Why Irish houses are still massively overpriced

rodento

Wonder what will happen when housing repossession creeps in, 80,000 odd thou is alot of property to come onto the market at once...

utyh2ikcq9z76b

Watched house in the sun the other day, and the houses they could get in Florida with swimming pool for under €100,000 were amazing and it just reinforced how massively overpriced Irish property is

GCU Flexible Demeanour

Macie Low Eyeliner wrote: »

Watched house in the sun the other day, and the houses they could get in Florida with swimming pool for under €100,000 were amazing and it just reinforced how massively overpriced Irish property is

Not necessarily. Didn't they have a bubble in Florida, there being a lot of it about?

You wouldn't get much in Manchester for that. And probably with good reason.

Cody Pomeray

Macie Low Eyeliner wrote: »

Watched house in the sun the other day, and the houses they could get in Florida with swimming pool for under €100,000 were amazing and it just reinforced how massively overpriced Irish property is

No... it's more likely that Florida house prices are the outcome of the local supply and demand equilibrium: e.g. the number of vacant properties for sale, local household incomes, and a diminished number of retirees who can afford to migrate from the North.

Every region is going to have a different dynamic depending on its housing stock and local demand; there's no rule that says just because house prices are lower in one place, they are overpriced everywhere else. If that were the case, house prices would always be overpriced.

There is a worrying emergence, in my opinion, of a small but vocal band of individuals who may never have got on "the housing ladder" during the boom, and now seek to maximize their purchasing power by decrying every conceivable barrier to home ownership. NAMA is preventing me from buying a house, the banks aren't lending I can't buy a house, Landlords are greedy i can't afford a house... look, if there's one thing the crisis should have taught us, it's we shouldn't effing care if you can't afford a house; home ownership isn't a universal right !

washman3

Cody Pomeray wrote: »

There is a worrying emergence, in my opinion, of a small but vocal band of individuals who may never have got on "the housing ladder" during the boom,

Cant believe i'm reading this. sounds exactly like a quote from bullyboy Phil Hogan. :mad:
i'm not one of these 'vicious creatures' by the way, but is it some form of treason not to have bought during 'the boom'.

nokia69

Cody Pomeray wrote: »

There is a worrying emergence, in my opinion, of a small but vocal band of individuals who may never have got on "the housing ladder" during the boom, and now seek to maximize their purchasing power by decrying every conceivable barrier to home ownership. NAMA is preventing me from buying a house, the banks aren't lending I can't buy a house, Landlords are greedy i can't afford a house... look, if there's one thing the crisis should have taught us, it's we shouldn't effing care if you can't afford a house; home ownership isn't a universal right !

you really are a fool, all we want is lower house prices and lower rents, thats all

high house prices and rents are bad for the economy

BTW it was not a boom, it was a bubble, the bubble has gone but the same type of people are still rigging the market so they can scam money from people

in the late 70s my parents bought a 4 bed house with just my fathers wage, a person doing the same job today could never buy the same house

its a scam and its bad for the economy

jetfiremuck

The silly mindset that Nolan of the Simi has re the car market .gov pressure that they apply with 131 regs, bi annual regs anti used car import, Japanese imports being unsafe. Remember all that. The market cannot be manipulated . Lower interest rates reasonable house prices etc have not boosted house sales. Re the car market the market is probably 70k new units a year. Look at Ll the sofa shops that have gone. How many new sofas do you think are needed every year. The market has satisfied itself .

Good loser

washman3 wrote: »

Cant believe i'm reading this. sounds exactly like a quote from bullyboy Phil Hogan. :mad:
i'm not one of these 'vicious creatures' by the way, but is it some form of treason not to have bought during 'the boom'.

How do you equate a 'vocal band of individuals' with 'vicious creatures'? And treason? Are you dyslexic?

Cody Pomeray

washman3 wrote: »

Cant believe i'm reading this. sounds exactly like a quote from bullyboy Phil Hogan. :mad:
i'm not one of these 'vicious creatures' by the way, but is it some form of treason not to have bought during 'the boom'.

Absolutely not; if you didn't buy during the boom, count yourself lucky.

I have nothing against home ownership per se. The Communist revolution is not coming and until it does, I want to own my own place someday too.

Yes, NAMA and rent allowance and bank recapitalisation may be putting an artificial floor in Irish house prices. Guess what, the economy needs these things more than you need cheap houses.

So I'm sorry that some people can't afford a house, and that this is because of economic policy, and that house prices aren't as cheap as Florida. That's just too bad, though. Don't expect the rest of us to do anything about these facts. Trying to make property accessible to everyone was partially what got us in this mess.

Cody Pomeray

Cody Pomeray wrote: »

Yes, NAMA and rent allowance and bank recapitalisation may be putting an artificial floor in Irish house prices. Guess what, the economy needs these things more than you need cheap houses.

No the economy certainly does not. I can`t believe I just read that.
This whole scam has cost us our competitiveness and another price to pay is high unemployment.

It cripples the economy's ability to readjust like it should without the recession.
The result here is an economy that could limp along for another 10 years without much improvement at best. At worst we will, like Japan did, have a second banking crisis that we now have no chance of solving meaning all these years of recession and cut backs were in vain. In that scenario we may have left the banks to fail in 2008.

Cody Pomeray

Deleted User wrote: »

This whole scam has cost us our competitiveness

That depends... what indicator(s) are you using to determine competitiveness?

In terms of exports over GDP (especially computers and pharma), exports to emerging markets over GDP, unit wage costs, and prime office space rental, we are way up on our competitiveness. Exports of goods comprises about 57% of GDP and 70% of Irish GNP, that's well more than some of our successful neighbours like the UK, France, Finland, Denmark, and Germany.

One could definitely argue that the domestic consumption has suffered, but you're quite wrong to say competitiveness has suffered, judging by these markers.

and another price to pay is high unemployment.

