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

Glenbhoy

Villa05 wrote: »

That article related to Commercial property. There is not as much interference in that market.

Indeed, because the main interference that was called for (and promised by FG should they get into power) was backed out of within a few months, thereby forcing firms to go into examinership in order to renegotiate a market rent - i'm referring of course to 'upwards only rent reviews', still, pension funds and investors love them!!

Gloomtastic!

Villa05 wrote: »

That article related to Commercial property. There is not as much interference in that market.

Apart from our unique Upward-only rent reviews!

Villa05

Gloomtastic! wrote: »

Apart from our unique Upward-only rent reviews!

upward rent reviews were bubble era contracts, not state interference.

Glenbhoy

Villa05 wrote: »

upward rent reviews were bubble era contracts, not state interference.

they've been here much longer than that, the lack of promised interference was the problem.

gaius c

handlemaster wrote: »

Dublin voted best european city to buy property by 500 experts across european up 15 places according to rate web site. Looks like the 25% drop is along way off as original poster was suggesting

Awesome. I love reading stuff from smart investors so I went to look for the link that you failed to provide and noticed this:

However the think tank said interest was already moving to Spain, where a turnaround in fortunes was expected after the launch of the country's equivalent of the National Asset Management Agency - known as Sareb.

So they are just dime-a-dozen speculators after all.

Villa05

http://www.independent.ie/business/personal-finance/mortgage-losses-at-banks-may-be-less-than-feared-29924287.html

Trying to pin down the true extent of losses in the Irish banks, especially on home loans, has vexed investors and policy makers since the start of the crash. For much of that time the fear has been that banks were downplaying the extent of the problem.

But the Davy report cites evidence from an unpublished Central Bank report that looked at borrowers' ability to meet repayments.

It found that many distressed borrowers have a higher level of income available than is widely assumed.

"This evidence still suggests that for significant cohorts of borrowers, mortgage modifications have plenty of scope to restore loan performance.

Not surprised, would like to see the evidence and why can it not be published?

In a further sign of normalisation, NAMA announced the end of its so called 80/20 mortgage scheme -- which protected home buyers from falling house prices -- due to lack of demand.

So much for pent up demand, No demand for a mortgage that protects you to the tune of 20% should there be any further falls in property prices.

gaius c

Talking of well monied folk not paying their debts...
New CRC chief executive owed €9m to two banks

At some point, the penny is going to drop that widespread debt-write off is a rescue for folk like Jim Nugent.

cookie1977

Shut it down everyone. We can all go home now. From the horses mouth:

NAMA Chairman Frank Daly says property crash is over. Mr Daly said the recovery was not "homogeneous", but was occurring more quickly in Dublin and in particular parts of Dublin.

He said, however, that he expected the recovery will spread to places such as Cork and then to other parts of the country.

http://www.rte.ie/news/2014/0117/498503-property/

cookie1977

Note: For the overly sensitive amongst us my tongue was firmly in my cheek on that last post.

Villa05

Interesting comments from Frank Daly
http://www.irishexaminer.com/ireland/nama-boss-warns-public-against-getting-carried-away-as-market-picks-up-255730.html

“I was in company having a few pints and I heard fellas talking about how it’s ‘time to get back into property again, it’s time to invest, there’s good deals out there’. That frightens me a little. I just wonder sometimes do we learn anything at all?”

Mr Daly was speaking at an Irish Examiner business breakfast attended by members of the Construction Industry Federation in Cork yesterday. He said that while he hoped the country was “in a better space now”, the Irish were “great people for recidivism”.

Recidivism = is the act of a person repeating an undesirable behavior after they have either experienced negative consequences of that behavior

Is he saying that Irish people are stupid?

Further comment

“People fall back into old habits very quickly so I think it [responsible behaviour] has to start with the banks and responsible lending because much of this couldn’t have happened unless there was very easy money available,” he said.

Yes banks can create easy money through lax lending. What about money printing in the UK, US and Japan, Is that not easy money? Are the latest price rises driven by foreign investment, a media and Government desperate to increase revenue from property?

Were these policies tried before and did they have a negative impact on our nation?

I conclude my post by asking the question: Is Frank Daly Irish?

Villa05

PS I've been hearing this every year for the past five years

“I was in company having a few pints and I heard fellas talking about how it’s ‘time to get back into property again, it’s time to invest, there’s good deals out there’.

OMD

Villa05 wrote: »

PS I've been hearing this every year for the past five years

However now is a good time to get into property esp in Dublin.

