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

mcsean2163

mcsean2163 wrote: »

https://www.learngrammar.net/english-grammar

Sadly this will not make property market in Ireland better.

mcsean2163

mcsean2163 wrote: »

https://www.learngrammar.net/english-grammar

Jesus that's rude.

NickNickleby

mcsean2163 wrote: »

https://www.learngrammar.net/english-grammar

Very disappointing response.

Graham

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Reins

KCB leaving the Irish market lessons the competition for future mortgage applications etc etc and nothing will change immediately but given yesterdays announcment will it have any immediate impact on new applications or drawdowns from our remaining lenders? Or is it just business as usual?

hometruths

Browney7 wrote: »

Whatever about the PDH classification, over 2000 BTL mortgages out of just under 98k are in arrears of over 10 years. If ever there was low hanging fruit.... indeed the number has increased from 1500 last December which is a significant increase in one year

Sure there is low hanging fruit in the BTLs but my guess is the BTLs are not having such a significant impact on the overall market in terms of property being misallocated. The numbers are quite small in comparison to the PDHs.

No doubt some of them are vacant, but most will be rented out, either via receivers or landlords who are taking the p*ss, but assuming the tenants are paying the rent, at least the properties are providing housing to the end user at the market rate (albeit a distorted market).

Re the increase in 10 years, we can expect to see a big jump in that figure on PDHs and BTLs in second half of this year and first half of next year because in July we have the 10 year anniversary of the Dunne ruling.

This was a court ruling that stated that banks could no longer repossess until new legislation was brought in on the issue. This has been shown to have directly led to a spike in mortgage defaults.

Irish people stopped paying mortgages in their droves after a ruling blocked the banks from evicting

Browney7

schmittel wrote: »

Sure there is low hanging fruit in the BTLs but my guess is the BTLs are not having such a significant impact on the overall market in terms of property being misallocated. The numbers are quite small in comparison to the PDHs.

No doubt some of them are vacant, but most will be rented out, either via receivers or landlords who are taking the p*ss, but assuming the tenants are paying the rent, at least the properties are providing housing to the end user at the market rate (albeit a distorted market).

Re the increase in 10 years, we can expect to see a big jump in that figure on PDHs and BTLs in second half of this year and first half of next year because in July we have the 10 year anniversary of the Dunne ruling.

This was a court ruling that stated that banks could no longer repossess until new legislation was brought in on the issue. This has been shown to have directly led to a spike in mortgage defaults.

Irish people stopped paying mortgages in their droves after a ruling blocked the banks from evicting

On a proportionality basis though, the level of arrears in BTL mortgages is incredibly high - nearly 6500 BTL mortgages out of 96k in the dataset have arrears of more than 5 years. The PDH equivalent figure is 16k out of 732k in the dataset. If ever there was an argument for "strengthening" the repo legislation from a political perspective it would be to put out a few stories of delinquent landlords pocketing ten years of rent whilst not paying a penny and how this "cheats us all".

I don't doubt the legal position on repos has a large impact on banking and lending. But so too does the billions in tracker mortgages at razor thin margins sold in the boom which are subsidised by new lending. This is to generate any sort of return on the overall capital which banks have to deploy to operate in this market which in of itself is another debate!

fago

Reins wrote: »

KCB leaving the Irish market lessons the competition for future mortgage applications etc etc and nothing will change immediately but given yesterdays announcment will it have any immediate impact on new applications or drawdowns from our remaining lenders? Or is it just business as usual?

From the buying thread:
"We're in the same boat as above, AIP from KBC with an LTI exception valid for just 2 months. Got a call from our broker to say they're halting LTI exceptions, and that we really had this week to get something across the line to be in with a chance to get an offer with the exception."

How much of an impact this has depends on whether the same applicant would have got an LTI exemption from AIB/BOI, and would have the same bidding capacity now.

About couple months ago there was huge drop in BTL applications for mortgages.
The small investors are on hold for better days and would not like take risk in today reality
I suspect there is huge problems on AirB&B already due with significant drop in tourism industry
Many owner went into long term rent market because has pay mortgages for property they invested in.
Plus we have unemployment what brought rent prices down since Covid started
The only Reit and similar investing to property for rent because no job no mortgage will bring many people to renting property as this happened in 2010 when all mess with housing started
At the moment we have plenty property for rent not much renters because many unemployed went home to daddy and mummy and destroyed economy with banks leaving country
I would be very careful before saying that rent prices will growing.

The another question is how long government will support paying HAPs in this bad economy and low budget incomes situation.

hometruths

Browney7 wrote: »

On a proportionality basis though, the level of arrears in BTL mortgages is incredibly high - nearly 6500 BTL mortgages out of 96k in the dataset have arrears of more than 5 years. The PDH equivalent figure is 16k out of 732k in the dataset. If ever there was an argument for "strengthening" the repo legislation from a political perspective it would be to put out a few stories of delinquent landlords pocketing ten years of rent whilst not paying a penny and how this "cheats us all".

