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

Villa05

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.........

I'm not so sure, Picture yourself in an apt or small starter home which is in 50% negative equity, you can barely afford the repayments. The property is too small for your needs.

What would the average person do? Would you be tempted to play the system? Pay the minimum, which may be well below rental rates. Keep the utility value of the property.

Mcdook pointed to issues here before.

cookie1977

Let's call it then. What percent of those in arrears do people here think are playing the system? 10%, 25%, 50%? More then that? I know no one knows here for sure but many think it's going on (as it is for sure) but what percent do you think it is?

MouseTail

My guess, based on putting my finger in the air is 20-30%.

cookie1977

MouseTail wrote: »

My guess, based on putting my finger in the air is 20-30%.

I'd agree based on anecdotal evidence. If there was a significant number doing it then I'm sure the banks would be shouting it from the roof tops in order to justify increased repossessions.

It is a pity that there hasn't been proper investigations in to this though. I cant understand how there cannot be any. But I do believe that most people in arrears want a solution of some sort. They dont want to be worrying and looking over their shoulders wondering what's going to happen if they're found out for dodging payments. Despite what some say on here the average person in arrears is very worried and stressed. They dont want to be in arrears.

Montroseee

cookie1977 wrote: »

I'd agree based on anecdotal evidence. If there was a significant number doing it then I'm sure the banks would be shouting it from the roof tops in order to justify increased repossessions.

It is a pity that there hasn't been proper investigations in to this though. I cant understand how there cannot be any. But I do believe that most people in arrears want a solution of some sort. They dont want to be worrying and looking over their shoulders wondering what's going to happen if they're found out for dodging payments. Despite what some say on here the average person in arrears is very worried and stressed. They dont want to be in arrears.

This is correct. The number of people playing the system is low, definitely under 20% and more like 10% in my opinion. It is a bit of a myth that there are huge amount of people engaging in it, anyone not making their best efforts at repaying their mortgage will eventually be found out in court. There will never be a glut of repossessed houses put on the market all at once, the property market almost certainly bottomed out around 2011.

The_Conductor

Montroseee wrote: »

the property market almost certainly bottomed out around 2011.

Really?
The market (as in the Irish market as a whole), is stable, thanks to price rises in South Dublin. Strip South Dublin out of the equation- and prices are continuing to fall nationally- and even leaving South Dublin in the equation- as its increases have tapered significantly over the past 4-5 months- the little bounce thanks to South Dublin, is also tapering- and South Dublin itself may start to fall again- on current trends by March/April........

There have been significant increases in prices in South Dublin- and even in West Dublin- however the volumes involved are minuscule, indeed to even suggest there is a functional property market, is a stretch.

People have raided their mattresses, piggybanks and their wall safes- and chased the low hanging fruit to find a home for their cash- which is now running out.

It would be a very very confident person who was willing to declare any particular point in time a low, or indeed a high- all you can look at are trends, which are based on fact, after that- its pure hypothesis.

McDook

handlemaster wrote: »

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.

Working out pretty well for me.
Plenty to choose from too.
But I also have access to properties that arent advertised via the usual means, so i might have an advantage there tbh.

handlemaster

McDook wrote: »

Working out pretty well for me.
Plenty to choose from too.
But I also have access to properties that arent advertised via the usual means, so i might have an advantage there tbh.

What price range are u working in .Not advertised ? I presume you mean bank repos.

Montroseee

The_Conductor wrote: »

Really?
The market (as in the Irish market as a whole), is stable, thanks to price rises in South Dublin. Strip South Dublin out of the equation- and prices are continuing to fall nationally- and even leaving South Dublin in the equation- as its increases have tapered significantly over the past 4-5 months- the little bounce thanks to South Dublin, is also tapering- and South Dublin itself may start to fall again- on current trends by March/April........

There have been significant increases in prices in South Dublin- and even in West Dublin- however the volumes involved are minuscule, indeed to even suggest there is a functional property market, is a stretch.

