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

lima

SeanSouth wrote: »

I know all of these cities firsthand and that's why I'm asking you the question.

So do I, I have worked in Stockholm and lived in London. They are incomparible.

lima

cookie1977 wrote: »

It's all a matter of personal opinion but I'd beg to differ on your opinion on this. We have been consistently ranked as one of the top cities in the world to live in: http://goo.gl/sfzEsG

In 2011 we were ranked 26th in the world.
http://www.thejournal.ie/dublin-ranked-26th-best-place-to-live-in-the-world-292789-Nov2011/

I think we do ok compared to an international list of cities that anyone could come up with. But you're free to put us down if you like.

Bern, Helsinki and Stockholm are in the top 6. Incomparible.

London has difficulty with the size and variation of it because of its metropolis, but even because of that it's incomparible to this tiny insignificant little city.

SeanSouth

@Lima, that's grand so.

murphaph

To be honest the prices themselves are not the problem it's the volatility of prices that sets us apart from those continental cities. Wild swings up or down are not good for anyone as you never know where you stand.

cookie1977

murphaph wrote: »

To be honest the prices themselves are not the problem it's the volatility of prices that sets us apart from those continental cities. Wild swings up or down are not good for anyone as you never know where you stand.

Well hopefully going forward we will learn from our mistakes of the past. Yes I know some people on here will say we're repeating those right now and that is partly true (in my opinion) but getting back to the point of the thread, mass repossessions actually will help no one despite what some on here would have you believe.

Long term a stable building plan for the country along with no crazy ideas on stimulating investment in the property sector so we have a reasonably stable active property market will help. This has to be led by good government oversight of the banks and the industry. I see what we have to deal with know (those currently in arrears) and what we're moving ahead with (new mortgages) as something we've got to deal with separately.

Repossess the unworkable mortgages (and lets be honest start here with the BTL's) to crystalise the banks and force the banks to do proper deals on workable mortgages (this does not have to include debt forgiveness as there's plenty of options out there before we get to that.
Debt forgiveness should be applied where a house is repossessed and the banks take on the sale of the repossessed property is less then the mortgage and the resultant difference would be excessively burdensome on the mortgagee.

Yes yes I can hear the cries of "no debt forgiveness no matter what" but lets look at what we've got now. Absolutely little or nothing going on with repossessions or deals on arrears nor banks crystalising their debts. As well as no real undertanding of what is actually happening in the property market now or into the near future. So we have to start somewhere. Clearly no matter what the people on here have to say the majority (silent it may be) of the country are against mass repossessions (if they were we'd have had heard more from them by now). Once we start working towards some sort of a solution then and only then can we actually see the real total cost to the tax payer. So people speculating on here about the HUGE cost to the tax payer if we dont repossess are doing just that, speculating. We dont know the costs to the banks and we wont have much of a clue until next years tests (even if we do get to hear about it all then as I suspect people will be disappointed in the info it provides as remember this is europe testing itself and it's hardly going to tell the whole truth for fear of repercussions on the euro).

Any who I live in hope something concrete and decisive happens soon.

gaius c

SeanSouth wrote: »

@Kaymin

Thanks for your clarification however I can tell you that its not possible to build an average house in any location for 150K. The cost of the site would be in addition.

Incredible really. I've no idea how less advanced societies than ours who pay less than that for their houses make ends meet.

The_Conductor

SeanSouth wrote: »

@Kaymin
........
Whats the matter with you man, lol

Kindly refrain from personalising your posts- and stick with facts.
Comments like the above come across as sneering at someone- and are not welcome in this forum.

Regards,

The_Conductor

Villa05

Which one of you hacked in to the Indo Website?

Property prices to fall

Residential property prices will end the year falling. There's a cash-fuelled bubble inflating in certain Dublin suburbs.

The working through of the pent up demand, coupled with an exhaustible supply of cash buyers will see prices in South Dublin stall after the summer (it'll be a scorcher).

The economic crisis has meant that potential house buyers have been saving for far longer than normal. They have way bigger deposits and need smaller mortgages.

