2021 Irish Property Market chat - *mod warnings post 1*

PropQueries

DataDude wrote: »

If you really want to make your blood boil, have a read of this with your lunch. He gets torn to pieces in the comments section, and is responding himself so nearly more entertaining than the article.

People pulled up his records + planning applications and he was collecting 100s of k from the medical card scheme. Built a mcmansion in the country. Fell into negative equity so emigrated to Australia. Didn't even have the decency to leave the key in the door, continued to rent the house out for years whilst not paying a dime on the mortgage. Bought a massive house in Australia all whilst keeping the house in Ireland rented. Then writes into the Irish Times saying his debt should be forgiven because we need him...

https://www.irishtimes.com/life-and-style/abroad/generation-emigration/many-emigrants-left-to-escape-debt-why-isn-t-this-talked-about-1.2503581

Looked like it worked anyway - seems he's back in business

https://www.independent.ie/regionals/enniscorthyguardian/news/local-doctor-questions-nphets-covid-19-plan-39670981.html

He has a bit of a point though. The risk takers are what we need to keep an economy growing. Obviously, it’s the risk takers who will leave if they’re not allowed to start again and punished for decades if they fail just once.

Workers pay PRSI so are entitled to any help they get, the state took the tax revenue from the developers when times were good before they went bust.

The only groups who appear to have been bailed out are the non risk takers who add very little to the future growth of the economy IMO

A good example is in 2012 when the state allowed AIB to put over a €1billion into the AIB pension fund at a time when we really didn’t have any cash.

Maybe keeping AIB open was needed. But funding their pension deficit? Was that needed?

Link to AIB pension deficit funding here: https://m.independent.ie/business/irish/aib-beats-pension-crisis-after-11bn-loans-bailout-30740410.html

DataDude

PropQueries wrote: »

He has a bit of a point though. The risk takers are what we need to keep an economy growing. Obviously, it’s the risk takers who will leave if they’re not allowed to start again and punished for decades if they fail just once.

Workers pay PRSI so are entitled to any help they get, the state took the tax revenue from the developers when times were good before they went bust.

The only groups who appear to have been bailed out are the non risk takers who add very little to the future growth of the economy IMO

A good example is in 2012 when the state allowed AIB to put over a €1billion into the AIB pension fund at a time when we really didn’t have any cash.

Maybe keeping AIB open was needed. But funding their pension deficit? Was that needed?

Link to AIB pension deficit funding here: https://m.independent.ie/business/irish/aib-beats-pension-crisis-after-11bn-loans-bailout-30740410.html

Really don't see a GP servicing medical card patients building a 300Sqm+ one off house in the country as a "risk-taker". Or certainly not the type of risk-taker that we desperately need to protect and nurture....

I'd somewhat agree with entrepreneurs in some instances, but you always have to be wary of the moral hazard raised when people are protected from the consequences of their actions.

combat14

will be interesting to see if mortgage interest rates start to rise here once we are left with very little competition again effectively just AIB and BOI and to a small extent new player Avant

will house prices start to drop as rates rises due to lack of competition once again adversely affecting consumers

as other posters mentioned this does seem to be the price to be paid for facilitating those who decide to never pay their mortgage

once again the government appear to be doing nothing as irish interest are about double the eu average....

PropQueries

DataDude wrote: »

Really don't see a GP servicing medical card patients building a 300Sqm+ one off house in the country as a "risk-taker". Or certainly not the type of risk-taker that we desperately need to protect and nurture....

I'd somewhat agree with entrepreneurs in some instances, but you always have to be wary of the moral hazard raised when people are protected from the consequences of their actions.

I agree with your point as well. But the current generation of potential risk takers are going to be looking at our debt levels and asking themselves if they succeed and pay taxes, where are those taxes going? To invest in better infrastructure, a better society etc. or just going to pay back the debt associated with the previous generations bailout.

Extremely hard for a risk taker to be incentivised to invest or take a risk in this country at the moment IMO

We had the past 5 very lucky years to get our house in order and now with our current debt levels, covid, the EU/Biden’s tax reforms etc. etc. we’re in an even worse starting point than 2008 IMO

Villa05

engagethecore wrote:

Agreed , its not a fluke that two lenders (who do well abroad) want to pull out of the market . Very difficult to get money when you cant get money back when somebody doesn't pay for their Mortgage

Hubertj wrote:

Current system is down to populism, not simply gubberment. Mixture of weak politicians, populism, rise of the left, lack of personal responsibility

The art of politics in manipulating the public into the belief that your polices are benefitting them when the truth is that its really benefitting that political groups interests, financiers and lobbyists

Hubertj

Villa05 wrote: »

The art of politics in manipulating the public into the belief that your polices are benefitting them when the truth is that its really benefitting that political groups interests, financiers and lobbyists

It’s very easy to blame the Hubble rent for everything when someone has such a blinkered view of what the problems are. Swallowing the populism hook line and sinker when the really problems are a lot bigger than the gubberment.

