Vulture fund to sell currently tenanted homes in Dublin 15

Villa05

quadrifoglio verde wrote:

The problem for the state is that it can't be seen to be building a new ballymun or darndale but at the same time to avoid that happening, it'd need to give significant discounts on the sale price to entice members of the so called squeezed middle. However as we've already seen the loony left of coppinger and Co, are totally against members of the squeezed middle buying houses so the states fecked if it does and fecked if it doesn't

If the sale price is unaffordable to the "squeezed middle" the sale price is too high.
The state needs to tackle the costs that means having a good hard look at itself

We have seen what subsidies do, clearly many have not learned the lesson

quadrifoglio verde

Villa05 wrote: »

If the sale price is unaffordable to the "squeezed middle" the sale price is too high.
The state needs to tackle the costs that means having a good hard look at itself

We have seen what subsidies do, clearly many have not learned the lesson

the sale price mightn't be unaffordable to members of the squeezed middle, just that in order to attract the squeezed middle classes into Ballymun Nua, the sale price needs to be much lower than in a 100% private estate.

Villa05

Villa05 wrote: »

If the sale price is unaffordable to the "squeezed middle" the sale price is too high.
The state needs to tackle the costs that means having a good hard look at itself

We have seen what subsidies do, clearly many have not learned the lesson

If the sale price is too high, the house won't sell.

If the seller really wants to sell it, they will have to lower their price in order to do so.

ECON101

Villa05

Deleted User wrote:

If the sale price is too high, the house won't sell.

The market is rigged, supply is strangled, the forces that prevent supply are not being tackled.
Economics 101 left Ireland with her hands covering her face a long time ago

Villa05

Villa05 wrote: »

The market is rigged, supply is strangled, the forces that prevent supply are not being tackled.
Economics 101 left Ireland with her hands covering her face a long time ago

None of that changes anything from the above! Nor has anything to do with it whatsover.

I absolutely agree that normal supply is constrained.

However your contention regarding the asking price being too high is a very simple one to analyse.

Once more.

We can both agree with this I assume - "If the asking price is unaffordable, the house will not sell."

Logically, we can create this recursive test;

Either the house sells or does not sell.
If it does sell, then the price is patently not unaffordable.
If it does not sell, then the seller in order to sell the property, would have to lower their asking price.

Eventually the house is sold at an affordable price. Any unaffordable priced house does not sell. There is no unaffordable sale price. There are overambitious asking prices, but never unaffordable sale prices!

The_Conductor

Deleted User wrote: »

Either the house sells or does not sell.
If it does sell, then the price is patently not unaffordable.
If it does not sell, then the seller in order to sell the property, would have to lower their asking price.

This may be a basic concept- however, and unfortunately- it just doesn't hold true in an Irish context. You can set your price at whatever you like- and have a stream of people offer you your asking price- only to have every single offer fall through as the prospective purchasers discover they are unable to access the finance that they imagined they had no difficulty getting.

In one recent extreme case- I am aware of a property in Lucan village which has been on the market for the last 29 months (since Dec 2013) and has had offers accepted 12 times. It is priced competitively (at approximately 10% below the recent sales prices of other properties on the Property Price Register)- the seller is not being overly ambitious. (The property is a 2 bed apartment in a managed complex on Main Street in Lucan village)

This is an extreme example- but sales falling through because of a lack of finance- are rapidly becoming the norm- 4-5-6 sales falling through is now incredibly common.

Economics 101 doesn't always apply- when there are curve balls out there fundamentally changing the nature of how the market works (and this curve ball- is wholly independent of supply side issues- which is a separate problem in its own right).

So once again, no sale price is unaffordable right?

There certainly exist overly Ambitious asking prices that are unaffordable.

Sale prices by virtue of being sales (i.e a buyer and a seller find a price to agree on and a transaction takes place) cannot be unaffordable.

And if asking prices are unaffordable, then in order for a sale to take place, the asking price must be reduced. If the seller wants a sale, then they must reduce the asking price.

The_Conductor

Deleted User wrote: »

So once again, no sale price is unaffordable right?

There certainly exist overly Ambitious asking prices that are unaffordable.

Sale prices by virtue of being sales (i.e a buyer and a seller find a price to agree on and a transaction takes place) cannot be unaffordable.

And if asking prices are unaffordable, then in order for a sale to take place, the asking price must be reduced. If the seller wants a sale, then they must reduce the asking price.