It certainly is. And yet, you're suggesting we should have allowed our financial system to collapse.

jmayo

Macie Low Eyeliner wrote: »

Watched house in the sun the other day, and the houses they could get in Florida with swimming pool for under €100,000 were amazing and it just reinforced how massively overpriced Irish property is

The difference between Florida and Ireland is that the market has been allowed find it's own level in Florida.
A house with pool in Florida, particularly if near coast or near Orlando would probably have fetched 500,000 plus in 2006/2007.
Apartments were going for 300,000 plus depending on area.
Now here is the rub, the market in Florida collapsed and bankers went in and fire sold what they could.
people in default, developers in default were kicked out and the properties used as security were offloaded.

Has that really happened in Ireland ?

Cody Pomeray wrote: »

No... it's more likely that Florida house prices are the outcome of the local supply and demand equilibrium: e.g. the number of vacant properties for sale, local household incomes, and a diminished number of retirees who can afford to migrate from the North.

There are as good as two property markets in Florida.
One is the short term rental market and non local market which is all about tourism.
This grew because credit was cheap with lots of US buyers and you had lots of overseas buyers with their own cheap credit wanting to buy property both for rental and personal use.
Then you had the influx of workers into Florida who needed to be housed and thi smarket also increased.
Prices had rocketed, but post 2007 they collapsed.
In places like Fort Meyers and Melbourne prices dropped around 60% between 2006 and 2011.
What was once $400,000 had suddenly become $175,000.

Difference between there and here is that here what was once €400,000 became 380,000, then 350,000, 320,000, 300,000, 280,000, then 250,000, so and so forth until it is now 220,000.
In true bubble collapse we still have a way to go.

Cody Pomeray wrote: »

Every region is going to have a different dynamic depending on its housing stock and local demand; there's no rule that says just because house prices are lower in one place, they are overpriced everywhere else. If that were the case, house prices would always be overpriced.

There is a worrying emergence, in my opinion, of a small but vocal band of individuals who may never have got on "the housing ladder" during the boom, and now seek to maximize their purchasing power by decrying every conceivable barrier to home ownership. NAMA is preventing me from buying a house, the banks aren't lending I can't buy a house, Landlords are greedy i can't afford a house... look, if there's one thing the crisis should have taught us, it's we shouldn't effing care if you can't afford a house; home ownership isn't a universal right !

And why shouldn't people, who may be in a position to buy, demand value for money ?

As a converse to your claim, we can see and hear a pretty large pretty vocal group continously looking for bailouts, debt forgiveness (i.e. handouts courtesy of the taxpayers) just becasue they did bloody buy during the bubble and couldn't wait to get on the "the housing ladder" to untold wealth.

And maybe it is this group you should tell about how home ownership isn't a universal right, and not the ones who seek to buy affordable proeprty and not have to pay for the ones who now want out of their legal obligations and negative equity.

If you ask me I know which group I favour.

Cody Pomeray

jmayo wrote: »

The difference between Florida and Ireland is that the market has been allowed find it's own level in Florida.

No, that's not true.

The US states and Federal government have more active, formal poltitical intervention keeping people in their homes than exists in Ireland. I've no doubt there are Americans whinging that HAMP is stopping them from buying a home, for example.

And why shouldn't people, who may be in a position to buy, demand value for money ?

They should ask for value for money.

They have no right to approach stakeholders in the Irish economy and ask us to suffer more mass mortgage default and therefore recapitalisations so that they can afford to buy a house, though... i.e., they want a handout.

vinylbomb

Cody Pomeray wrote: »

No, that's not true.

The US states and Federal government have more active, formal poltitical intervention keeping people in their homes than exists in Ireland. I've no doubt there are Americans whinging that HAMP is stopping them from buying a home, for example.

I believe that that provision only relates to ownership of a primary residence in Florida. Buy to lets in Florida are not covered, and evicting renters is easier.


"Ireland's eviction rate is 0.25pc and the rate in Britain, which is not going through a property market crisis, is 12 times the Irish rate at 3pc, while in the US the eviction rate is 5pc."
http://www.independent.ie/opinion/analysis/john-downing-tds-dont-want-to-admit-it-but-evictions-are-firmly-on-agenda-29121388.html

Also, by the by

"Florida Gov. Rick Scott, ignoring veto pleas from consumer advocates, on Friday signed two measures into law that could affect renters and homeowners across the state. One bill could up speed up the foreclosure process in Florida. The other makes it easier for landlords to evict tenants.
"

http://www.miamiherald.com/2013/06/07/3439240/fla-gov-signs-foreclosure-and.html

Cody Pomeray

vinylbomb wrote: »

I believe that that provision only relates to ownership of a primary residence in Florida. Buy to lets in Florida are not covered, and evicting renters is easier.

Nobody is defending protecting buy to let mortages here per se, save in respect of a detrimental damage to bank mortgage books necessitating a further round of recapitalisation, or a deeper round of recapitalisation than might otherwise be anticipated.

I'm not sure what the two references to renters are supposed to be about. Irish Landlord & Tenant Law as regards private residential tenancy is hardly disproportionately burdensome to either party. Please, please, don't anyone take that as an invitation to spill your guts about your problems with a landlord/ tenant. Nobody cares.

creedp

Cody Pomeray wrote: »

Nobody is defending protecting buy to let mortages here per se, save in respect of a detrimental damage to bank mortgage books necessitating a further round of recapitalisation, or a deeper round of recapitalisation than might otherwise be anticipated.

I'm not sure what the two references to renters are supposed to be about. Irish Landlord & Tenant Law as regards private residential tenancy is hardly disproportionately burdensome to either party. Please, please, don't anyone take that as an invitation to spill your guts about your problems with a landlord/ tenant. Nobody cares.