I don't doubt the legal position on repos has a large impact on banking and lending. But so too does the billions in tracker mortgages at razor thin margins sold in the boom which are subsidised by new lending. This is to generate any sort of return on the overall capital which banks have to deploy to operate in this market which in of itself is another debate!

No doubt proportionally BTLs are worse. But look at arrears over 2 years + restructures in both categories.

Approx 20,000 BTLs vs approx 85,000 PDHs. Over 4 times as many. There is no doubt that the PDHs are having a far bigger impact in terms of "cheats us all".

By looking at the proportionality to focus on delinquent, dishonest landlords vs the noble, impoverished homeowners just continues to normalise not paying the mortgage, and worsen the problem.

Datadude put it perfectly yesterday:

DataDude wrote: »

Just seems strange to so aggressively defend the "right to the family home"...once you have a family home...if you don't...then good luck to you...

People completely ignore that by affording additional protections/rights to those with something, you automatically disadvantage the people without that thing..

It is blatantly unfair.

Villa05

schmittel wrote:

It is blatantly unfair.

Renters are the oppressed minority in Ireland
Homeowners whether you paying for it or not are consistent voters
The transient nature of the rental market makes voting that bit more difficult

I see republicans are pushing through laws that makes voting cumbersome and difficult in disadvantaged minority communities in the US

Claw Hammer

Browney7 wrote: »

On a proportionality basis though, the level of arrears in BTL mortgages is incredibly high - nearly 6500 BTL mortgages out of 96k in the dataset have arrears of more than 5 years. The PDH equivalent figure is 16k out of 732k in the dataset. If ever there was an argument for "strengthening" the repo legislation from a political perspective it would be to put out a few stories of delinquent landlords pocketing ten years of rent whilst not paying a penny and how this "cheats us all".

I don't doubt the legal position on repos has a large impact on banking and lending. But so too does the billions in tracker mortgages at razor thin margins sold in the boom which are subsidised by new lending. This is to generate any sort of return on the overall capital which banks have to deploy to operate in this market which in of itself is another debate!

The current legislation allows receivers to be appointed which diverts the rent away from the landlords. In other cases the landlords are paying a interest and some of the capital but is is defined as arrears because they are not clearing the principal sum due fast enough.
In the period from 2008 rents fell by an average of 30%, vacancy rates rose with longer intervals between lettings, the NPPR was brought into being, mortgage interest was cut and the bansk refused to roll over interest only mortgages. It is hardly surprising that many BTL mortgages went into arrears.
Since covid many BTL landlords have lost their income from other businesses as well as having high vacancy rates and (in Dublin) lower rents.

Donald Trump

schmittel wrote: »

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.

They would just need to bump up the property tax. Perhaps also have a higher scale for non-owner-occupied properties. That would take some of the heat out of the market if they are pumping money in on the other end.

Hubertj

Villa05 wrote: »

Renters are the oppressed minority in Ireland
Homeowners whether you paying for it or not are consistent voters
The transient nature of the rental market makes voting that bit more difficult

I see republicans are pushing through laws that makes voting cumbersome and difficult in disadvantaged minority communities in the US

Hang on a second. I thought republicans were changing voting laws as the domecrats stole the election. Are you telling me that’s not the case?

yer man!

I have a bit of a stupid question, is there a way of telling how many houses are available in a development from daft or from an estate agent website? Or is it a case of calling each one up and getting the details? Looking at new builds on daft and it appears there's a rake of new builds but no idea what's actually gone.

I'm in the Netherlands at the moment and looking here the developer makes it clear on the website what houses are available and what's reserved. You have to "win" a house in their little lottery. Just wanted to see how this works in Ireland.

standardg60

schmittel wrote: »

Sure there is low hanging fruit in the BTLs but my guess is the BTLs are not having such a significant impact on the overall market in terms of property being misallocated. The numbers are quite small in comparison to the PDHs.

No doubt some of them are vacant, but most will be rented out, either via receivers or landlords who are taking the p*ss, but assuming the tenants are paying the rent, at least the properties are providing housing to the end user at the market rate (albeit a distorted market).

Re the increase in 10 years, we can expect to see a big jump in that figure on PDHs and BTLs in second half of this year and first half of next year because in July we have the 10 year anniversary of the Dunne ruling.

This was a court ruling that stated that banks could no longer repossess until new legislation was brought in on the issue. This has been shown to have directly led to a spike in mortgage defaults.

