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

cookie1977

carpejugulum wrote: »

The elderly are the richest, most secure and least hit group.

That statement is ridiculous. Fine, yes some are but to say they all are is utterly wrong. Pension cuts, cuts to support, no more discounts on phone lines etc... They are being hit and hit somewhat hard too.

carpejugulum

Barracuda1 wrote: »

its the only country in the EU recording growth for this year.

Just lying now?
http://www.imf.org/external/pubs/ft/weo/2012/02/c2/fig2_4.pdf
http://ec.europa.eu/economy_finance/eu/forecasts/2013_winter_forecast_en.htm

lima

username123 wrote: »

In my experience, anyone I knew who left for Australia and managed to get residency, is never coming back. Ditto Canada, the USA. Coming back is a dream they talk about until they meet someone, get settled etc... Why would they come back? This country is going further down the toilet everyday.

Well I came back! maybe I'm just a blip in the statistics though

StillWaters

lima wrote: »

Well I came back! maybe I'm just a blip in the statistics though

Now maybe, but I'm a lot older than you, was an emigrant in the last wave. Of course we all said we werent coming back having escaped a small inward looking grey recession hit country with unsustainable levels of debt. Most of the people I knew did come back in the late 90s, early 00s.

carpejugulum

cookie1977 wrote: »

That statement is ridiculous.

That statement is true.
Retired Irish people are least affected by recession; More confident than rest about financial outlook

cookie1977 wrote: »

Fine, yes some are but to say they all are is utterly wrong.

And I didn't say all. It's an average of course.

cookie1977

carpejugulum wrote: »

That statement is true.
Retired Irish people are least affected by recession; More confident than rest about financial outlook

And I didn't say all. It's an average of course.

The link doesn't work and while you didn't say all you also didn't say some or average. "The elderly" encompasses all for me. Be more specific.

http://www.thejournal.ie/health-care-ageing-830000-Mar2013/

http://www.independent.ie/irish-news/call-to-check-on-elderly-29123321.html

http://www.irishexaminer.com/ireland/fears-elderly-will-forego-food-to-pay-property-tax-225038.html

StillWaters

cookie1977 wrote: »

The link doesn't work and while you didn't say all you also didn't say some or average. "The elderly" encompasses all for me. Be more specific.

http://www.thejournal.ie/health-care-ageing-830000-Mar2013/

http://www.independent.ie/irish-news/call-to-check-on-elderly-29123321.html

http://www.irishexaminer.com/ireland/fears-elderly-will-forego-food-to-pay-property-tax-225038.html

I concur that older people have escaped the harshest of cuts, and remain protected with more attractive tax rates etc.

They are the group at the lowest risk of poverty.

http://www.eapn.ie/eapn/training/poverty-in-ireland

Of course we are not talking about people here reliant solely on the State Pension. We are talking about those with generous private pensions, investments and savings who are being subsidised by a younger generation, and remain unscathed. it is political of course. Older people most likely group to vote.

The_Conductor

The group most affected by the recession are families with young children, particularly those lucky enough to have work, who do not qualify for medical cards or other assistance. Fergus Finlay of Barnados has published several statements on this- claiming 1.8m Irish children are now affected by relative poverty- in many cases living in homes their parents cannot afford to heat, unable to afford clothing or nutritious food etc........ Workers with young children appear to be the new poor and those most vulnerable in society as a result of budgetary policies.

cookie1977

I was just replying to someone who took a single sentence from a post of mine a while back and decided to hone in on it. The fact is recession is hitting all in different ways but we are speaking here of repossessions which is affecting young people with families. Back on topic.

Zamboni

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.

gurramok wrote: »

Source?

D3PO wrote: »

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.

I cannot believe you are criticising gurramok for requesting a source and then, ironically, call for rationality.
Where is this large group of well funded 20/30 year old?
The demographic mostly affected by unemployment.
The demographic most active in emmigration.
The demographic which are in professions and employment where starting salaries have been reduced in both public and private enterprise.
The demographic who are paying rent.

Sure there is a historical trend for the demand for property ownership but what segment of this demographic have the discipline and excess income to save after rent and accumulate a deposit and have the salaries required to attain a mortgage adequate purchase at current property prices?
And are also debt free?

It is really unreasonable to ask for a source when a poster makes a claim that this group is a "large cohort"?

Villa05

cookie1977 wrote: »

The fact is recession is hitting all in different ways but we are speaking here of repossessions which is affecting young people with families. Back on topic.