The_Conductor

Villa05 wrote: »

Recidivism = is the act of a person repeating an undesirable behavior after they have either experienced negative consequences of that behavior

Is he saying that Irish people are stupid?

We are stupid.
We do this- again and again and again.......
Its not our first boom and burst- and it sure as hell won't be our last.
All Frank Daly has done- is call a spade, a spade.

aprilmarch

Some Irish people are very stupid.

Let me give two concrete examples in the last few months that I experienced in the Irish property market - I'll call them Dope #1 and Dope #2

Dope #1
October 2013

The asking price for a house in Dublin is 250,000e. Mos reasonable people would say offer 20-30k below AP. Dope #1 offers 250k and the price escalates to 261,500k.

Dope #2
January 2014

The asking price for a house in Dublin is 205,000. The estate agent signals that property needs substantial upgrading. The dope offers 230,000 initial offer.

There are countless more dopes. They have learned nothing from the property bubble. They do not understand economics. They do not understand the psychology of property markets.

I believe there are enough of these dopes to fuel another bubble. As soon as credit improves, it will happen. No questions about it!

handlemaster

I think agents are under pricing to get interest. Two examples recently in Dublin. Both properties on the market one is currently 30% over asking the other 40%. They are apartments city centre

lima

aprilmarch wrote: »

Some Irish people are very stupid.

Let me give two concrete examples in the last few months that I experienced in the Irish property market - I'll call them Dope #1 and Dope #2

Dope #1
October 2013

The asking price for a house in Dublin is 250,000e. Mos reasonable people would say offer 20-30k below AP. Dope #1 offers 250k and the price escalates to 261,500k.

Dope #2
January 2014

The asking price for a house in Dublin is 205,000. The estate agent signals that property needs substantial upgrading. The dope offers 230,000 initial offer.

There are countless more dopes. They have learned nothing from the property bubble. They do not understand economics. They do not understand the psychology of property markets.

I believe there are enough of these dopes to fuel another bubble. As soon as credit improves, it will happen. No questions about it!

I agree, I was looking at a place the other week and some farmer type with a kerry accent was telling the EA that he wanted to offer over the asking price. The house is now 35k over as of last week so is probably going for more now.

There is a mania going on now with people with money to burn offering crazy sums over the asking price. They are acting like it's 2006!

..and as much as I think property is not worth the money in terms of quality in Dublin, I truly believe that if I don't buy now I will get priced out of the market! Especially since I have just obtained mortgage approval again, I am starting to get a bit panicky.

And regarding Repossessions, It appears that repo's won't happen that much, however I am happy that people are starting to pay their way. My main gripe was people living in houses for free. Now that people realise they are not going to get a debt write off they have gone and restructured their mortgages. If repos affect the market it will be a bonus but sure this is Ireland.

Montroseee

lima wrote: »

I agree, I was looking at a place the other week and some farmer type with a kerry accent was telling the EA that he wanted to offer over the asking price. The house is now 35k over as of last week so is probably going for more now.

There is a mania going on now with people with money to burn offering crazy sums over the asking price. They are acting like it's 2006!

..and as much as I think property is not worth the money in terms of quality in Dublin, I truly believe that if I don't buy now I will get priced out of the market! Especially since I have just obtained mortgage approval again, I am starting to get a bit panicky.

And regarding Repossessions, It appears that repo's won't happen that much, however I am happy that people are starting to pay their way. My main gripe was people living in houses for free. Now that people realise they are not going to get a debt write off they have gone and restructured their mortgages. If repos affect the market it will be a bonus but sure this is Ireland.

To be honest, people that think there is going to be a huge stream/supply of repossessed houses put on the market in the future are just as stupid as people offering over asking prices. The banks are in control of plenty of properties as are NAMA, to sell a significant amount within a short period of time will just devalue their acquisitions. They will be sold very slowly.

cookie1977

Montroseee wrote: »

To be honest, people that think there is going to be a huge stream/supply of repossessed houses put on the market in the future are just as stupid as people offering over asking prices. The banks are in control of plenty of properties as are NAMA, to sell a significant amount within a short period of time will just devalue their acquisitions. They will be sold very slowly.

Particularly the repossessed houses as they can get decent rents if they want to at present if the property is in a good location then bide their time deciding when to sell.

Villa05

cookie1977 wrote: »

Particularly the repossessed houses as they can get decent rents if they want to at present if the property is in a good location then bide their time deciding when to sell.