This won't last. The banks will eventually work through the cash rich buyers and when the barrel is empty . . . qualifying for credit will be ridiculously hard. This lack of money for homes will see a fall in prices. Not massive . . . but enough to jog the memory.

Prices in the rest of the country will largely mark time.

http://www.independent.ie/business/irish/a-year-of-drama-over-nama-and-house-prices-beckons-as-troika-exits-stage-left-29872401.html

The Spider

Villa05 wrote: »

Which one of you hacked in to the Indo Website?


http://www.independent.ie/business/irish/a-year-of-drama-over-nama-and-house-prices-beckons-as-troika-exits-stage-left-29872401.html

There you go proof if needed house prices are on the way up for the foreseeable.

The_Conductor

The Spider wrote: »

There you go proof if needed house prices are on the way up for the foreseeable.

Quite how you can say this- referencing the Indo article (which I have to concur is a rag of the highest order)- without us, the moderators, thinking you're trolling, is beyond me......... You had better prove me wrong.

moxin

It wasn't me that wrote it but I did write something similar here earlier

"Ridiculously hard" credit is nearly here, already back in August the banks rowed back on the salary multiples(3.5x for single, 4.2x i believe for a couple). They did it on the quiet without any media attention and as we know many banks do 6 month provisional approvals which are running out now. Many property buyers need a hoard of cash at 6 figure sums to buy, the cash will run out as there are only so many cash rich buyers actually interested in buying property, its a finite resource.

Call it a cash bubble or whatever, the lack of a supply issue is not the only factor. The demand(buyers) will simply not have the available credit to purchase a house, you know how that ends.

gaius c

moxin wrote: »

It wasn't me that wrote it but I did write something similar here earlier

"Ridiculously hard" credit is nearly here, already back in August the banks rowed back on the salary multiples(3.5x for single, 4.2x i believe for a couple). They did it on the quiet without any media attention and as we know many banks do 6 month provisional approvals which are running out now. Many property buyers need a hoard of cash at 6 figure sums to buy, the cash will run out as there are only so many cash rich buyers actually interested in buying property, its a finite resource.

Call it a cash bubble or whatever, the lack of a supply issue is not the only factor. The demand(buyers) will simply not have the available credit to purchase a house, you know how that ends.

My own prediction is that the market will probably drop a bit in the next year as potential cash buyers will hold off, thinking that another bubble is forming and wait for it to cool down a bit before jumping back in again. So we have a bit of bouncing around on the bottom to go yet.
Something similar happened during the great depression as investors who managed to avoid the initial bloodbath, piled into what they thought was the bottom only to have the market drop again and they themselves were wiped out.

When repos arrive (and they will), the game changes because there is so little stock that is genuinely for sale, it will only take a moderate amount of new stock to change the supply/demand dynamic. With the archaic courts system, I wouldn't be surprised if this got dragged out into 2015 and the phoney war continued into 2014.

gaius c

Interesting snippet from a BBC world podcast.
Colm O'Regan is talking to somebody from SVDP and they are pointing out all the houses in Blackrock where the occupants need food handouts to get by. Starts about 18 mins in.
Just as well there's no arrears in Dublin and they are all in Leitrim!

jmayo

SeanSouth wrote: »

I spent years (before the crash) posting on Askaboutmoney and other sites and crying that property prices were way too high.

I presume you were banned then ?

SeanSouth wrote: »

What I don't get now is the people who still hold a view that property prices should continue to fall.I simply do not get it. In my view property is now at absolute bargain prices. We have overshot the bottom of the collapse and we are now experiencing a typical bounce.

Ehh when did Irish property prices begin to start increasing and have the prices reached that point.
A lot of people do not see the beginning of our bubble being 2002.

SeanSouth wrote: »

1. Someone has mentioned that the average worker should be able to purchase a family home for 150,000 in SCD.

Firstly who has said this and secondly please note all of SCD is not Foxrock, Blackrock, Kiliney, Dalkey ?

SeanSouth wrote: »

3) For prices to fall, demand needs to abate. At the moment we are witnessing huge pent up demand. Young people in their 20s have held off purchasing for the past seven years and are extremely anxious to get into the market.