Affordability- and the ability to complete a sale- are two entirely different constructs- that is the point I was making. Even overly ambitious asking prices may meet 'affordability' criterion- and properties may sell (esp. if you constrain supply). Finance- the ability to actually complete a transaction- is a different construct altogether.

You can reduce the asking price until the cows come home- and indeed accept as many offers at your new price point as you see fit- it still doesn't mean that the prospective buyer is going to complete the transaction. That is the sticking point in the equation- and increasingly- its coming to the fore over and above almost any other issue (such as supply side constraints).

The_Conductor

The_Conductor wrote: »

Affordability- and the ability to complete a sale- are two entirely different constructs- that is the point I was making. Even overly ambitious asking prices may meet 'affordability' criterion- and properties may sell (esp. if you constrain supply). Finance- the ability to actually complete a transaction- is a different construct altogether.

Yes, agreed. Look where this started;

Villa05 wrote: »

If the sale price is unaffordable to the "squeezed middle" the sale price is too high.
The state needs to tackle the costs that means having a good hard look at itself

We have seen what subsidies do, clearly many have not learned the lesson

If there is a sale price, then the price was not unaffordable.

If the asking price is unaffordable, then the only way there will be a sale will be by lowering that price.
-
And this from a discussion on whether the state should buy the houses that are already built and exist in D15 (i.e, have no effect whatsoever on supply of housing).

newacc2015

Marcusm wrote: »

He's the Master of the High Court meaning that he deals with pre trial matters. If you google him you'll find most references are to judges criticising him and issuing injunctions to stop him trying to exercise powers and make decisions that are outside his area.

He's talking abut CPO type powers which are most often exercised to acquire land for roads, hospitals etc. The cases being talked about in this thread are about houses which are fully occupied and proposed to be out on the open market for sale. It's hard to see what justification the State could have to interfere in matters such as that - there is no social policy benefit. They are fully occupied and will remain fully occupied.

Empty estates, undeveloped land etc would, I think, be more appropriate targets.

As Master of the High Court he also watches trials going through the courts. He has raised the point, that a lot of receivership properties sales have be very questionable. It is nice to see someone in the courts looking out for the small business owners and accidental landlords. Honohan is one of the few people in this country is constantly dealing with bank receiverships and judgements.

Edmond has raised the point that we dont know who is buying his properties. It would make more sense for the state to CPO all these properties and borrow against their equity in a SPV. This would keep them off the state balance sheet.

Your right in the sense there is no social benefit from CPO these various assets. But it will allow the state to buy back properties that were sold far too cheaply and borrow against them to build other housing. I would rather the state own these properties, than a handful of dodgy individuals hoping to make a quick buck at the expense of landlords who had their properties repossessed often without their knowledge.

Graham

newacc2015 wrote: »

As Master of the High Court he also watches trials going through the courts. He has raised the point, that a lot of receivership properties sales have be very questionable. It is nice to see someone in the courts looking out for the small business owners and accidental landlords. Honohan is one of the few people in this country is constantly dealing with bank receiverships and judgements.

Haven't a couple of the previous been overturned for overstepping the authority of the position?

newacc2015 wrote: »

Edmond has raised the point that we dont know who is buying his properties. It would make more sense for the state to CPO all these properties and borrow against their equity in a SPV. This would keep them off the state balance sheet.

Alternatively just create an SPV an use it to build new homes, net result is the same without interfering with the principles of property ownership.

newacc2015 wrote: »

Your right in the sense there is no social benefit from CPO these various assets. But it will allow the state to buy back properties that were sold far too cheaply and borrow against them to build other housing. I would rather the state own these properties, than a handful of dodgy individuals hoping to make a quick buck at the expense of landlords who had their properties repossessed often without their knowledge.

Are you referring to the D15 properties here?

quadrifoglio verde

Graham wrote: »

Haven't a couple of the previous been overturned for overstepping the authority of the position?



Alternatively just create an SPV an use it to build new homes, net result is the same without interfering with the principles of property ownership.



Are you referring to the D15 properties here?

Net result is actually improved as supply has increased

The biggest problem I see for the government is how does it house the people on its housing list in dublin and at the same time not loose face with the 70 K a year earner who can only afford to buy in portlaoise

The_Conductor

quadrifoglio verde wrote: »

The biggest problem I see for the government is how does it house the people on its housing list in dublin and at the same time not loose face with the income tax payer who can only afford to buy in portlaoise

If the income tax payer has to abandon their support network, their family and friends- and move to Portlaoise to house themselves- I don't see why a housing list recipient should expect special treatment?

