Dead Cat Bounce

Galego

gaius c wrote: »

Michael Clontarf and Jason Glasnevin might not have PPR mortgages against their main house but do they have separate BTL mortgages or BTL mortgages secured on the PPR?

I'd bet my money that they certainly do.

gaius c

Interesting factoid is that first-time buyers managed to to hit a high of a whole 23.3% of the mortgage market so they were never more than a quarter of the mortgage market. The remaining three quarters were made up of:
BTL
Trader-uppers (and the fashion towards the top end of the bubble was to keep your original house & let it out)
And "equity release" folk

That's a lot of debt built up by the very people who should have the least NE problems. Allied to the fact that 60% of the 2006 market was BTL and it starts to become clear that the problems are not with John & Mary FTB but rather with their parents.

Galego

There is a lot of NE with the old folks who also joined the bubble party borrowing based on their PPRs. I'd even bet my money that they represent a much higher percentage than the FTBs.

I guess pension plans were never seen as a secured and/or attractive investment in this country.

Idbatterim

look, there is much debate here as to whether prices have risen, well I live in churchtown, and I dont need to be told what I can see, undoubtedly the asking prices have risen since last summer and significantly. Id go as far as saying they were laughably low for like and like properties comparing this time last year and now. I dont own, but would like to buy in the Dublin 14 area at some point, so believe me, I dont want to see prices rising.

It wont be for another while before we can judge where prices are at this time and even in the recent past, but when looking back, it wouldnt surprise me if circa 6-18 months ago was the the trough, in Socodu anyway... I think anyone who thinks they are going to buy anything semi decent in the most popular relatively tiny pocket of the country for 3-4 times the "average industrial wage" is getting and is going to be in for a serious reality check. I think that just as on the way up there was no limit on what people were prepared to pay, that on the way back down hysteria is they prices will drop forever...

A lot of people on this board seem to thing that humans act in a perfectly rational fashion, they dont! the Irish still are and wil always be property obsessed. We all need a roof over our heads & some point most of us will make the decision to jump. Its like buying a car, should I keep putting it off indefinetly because I know it will be worth less tomorrow? at some point people will get sick of the waiting...

RATM

hfallada wrote: »

Its basic economics Demand vs supply. If supply is pretty much non existent and demand is relatively high prices go up. Some areas ARENT going have a ton of bank repossessions and even the banks do sell repossessed houses the prices wont fall. Some areas like Clontarf, Glasnevin, Ballsbridge only about half the houses would have mortgages. So a few repossessions would only be about 4-6% of the house stock. These areas are mature with older families.

On the other hand some where like swords except a continuing fall in prices. As they say in the US the top of the market falls last a recovers the fastest and Dublin is being marketed aboard as a place to buy a luxury second home

I've heard that argument on other threads too. I wouldn't be so sure because during the boom people in these desirable areas had access to more money than the average Joe Soap.

In many cases people from the likes of Clontarf, Howth or SCD had built up their own property portfolios, often going in on investments with their golfing buddies. Solicitors, doctors, accountants, none of them were immune and the banks were throwing them as much money as they wanted provided they did one thing- give a personal guarantee.

Take just one example- former TD and Senator Ivor Callelly. Whilst earning a senators salary of €80,000 AIB lent him €10 million. He already had outstanding mortgages on another four houses in Clontarf as well as another few around Artane and was set about buying another few to develop apartments. The guy is in the hock for somewhere in the region of €15m-€20m. And that's someone who is now unemployed.

So there will be repossessions in Clontarf, Callelly has severalhouses in the area and he can't pay the mortgages. I'd wager a bet that for every Callelly in Clontarf there are several more who gave personal guarantees over properties in SCD, Howth, Portmarock or Blackrock

davet82

RATM wrote: »

I've heard that argument on other threads too. I wouldn't be so sure because during the boom people in these desirable areas had access to more money than the average Joe Soap.

In many cases people from the likes of Clontarf, Howth or SCD had built up their own property portfolios, often going in on investments with their golfing buddies. Solicitors, doctors, accountants, none of them were immune and the banks were throwing them as much money as they wanted provided they did one thing- give a personal guarantee.