In what areas of the country are rents rising, or more importantly falling. I would imagine if you are in a, party of the coumtry where property os, falling, it would make financial sense to default

The_Conductor

Villa05 wrote: »

In what areas of the country are rents rising, or more importantly falling. I would imagine if you are in a, party of the coumtry where property os, falling, it would make financial sense to default

Its becoming clearer and clearer- that strategic defaulting will not be accepted or tolerated. If its legitimate- and the borrower keeps in good contact with their lender- its very possible that some accommodation may be come to- however strategically defaulting and ignoring bank correspondence- is not the gateway to a write-off that people once imagined it might be.........

cookie1977

The_Conductor wrote: »

Its becoming clearer and clearer- that strategic defaulting will not be accepted or tolerated. If its legitimate- and the borrower keeps in good contact with their lender- its very possible that some accommodation may be come to- however strategically defaulting and ignoring bank correspondence- is not the gateway to a write-off that people once imagined it might be.........

Did many people believe it was or where they really holding out to a proper solution for the debt from the bank because certainly some of the solutions the banks attempted to put in place we're pretty weak and pointless. Of course some were hoping against hope for right downs but I suspect others were holding out (yes wrongly but understandably so) for a real workable solution from the bank

SeanSouth

I think the two dopes mentioned in the examples above are anything but dopes and I suspect time will tell who the real dopes are.

Bidding below asking price in a tight market with curtailed supply doesn't make any sense at all. If you want to get the property, its fairly easy to work out that the dope strategy is the only one that will work. By bidding strong the dopes are leaving all the exasperated doubting thomas behind.

You may disagree with the direction of prices, you may find them illogical, unpalatable and unsustainable.
The real question however is when is the best time to get the property at the cheapest price. Many people believe that time is now.

The dopes in this case are just trying to snap up a house before everyone else jumps off the fence to compete with them. Its a self fulfilling prophacy.
If there are enough dopes thinking this way, then prices have to rise and all the non-dopes are screwed.

The earlier poster also mentioned that the dopes don't understand the "psychology of property markets". Does he think that the psychology of property markets means that we all watch prices drifting lower for six years after which there is an announcement on the six o clock news that the market has reached its trough and at that point, we all gently reenter the market offering 10% below asking price. Markets have never worked like this. Markets are competitive. Its impossible to guage the bottom of any market. Savvy and experienced property buyers realise that all the conditions now exist for further prices rises in the Dublin market. Nobody can change the tide. Sellers are now expecting more and certain buyers believe that prices are about to rise and are therefore paying more. Where does this leave the non-dope who is sitting on the fence waiting for prices to fall. Well he's no where. He's the dope.

McDook

lima wrote: »

I truly believe that if I don't buy now I will get priced out of the market! Especially since I have just obtained mortgage approval again, I am starting to get a bit panicky.

Why not just resign from the race then.

Nobody NEEDS to own their house, though I will say that I am of the view that I can live a much better life for myself and my family by buying a house instead of remaining renting.
But if they become out of my reach im happy to rent forever.

makeorbrake

@lima. There's intelligence in what McDook suggests. I don't think I'm a dope but I was also carried away in the Tiger era - feeling left behind by virtue of the fact that I hadn't made a property purchase. I ended up with a lump of concrete that is seriously in negative equity but luckily that doesn't really matter so much. It's not to an extent that I can't afford it (even if I paid over the odds) and I got the best deal ever in terms of financing.

However, we probably track the same threads - and so I've noticed your posts - and I see that you are keen to do a deal whenever a property reaches the right price point. I see your frustration and everyone knows that the irish property crash is being fudged and not left to run the course as it normally would.

I think SeanSouth makes a good point even if you don't agree that its 'sane' that the market should be going that direction (I agree with you 100% but then, when have markets for anything been wholly 'sane'? People are always the variable). Take the pressure off yourself and heed McDooks advice i.e. there is another option. If you feel that there is no sense in it and no value to be had, stay away and keep renting.

If more people had done that in the boom, then they would clearly be in so much better of a position - and perhaps things wouldn't have gotten more 'boomier' (i.e. more indebted and overpriced).

MouseTail

McDook wrote: »

Why not just resign from the race then.

Nobody NEEDS to own their house, though I will say that I am of the view that I can live a much better life for myself and my family by buying a house instead of remaining renting.
But if they become out of my reach im happy to rent forever.