The root of all of this- is that there was a government decision made to allow local authorities divest themselves of their housing stock at significant discounts to open market prices (up to 40% discounts- depending on the length of tenancy of the occupant).

This legislation has not changed. As it stands- if the government were to buy a couple of hundred units in Dublin 15 as is proposed- they could all be sold off at half their open market price in 12 years time- and hey, we'd be back at dot one again.........

The system needs to be reformed. Local authority housing needs to be local authority housing in perpetuity- and only ever sold at open market prices- and even then it should only be for the purpose of gentrification or creating mixed resident estates (aka- no more of the afore mentioned Darndales, Inchicore or Tallaght)..........

We have had enough of these short term cute hoor solutions to last several life times- booting the problem down the road simply means it becomes more critical when you actually *have* to deal with it..........

quadrifoglio verde

The_Conductor wrote: »

If the income tax payer has to abandon their support network, their family and friends- and move to Portlaoise to house themselves- I don't see why a housing list recipient should expect special treatment?

The root of all of this- is that there was a government decision made to allow local authorities divest themselves of their housing stock at significant discounts to open market prices (up to 40% discounts- depending on the length of tenancy of the occupant).

This legislation has not changed. As it stands- if the government were to buy a couple of hundred units in Dublin 15 as is proposed- they could all be sold off at half their open market price in 12 years time- and hey, we'd be back at dot one again.........

The system needs to be reformed. Local authority housing needs to be local authority housing in perpetuity- and only ever sold at open market prices- and even then it should only be for the purpose of gentrification or creating mixed resident estates (aka- no more of the afore mentioned Darndales, Inchicore or Tallaght)..........

We have had enough of these short term cute hoor solutions to last several life times- booting the problem down the road simply means it becomes more critical when you actually *have* to deal with it..........

Agree completely. Not only that however, it should be based on your needs and reassessed yearly. Your in a 3 bed local authority house and its just yourself and the misses, you're moved to a 1 bed flat so that the 3 bed house can be given to the family who are in the same situation as you were twenty odd years ago.
Your means change, your income rises, you pay the open market rate. Not a percent so small (10/15% if I'm correct).

The only issue though is that unless you allow the nurse, teacher, it engineer to rent there on the cheap, you are going to create ghettos.

But expecting a first time buyer to solve the social housing problem by taxing them via part V has to be the most bonkers idea

Graham

quadrifoglio verde wrote: »

Net result is actually improved as supply has increased

I'll clarify my statement. The net result is the same increase in housing stock without resorting to a CPO.

Villa05

Graham wrote:

Alternatively just create an SPV an use it to build new homes, net result is the same without interfering with the principles of property ownership.

Net result for the taxpayer is as follows

Buy a distressed 2 bed apartment for 100k

Buy 2 bed apartment at the vested interests build price of 280k build cost + site cost at a coservative 50k

Taxpayer paying 230k more for a similar asset. Multiply that by say the requirement of 20,000 units, that is some saving for the taxpayer. It is scandalous that these are being sold to vulture funds during a housing crisis.

We had a massive opportunity to build up social/affordable housing stock, the opportunity still exists but no action

Instead taxpayer will be robbed blind for many years to come.

Graham

Villa05 wrote: »

Net result for the taxpayer is as follows

Buy a distressed 2 bed apartment for 100k

Buy 2 bed apartment at the vested interests build price of 280k build cost + site cost at a coservative 50k

Taxpayer paying 230k more for a similar asset. Multiply that by say the requirement of 20,000 units, that is some saving for the taxpayer. It is scandalous that these are being sold to vulture funds during a housing crisis.

We had a massive opportunity to build up social/affordable housing stock, the opportunity still exists but no action

Instead taxpayer will be robbed blind for many years to come.

Instead the suggestion appears to be lets just compulsory purchase whatever we fancy almost guaranteeing international investment in any kind of asset backed Irish based business stops.

Compulsory purchase does not increase housing stock, end of. If you think an SPV will increase housing stock there's no need to mix that with CPOs.

newacc2015

Graham wrote: »

Haven't a couple of the previous been overturned for overstepping the authority of the position?



Alternatively just create an SPV an use it to build new homes, net result is the same without interfering with the principles of property ownership.



Are you referring to the D15 properties here?

Source for the overturned decisions? I know Edmond Honohan published a paper at Christmas time on a fund set up to buy former Danske mortgage properties. A lot of the purchases were questionable eg a mortgage holder got an offer on their property and Danske refused to allow them to sell the property. Then their property was repossessed and sold to a fund for less than what they got offered on the private market!