Take just one example- former TD and Senator Ivor Callelly. Whilst earning a senators salary of €80,000 AIB lent him €10 million. He already had outstanding mortgages on another four houses in Clontarf as well as another few around Artane and was set about buying another few to develop apartments. The guy is in the hock for somewhere in the region of €15m-€20m. And that's someone who is now unemployed.

So there will be repossessions in Clontarf, Callelly has severalhouses in the area and he can't pay the mortgages. I'd wager a bet that for every Callelly in Clontarf there are several more who gave personal guarantees over properties in SCD, Howth, Portmarock or Blackrock

I wouldn't revel in peoples misery but we definitely live in interesting times!

jmayo

gaius c wrote: »

You need to join the dots. MABS are reporting that the people coming into them needing help with mortgage arrears are much older than expected. Michael Clontarf and Jason Glasnevin might not have PPR mortgages against their main house but do they have separate BTL mortgages or BTL mortgages secured on the PPR?

I remember going to some foreign property shows and a lot of the people there were middle aged.
One day I got talking to one guy, who I guessed was in his 50s, he told me he was interested in Bulgaria but he had already bought in Dundrum and Dubai.
There has to be a big tranche of people out there who released equity in the home to buy first in Ireland and then when that became expensive they went looking overseas.

Just think about those flights to Florida with MRI (not sure if I can mention their full name around here), who do people think were on them ?

I remember a couple in their forties from Galway on one of those property magazines extolling the virtues of the property they had bought in Humber Valley in New Foundland.
FFS it was madness and a lot of the seed cash for these buys was coming out of equity release on property back home.

A lot of the buyers of the overseas properties were not seeking funding/mortgages in the country they were buying but were doing it here.
The foreign investments have for the most part fallen apart leaving the Irish buyer holding a crock that there is no local market for.

davet82 wrote: »

I wouldn't revel in peoples misery but we definitely live in interesting times!

Ah but it is callely
Lets revel to our hearts content that a sleeveen, who thought that dodgy invoices to get extra payment from the taxpayer was ok, could lose his little empire.

Devi

I agree that house prices have increased since last year in Dublin but what has actually changed economy wise since last year? Which variable has changed? Unemployment is still high, almost no change in GDP in last quarter of 2012, have the banks loosened their lending maybe? Haven’t looked too deeply into it but there has to be an economic reason for it.

davet82

jmayo wrote: »

Ah but it is callely

Well I thought that exception went without saying! :pac:

The Spider

Devi wrote: »

I agree that house prices have increased since last year in Dublin but what has actually changed economy wise since last year? Which variable has changed? Unemployment is still high, almost no change in GDP in last quarter of 2012, have the banks loosened their lending maybe? Haven’t looked too deeply into it but there has to be an economic reason for it.

Well going on the traffic into work lately, it seems like the recession is well and truly over.

davet82

Devi wrote: »

I agree that house prices have increased since last year in Dublin but what has actually changed economy wise since last year? Which variable has changed? Unemployment is still high, almost no change in GDP in last quarter of 2012, have the banks loosened their lending maybe? Haven’t looked too deeply into it but there has to be an economic reason for it.

banks are lending but not what you'd expect from using their mortgage calculators that's for sure.

more balance in supply and demand is the only explanation...

from what I've seen houses that are ready to move into and have been looked after achieve and exceed the asking. There are a lot of bargains out there, I've noticed a lot more rented houses come on the market and you could get them cheap but you'll find most are dumps that need money and that's one thing most people don't have at the moment so you find a lot of people chasing the same 'bone'.

gaius c

jmayo wrote: »

Ah but it is callely
Lets revel to our hearts content that a sleeveen, who thought that dodgy invoices to get extra payment from the taxpayer was ok, could lose his little empire.

Lord Kilcrohane to give him his proper name!

gurramok

The Spider wrote: »

"In South County Dublin, asking prices are now 6% higher than a year ago, a rate of change not seen since early 2007. After 19 straight quarters of falling prices, they have now risen in that area in four of the last five quarters. Prices are also higher, year-on-year, in Dublin city centre and in the South City region, while in the North City region, they are roughly stable (down -0.5% year-on-year)."

ASKING prices.