Are they ?
And where are all these 20 somethings working, might they be nearer to Sydney or Toronto ?

SeanSouth wrote: »

5) Our house prices are now substantially lower than other comparable capital cities. Lower than Helsinki, lower than Stockholm, lower than Bern, lower than London.

FFS you are having a laugh, right.
About the only things comparable between London and Dublin is weather and drinking habits.
People in Helsinki and Stockholm would not have the same love affair with ownership of property.

SeanSouth wrote: »

Houses in South County Dublin were never cheap. They were always the reserve of the highly paid. They were never accessible to the average paid.

Ever been to Ballyogan, Sandyford, Stillorgan, Ballybrack, Sallynoggin ?

SeanSouth wrote: »

I would be very interested to hear any views, based on fundamentals, as to why house prices are likely to decrease.

Ehh the country is fooked economically - our national debt is unsustainable and we hope some nice foreigners write off a big chunk of it, we have shag all banks except those kept afloat by the taxpayers, a big chunk of people can no longer afford the property they "own" and should be turfed out of them and we have one of the highest levels of personal debt in the world.

Apart from that we are grand.

L1011

jmayo wrote: »

And where are all these 20 somethings working, might they be nearer to Sydney or Toronto ?

The number of people who have permanently emigrated has been hugely, hugely overstated. Being in the 20-somethings who held off from buying and has since bought I can count on one hand the number of my classmates who have actually permanently emigrated - actually leaving a full-time job for a year's travelling is far more common yet gets considered an emigration for statistics purposes.

jmayo

MYOB wrote: »

The number of people who have permanently emigrated has been hugely, hugely overstated. Being in the 20-somethings who held off from buying and has since bought I can count on one hand the number of my classmates who have actually permanently emigrated - actually leaving a full-time job for a year's travelling is far more common yet gets considered an emigration for statistics purposes.

Note the word permanently.
A lot of people have shagged off to Oz for 1/2 years, but will they want to return to the dole ?
A lot of Irish left in the 50s and 60s claiming they would be back.
Some did return in 70s, but most stayed away.

A lot depends on where you are from and how educated you are.
A lot also depends on what area you are working or what your qualifications are.

When you say classmates are you talking about college ?

L1011

jmayo wrote: »

Note the word permanently.
A lot of people have shagged off to Oz for 1/2 years, but will they want to return to the dole ?

The first lot of them have returned, as they were on tourist/working holiday visas and cannot remain. They aren't returning to the dole in most cases. The returnees are never factored in when giving out the doomsday figures.

jmayo wrote: »

When you say classmates are you talking about college ?

School. Didn't go to college after school, Tiger was in full roar at the time and I could walk in to an IT (well, broadcast technical) job paying graduate money without; doing it now while being paid.

Villa05

The number of applications for bankruptcy looks set to surpass the expectations of officialdom by a country mile, putting huge pressure on the Court Service, with the real prospect of lengthy delays while the backlog of petitions for bankruptcy are dealt with.

The number of applications could reach as high as 15,000, according to one expert, Ross Maguire, SC, the founder of the borrower advocacy and advisory group, New Beginning.

Not that I would attach much credence to what Ross Maguire has to say, you can see by his snarly smile that he expects to be the real winner from all these bankruptcy proceedings. Another parasite profession awaiting a flood of victims

http://www.irishexaminer.com/business/who-is-set-to-gain-from-bankruptcy-shake-up-254064.html

cookie1977

Villa05 wrote: »

Not that I would attach much credence to what Ross Maguire has to say, you can see by his snarly smile that he expects to be the real winner from all these bankruptcy proceedings. Another parasite profession awaiting a flood of victims

http://www.irishexaminer.com/business/who-is-set-to-gain-from-bankruptcy-shake-up-254064.html

But this is a major concern to me:

But will the courts be able to cope? Mr Maguire doubts it. He believes the Government should consider appointing extra High Court judges, or preferably, assign between 10 and 20 judges of the Circuit Court to deal with the matter. Transferring jurisdiction to the Circuit Court will require a change to the Bankruptcy Act, 1998.