Your comment makes no sense. The state gets say €10bn worth of property for €7bn with a CPO. They can take that equity and leverage it to build more property without increasing the state borrowing. It is not the same, as having to borrow €10bn on the market to build €10bn of property. Violating property rights is seizing property off people without informing them to sell it to vulture funds for a fraction of what it is worth. I believe in capitalism, but I dont agree with shady deals. The state buying back that property for the price speculator bought it for is fair IMO. These people will dump their Irish property in a few years and move onto another country. These people dont have any long term plans to remain in Ireland. Once yields are higher elsewhere, they will sell up here

No I am talking about this
http://www.independent.ie/business/personal-finance/property-mortgages/high-court-master-urges-state-to-nationalise-repossessed-homes-34282536.html

Villa05

Graham wrote:

Instead the suggestion appears to be lets just compulsory purchase whatever we fancy almost guaranteeing international investment in any kind of asset backed Irish based business stops.

Plenty of distressed assets left out there, no need to go after the already sold stock. International investment in property here is probably drying up anyway.

Villa05

Graham wrote:

Compulsory purchase does not increase housing stock, end of. If you think an SPV will increase housing stock there's no need to mix that with CPOs.

Again it's not rocket science to increase supply. I have outlined how, several times in other posts. If we are too stupid to do it then, fair enough, live with the consequences

What I am addressing is the cost to the taxpayer of providing social and affordable accommodation. There was/is a once in a lifetime opportunity to provide it at minimal cost, potentially even making a profit and that opportunity is being wasted

Graham

Villa05 wrote: »

Again it's not rocket science to increase supply. I have outlined how, several times in other posts. If we are too stupid to do it then, fair enough, live with the consequences

No argument that measures to stimulate supply should be considered I just disagree completely with the CPO approach.

Marcusm

newacc2015 wrote: »

Source for the overturned decisions? I know Edmond Honohan published a paper at Christmas time on a fund set up to buy former Danske mortgage properties. A lot of the purchases were questionable eg a mortgage holder got an offer on their property and Danske refused to allow them to sell the property. Then their property was repossessed and sold to a fund for less than what they got offered on the private market!

Your comment makes no sense. The state gets say €10bn worth of property for €7bn with a CPO. They can take that equity and leverage it to build more property without increasing the state borrowing. It is not the same, as having to borrow €10bn on the market to build €10bn of property. Violating property rights is seizing property off people without informing them to sell it to vulture funds for a fraction of what it is worth. I believe in capitalism, but I dont agree with shady deals. The state buying back that property for the price speculator bought it for is fair IMO. These people will dump their Irish property in a few years and move onto another country. These people dont have any long term plans to remain in Ireland. Once yields are higher elsewhere, they will sell up here

No I am talking about this
http://www.independent.ie/business/personal-finance/property-mortgages/high-court-master-urges-state-to-nationalise-repossessed-homes-34282536.html

You need to read through the subtlety of the language here to see exactly how much the Court of Appeal criticised Honohan - having previously had a decision overturned, he proceeded to make further orders in defiance of that decision. http://www.independent.ie/irish-news/courts/court-official-exceeded-power-in-striking-out-debt-case-31163547.html

As regards CPO powers, I think you have missed the point. The government would have to pay full market value, not simply appropriate the assets at the values previously paid for them. They would this allow the funds to sell the assets at full value with less hassle. There is no public benefit to that.

jimmycrackcorm

Villa05 wrote:

I think Honohans point was to do with the supply of affordable accommodation and for the short term until something more long term was in place. I think compulsory purchase orders on already sold stock is over the top and instead they should go after the existing distressed loans of which there are plenty.

I agree as bringing in CPOs on the basis he suggests would mean that there would be a precedent to also CPO land for development at prices they were originally bought at. So if you had purchased land 20 years ago and the local authority wanted it for development, they could effectively argue for that price.

The government should instead concentrate on increasing supply by doing normal CPOs on say agricultural land adjacent to existing urban areas at their prices, then rezone that for development and build cheaper housing.

newacc2015

Marcusm wrote: »

You need to read through the subtlety of the language here to see exactly how much the Court of Appeal criticised Honohan - having previously had a decision overturned, he proceeded to make further orders in defiance of that decision. http://www.independent.ie/irish-news/courts/court-official-exceeded-power-in-striking-out-debt-case-31163547.html

As regards CPO powers, I think you have missed the point. The government would have to pay full market value, not simply appropriate the assets at the values previously paid for them. They would this allow the funds to sell the assets at full value with less hassle. There is no public benefit to that.