I think there is a pretty strong anti-home owner bias amongst many contributers on this and other similar threads [which is somewhat ironic as many of these are seeking to become homeowners themselves albeit on much better financial terms]. It seems to stem predominantly from people who were lucky enough not to buy massively overpriced property during the bubble and now want to snap it up a bargain or it sometime seems that they almost want to be able to buy it for zero financial outlay. . They blame the Govt for interfering in the market because they should be entitled to bag their dream home at a knock down price now.

They seem to forget the reason why prices were so massively inflated during the bubble was down to inappropriate Govt interference and some people were lulled into purchasing at these prices. Now it seems to Govt should dump them in favour of those people who didnt buy property previously and now can much more easily afford it becasue, despite the title of this thread, prices have already dropped by over 50% and income has not dropped measurably in any sector of the economy other than construction.

I suppose at the end of the day we are all human and want the best for ourselves irrespective of what that means for others.

Potatoeman

creedp wrote: »

I think there is a pretty strong anti-home owner bias amongst many contributers on this and other similar threads [which is somewhat ironic as many of these are seeking to become homeowners themselves albeit on much better financial terms]. It seems to stem predominantly from people who were lucky enough not to buy massively overpriced property during the bubble and now want to snap it up a bargain or it sometime seems that they almost want to be able to buy it for zero financial outlay. . They blame the Govt for interfering in the market because they should be entitled to bag their dream home at a knock down price now.

They seem to forget the reason why prices were so massively inflated during the bubble was down to inappropriate Govt interference and some people were lulled into purchasing at these prices. Now it seems to Govt should dump them in favour of those people who didnt buy property previously and now can much more easily afford it becasue, despite the title of this thread, prices have already dropped by over 50% and income has not dropped measurably in any sector of the economy other than construction.

I suppose at the end of the day we are all human and want the best for ourselves irrespective of what that means for others.

Those that didnt buy are still entering an inflated market. Prices are down from peak but still increased a huge amount over the last twenty years. Those that were kept out are expected to overpay now for the mistakes of those before them.

jmayo

Cody Pomeray wrote: »

No, that's not true.

The US states and Federal government have more active, formal poltitical intervention keeping people in their homes than exists in Ireland. I've no doubt there are Americans whinging that HAMP is stopping them from buying a home, for example.

It would be interesting if you check out the foreclosure rates and compare Ireland to Florida.

Cody Pomeray wrote: »

They should ask for value for money.

They have no right to approach stakeholders in the Irish economy and ask us to suffer more mass mortgage default and therefore recapitalisations so that they can afford to buy a house, though... i.e., they want a handout.

And conversily the stakeholders in the Irish economy shouldn't have to cough up so that some can stay in the homes they can no longer afford and probably by extension prevent others from buying.
The only ones I see demanding handouts are the ones currently in homes or currently with property. :rolleyes:

creedp wrote: »

I think there is a pretty strong anti-home owner bias amongst many contributers on this and other similar threads [which is somewhat ironic as many of these are seeking to become homeowners themselves albeit on much better financial terms].

No it is not an anti-home owner bias.
It is a fooking anti non responsibility, anti bailout bias.
Speaking for myself I couldn't care less when and how people bought their home or how many properties they have, if they can afford to pay for them themselves.

What I do bleedin care about is that people seem to think they are owed something by the rest of us (particularly those of us who either didn't buy during the bubble or have never bought).
All I hear is continous sh**e day in day out about how people are in negative equity and basically how it isn't fair that their mortgages far outweigh the value of their property.
Or that their earnings are down and they can no longer afford their property.
How many threads have their been around here asking about legging it and dumping the debts on the banks i.e. the taxpayers.

Yes there are indeed some hard luck stories were people have been unlucky losing jobs, etc.
But a fair amount of the time you find the ones doing the most whinging spent money like it was growing on trees, bought lavish properties, bought multiple properties, were at the time making wads of cash due to fact we had a huge bubble economy, spent more time chosing the cars they drove than in buying property or have been indulging in strategic defaults because they don't see why they should repay their debts on property whose price is no longer a bragging point.

creedp wrote: »

It seems to stem predominantly from people who were lucky enough not to buy massively overpriced property during the bubble and now want to snap it up a bargain or it sometime seems that they almost want to be able to buy it for zero financial outlay. . They blame the Govt for interfering in the market because they should be entitled to bag their dream home at a knock down price now.

Just because someone didn't buy an overpriced piece of crud during one of the world's biggest bubbles is not luck.
Some of us call it cop on.

creedp wrote: »

They seem to forget the reason why prices were so massively inflated during the bubble was down to inappropriate Govt interference and some people were lulled into purchasing at these prices.

Lulled my ar**.
A lot of people acted like idiots, pure and simple.
As I said somewhere around here before, you had to have either been a moron or willfully remiss not to notice that the price of Irish property had reached nonsenical levels.
Or perhaps you think the price of property outside a small national capital on the periphery of Europe should be the same as outside London or New York.
Or maybe that all those houses being built in historically high emigration and low employment blackspots (West of Ireland) would somehow find owners who could actually afford to live there for the next 30 years.

I grew up in a part of Ireland where emigration (even migration) was a fact of life because there weren't the jobs prospects and suddenly you had people paying the same price as a house in Galway would have gotten a few years before.
Had we struck oil, had an Intel plant opened near by ?
No, the only new employmemnt was construction and retail.
It was madness pure and simple.

creedp wrote: »

Now it seems to Govt should dump them in favour of those people who didnt buy property previously and now can much more easily afford it becasue, despite the title of this thread, prices have already dropped by over 50% and income has not dropped measurably in any sector of the economy other than construction.

The government should do what it should have always done and that is leave the market a fooking alone.