Truly shocked at Lima being in the market. He was so vehemently against purchasing at the bottom, and gave those of us buying or calling the bottom a very hard time. AFAIR he had enough to buy in cash then, or almost enough.

gaius c

Villa05 wrote: »

Interesting comments from Frank Daly
http://www.irishexaminer.com/ireland/nama-boss-warns-public-against-getting-carried-away-as-market-picks-up-255730.html


Recidivism = is the act of a person repeating an undesirable behavior after they have either experienced negative consequences of that behavior

Is he saying that Irish people are stupid?

Further comment


Yes banks can create easy money through lax lending. What about money printing in the UK, US and Japan, Is that not easy money? Are the latest price rises driven by foreign investment, a media and Government desperate to increase revenue from property?

Were these policies tried before and did they have a negative impact on our nation?

I conclude my post by asking the question: Is Frank Daly Irish?

He's covering his ass.
"I told you that the property market had bottomed but dumb people went and made a new bubble, which then popped and blew everything up again."

gaius c

The_Conductor wrote: »

Its becoming clearer and clearer- that strategic defaulting will not be accepted or tolerated. If its legitimate- and the borrower keeps in good contact with their lender- its very possible that some accommodation may be come to- however strategically defaulting and ignoring bank correspondence- is not the gateway to a write-off that people once imagined it might be.........

Really? All I've seen is some tough talk followed by pitifully little and achingly slow action.

McDook

MouseTail wrote: »

Truly shocked at Lima being in the market. He was so vehemently against purchasing at the bottom, and gave those of us buying or calling the bottom a very hard time. AFAIR he had enough to buy in cash then, or almost enough.

To be fair though most people who buy anything feel the same. We all want to get the best value.
Sure it took me years to buy a PC back in 1995. I kept saying in another 6 months i'll get much better value for my money, over and over. Eventually after 3 years I still had no PC, value or not. So I decide then that I should just buy it.
But its hard to pay more than you thought you were going to have to pay in the end.

There are people around who are trying their best to get people to think that we are in another bubble, purely so that they dont buy. These people seem to think that they can influence the property market downwards buy telling people not to buy. They have learned nothing.

Its very clear where the market is going though. So just let them cry bubble as long as they want and get on with our own lives. So, I think Lima is being realistic and getting on with his life. We all know, we either need to sh1t or get off the pot and we may be waiting a while for the next lower pot to come along (but it will come along, be it 5 years, 10 years or 20 years. Can we wait til then?)

We dont have to sh1t at all either if it doesnt suit us.

We had some money left over from when we sold our house years ago and put 50% away for when we buy our perfect house. We want to buy now and nearly did few months ago and were waiting for the perfect house to come along again after that. But as we wait, perfect houses are becoming more expensive.
We have found it now though and are in the process of closing.

The big decision now is to get a mortgage for 35% of the value, or get a mortgage for 80% of the value and then buy 2 one bed investment properties in Dublin because of the yield available. We have approval for both scenarios.

We have looked at a few investment properties but have to decide. I would say we'll be buying 2 one bed apartments in Dublin before the summer. We already have one in London since 2000 and had one from 2000 to 2005 in Dublin rented, so know well that for the sake of 8% an agent can run the properties for us and there will be minimal input from us needed.

But all of these decisions are not easy. sh1t or get off the pot? Hard decision for anyone to be fair.

handlemaster

Mcdook. I had been looking online the one beds over the last year in Dublin. The prices have moved on so much its really a case by case if the rental value is there anymore.

cormie

I've been popping in for a look at this thread every so often.

I'm renting at the moment and would much prefer to have my own place (who wouldn't). I've had a steady enough income for the last 7 years so I'd hopefully get some kind of mortgage, although maybe not. I don't want a property for investment, just a better living space for myself and maybe I'd be able to rent it out after a while if I want to travel to help pay for my rent somewhere else, that's about it. The place I'm renting is cold and a bit dark too. I'd love to just be able to do whatever I want to a property because it's mine, like simple insulation even!

I'd be a total beginner at this, I saw one property that was actually commercial in my locality (Dun Laoghaire), but I thought it could work as residential too perhaps, decided to ring the agent and he said the list price of €170,000 or so was gone way above now with the latest bid being about €340,000 :eek: and he said "they must know something we don't know" about the residential prospect of it

It seems very annoying that any appealing place seems to be just snatched up by investors, that's the open market I know, but how is a hard working, wage earning citizen to get a place to live they can call their own in this market? Only solution seems to become rich Oh I wouldn't mind a detached house 2 bedroom is fine, with its own front door and maybe a little back yard and on street parking is fine! I've a fleet of vans so an apartment won't do.