People have raided their mattresses, piggybanks and their wall safes- and chased the low hanging fruit to find a home for their cash- which is now running out.

It would be a very very confident person who was willing to declare any particular point in time a low, or indeed a high- all you can look at are trends, which are based on fact, after that- its pure hypothesis.

Prices have gone up all over Dublin bar the usual undesirable areas. There is significant demand for houses out there that is not going away and there is absolutely no chance house prices will drop in South County Dublin anytime soon. If your a betting man, I'll give you good odds on them falling in the next year.

MouseTail

The cash is a long way from running out. Recent Central Bank stats show just how cash rich we are. It would be foolish to underestimate the impact of REITs, of course primarily they are after commercial, which we have a dearth of, but they are eying up residential also.

McDook

handlemaster wrote: »

What price range are u working in .Not advertised ? I presume you mean bank repos.

Looking at several apartments between 100 - 140k.
Should be getting 8 to 10% yield. If I didnt get that i wouldnt be going any further anyway, but i know some people who are happy with 5% yield these days.
Ive read threads on here with real worked examples which arent a million miles away from my calcs. You should look them up. They make an interesting read.

gaius c

McDook wrote: »

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.

A mind-numbingly nonsensical comparison.
If folk "invested" in PC's, the price went up and down depending on demand and PC's produced a return on investment, your comparison might start to make some notion of sense.

cookie1977

gaius c wrote: »

A mind-numbingly nonsensical comparison.
If folk "invested" in PC's, the price went up and down depending on demand and PC's produced a return on investment, your comparison might start to make some notion of sense.

I think the point that was being made is that procrastination is the thief of time.

gaius c

cookie1977 wrote: »

I think the point that was being made is that procrastination is the thief of time.

Yep, I'm real sorry I didn't jump into the market back in 2006.

You buy when the time is right for you. All McDook is posting is a variation of "if you wait too long, you'll never buy" boomtime scaremongering.

El_Dangeroso

gaius c wrote: »

A mind-numbingly nonsensical comparison.
If folk "invested" in PC's, the price went up and down depending on demand and PC's produced a return on investment, your comparison might start to make some notion of sense.

And the analogy is even more nonsensical when you consider how much more you got for your money year on year for PC's in the 1990's.

handlemaster

McDook wrote: »

Looking at several apartments between 100 - 140k.
Should be getting 8 to 10% yield. If I didnt get that i wouldnt be going any further anyway, but i know some people who are happy with 5% yield these days.
Ive read threads on here with real worked examples which arent a million miles away from my calcs. You should look them up. They make an interesting read.

Ive seen some before on here but they are going back a while. Do you have a link ? Also I don't think 8 -10 is sufficient once you take out all costs (management fees, tax, agents fees , empty periods etc )

Galego

handlemaster wrote: »

Ive seen some before on here but they are going back a while. Do you have a link ? Also I don't think 8 -10 is sufficient once you take out all costs (management fees, tax, agents fees , empty periods etc )

That is 8-10 after expenses. If it was before expenses then your money would be better off in a current account! :cool:

Thargor

Where is anyone seeing 8-10 after expenses? Is there anywhere in Ireland paying that?

Galego

Thargor wrote: »

Where is anyone seeing 8-10 after expenses? Is there anywhere in Ireland paying that?

Seen examples of apartments in Dublin city center yielding 8-10% after expenses.

I have a real example from a friend. If I find the calculations (I used to have them in my pc), I will post them here.

handlemaster

You would want to be paying a big deposit ...or is it a cash buy? An apt D1 with asking 100-140 is a one bed. Management fees alone are 1100 minimum. Rental would be from 800 -1100 depending on exact location and spec.

Galego

handlemaster wrote: »

You would want to be paying a big deposit ...or is it a cash buy? An apt D1 with asking 100-140 is a one bed. Management fees alone are 1100 minimum. Rental would be from 800 -1100 depending on exact location and spec.