Duggys Housemate

creedp wrote: »

I think there is a pretty strong anti-home owner bias amongst many contributers on this and other similar threads [which is somewhat ironic as many of these are seeking to become homeowners themselves albeit on much better financial terms]. It seems to stem predominantly from people who were lucky enough not to buy massively overpriced property during the bubble and now want to snap it up a bargain or it sometime seems that they almost want to be able to buy it for zero financial outlay. . They blame the Govt for interfering in the market because they should be entitled to bag their dream home at a knock down price now.

They seem to forget the reason why prices were so massively inflated during the bubble was down to inappropriate Govt interference and some people were lulled into purchasing at these prices. Now it seems to Govt should dump them in favour of those people who didnt buy property previously and now can much more easily afford it becasue, despite the title of this thread, prices have already dropped by over 50% and income has not dropped measurably in any sector of the economy other than construction.

I suppose at the end of the day we are all human and want the best for ourselves irrespective of what that means for others.

Of course we have a bias, but you can't argue against the bias but against the arguments. I could easily afford a house in Dublin ( on 70K) but I want to afford a cheaper house in Dublin, or a better one. I suspect it will be cheaper, I don't get believe in " maximize your payments at the maximum the Banks give you". I like a high disposable. And at the moment I can get that with rent, but not with mortgages.

So what if Ireland's wages for employed people have remained static. Thats not how it works, overall income per capita has declined. And People earn after tax income, not before tax income. Mortgage supplements have been eliminated. Public Sector workers have seen drops in income with more to come. People of buying age have emigrated. Credit has fallen.

Clearly the lack of repossessions, the holding onto property by NAMA is an issue. How could it not be. There are now artificial floors on the market, were that not the case the nascence of the FTB allowance should have seen price reductions. Housing prices are set at the margins.

vinylbomb

Cody Pomeray wrote: »

Nobody is defending protecting buy to let mortages here per se, save in respect of a detrimental damage to bank mortgage books necessitating a further round of recapitalisation, or a deeper round of recapitalisation than might otherwise be anticipated.

I think you misunderstood what I said here.

Which was - You're flat out wrong with your facts.

creedp

Potatoeman wrote: »

Those that didnt buy are still entering an inflated market. Prices are down from peak but still increased a huge amount over the last twenty years. Those that were kept out are expected to overpay now for the mistakes of those before them.

Its up to them to decide when they want to buy ... if the market is not as they would like it, then they don't have to buy. At least then they won't be derided by people for having done so .. .after all home ownership is so yesterday .. we are now modern europeans and therefore ...

Godge

jmayo wrote: »

It would be interesting if you check out the foreclosure rates and compare Ireland to Florida.



And conversily the stakeholders in the Irish economy shouldn't have to cough up so that some can stay in the homes they can no longer afford and probably by extension prevent others from buying.
The only ones I see demanding handouts are the ones currently in homes or currently with property. :rolleyes:



No it is not an anti-home owner bias.
It is a fooking anti non responsibility, anti bailout bias.
Speaking for myself I couldn't care less when and how people bought their home or how many properties they have, if they can afford to pay for them themselves.

What I do bleedin care about is that people seem to think they are owed something by the rest of us (particularly those of us who either didn't buy during the bubble or have never bought).
All I hear is continous sh**e day in day out about how people are in negative equity and basically how it isn't fair that their mortgages far outweigh the value of their property.
Or that their earnings are down and they can no longer afford their property.
How many threads have their been around here asking about legging it and dumping the debts on the banks i.e. the taxpayers.

Yes there are indeed some hard luck stories were people have been unlucky losing jobs, etc.
But a fair amount of the time you find the ones doing the most whinging spent money like it was growing on trees, bought lavish properties, bought multiple properties, were at the time making wads of cash due to fact we had a huge bubble economy, spent more time chosing the cars they drove than in buying property or have been indulging in strategic defaults because they don't see why they should repay their debts on property whose price is no longer a bragging point.



Just because someone didn't buy an overpriced piece of crud during one of the world's biggest bubbles is not luck.
Some of us call it cop on.



Lulled my ar**.
A lot of people acted like idiots, pure and simple.
As I said somewhere around here before, you had to have either been a moron or willfully remiss not to notice that the price of Irish property had reached nonsenical levels.
Or perhaps you think the price of property outside a small national capital on the periphery of Europe should be the same as outside London or New York.
Or maybe that all those houses being built in historically high emigration and low employment blackspots (West of Ireland) would somehow find owners who could actually afford to live there for the next 30 years.

I grew up in a part of Ireland where emigration (even migration) was a fact of life because there weren't the jobs prospects and suddenly you had people paying the same price as a house in Galway would have gotten a few years before.
Had we struck oil, had an Intel plant opened near by ?
No, the only new employmemnt was construction and retail.
It was madness pure and simple.




The government should do what it should have always done and that is leave the market a fooking alone.

Excellent post

Cody Pomeray

jmayo wrote: »

It would be interesting if you check out the foreclosure rates and compare Ireland to Florida.

I think it would be pretty boring actually. As was mentioned earlier, Florida has an independent supply and demand equilibrium beyond the simple legal and economic aspects of their property market. There's no reason why, imagining Florida and Ireland were to exist on an equal legal and political footing, Florida house prices would be replicated in Ireland. So it's all a waste of time.

And conversily the stakeholders in the Irish economy shouldn't have to cough up so that some can stay in the homes they can no longer afford and probably by extension prevent others from buying.

Of course they should. The alternatives are (i) allow the (already recapped) banking system to collapse entirely or (ii) allow a firesale of property and recapitalise the banking system to a greater extent than has already happened.

Which one of those are you therefore proposing?

vinylbomb wrote: »

I think you misunderstood what I said here.

Which was - You're flat out wrong with your facts.

Nope.

Sconsey

Cody Pomeray wrote: »

Of course they should. The alternatives are (i) allow the (already recapped) banking system to collapse entirely or (ii) allow a firesale of property and recapitalise the banking system to a greater extent than has already happened.

