehow you think we can happily continue with this weird low number of transactions and we'll magically never have to deal with arrears mess that has accumulated?

Respectfully, that really doesn't have the ring of truth about it at all.

You are right of course, so you dont have to believe me if you dont want to.
Im only trying to tell people what i have seen. Its your choice to throw that info out or not.

You are also right that i shouldnt be giving any opinion on the future market. My view on it is just that. My view, but being honest much better and more qualified minds than mine have been getting economic predictions wrong for many a year now (and they actually studied and work in the field), so i cant really say my predictions have a better chance of being right than them. So i'll keep them to myself from now on.

I just thought of another thing that ive seen recently, which, if you will indulge me, i will post and then i'll be on my merry way never to darken your thread again.

A couple with two well paying jobs and 1 child bought a 3 bed house in 2003. (payments €1600 per month. Income €5000+ a month at the time - i think - cant remember exact figures)
The next year she got pregnant - twins. And another baby in 2008.
Then in 2009 they both lost their jobs within a couple of months of each other and got a little bit of redundancy.
He could only get a jobbridge job, so their savings disappeared and they fell behind with their mortgage by a good bit. And we started the process of sending letters - eventually to lead to threats of repo and eventually repo in that case.

Guess what they did.

He made sure he wasnt getting offered the job for a pittance at the end of the jobbridge placement and finished it out. They sold the house before they went into negative equity and even got some change. And then rented another, much better, 4 bed house and got social welfare and rent allowance. They are far better off now after doing that. ANd we would have moved on that particular house, because it was positive, but they still beat the system big time.

I know this because he told me everything they did afterwards just to sicken me. Though secretly i was delighted for him. I could only say "wow". Pure genius.


So now as promised i will leave your thread.

Villa05

@mcdook not sure what that story has to do with this thread.

cookie1977

I think it's as relevant as much as the rest of the conversation in here has been. They're giving another example of why a "Glut of repossessed houses could depress prices ‘by up to 25%’" wont actually happen.

The_Conductor

Its just yet another example of people gaming the system, and getting away with it.........

I'm going to let it stand- on the understanding that this thread gets back on topic.

Regards,

The_Conductor

cookie1977

The_Conductor wrote: »

Its just yet another example of people gaming the system, and getting away with it.........

Would people be "gaming" the system if there was a proper system in place to begin with. If there was a clear process to help rescue mortgages that are rescuable and a clear process to end the debts (through repossession) of those that are not rescuable? I doubt it. I think what we're seeing is a symptom of the unclear and unsupervised process that is the entire mortgage system in this country.

Villa05

cookie1977 wrote: »

I think it's as relevant as much as the rest of the conversation in here has been. They're giving another example of why a "Glut of repossessed houses could depress prices ‘by up to 25%’" wont actually happen.

yes paying your mortgage is a good reason

gaius c

Gaming the system?
They've still lost their house, savings and are completely dependent on social welfare?
They bought their house in 2003, went into arrears and had it repossessed sometime after 2009 but it was still in positive equity and they are now living like kings off a mixture of this positive equity, redundancy payments and social welfare? Unless they are extremely frugal, the first two of those are going to run out at some point.

I'm going to put my Daily Hate/Sindo bull**** filter on these unverifiable anecdotes because that's all they are.

The Spider

gaius c wrote: »

Gaming the system?

I'm going to put my Daily Hate/Sindo bull**** filter on these unverifiable anecdotes because that's all they are.

But then nothing is verifiable in this entire thread, it's all speculation.

jmayo

cookie1977 wrote: »

How to say so much yet say so little.

Well to sumarise just for you...

Our banks are still fooked.
Our soverign debt means we as a state are fooked.
There is no magic money tree, so the money to pay off all the debts has to come from somewhere and someone.
Oh and I don't want my family and I to fund the bailouts you and another multiple property owner poster around here want for yet more property investors/speculators/owners.

Was that succint enough for you ?

cookie1977

And what about Iceland's proposal then?

Any comments there:
http://www.boards.ie/vbulletin/showpost.php?p=87807386&postcount=2151