Hubertj

DataDude wrote: »

If you really want to make your blood boil, have a read of this with your lunch. He gets torn to pieces in the comments section, and is responding himself so nearly more entertaining than the article.

People pulled up his records + planning applications and he was collecting 100s of k from the medical card scheme. Built a mcmansion in the country. Fell into negative equity so emigrated to Australia. Didn't even have the decency to leave the key in the door, continued to rent the house out for years whilst not paying a dime on the mortgage. Bought a massive house in Australia all whilst keeping the house in Ireland rented. Then writes into the Irish Times saying his debt should be forgiven because we need him...

https://www.irishtimes.com/life-and-style/abroad/generation-emigration/many-emigrants-left-to-escape-debt-why-isn-t-this-talked-about-1.2503581

Looked like it worked anyway - seems he's back in business

https://www.independent.ie/regionals/enniscorthyguardian/news/local-doctor-questions-nphets-covid-19-plan-39670981.html

It’s to unbelievable you’d nearly think it’s a wind up but it isn’t. Sad thing is there are plenty of people like him that can’t or won’t accept responsibility for their own actions. Imagine having that clown as your GP.

Donald Trump

engagethecore wrote: »

Agreed , its not a fluke that two lenders (who do well abroad) want to pull out of the market . Very difficult to get money when you cant get money back when somebody doesn't pay for their Mortgage

There might also be another reason why they jump. They might be expecting a market correction in the slightly longer term and don't want to be left with impaired assets on their book.


Short term bubble and medium term bust perhaps.

Villa05

The KBC news and who is potentially buying it wont come as any suprise to McWilliams who predicted a similar outcome for Ulster Bank in his podcast
How Ireland Works

and seperatley this on this one is really good. David interviews a former US Bank Regulator on how he would handle

The Davy Stockbrokers scandal

They claim that some of those involved were also involved in the greencore scandal back in 1993, Its like an episode of only fools and horses starring the wealthy and privileged

For those that remember around that time there were numerous financial scandals Ansbacher, DIRT Tax etc and shortly after them their was a tax amnesty introduced despite the protestations of revenue as they were close to catching most of the issues

It is amazing that no criminal investigation was initiated following the Davy Scandal

Wanderer78

Villa05 wrote: »

The KBC news and who is potentially buying it wont come as any suprise to McWilliams who predicted a similar outcome for Ulster Bank in his podcast
How Ireland Works

and seperatley this on this one is really good. David interviews a former US Bank Regulator on how he would handle

The Davy Stockbrokers scandal

They claim that some of those involved were also involved in the greencore scandal back in 1993, Its like an episode of only fools and horses starring the wealthy and privileged

For those that remember around that time there were numerous financial scandals Ansbacher, DIRT Tax etc and shortly after them their was a tax amnesty introduced despite the protestations of revenue as they were close to catching most of the issues

It is amazing that no criminal investigation was initiated following the Davy Scandal

its actually very disturbing, yet again!

JimmyVik

Donald Trump wrote: »

There might also be another reason why they jump. They might be expecting a market correction in the slightly longer term and don't want to be left with impaired assets on their book.


Short term bubble and medium term bust perhaps.

I rememebr AIB did a lot of maneuvering before the last crash too.

Yurt2

Wanderer78 wrote: »

its actually very disturbing, yet again!

White collar crime is woefully underprosecuted in this country. Gardai aren't resourced and they don't have enough experts in the force. I'd argue for special commissions into the force for forensic accountants and those with expertise to build a formidable unit.

Villa05

JimmyVik wrote: »

I rememebr AIB did a lot of maneuvering before the last crash too.

Which bank did a sale and leaseback on their HQ just prior to the crash

Hubertj

Yurt! wrote: »

White collar crime is woefully underprosecuted in this country. Gardai aren't resourced and they don't have enough experts in the force. I'd argue for special commissions into the force for forensic accountants and those with expertise to build a formidable unit.