(iii)allow all defaulters keep their properties and the taxpayer covers their debts by recapitalising the banks (which I get the feeling is your preference)

(iv) reposess properties that debtors cannot repay loan on, give them the oprtion to rent the property, recapitalise the banks to cover the losses, allow banks to claw back losses by selling the houses over time.

(v) etc. etc.

There are more than the two options which you describe, your two options are not a clear reflection of Jmayo's (IMO) excellent post.
I don't see any realistic option, by the way, that does not include recapitalising the banks.

Potatoeman

creedp wrote: »

Its up to them to decide when they want to buy ... if the market is not as they would like it, then they don't have to buy. At least then they won't be derided by people for having done so .. .after all home ownership is so yesterday .. we are now modern europeans and therefore ...

Its a lose-lose situation for thecautious. Renting in this country is almost as expensive as getting amortgage and far less stable. The banks and the government are trying to keep prices high so home owners don't default due to massive NE.The exponential price growth from the boom has not really been answered by similar price drops. Fifty percent from peak is not asgood as it sounds when you factor in the bubble price increases.

Villa05

creedp wrote: »

It seems to stem predominantly from people who were lucky enough not to buy massively overpriced property during the bubble and now want to snap it up a bargain or it sometime seems that they almost want to be able to buy it for zero financial outlay. They blame the Govt for interfering in the market because they should be entitled to bag their dream home at a knock down price now.

They seem to forget the reason why prices were so massively inflated during the bubble was down to inappropriate Govt interference and some people were lulled into purchasing at these prices. Now it seems to Govt should dump them in favour of those people who didnt buy property previously and now can much more easily afford it becasue, despite the title of this thread, prices have already dropped by over 50% and income has not dropped measurably in any sector of the economy other than construction.

I suppose at the end of the day we are all human and want the best for ourselves irrespective of what that means for others.

Govt Intervention was a disaster in the bubble and will be a disaster in the bust, that is why many did/will not buy, not luck as you say. If you had a pulse you got a mortgage in the bubble, therefore it was choice not luck that stopped people from buying.

Cody Pomeray

Sconsey wrote: »

(iii)allow all defaulters keep their properties and the taxpayer covers their debts by recapitalising the banks (which I get the feeling is your preference)

In an ideal world? No, my ideal option would be similar to your (iv), whereby there would be established an SPV akin to a Baby NAMA. This agency would:

1. Buy mortgages from the banks at a discount with assistance from the ESM and take ownership of residential homes
2. Disinvest over time either by reselling to the inhabitant or on the open market.

But this amounts to taxpayers 'coughing up' to allow homeowners to stay in their property and taxpers recapitalising the banks to that end (albeit a smaller recap than allowing a second property cliff). Predictably, those vociferous protestors who decry Government intervention, and who are eager to get on the property market, will oppose it.

Their preferred options are limited to options (i) and (ii) as I laid them out.

I don't see any realistic option, by the way, that does not include recapitalising the banks.

There is none.

The question is how deeply we need to recapitalise when we go back.

Duggys Housemate

Cody Pomeray wrote: »

In an ideal world? No, my ideal option would be similar to your (iv), whereby there would be established an SPV akin to a Baby NAMA. This agency would:

1. Buy mortgages from the banks at a discount with assistance from the ESM and take ownership of residential homes
2. Disinvest over time either by reselling to the inhabitant or on the open market.

But this amounts to taxpayers 'coughing up' to allow homeowners to stay in their property and taxpers recapitalising the banks to that end (albeit a smaller recap than allowing a second property cliff). Predictably, those vociferous protestors who decry Government intervention, and who are eager to get on the property market, will oppose it.

Their preferred options are limited to options (i) and (ii) as I laid them out.


There is none.

The question is how deeply we need to recapitalise when we go back.

All of this is admitting that housing is propped up. Housing as a whole, is "too big to fail"

Cody Pomeray

It's not "admitting" that economic policy is putting a floor in house prices, I freely stated that fact myself.

Do you think that's some sort of argument in its own right or something? No. It is in the common good that there exists a floor in house prices in 2013 and in the coming years. Until such time as the public cease being on the hook for the Irish banking system, our right to minimise our exposure to the banks trumps your imagined 'rights' to cheap houses.

Duggys Housemate

Cody Pomeray wrote: »

It's not "admitting" that economic policy is putting a floor in house prices, I freely stated that fact myself.

Do you think that's some sort of argument in its own right or something? No. It is in the common good that there exists a floor in house prices in 2013 and in the coming years. Until such time as the public cease being on the hook for the Irish banking system, our right to minimise our exposure to the banks trumps your imagined 'rights' to cheap houses.

So I have an "imaginary right" to cheap houses, but you have a definite right to extra subsidized equity in your house with my taxes, taxes which not just keep a floor on house costs, but rental prices.

F*ck that. If thats the policy of the IRish State I suggest all IT and other workers in the rental sector leave tomorrow. The fix is in.

the moral hazard is also immense, it allows the stupid to understand they will be subsidized in the future by the smart, lest their housing mistakes "cost the taxpayer".

Cody Pomeray

Duggys Housemate wrote: »

So I have an "imaginary right" to cheap houses, but you have a definite right to extra subsidized equity in your house with my taxes, taxes which not just keep a floor on house costs, but rental prices.

Er, I'm not a property owner.

The wishes of the public at large take precedence over the wishes of prospective house purchasers.

That is, the public have a need for an artificial floor in house prices, which will protect the funds the public have very generously extended in support the Irish financial system. If that means you (or I, or anyone) cannot afford a certain house, the public are entitled to shrug. Nobody cares.

Duggys Housemate

Cody Pomeray wrote: »

Er, I'm not a property owner.

The wishes of the public at large take precedence over the wishes of prospective house purchasers.

That is, the public have a need for an artificial floor in house prices, which will protect the funds the public have very generously extended in support the Irish financial system. If that means you (or I, or anyone) cannot afford a certain house, the public are entitled to shrug. Nobody cares.