No big deposit. Minimum % deposit and loan taken to as many years as you can.

Let's say, invest 12k in one of those 100-140 apartment with a possible annual income of 12k.

moxin

Montroseee wrote: »

Prices have gone up all over Dublin bar the usual undesirable areas.

This is another falsehood. Prices as well as rising have actually either fallen or stabilised in areas of North and West Dublin which are not "undesirable". You cannot brand the entire Dublin area as one unit, each local area has a different market.

handlemaster

Galego wrote: »

No big deposit. Minimum % deposit and loan taken to as many years as you can.

Let's say, invest 12k in one of those 100-140 apartment with a possible annual income of 12k.

That's not going to give 8%-10% after expenses. Purchase costs added , fit out, repayment a, management fees, void periods, property tax, income tax, accountant fees etc etc

SeanSouth

@ Moxin you remind me a little bit of Comical Ali, the Iraqi pres officer during the american invasion of Iraq in 2003. Basically, he was the king of spin. Many people still talk about him.

In your case its always the same,property prices are not going up, property prices are falling, You cannot take Dublin as a single market etc etc etc.

I dont think anyone can say for sure that prices will continue to rise. Likewise no one can say for sure that they will stabalise or decline. All anecdotal evidence seems to suggest that prices in Dublin (all Dublin) are starting to rise including desirable and not so desirable areas. Why are you so adamant that this is not so ?

moxin

SeanSouth wrote: »

@ Moxin you remind me a little bit of Comical Ali, the Iraq'i pres officer during the American invasion of Iraq in 2003. Basically, he was the king of spin. Many people still talk about him.

In your case its always the same,property prices are not going up, property prices are falling, You cannot take Dublin as a single market etc etc etc.

I dont think anyone can say for sure that prices will continue to rise. Likewise no one can say for sure that they will stabalise or decline. All anecdotal evidence seems to suggest that prices in Dublin (all Dublin) are starting to rise including desirable and not so desirable areas. Why are you so adamant that this is not so ?

I was using the past tense, not the future tense. Adamant? I ain't a watcher of the elite SCD market, I watch nearly everywhere else in Dublin where the vast majority of people live. A few Comical Ali's in this thread alright.

Cuddlesworth

SeanSouth wrote: »

All anecdotal evidence seems to suggest that prices in Dublin (all Dublin) are starting to rise including desirable and not so desirable areas. Why are you so adamant that this is not so ?

Actual evidence states that prices are still dropping in Dublin outside of specific areas. But due to the small number or purchases country wide and the fact that house prices in South Dublin are already significantly higher, small fluctuations in price are capable of affecting the entire country's statistics or in this case, Dublins.

Cuddlesworth

Also, from a pure investment situation the risks when renting property are significant. I know a few professional landlords from a previous job, if you are incapable of taking a hit of 20-30k to your cash flow while in the lower end of the market you shouldn't invest.

Galego

Cuddlesworth wrote: »

Also, from a pure investment situation the risks when renting property are significant. I know a few professional landlords from a previous job, if you are incapable of taking a hit of 20-30k to your cash flow while in the lower end of the market you shouldn't invest.

Yes fair point but any investment with annual returns >4-5% tends to have certain level of risk.

Barely Hedged

gaius c wrote: »

Yep, I'm real sorry I didn't jump into the market back in 2006.

You buy when the time is right for you. All McDook is posting is a variation of "if you wait too long, you'll never buy" boomtime scaremongering.

If you are looking or considering buying since a minimum of 2006 would 2010 - now not have been or is the right time for you to buy?

What stopped you or is stopping you, based on the assertion youre looking of course?

McDook

handlemaster wrote: »

Ive seen some before on here but they are going back a while. Do you have a link ? Also I don't think 8 -10 is sufficient once you take out all costs (management fees, tax, agents fees , empty periods etc )

On the phone at the moment but if you search "property portfolio" or "investment portfolio" either here or askaboutmoney you should get some of them.