Totally agree - forensic accounting team within Gardai required but also much more robust legislation supported by tougher sentencing. Think about the number of commercial transactions, many in property, which would have come under scrutiny over the last 20 years - planning breaches, bribes, etc

Villa05

Mad_maxx wrote:

Hall is a pure charlatan , his company have negotiated deals effectively where banks sold houses to the company , the defaulters remained in situ but the state guarenteed the rent to Halls company , Hall also gets to portray himself as a defender of a family facing eviction

Hubertj wrote:

It’s very easy to blame the Hubble rent for everything when someone has such a blinkered view of what the problems are. Swallowing the populism hook line and sinker when the really problems are a lot bigger than the gubberment.

Provision of housing was so much easier and responsive when we were broke and the sector was dominated by blue collar workers

Complicated indeed

combat14

Wanderer78 wrote: »

...and if this was done, there would be rapid rise in homelessness, this is currently unresolvable, unless radical changes are implemented, i personally would go with a public banking system, but that to would be problematic

country cant afford it and we are part of eu not ussr

PropQueries

Villa05 wrote: »

Provision of housing was so much easier and responsive when we were broke and the sector was dominated by blue collar workers

Complicated indeed

Spot on. House building since the Stone Age has changed very little. Still four walls and a roof no matter how some people dress it up IMO

We have the land, we have the skill base. Every single action in relation to the provision of housing over the past 40 years appears to be to drive up not the actual build cost above the site but to drive up the site cost.

The proposed affordable housing bill backs this up IMO

The price cap in Dublin City is €450k while in Co. Tipperary it’s €225k according to The Times recently.

Where’s the €225k difference going? Mostly “site” costs from what I can gather. Who gives any site it’s value above agri level? The local council or an bord pleanala. I have no idea how after granting this gift, they still allow such sites to stay vacant for years. It’s a gift from the state/taxpayer and should be taken back swiftly if not used and given to someone who would use it.

Anyone commuting into the city from the suburbs each day can see there’s absolutely no shortage of land to build on closer to the city even at old style three-bed, large garden density levels to justify sites in Dublin being much more expensive than sites in Co. Tipperary IMO

enricoh

Worst case scenario a 6 billion hit to our corporation tax take, sod biden anyway- bring back donald!!

https://www.irishtimes.com/business/economy/john-fitzgerald-corporation-tax-changes-may-pack-more-punch-than-covid-1.4538632?mode=amp

Wanderer78

combat14 wrote: »

country cant afford it and we are part of eu not ussr

of course we can, whatever is required to set them up can be easily borrowed for, and ive no idea where you re going with the ussr comment, public banks are common enough across the world, including in other eu countries such as france and germany

PropQueries

enricoh wrote: »

Worst case scenario a 6 billion hit to our corporation tax take, sod biden anyway- bring back donald!!

https://www.irishtimes.com/business/economy/john-fitzgerald-corporation-tax-changes-may-pack-more-punch-than-covid-1.4538632?mode=amp

At least that €6 billion figure makes way way more sense than the €2 billion nonsense figure they being spouting for the past few years. Where they got that €2 billion figure from is beyond me given the percentage of our corporation tax receipts that come from these multinationals.

Cyrus

Villa05 wrote: »

It is amazing that no criminal investigation was initiated following the Davy Scandal

what particular crime did you expect to be investigated.

Wanderer78

Cyrus wrote: »

what particular crime did you expect to be investigated.

its clearly obvious that its 'insider trading'!

Cyrus

Wanderer78 wrote: »

its clearly obvious that its 'insider trading'!

one would imagine if an actual law was broken that there would be a criminal investigation.

yagan

Cyrus wrote: »

one would imagine if an actual law was broken that there would be a criminal investigation.

Laughing in Sean Fitzpatrick.

SmokyMo

Cyrus wrote: »

one would imagine if an actual law was broken that there would be a criminal investigation.

No law was broken as Ireland has very poor laws in relation white collar crime and specifically for fin sector. That's why its poster child in Western Europe for grey accounting.

MacronvFrugals

SmokyMo wrote: »

No law was broken as Ireland has very poor laws in relation white collar crime and specifically for fin sector. That's why its poster child in Western Europe for grey accounting.

That’s why we’re called “Treasure Ireland” come for the tax and stay for the nonexistent regulation/enforcement.