Would it not be better to repossess from those in this category first who are in severe arrears and write off/restructure the balance for the following reasons:
- Many purchased too far away from where they work. Renting close to where they work will probably be cheaper than the mortgage and free up expenditure on travel
- They have outgrown the property
- They have time on their side to recover
- Repossessions will at a minimum will keep prices stable (more likely to result in a drop) This will keep accommodation costs low and allow the family to re enter the market at a more sane level in 3 to 5 years time.

Repossession is not throwing people out on the street, it is a first step to release and recovery and allows people to get on with their lives with a clean slate after a few years.

Would you prefer if our tax money was used to subsidise our friend on prime time with 5 BTL's and feels his children are entitled to second level fee paying education. That's what will happen if people do not cop on and realise what is happening here.

Have you looked at the Dail register of interests and seen how many TD's have multiple BTL's and that is what they are declaring. What are they not declaring/passed to relatives

I know where i'd like my tax money to go to

handlemaster

Ulster bank expect to hit 1000 repossession for this year. If other banks follow suit it maybe bring down prices further as the OP thread title says.

cookie1977

Villa05 wrote: »

Would it not be better to repossess from those in this category first who are in severe arrears and write off/restructure the balance for the following reasons:
- Many purchased too far away from where they work. Renting close to where they work will probably be cheaper than the mortgage and free up expenditure on travel
- They have outgrown the property
- They have time on their side to recover
- Repossessions will at a minimum will keep prices stable (more likely to result in a drop) This will keep accommodation costs low and allow the family to re enter the market at a more sane level in 3 to 5 years time.

Repossession is not throwing people out on the street, it is a first step to release and recovery and allows people to get on with their lives with a clean slate after a few years.

Would you prefer if our tax money was used to subsidise our friend on prime time with 5 BTL's and feels his children are entitled to second level fee paying education. That's what will happen if people do not cop on and realise what is happening here.

Have you looked at the Dail register of interests and seen how many TD's have multiple BTL's and that is what they are declaring. What are they not declaring/passed to relatives

I know where i'd like my tax money to go to

Where restructuring of the debt through various measures (including debt for equity swap etc...) then yes all you suggest is perfectly fine in relation to PDH/PPR's. In relation to BTL's going first. I think that the only here is that we, where necessary (once individuals ability to repay has been assessed), wipe any outstanding debt once the repossession and sale of the property has gone through with an over hang. I dont see a huge issue with doing these first as surely all the banks have written down the value of their loan book already in relation to a lot of the mortgages.

Re repossession. I feel you give it to rosy a solution. I understand your point but there is a huge stigma to it and this can effect families significantly in an adverse way. As I've said before it's been shown that suicides have risen across Europe since the recession.

Again no solution is perfect but the solution that enables a recovery with the least cost (financially and psychologically) to a nation has to be the aim in my mind.

The_Conductor

handlemaster wrote: »

Ulster bank expect to hit 1000 repossession for this year. If other banks follow suit it maybe bring down prices further as the OP thread title says.

Also as alluded to in the thread- it depends entirely on where these properties are and what property types they are. Repossessing 1000 apartments in Carrick-on-Suir (quite incredibly- which is actually possible) would make no difference other than locally, and even at that- only in the apartment sector.

We don't have a breakdown on where these mortgages in arrears are- or what property types are in question- but if people imagine that its going to have a marked impact on the price of ye three bed semi-d with a garden in the leafy suburbs of Dublin, Cork or Galway- they are most probably going to be sadly disappointed.......

Mr Chuckles

It's a double edged sword for the banks, and in the case of Irish banks, the people. Writing down the value of assets means borrowing more money. The more repossessions, the more depressed the market becomes. So it will be a drawn out process over several years. Also the banks are already in possession of a lot of property where keys have been handed back. Then there is the issue of social housing, for people who should never have a mortgage

handlemaster

Mr Chuckles wrote: »

It's a double edged sword for the banks, and in the case of Irish banks, the people. Writing down the value of assets means borrowing more money. The more repossessions, the more depressed the market becomes. So it will be a drawn out process over several years. Also the banks are already in possession of a lot of property where keys have been handed back. Then there is the issue of social housing, for people who should never have a mortgage

according to mr noonan the irish banks are already capitalised for right downs and they just havent moved

The_Conductor

handlemaster wrote: »

according to mr noonan the irish banks are already capitalised for right downs and they just havent moved

They have been capitalised for write downs of a certain percentage. However no-one in their wildest imaginations factored levels of delinquent loans such as we currently have. Even some politicians who've plugged the numbers reckon we could need anywhere between another 8 billion and 20 billion, depending on how things go (and this is after the Basle 2 capitalisation rules have been relaxed).

When we recapitalised the banks- we factored on a worse case scenario of less than half the current number of mortgages being delinquent, this has proven to be wildly optimistic.