Did you also see that a high court judge dismissed the same case that Honohan dismissed? He is still a legal expert and mistakes may have made in the past doesnt mean his suggestion for a CPO is in anyway wrong. If an Economist makes a decision in the past that was wrong. Do you disregard their opinion for the rest of their career?

Is there anything in the law stopping the state nationalising these properties below their market value? Presently you are supposed to get market value. What is stopping the state giving you want to paid for them other than the current laws which can be changed? The constitution says the state can violate your property rights for a common good ie social housing. Honohan talks about changing the current laws.

Graham

newacc2015 wrote: »

Is there anything in the law stopping the state nationalising these properties below their market value?

Common sense one would hope.

newacc2015

newacc2015 wrote: »

Did you also see that a high court judge dismissed the same case that Honohan dismissed? He is still a legal expert and mistakes may have made in the past doesnt mean his suggestion for a CPO is in anyway wrong. If an Economist makes a decision in the past that was wrong. Do you disregard their opinion for the rest of their career?

Is there anything in the law stopping the state nationalising these properties below their market value? Presently you are supposed to get market value. What is stopping the state giving you want to paid for them other than the current laws which can be changed? The constitution says the state can violate your property rights for a common good ie social housing. Honohan talks about changing the current laws.

woah.

Theft?

Marcusm

newacc2015 wrote: »

Did you also see that a high court judge dismissed the same case that Honohan dismissed? He is still a legal expert and mistakes may have made in the past doesnt mean his suggestion for a CPO is in anyway wrong. If an Economist makes a decision in the past that was wrong. Do you disregard their opinion for the rest of their career?

Is there anything in the law stopping the state nationalising these properties below their market value? Presently you are supposed to get market value. What is stopping the state giving you want to paid for them other than the current laws which can be changed? The constitution says the state can violate your property rights for a common good ie social housing. Honohan talks about changing the current laws.

It's not his opinion that I have a problem with, it's his disregard for the decisions of the courts. He is a functionary of the court rather than a judge and his disregard for explicit directions is abominable. If he disdains their superiority then he should simply resign.

As regards below market value targeted expropriations, can you not see that these are hallmarks of a banana republic. To permit such things would be to permit the executive to favour their cronies and dispossess their critics. It's a frankly sophomoric suggestion.

newacc2015

Marcusm wrote: »

It's not his opinion that I have a problem with, it's his disregard for the decisions of the courts. He is a functionary of the court rather than a judge and his disregard for explicit directions is abominable. If he disdains their superiority then he should simply resign.

As regards below market value targeted expropriations, can you not see that these are hallmarks of a banana republic. To permit such things would be to permit the executive to favour their cronies and dispossess their critics. It's a frankly sophomoric suggestion.

So he is not entitled to have an opinion? You aren't sticking to what he has suggested and are trying to undermine his opinion. How is the link you posted in anyway relevant to his suggestion?

The question I asked is his idea possible under Irish law and a possible change of law? You have not asked that in anyway. When a state defaults on its bonds, it has an unfavourable opinion in the eyes of some for a brief period of time. But benefits in the country in the long run.

Putting a CPO on property, that was often acquired under questionable circumstances should not be seen as negative thing. Some people on this thread clearly believe the property rights of speculators are of a greater importance than Irish property owners who had their property seized by unregulated receivers and sold for a fraction of the market price. Honohan is suggesting we give these speculators what they paid for these questionable sales and the state should acquire the assets.

We might annoy a few speculative property companies. But they are just going to move onto the next country. They are not here for the long haul.

Graham

newacc2015 wrote: »

Putting a CPO on property, that was often acquired under questionable circumstances

by questionable you mean completely legal?

newacc2015

newacc2015 wrote: »

So he is not entitled to have an opinion? You aren't sticking to what he has suggested and are trying to undermine his opinion. How is the link you posted in anyway relevant to his suggestion?

The question I asked is his idea possible under Irish law and a possible change of law? You have not asked that in anyway. When a state defaults on its bonds, it has an unfavourable opinion in the eyes of some for a brief period of time. But benefits in the country in the long run.

Putting a CPO on property, that was often acquired under questionable circumstances should not be seen as negative thing. Some people on this thread clearly believe the property rights of speculators are of a greater importance than Irish property owners who had their property seized by unregulated receivers and sold for a fraction of the market price. Honohan is suggesting we give these speculators what they paid for these questionable sales and the state should acquire the assets.

We might annoy a few speculative property companies. But they are just going to move onto the next country. They are not here for the long haul.

So yes, theft.