Donald Trump

Villa05 wrote: »

Which bank did a sale and leaseback on their HQ just prior to the crash

BofI did at least. Right around the peak


https://www.irishtimes.com/business/commercial-property/over-237m-for-bank-s-36-branch-portfolio-1.999111


One here that lost a few million for investors
https://www.independent.ie/business/commercial-property/bank-of-ireland-branch-sold-at-height-of-boom-on-market-for-36m-35049924.html

Cyrus

SmokyMo wrote: »

No law was broken as Ireland has very poor laws in relation white collar crime and specifically for fin sector. That's why its poster child in Western Europe for grey accounting.

so why is the poster amazed there wasnt a criminal investigation?

timmyntc

Cyrus wrote: »

so why is the poster amazed there wasnt a criminal investigation?

In any sane country it would be against the law.

Cyrus

timmyntc wrote: »

In any sane country it would be against the law.

perhaps but expecting a criminal investigation when no law has actually been broken is a bit pointless.

mcsean2163

timmyntc wrote: »

What would the state then do with its newly acquired property?

It would still run into the same eviction issues if they tried vacate the property.
If they leave them in situ then the state has basically just paid your mortgage.

The only solution is to allow easy evictions of non-paying mortgage holders. Like they do all over the world.

Ownership reverts to the state. Beats paying 150% to house the same people. We're spending billions, paying 25% would be better. They lose the asset but retain occupancy, cannot be sold for profit etc.

timmyntc

mcsean2163 wrote: »

Ownership reverts to the state. Beats paying 150% to house the same people. We're spending billions, paying 25% would be better. They lose the asset but retain occupancy, cannot be sold for profit etc.

So the state is taking the loss on the mortgage. Collecting no rent.
And its not means tested - the occupants could more than likely afford market rents but instead pay nothing.

The state has basically just bailed out the bank by taking liabilities off their books for no gain.

Unless you think the state bailing out banks with the sole purpose of keeping wealthy people in their homes mortgage free is the signs of a healthy functioning market?

hometruths

mcsean2163 wrote: »

Ownership reverts to the state. Beats paying 150% to house the same people. We're spending billions, paying 25% would be better. They lose the asset but retain occupancy, cannot be sold for profit etc.

So the state owns yet more houses. No wonder prices are rising and home ownership is declining in this country if this is the answer to all problems.

L1011

schmittel wrote: »

So the state owns yet more houses. No wonder prices are rising and home ownership is declining in this country if this is the answer to all problems.

Considering we're absolutely never going to go full libertarian on this, what is your workable suggestion for provision of housing for those who cannot afford open market prices for it?

timmyntc

L1011 wrote: »

Considering we're absolutely never going to go full libertarian on this, what is your workable suggestion for provision of housing for those who cannot afford open market prices for it?

People who default on their mortgages are often people who have the means, but not the will to pay a mortgage.
Or else people who are living beyond their means.

The solution is for them to live within their means - to downsize or rent.

The solution is not for the state to bail out the banks and enable these people to have a free ride living beyond their means.

mcsean2163

timmyntc wrote: »

So the state is taking the loss on the mortgage. Collecting no rent.
And its not means tested - the occupants could more than likely afford market rents but instead pay nothing.

The state has basically just bailed out the bank by taking liabilities off their books for no gain.

Unless you think the state bailing out banks with the sole purpose of keeping wealthy people in their homes mortgage free is the signs of a healthy functioning market?

People have laid out all the issues here. Buying the subprime would increase the social housing stock massively for 25% of the cost as demonstrated by the Goldman sale and be more politically acceptable as vulture funds are not liked and the state would be blocking them. The state taking ownership of the asset would then remove unintended consequences as everyone will know that although the people have a council house they've lost their asset.

If you can't work out the figures yourself, I suggest going back to school for a maths primer.

awec

timmyntc wrote: »

People who default on their mortgages are often people who have the means, but not the will to pay a mortgage.
Or else people who are living beyond their means.

The solution is for them to live within their means - to downsize or rent.

The solution is not for the state to bail out the banks and enable these people to have a free ride living beyond their means.

I'm not sure this is accurate. This undoubtedly happens but I would say it's the exception rather than the rule.

Someone in mortgage arrears, who gets repossessed, is never going to get another mortgage again. Downsizing is not an option.

PropQueries

L1011 wrote: »

Considering we're absolutely never going to go full libertarian on this, what is your workable suggestion for provision of housing for those who cannot afford open market prices for it?

10% vacant property tax would solve all current housing issues at no cost to the state IMO.