KegglesMcS

D3PO wrote: »

he wasnt smarter. He let slip he had mortgage approval in the boom. Why would he apply for mortgage approval if he thought they were overpriced....

he likes to think he was smart though

Ha ha brilliant. Smuggy O Mara tried to buy in the boom. Unfortunately he didn't earn enough money!

Galego

handlemaster wrote: »

Ulster bank expect to hit 1000 repossession for this year. If other banks follow suit it maybe bring down prices further as the OP thread title says.

As everyone predicted Ulster Bank is the first to make the move. Other foreign banks will follow this route too.

http://www.independent.ie/business/irish/ulster-is-first-major-lender-to-send-out-repossession-summonses-29133830.html

As of today, Daft shows 54,564 properties for sale. 1,000 repossessions represent 2% of properties in current market.

murphaph

Galego wrote: »

Repos will drive down prices and whoever do not understand this then do not understand simple economic theories. That banks and/or government are able to contain this in some way then that is a total different matter. Even if the stock is not in Dublin, even if they are s**t holes, they will still affect prices anywhere in the country. Ireland is a small country, travel distances are not that big.

You can't commute from outside Leinster to Dublin and even inside Leinster it can't be done from some parts without your quality of life being in the toilet. Also very expensive. Ireland is small, but it's not that small. It is not a single housing market. A few hundred empty houses in Donegal is going to have no impact on prices in the capital.

gurramok

murphaph wrote: »

A few hundred empty houses in Donegal is going to have no impact on prices in the capital.

Even if they are mortgaged by people living in Dublin or the nearest urban centre? Somebody somewhere has mortgages on empty houses?(non-developer investor\holiday home types)

cookie1977

Burgess on Marion RTE1 now. My skin is crawling.

Villa05

murphaph wrote: »

You can't commute from outside Leinster to Dublin and even inside Leinster it can't be done from some parts without your quality of life being in the toilet. Also very expensive. Ireland is small, but it's not that small. It is not a single housing market. A few hundred empty houses in Donegal is going to have no impact on prices in the capital.

Dublin has fallen the most so arguably has the worst of the negative equity problem. There is a close link between negative equity and strategic default

Dublin has the highest population, meaning the Greater Dublin area has the highest stock of houses.

Higher cost of living in Dublin. Companies based there considering getting out (Northern Trust move from Dublin to Limerick)

Dublin would have a higher population of public Servants. Their pay has been cut significantly while they were given higher mortgages as a % of their salary during the boom. This may well result in them making up a higher proportion of those in arrears. Investing in a BTL was a favored pastime of our public servants.

A value based property tax will hit Dublin harder, and be a greater deterrent to property ownership, could be the straw that breaks the camels back for those struggling to meet repayments.

Sure South Co. Dublin and maybe some other affluent areas may escape, but I don't think the rest of the Greater Dublin area will be unaffected by repossesions on the contrary I think they are more likely to be repossessed as they will be easy to rent out.

The people of Donegal are much more likely to keep their homes as they are not as rentable

cookie1977

Villa05 wrote: »

Dublin has fallen the most so arguably has the worst of the negative equity problem. There is a close link between negative equity and strategic default

Dublin has the highest population, meaning the Greater Dublin area has the highest stock of houses.

Higher cost of living in Dublin. Companies based there considering getting out (Northern Trust move from Dublin to Limerick)

Dublin would have a higher population of public Servants. Their pay has been cut significantly while they were given higher mortgages as a % of their salary during the boom. This may well result in them making up a higher proportion of those in arrears. Investing in a BTL was a favored pastime of our public servants.

A value based property tax will hit Dublin harder, and be a greater deterrent to property ownership, could be the straw that breaks the camels back for those struggling to meet repayments.

Sure South Co. Dublin and maybe some other affluent areas may escape, but I don't think the rest of the Greater Dublin area will be unaffected by repossesions on the contrary I think they are more likely to be repossessed as they will be easy to rent out.

The people of Donegal are much more likely to keep their homes as they are not as rentable

I dont have the energy anymore to reply to some of these posts. I'm going to leave this car wreck to someone else.

lima

KegglesMcS wrote: »

Ha ha brilliant. Smuggy O Mara tried to buy in the boom. Unfortunately he didn't earn enough money!

As I said in a later post:

I was not living in Ireland during the boom. I got mortgage approval last September, in order to see how much I could borrow.

Turns out I can borrow more than enough to buy a nice 3br house in Dublin (outside of D4/6/3) but I choose to wait, since the current property prices are being kept high by vested interests.