I think you are a property owner. I'll reply to this economic idiocy when I get off my phone. Basically the Irish economy can't begin to function unless houses reach their market level.

Cody Pomeray

Duggys Housemate wrote: »

I'll reply to this economic idiocy when I get off my phone. Basically the Irish economy can't begin to function unless houses reach their market level.

Sounds like you're going to blow this one out of the water, mac !

Make sure to CC Michael Noonan, Trichet, et al.

jmayo

Cody Pomeray wrote: »

I think it would be pretty boring actually. As was mentioned earlier, Florida has an independent supply and demand equilibrium beyond the simple legal and economic aspects of their property market. There's no reason why, imagining Florida and Ireland were to exist on an equal legal and political footing, Florida house prices would be replicated in Ireland. So it's all a waste of time.

My point about Florida is that repocessions took place rather than the faffing around we have had here with moratoriums etc.

Of course they should. The alternatives are (i) allow the (already recapped) banking system to collapse entirely or (ii) allow a firesale of property and recapitalise the banking system to a greater extent than has already happened.

Which one of those are you therefore proposing?

I am proposing that

• people who are negative get shag all bar a guarantee that they can move if necessary and take that negaitve equity with them.
  Just because your property is now worth less than what you paid for it doesn't mean you get others to compensate you.
  
• people who have not being paying their mortgage and refuse or are unable to come to any possible understanding with their lender get out of the house they no longer own and it is put on the market.
  Then we deal with the shortfall with regards the banks.

The alternative, which it appears you and other pro bailouters like, is to prop up the home owners, who no longer are paying for their property, at the expense of non home owners and indeed other home owners who are paying for their properties.


It appears that some are still spouting the utter drivel that the economy can't recover until house prices recover.
For some unknown reason the Irish got the idea that an economy is based on buying and selling houses to each other and even worse some still hold to this.

Cody Pomeray wrote: »

Er, I'm not a property owner.

The wishes of the public at large take precedence over the wishes of prospective house purchasers.

That is, the public have a need for an artificial floor in house prices, which will protect the funds the public have very generously extended in support the Irish financial system. If that means you (or I, or anyone) cannot afford a certain house, the public are entitled to shrug. Nobody cares.

Oh FFS.
You do know renters, people repaying their debts, and people without debts are also members of the public.
Ah but sure in true bailout proponent style who gives a fook about them.

And there are two things that causes me to have hope that your type of bullsh** plan won't get traction and that is that we no longer are allowed fully govern oursevles and good old so called Irish begrudery would make it a very bad precedent to follow.

Imagine all the neighbours knowing that paddy and mary get to keep their house after a debt writedown even though they blew loads of money during the bubble, whilst the neighbours pay through the nose for their own home and have to pay more taxes to support paddy and mary.

For once good old so called Irish begrudery might save us from ourselves.

Oh I find it very hard to believe you are not a property owner what with your championing of handouts for the property owning class.
Then again maybe you aren't and just plain like giving your own and other people's money away.

gaius c

GCU Flexible Demeanour wrote: »

Indeed, but the issue there is that a town 50 miles from Dublin isn't a commutable distance. I agree that even places like Wexford have, in some contexts, been referred to as the wider Dublin commuter belt. But they just ain't. I'd doubt that, with the exception of apartments, they would be too many ghost estates inside the M50

They are not attractive because the combined cost of the house and commuting is too high but if the house is available at a low enough price to tempt somebody who wants country living and wouldn't mind the commute...

By sitting on these houses, the outer Dublin market is being manipulated in order to funnel everybody inside Dublin itself.

Duggys Housemate

Cody Pomeray wrote: »

Sounds like you're going to blow this one out of the water, mac !

Make sure to CC Michael Noonan, Trichet, et al.

Reported for ad hominem.

And I am pretty sure the troika will advocate repossessions and house price reductions. The government is stalling.

johnr1

Some very angry prospective buyers around here... when houses are about 25,000 there'll be plenty of buyers - unless you lot decide to share one between ye....

Im in both camps, I built at the height of the boom, lost my business, was in arrears for a time, am now fully up to date - ahead even, and I have every intention of buying another one over the next year or three.

I can only remember ONE poster here "looking for a bailout" a few weeks ago, so this constant carping about everyone in negative equity looking for them is getting a bit old. Think up a new line could ye. Ive never asked for one, and neither have 99% of home owners who post here.

I think most of the bitching is simply a symptom of frustration at not having enough mortgage credit available to today's prospective buyers, and looking to place the blame on people who have enough problems in their lives because YOU can't get a mortgage and when it was THEIR time, they could.

I think most of the wise heads here didn't buy because they were to young and not in full time employment in 2002-07 or because they were backpacking around Asia, and again didn't want to stop being "young and free" Frankly I don't believe that you all were smarter than the hundreds of thousands of us who were working flat out and watching prices get further ahead of us every month.

To now pass off your youth/fecklessness which turned out to be fortuitous, as wisdom is fairly low tbh.

Apologies to anyone who can quote themselves pre 2007 showing their superior wisdom.

.

Potatoeman

johnr1 wrote: »

Some very angry prospective buyers around here... when houses are about 25,000 there'll be plenty of buyers - unless you lot decide to share one between ye....

Im in both camps, I built at the height of the boom, lost my business, was in arrears for a time, am now fully up to date - ahead even, and I have every intention of buying another one over the next year or three.

I can only remember ONE poster here "looking for a bailout" a few weeks ago, so this constant carping about everyone in negative equity looking for them is getting a bit old. Think up a new line could ye. Ive never asked for one, and neither have 99% of home owners who post here.

I think most of the bitching is simply a symptom of frustration at not having enough mortgage credit available to today's prospective buyers, and looking to place the blame on people who have enough problems in their lives because YOU can't get a mortgage and when it was THEIR time, they could.