Aim it at companies where they are the beneficial owners of at least 3 residential properties. That way at least I’ll finally get to know how many of the vacant homes in Ireland the funds really own

hometruths

L1011 wrote: »

Considering we're absolutely never going to go full libertarian on this, what is your workable suggestion for provision of housing for those who cannot afford open market prices for it?

I think the state should provide housing or subsidized housing for those who cannot afford open market prices.

But I think the state should also focus on policies that do not inflate open market prices by their actions in the market. It’s a vicious circle.

Eg the idea of prohibiting repossessions and instead expecting the state to take ownership of the house and convert it to social housing is a prime example of a mechanism that just pushes up “open market” prices and increases the number of people who cannot afford the “open market” prices, thereby increasing both the number and cost of the states obligation to provide housing.

If you want open market prices, repossess the houses and sell them on the open market. It’s not rocket science.

PropQueries

L1011 wrote: »

Considering we're absolutely never going to go full libertarian on this, what is your workable suggestion for provision of housing for those who cannot afford open market prices for it?

10% vacant property tax would solve all current housing issues at no cost to the state IMO.

Aim it at companies where they are the beneficial owners of at least 3 residential properties. That way at least I’ll finally get to know how many of the vacant homes in Ireland the funds really own

hometruths

awec wrote: »

I'm not sure this is accurate. This undoubtedly happens but I would say it's the exception rather than the rule.

Someone in mortgage arrears, who gets repossessed, is never going to get another mortgage again. Downsizing is not an option.

Of course it is an option. If they are unable to afford a smaller mortgage, they downsize by renting a house that they can afford.

What is the problem with this? It seems to work just fine in every other country.

timmyntc

awec wrote: »

I'm not sure this is accurate. This undoubtedly happens but I would say it's the exception rather than the rule.

Someone in mortgage arrears, who gets repossessed, is never going to get another mortgage again. Downsizing is not an option.

People in mortgage arrears more often than not will be able to negotiate some kind of payment plan with the bank. repossessions are the absolute last resort since its so hard to actually do them.

In this country, repossessions are overwhelmingly of people who refuse to pay rather than people who are struggling to pay.

L1011

PropQueries wrote: »

10% vacant property tax would solve all current housing issues at no cost to the state IMO.

Aim it at companies where they are the beneficial owners of at least 3 residential properties. That way at least I’ll finally get to know how many of the vacant homes in Ireland the funds really own

Except the data to support your belief simply does not exist.

PropQueries

awec wrote: »

I'm not sure this is accurate. This undoubtedly happens but I would say it's the exception rather than the rule.

Someone in mortgage arrears, who gets repossessed, is never going to get another mortgage again. Downsizing is not an option.

A simple change in the law would resolve that issue. Can’t pay your mortgage. Out in 3 months. But your credit rating is cleared in 12 months and your next mortgage application is based on your new financial circumstances in 12 months time.

Win-win for the economy. People are able to take risks without been held back by a previous failure or bad luck. Banks credit risks are aligned with the real economy. Less hassle and heartbreak all round?

PropQueries

L1011 wrote: »

Except the data to support your belief simply does not exist.

Maybe not explicitly but definitely implicitly IMO If I’m wrong then it won’t impact anyone. If I’m right, all problems solved. That’s if the powers that be truly want them resolved

Cyrus

PropQueries wrote: »

A simple change in the law would resolve that issue. Can’t pay your mortgage. Out in 3 months. But your credit rating is cleared in 12 months and your next mortgage application is based on your new financial circumstances in 12 months time.

Win-win for the economy. People are able to take risks without been held back by a previous failure or bad luck. Banks credit risks are aligned with the real economy. Less hassle and heartbreak all round?

mortgage loans would have to be non recourse on this basis, which would push up the costs, but also lower banks risk appetites and hopefully dampen prices a little.

hometruths

Cyrus wrote: »

mortgage loans would have to be non recourse on this basis, which would push up the costs, but also lower banks risk appetites and hopefully dampen prices a little.

Agreed. I think non recourse loans would solve a lot of problems for both borrowers and lenders.

Cyrus

schmittel wrote: »

Agreed. I think non recourse loans would solve a lot of problems for both borrowers and lenders.

its all very simple really, wont happen though

awec

schmittel wrote: »

Of course it is an option. If they are unable to afford a smaller mortgage, they downsize by renting a house that they can afford.

What is the problem with this? It seems to work just fine in every other country.

Sorry, I took downsize to mean sell the house and buy a cheaper one.

combat14

mortgage lending is facing a car crash style crisis if the government dont take action to stimulate competition in the sector