If you really want to know, I earn quite a lot more than the average salary in Ireland :D

murphaph

gurramok wrote: »

Even if they are mortgaged by people living in Dublin or the nearest urban centre? Somebody somewhere has mortgages on empty houses?(non-developer investor\holiday home types)

I meant a few hundred houses being repossessed, given the thread title and all. Maybe the owners live in London and it'll depress London property prices ;-)

Galego

murphaph wrote: »

You can't commute from outside Leinster to Dublin and even inside Leinster it can't be done from some parts without your quality of life being in the toilet. Also very expensive. Ireland is small, but it's not that small. It is not a single housing market. A few hundred empty houses in Donegal is going to have no impact on prices in the capital.

You can't but you are missing the point in my argument. It is not about commuting. It is called the economic domino theory.

gurramok

murphaph wrote: »

I meant a few hundred houses being repossessed, given the thread title and all. Maybe the owners live in London and it'll depress London property prices ;-)

If so

But if they are in Dublin, their PPR mortgages will be affected, a domino affect as Galego pointed out.

cookie1977

Are you saying if they're (for example) an owner of a BTL in donegal and a PPR/PDH in Dublin, the dublin property will be affected in any repossession of the BTL?

The_Conductor

Villa05 wrote: »

Dublin has fallen the most so arguably has the worst of the negative equity problem. There is a close link between negative equity and strategic default

A bland statement such as Dublin has fallen the most- so arguably has the worst of the negative equity problem, simply holds no water. First off- parts of the midlands have fallen further (percentage-wise) than almost any part of Dublin, and secondly- you're looking at areas, rather than property types- and certain property types have held their value a lot better than have other property types. Apartments have fallen most- and rural apartments have fallen most of all (of which there are a shocking number of).

As for their being a close link or correlation between negative equity and strategic default- common sense really- a borrower has nothing to loose when the asset backing the loan is less than the amount of the loan...... Sure there is a correlation- but only because it wouldn't make sense for someone with equity to deliberately throw away that equity.

Villa05 wrote: »

Dublin has the highest population, meaning the Greater Dublin area has the highest stock of houses.

Dublin is our capital city- however as a ratio of housing stock per head of population- even rural Leitrim has a higher number of housing units. If you're looking at absolute numbers, then sure, Dublin has a higher stock of housing units- however as it also has a higher relative demand, this is meaningless. A couple of hundred empty apartments in Carrick-on-Shannon, is economically more significant, than a similar number of empty apartments in Adamstown......

Villa05 wrote: »

Higher cost of living in Dublin. Companies based there considering getting out (Northern Trust move from Dublin to Limerick)

The inverse of this is true. A number of high profile multinational companies have stated they have not opened offices in Dublin, purely because they can't find vacant office space, and other companies such as Northern Trust have moved operations elsewhere for the self same reason- a lack of expansion possibilities in the Dublin area.

Villa05 wrote: »

Dublin would have a higher population of public Servants. Their pay has been cut significantly while they were given higher mortgages as a % of their salary during the boom. This may well result in them making up a higher proportion of those in arrears. Investing in a BTL was a favored pastime of our public servants.

Dublin may have a higher population of public sector employees than elsewhere- however as a proportion of the workforce, its actually the lowest in the entire country. Look at places like Portlaoise- where over 60% of the entire working population are in the public sector- or even little places like Clonakility, better known for other reasons- have a disproportionately large public sector workforce. Dublin may have more- in absolute numbers- but thats only because its our only sizeable city (and even on international scales, it doesn't register sizewise).

Villa05 wrote: »

A value based property tax will hit Dublin harder, and be a greater deterrent to property ownership, could be the straw that breaks the camels back for those struggling to meet repayments.

Back we go again. Who is to say that Dublin homeowners are any more likely to default than owners of apartments in Carrick-on-Shannon (or Longford or anywhere else). You simply don't know. Its pure speculation to suggest that property tax will be the straw that breaks the camels back for Dublin homeowners. There are plenty of far more onerous straws than the property tax.......

Villa05 wrote: »

Sure South Co. Dublin and maybe some other affluent areas may escape, but I don't think the rest of the Greater Dublin area will be unaffected by repossesions on the contrary I think they are more likely to be repossessed as they will be easy to rent out.

South Dublin (by this I mean Dunlaoghaire Rathdown CC) has a higher number of vacant residential property units, than does Lucan (and its all apartments- thousands of the sodding things). Not all of South Dublin is leafy suburbs of 3 beds detached with gardens- its a myth if you think its so. Look at the CSO figures.

Villa05 wrote: »

The people of Donegal are much more likely to keep their homes as they are not as rentable

Perhaps they are not as rentable- however as a proportion of total housing units- surely a far higher percentage are holiday homes, unlettable, and in negative equity, that owners might be only too happy to be shot of? I don't see any vacant holiday villages in West Dublin...........