Year on year change in asking prices:

North County Dublin(-5%), West County Dublin(-6.4%), North Dublin City(-0.2%), Dublin City Centre(+1.8%), South Dublin City(+1.3%) and your famous SCD +6.1%

And the important bit:

Daft wrote:

According to an analysis of Property Price Register entries, transaction prices in Dublin in early 2013 were 2.4% lower than a year previously

Also, they conveniently do not give a transaction prices breakdown for each region of Dublin.

lima

Devi wrote: »

I agree that house prices have increased since last year in Dublin but what has actually changed economy wise since last year? Which variable has changed? Unemployment is still high, almost no change in GDP in last quarter of 2012, have the banks loosened their lending maybe? Haven’t looked too deeply into it but there has to be an economic reason for it.

They have increased because;
1. Nama is restricting stock and
2. Lack of Repossessions is restricting stock

And that suits the people in control fine because they all have a bunch of apartments each so it is in their interests to have their 'investments' rise.

I really hope the opposite happens just to spite them

The Spider

gurramok wrote: »

ASKING prices.

Year on year change in asking prices:

North County Dublin(-5%), West County Dublin(-6.4%), North Dublin City(-0.2%), Dublin City Centre(+1.8%), South Dublin City(+1.3%) and your famous SCD +6.1%

And the important bit:


Also, they conveniently do not give a transaction prices breakdown for each region of Dublin.

Wait and see, the trend is up, check out the below link, granted it's an estate agent so should be taken with a fist of salt.

http://www.irishexaminer.com/breakingnews/ireland/second-hand-dublin-house-prices-up-95-claims-report-589824.html

but all these reports are starting to accumulate.

Oh you'd better take a look at this too.

http://www.independent.ie/lifestyle/property-homes/key-steps-for-buyers-prior-to-hunting-for-a-home-29191224.html

gurramok

The Spider wrote: »

Wait and see, the trend is up, check out the below link, granted it's an estate agent so should be taken with a fist of salt.

http://www.irishexaminer.com/breakingnews/ireland/second-hand-dublin-house-prices-up-95-claims-report-589824.html

but all these reports are starting to accumulate.

What reports? (estate agents do not count.)

What trend?

The Spider

gurramok wrote: »

What reports? (estate agents do not count.)

What trend?

Fine.....but everything counts, seriously, that's childish, they wouldn't have counted two years ago, but when the reports are coming from other quarters, then it all counts.

gurramok

The Spider wrote: »

Fine.....but everything counts, seriously, that's childish, they wouldn't have counted two years ago, but when the reports are coming from other quarters, then it all counts.

Estate agent reports are biased, they have a vested interest to sell houses.

Other official sources are more trustworthy.

So you have no trends to report at all then other than asking prices in SCD?

The Spider

gurramok wrote: »

Estate agent reports are biased, they have a vested interest to sell houses.

Other official sources are more trustworthy.

So you have no trends to report at all then other than asking prices in SCD?

Don't need em, just as people didn't need trends or graphs to say that prices would collapse, the only things they could point to were ridiculous prices (which I agreed with).

I didn't plot any graphs when I held off for the crash, as I believed it was inevitable just as I don't need them now, to know we've hit the bottom, all as that takes is comparing going to viewings last year and the prices offered then as to now, and people I know trying to buy.

The Spider

Here's another one for ya, feel free to ignore it as it could be a vested interest.

http://www.build.ie/construction_news.asp?newsid=161231

gurramok

The Spider wrote: »

Here's another one for ya, feel free to ignore it as it could be a vested interest.

http://www.build.ie/construction_news.asp?newsid=161231

That's a Northern Ireland survey!!

The Spider

gurramok wrote: »

That's a Northern Ireland survey!!

And you are right, hands up my fault, completely missed the word Northern!

cson

Had a little chuckle at you linking the Independent as a source.

They've been trying the raise the property ghost with various stories and property porn for quite some time at this stage.

Devi

lima wrote: »

They have increased because;
1. Nama is restricting stock and
2. Lack of Repossessions is restricting stock

And that suits the people in control fine because they all have a bunch of apartments each so it is in their interests to have their 'investments' rise.