I think most of the wise heads here didn't buy because they were to young and not in full time employment in 2002-07 or because they were backpacking around Asia, and again didn't want to stop being "young and free" Frankly I don't believe that you all were smarter than the hundreds of thousands of us who were working flat out and watching prices get further ahead of us every month.

To now pass off your youth/fecklessness which turned out to be fortuitous, as wisdom is fairly low tbh.

Apologies to anyone who can quote themselves pre 2007 showing their superior wisdom.

.

By buying you were part of the problem.If more people thought before they bought the problem would be far smaller. It was a pyramid scheme that bubbled out of control. Look at the exponential growth of the bubble and compare it to the decline. People that buy now are still paying inflated prices.

Cody Pomeray

jmayo wrote: »

[*]people who are negative get shag all bar a guarantee that they can move if necessary and take that negaitve equity with them.
Just because your property is now worth less than what you paid for it doesn't mean you get others to compensate you.

[*]people who have not being paying their mortgage and refuse or are unable to come to any possible understanding with their lender get out of the house they no longer own and it is put on the market.
Then we deal with the shortfall with regards the banks.
[/LIST]

The problem here is that the majority of individuals in this country who are at work or in retirement are not house-hunting.

Why would the rest of us agree to undermining the banks' asset books, and therefore re-capitalising the banks to a greater degree than was anticipated... just so people like you can have a cheap house that would be presently be deemed out of your budget?

That's what I call asking for a handout tbh.

The alternative, which it appears you and other pro bailouters like, is to prop up the home owners, who no longer are paying for their property, at the expense of non home owners and indeed other home owners who are paying for their properties.

Essentially, yes. See my Baby NAMA suggestion.

Duggys Housemate wrote: »

Reported for ad hominem.

And I am pretty sure the troika will advocate repossessions and house price reductions. The government is stalling.

Nothing wrong with repos, so long as the floor in house prices is maintained for the next few years.

As for the other matter - there's no ad hominem accusation, it's simple. Don't expect to put forward a silly suggestion like burning the banks' secured assets and therefore their solvency, and expect people to swallow that just because you want a house you can't afford. Nobody's seriously going to agree to that.

johnr1

johnr wrote:

I built at the height of the boom
.

Potatoeman07256 wrote:

By buying you were part of the problem.If more people thought before they bought the problem would be far smaller. It was a pyramid scheme that bubbled out of control. Look at the exponential growth of the bubble and compare it to the decline. People that buy now are still paying inflated prices.

See my post above. I BUILT - as in me, - building it myself, on a site i already owned.

Was i wrong to buy building materials then which are dearer today?

How am I part of the problem Your Honour ????

Cody Pomeray

Cody Pomeray wrote: »

They have no right to approach stakeholders in the Irish economy and ask us to suffer more mass mortgage default and therefore recapitalisations so that they can afford to buy a house, though... i.e., they want a handout.

Preventing defaults IS giving a handout....from everyone other peoples pockets
People living in houses without paying their mortgages are essentially sponging off everyone else.

Duggys Housemate

Duggys Housemate wrote: »

All of this is admitting that housing is propped up. Housing as a whole, is "too big to fail"

hey by the way what some people among the general public don`t realise is that putting a floor under the market is out in the open. It is policy.

Lenihan said it himself, it is a stated aim of NAMA.
https://www.youtube.com/watch?v=pWlz1IKWfw4

Duggys Housemate wrote: »

So I have an "imaginary right" to cheap houses, but you have a definite right to extra subsidized equity in your house with my taxes, taxes which not just keep a floor on house costs, but rental prices.

F*ck that. If thats the policy of the IRish State I suggest all IT and other workers in the rental sector leave tomorrow. The fix is in.

the moral hazard is also immense, it allows the stupid to understand they will be subsidized in the future by the smart, lest their housing mistakes "cost the taxpayer".

Potatoeman

johnr1 wrote: »

See my post above. I BUILT - as in me, - building it myself, on a site i already owned.

Was i wrong to buy building materials then which are dearer today?

How am I part of the problem Your Honour ????

If you built then I presume you are not intending to sell. So why encourage price increases?
It was large jumps in prices that caused this whole problem.

Cody Pomeray

Deleted User wrote: »

Preventing defaults IS giving a handout

Yes, it is. I know.

There is no solution that involves neither a handout nor a recapitalisation. The handout comment was in response to someone who was criticising home-owners, despite the fact that he was himself advocating a handout for prospective home-owners.

However, the solution that minimizes the recapitalisation - which is the bottom line for the taxpayer, lets face it - involves putting a floor in house prices in order to protect the banks' balance sheets we have already paid for.

We can remove this floor when the banks are no longer dependent on our funding. But we've put too much of our own money into the banking system to walk away from it now, just so some people can afford the house they currently cannot.

Potatoeman

Cody Pomeray wrote: »

Yes, it is. I know.

There is no solution that involves neither a handout nor a recapitalisation. The handout comment was in response to someone who was criticising home-owners, despite the fact that he was himself advocating a handout for prospective home-owners.

However, the solution that minimizes the recapitalisation - which is the bottom line for the taxpayer, lets face it - involves putting a floor in house prices in order to protect the banks' balance sheets we have already paid for.

We can remove this floor when the banks are no longer dependent on our funding. But we've put too much of our own money into the banking system to walk away from it now, just so some people can afford the house they currently cannot.

Expecting a writedown could be called a handout but benefiting from prices declining is not a handout. You seem to expect prospective buyers to pay more because of the economic mess created by high house prices.

Cody Pomeray

Potatoeman wrote: »

Expecting a writedown could be called a handout but benefiting from prices declining is not a handout.

Benefitting from prices declining is not in itself a handout.

Advocating that the floor in house prices be removed - necessarily undermining the banks' balance sheets, and consequently a larger recapitalisation than expected - is a de facto handout.