We will see cases proceed extremely slowly through the courts. Another reason not to see a glut of repossessions.

Villa05

cookie1977 wrote: »

But this is a major concern to me:


We will see cases proceed extremely slowly through the courts. Another reason not to see a glut of repossessions.

Voluntary surrender is the most plausible route to an increase in distressed assets to the market. Unfavourable outcomes for banks from insolvency/bankruptcy proceedings will push banks down this route with debt forgiveness thrown in to encourage the debtors to give up the house.

McDook

MYOB wrote: »

The number of people who have permanently emigrated has been hugely, hugely overstated. Being in the 20-somethings who held off from buying and has since bought I can count on one hand the number of my classmates who have actually permanently emigrated - actually leaving a full-time job for a year's travelling is far more common yet gets considered an emigration for statistics purposes.

I thought we were talking about Dublin prices.
Surely the movement of the population into and out of Dublin is what matters here and not the movement of people from the whole country out of the country.

Villa05

McDook wrote: »

I thought we were talking about Dublin prices.
Surely the movement of the population into and out of Dublin is what matters here and not the movement of people from the whole country out of the country.

There is a separate thread for Dublin

McDook

Villa05 wrote: »

There is a separate thread for Dublin

So this thread is about repos in the whole country?
It reads like Dublin to me.
The rest of the country is f*cked property price wise, repos or not.

Villa05

McDook wrote: »

So this thread is about repos in the whole country?
It reads like Dublin to me.
The rest of the country is f*cked property price wise, repos or not.

How come your earlier analysis only applies to Dublin and not the rest of the country?

The only potential supply for the rest of the country is from banks foreclosing on non paying customers, Dublin could see new supply from building

McDook

Villa05 wrote: »

How come your earlier analysis only applies to Dublin and not the rest of the country?

The only potential supply for the rest of the country is from banks foreclosing on non paying customers, Dublin could see new supply from building

There is already lots of supply in the rest of the country.
There is nothing else though. Economic recovery is well underway in Dublin.
It will be a long time before that spirals out beyond the greater Dublin area.
No economic recovery, noone buying houses.

leinsterdude

What about the stabilisation being ruined when interest rates change upwards ?

L1011

leinsterdude wrote: »

What about the stabilisation being ruined when interest rates change upwards ?

Rates on new mortgages are already far higher than ECB. It''ll depend on how much they.rise

makeorbrake

MYOB wrote: »

Rates on new mortgages are already far higher than ECB. It''ll depend on how much they.rise

Sure - but whilst in the short term, they won't rise, isn't it inevitable that in the medium term, they will? The considerations for ecb rates relate to the German/French economies for the most part - with little attention to the periphery. i.e. they simply won't care whats going on here in this specific regard.

When I first took out my mortgage in '05 I clearly remember a series of increases for quite a few quarters - resulting in a noticeable increase in the monthly repayment. To have this tacked on to what are now seriously inflated variable rate mortgages - well, it doesn't bear thinking about...

Villa05

leinsterdude wrote: »

What about the stabilisation being ruined when interest rates change upwards ?

Just 1 of the elephants in the room!
Are we not 1 of the most indebted nations in the world both public and private debt. We have the highest level of arrears in mortgage and commercial loans. Ignoring the elephants only works for so long! You do not want to be in the firing line when those elephants need their own space

gaius c

makeorbrake wrote: »

Sure - but whilst in the short term, they won't rise, isn't it inevitable that in the medium term, they will? The considerations for ecb rates relate to the German/French economies for the most part - with little attention to the periphery. i.e. they simply won't care whats going on here in this specific regard.

When I first took out my mortgage in '05 I clearly remember a series of increases for quite a few quarters - resulting in a noticeable increase in the monthly repayment. To have this tacked on to what are now seriously inflated variable rate mortgages - well, it doesn't bear thinking about...

What makes you think STV's are seriously inflated?
It's not like you're going to lose the house if you stop paying so they should really be credit-card level rates.