I really hope the opposite happens just to spite them

I agree both these are contributing factors but have they changed since 2012? I’m just trying to look at this objectively because I think if we can identify the reason for this, it may give us an insight into whether this is a dead cat bounce or a product of real economic growth.

davet82

Devi wrote: »

I agree both these are contributing factors but have they changed since 2012? I’m just trying to look at this objectively because I think if we can identify the reason for this, it may give us an insight into whether this is a dead cat bounce or a product of real economic growth.

there is nothing on the economic home front to suggest anything but a bounce due to a lack of supply in certain areas, every property bubble that popped has had a bounce, unless we are different like the soft landing that we had

by the seaside

Devi wrote: »

I agree both these are contributing factors but have they changed since 2012? I’m just trying to look at this objectively because I think if we can identify the reason for this, it may give us an insight into whether this is a dead cat bounce or a product of real economic growth.

Not sure how relevant this is but I am curious...

Daft.ie shows about 6% of total properties for sale in Ireland being in Co. Dublin (which includes Co. Fingal, I think).

Co. Dublin and Co. Fingal contain 1/3 of the population of the Republic and a little short of 1/4 of the population of the island. I may be missing something as I don't live in Ireland nor am I Irish, but supply looks very constrained, even if (as I have been told) it is true that daft has a lower market share in Dublin than nationally.

Even if this is explained by over-supply elsewhere flooding the market, look at the absolute numbers: 3,332 properties for sale in a population of 1.5 million, 1 house for every 450 individuals.

If I look pretty much at random at righmove.co.uk and do a search for properties in Nottingham, there are 6,400 properties for sale. Nottingham is a nice enough city of 304,000 but the economy is not booming.

It looks to me as if supply is severely constrained in Dublin, and all other things being equal that will exert an upward pressure on sale prices. But at a low volume. What is driving the low supply? Are people stuck in NE and unable to move, and not being repo'd if unable to repay. Is supply of properties being constrained by NAMA holding onto properties? If so, then this is not a recovery in the market. It is an upward tick in prices due to artificial constraints on the market, but that is not sustainable, because eventually the assets on banks books must be liquidated.

Any views (particularly on the perceived supply constraint)?

Devi

davet82 wrote: »

there is nothing on the economic home front to suggest anything but a bounce due to a lack of supply in certain areas, every property bubble that popped has had a bounce, unless we are different like the soft landing that we had

That’s true and in a normal functioning economy an increase in house prices (from an increase in demand) should follow economic growth not precede it.

by the seaside wrote: »

Not sure how relevant this is but I am curious...

Daft.ie shows about 6% of total properties for sale in Ireland being in Co. Dublin (which includes Co. Fingal, I think).

Co. Dublin and Co. Fingal contain 1/3 of the population of the Republic and a little short of 1/4 of the population of the island. I may be missing something as I don't live in Ireland nor am I Irish, but supply looks very constrained, even if (as I have been told) it is true that daft has a lower market share in Dublin than nationally.

Even if this is explained by over-supply elsewhere flooding the market, look at the absolute numbers: 3,332 properties for sale in a population of 1.5 million, 1 house for every 450 individuals.

If I look pretty much at random at righmove.co.uk and do a search for properties in Nottingham, there are 6,400 properties for sale. Nottingham is a nice enough city of 304,000 but the economy is not booming.

It looks to me as if supply is severely constrained in Dublin, and all other things being equal that will exert an upward pressure on sale prices. But at a low volume. What is driving the low supply? Are people stuck in NE and unable to move, and not being repo'd if unable to repay. Is supply of properties being constrained by NAMA holding onto properties? If so, then this is not a recovery in the market. It is an upward tick in prices due to artificial constraints on the market, but that is not sustainable, because eventually the assets on banks books must be liquidated.

Any views (particularly on the perceived supply constraint)?

It’s definitely looks like a artificial supply issue alright, I think my moneys on a DCB.

gaius c

Interest rates up and AIB are 46% of the mortgage market right now.
http://www.aib.ie/personal/mortgages/mortgage_notice?c_id...ad...CachedYou

Guess that won't affect house prices at all though?

The Spider

Nope, it wont, supply and demand will, If there's more supply it'll drive em down if not they'll keep going up, I dont see any new supply, in the nice areas of Dublin anyway!

by the seaside

The Spider wrote: »

Nope, it wont, supply and demand will, If there's more supply it'll drive em down if not they'll keep going up, I dont see any new supply, in the nice areas of Dublin anyway!

Just checking I haven't got the wrong end of the stick:

After a huge credit fuelled housing bubble, you're not saying that demand is unaffected by cost and availability of credit, are you?