A handout is the altruistic reallocation of resources to those who seek them.

There is no economic benefit to fcuking up the banks after the funds they have taken from the public. The only reason to do this, and thereafter to repair the banks, again - would be as part of a handout to prospective house buyers.

jmayo

johnr1 wrote: »

Some very angry prospective buyers around here... when houses are about 25,000 there'll be plenty of buyers - unless you lot decide to share one between ye....

Im in both camps, I built at the height of the boom, lost my business, was in arrears for a time, am now fully up to date - ahead even, and I have every intention of buying another one over the next year or three.

I can only remember ONE poster here "looking for a bailout" a few weeks ago, so this constant carping about everyone in negative equity looking for them is getting a bit old. Think up a new line could ye. Ive never asked for one, and neither have 99% of home owners who post here.

Ehh check out Accommodation & Property forum or some other sites and then come back to us about only one poster.

Do you think you should be congratulated because you didn't ask for a handout ?
I call what you did as being responsible.

johnr1 wrote: »

I think most of the bitching is simply a symptom of frustration at not having enough mortgage credit available to today's prospective buyers, and looking to place the blame on people who have enough problems in their lives because YOU can't get a mortgage and when it was THEIR time, they could.

Ehh yet again we have a proponent of protecting house owners in trouble trying to obfuscate the argument.
Who do you think is to blame if someone spent more than they should have on a property that probably wasn't suitable for them in the long run ?
Or are you going to trot out the old lines about government, bankers etc ?

BTW as another poster mentionned, any fooking one could get a mortgage during the bubble.
So please stop peddalling that cr**.
I got offered multiple mortgages.
But get this, I knew buying overpriced pieces of sh**e that I didn't want long term was a bad bad idea.
The only thing I ever considered was buying to flip within months so that some eejit could be left with it long term.
And I knew a few guys who did that ensuring they got out before the sh** hit the fan.

johnr1 wrote: »

I think most of the wise heads here didn't buy because they were to young and not in full time employment in 2002-07 or because they were backpacking around Asia, and again didn't want to stop being "young and free" Frankly I don't believe that you all were smarter than the hundreds of thousands of us who were working flat out and watching prices get further ahead of us every month.

You should never jump to conclusions or assumptions.
Of course you don't or can't believe that some people were smart enough not to buy into the ponzi scheme.
It might shatter your illusion that property is always a good investment.
After all you admit you want to buy more property.

johnr1 wrote: »

To now pass off your youth/fecklessness which turned out to be fortuitous, as wisdom is fairly low tbh.

Apologies to anyone who can quote themselves pre 2007 showing their superior wisdom.

.

I can quote you from Jan 2007 with my first ever post on this website.
I did not post pre 2007 here.
Will that be good enough for you ?

jmayo

Cody Pomeray wrote: »

The problem here is that the majority of individuals in this country who are at work or in retirement are not house-hunting.

Why would the rest of us agree to undermining the banks' asset books, and therefore re-capitalising the banks to a greater degree than was anticipated... just so people like you can have a cheap house that would be presently be deemed out of your budget?

That's what I call asking for a handout tbh.

Oh FFS.
Somewhere I think you do actually acknowledge that allowing someone stay in a home they can no longer afford and probably are no longer paying for is a handout.
But yet you keep pedalling inane bullsh** about prospective buyers getting handouts.

Cody Pomeray wrote: »

Essentially, yes. See my Baby NAMA suggestion.

Anything NAMA like related is moronic.
It is bad enough we have NAMA itself without spawning off more.

Cody Pomeray wrote: »

Nothing wrong with repos, so long as the floor in house prices is maintained for the next few years.

To use a famous line I don't believe it.

If an artifical floor is maintained then why would anyone buy.
You have thus stagnated the market and ensured that once that floor is removed the ar** falls out of it.

Ever hear of can kicking ?

Cody Pomeray wrote: »

As for the other matter - there's no ad hominem accusation, it's simple. Don't expect to put forward a silly suggestion like burning the banks' secured assets and therefore their solvency, and expect people to swallow that just because you want a house you can't afford. Nobody's seriously going to agree to that.

And people are going to agree that those who can't afford their properties should just be left in them and anyone who might want to buy should actually support the ones already in at their own expense ?

Cody Pomeray wrote: »

Yes, it is. I know.

There is no solution that involves neither a handout nor a recapitalisation. The handout comment was in response to someone who was criticising home-owners, despite the fact that he was himself advocating a handout for prospective home-owners.

It is not a FOOKING handout.
It is leaving the market alone and cleaning it up so that it can function properly not be artifically manipulated.

Prof. Armitage Shanks

johnr1 wrote: »

.

I think most of the bitching is simply a symptom of frustration at not having enough mortgage credit available to today's prospective buyers, and looking to place the blame on people who have enough problems in their lives because YOU can't get a mortgage and when it was THEIR time, they could.

.

Or perhaps it has nothing to do with the unavailability of mortgage credit. Perhaps it is due to ones desire to live in a society that deals with it's economic problems in a responsible manner, a society that does not bow to the vested interests of large groups to the potential detriment of the whole. A desire to see ones children grow up in a society that judges it's economic performance on sound economic principles and not the ability to buy and sell houses to each-other.

Potatoeman

Cody Pomeray wrote: »

Benefitting from prices declining is not in itself a handout.

Advocating that the floor in house prices be removed - necessarily undermining the banks' balance sheets, and consequently a larger recapitalisation than expected - is a de facto handout.

A handout is the altruistic reallocation of resources to those who seek them.

There is no economic benefit to fcuking up the banks after the funds they have taken from the public. The only reason to do this, and thereafter to repair the banks, again - would be as part of a handout to prospective house buyers.

No it really isn't. You are basically expecting those that didnt buy during the boom to pay more now to keep the pyramid scheme going.