Irish people stopped paying mortgages in their droves after a ruling blocked the banks from evicting

Enjoyed reading (honestly) that entire judgement, the following caught my eye however;

“There appears no trace, prior to 1936, of any right in any court to deny a mortgagee asserting or claiming his right to
possession, the appropriate order - though to this a qualification has to be made in that a court in the exercise of its
inherent jurisdiction for proper reason to postpone or adjourn a hearing might by adjournment for a short time afford the
mortgagor a limited opportunity to find means to pay off the mortgagee or otherwise satisfy him if there was a reasonable
prospect of either of those events occurring. Indeed, it would be to me surprising if there had been such a trace, having
regard to the fact that a legal mortgagee does not necessarily require any assistance from the court to assert his right to
possession. Moreover, a mortgagee once rightfully in possession could never be ousted by the mortgagor except on
paying off in full.”

So, while the repeal of S62(7) from the 1964 act prevents lenders applying to courts for orders for repossession, there seems to be nothing stopping them from physically securing possession themselves, entering when vacant and changing locks etc.

Of course, doing that is another can of worms, but the legal protection seems to be there.

SmokyMo

Cyrus wrote: »

Well if these people aren't coming here becase if the tax regime then we are not attracting best talent are we.

I came across this video and thought of you comment.

https://www.youtube.com/watch?v=hWmO8tQ3wWM&ab_channel=TheValuableInvestors

Still cant find any evidence of any sort of correlation between tax regimes and workforce talent.

combat14

looks like we are going to be absolutely fleeced with additional taxes in the coming years - talk has already started..

https://www.rte.ie/news/business/2021/0417/1210516-should-pandemic-winners-pay-a-solidarity-tax/

something those who are stretched currently buying over priced houses should bear in mind along with having future kids and now upcoming lack of competition in the mortgage market which will likely drive mortgage interest rates higher too

affordability here is looking ever more and more fragile

yer man!

yer man! wrote: »

I have a bit of a stupid question, is there a way of telling how many houses are available in a development from daft or from an estate agent website? Or is it a case of calling each one up and getting the details? Looking at new builds on daft and it appears there's a rake of new builds but no idea what's actually gone.

I'm in the Netherlands at the moment and looking here the developer makes it clear on the website what houses are available and what's reserved. You have to "win" a house in their little lottery. Just wanted to see how this works in Ireland.

The bigger problem in Ireland that buying and selling process taking up to 1 year.
And even if sale will agreed you will have pay for rent or live in another property before you will get keys.When in most European countries buying and selling process taking up to 1 week.Finland for example between mortgage approval and keys from property take only 3 days.
That is the one of reasons why property market in Ireland are slow and many people are homeless even if they has money for house .
In some cases government wasting money for HAPs because people cant move to property they bought.

Hubertj

combat14 wrote: »

looks like we are going to be absolutely fleeced with additional taxes in the coming years - talk has already started..

https://www.rte.ie/news/business/2021/0417/1210516-should-pandemic-winners-pay-a-solidarity-tax/

something those who are stretched currently buying over priced houses should bear in mind along with having future kids and now upcoming lack of competition in the mortgage market which will likely drive mortgage interest rates higher too

affordability here is looking ever more and more fragile

You sound surprised taxes will increase? You’d want to be a bit dim to think they won’t increase over the coming years, in my opinion.

Cyrus

SmokyMo wrote: »

I came across this video and thought of you comment.

https://www.youtube.com/watch?v=hWmO8tQ3wWM&ab_channel=TheValuableInvestors

Still cant find any evidence of any sort of correlation between tax regimes and workforce talent.

Glad you are thinking of me, have you found any evidence of a correlation to support your thesis ?

handlemaster

Deleted User wrote: »

The bigger problem in Ireland that buying and selling process taking up to 1 year.
And even if sale will agreed you will have pay for rent or live in another property before you will get keys.When in most European countries buying and selling process taking up to 1 week.Finland for example between mortgage approval and keys from property take only 3 days.
That is the one of reasons why property market in Ireland are slow and many people are homeless even if they has money for house .
In some cases government wasting money for HAPs because people cant move to property they bought.

Government paying for Hap while someone has bought a property.... not likely
It doesn't take one year between offer on a property and getting the keys.

mcsean2163

[Deleted User] wrote: »

Sadly this will not make property market in Ireland better.

My response should have been more considered. You make interesting points. If you are a non native English speaker I must apologise as your English is far superior to any of my second languages, if you are a native English speaker, you make interesting points but would appreciate it if you could spend a bit more time formatting those points.

I'm afraid it got to me that day in particular but please don't by put off by my rash reply for which I apologise if offense was taken..

2Mad2BeMad

mcsean2163 wrote: »

My response should have been more considered. You make interesting points. If you are a non native English speaker I must apologise as your English is far superior to any of my second languages, if you are a native English speaker, you make interesting points but would appreciate it if you could spend a bit more time formatting your points. I'm afraid it got to me that day in particular but please don't by put off by my rash repl for which I apologise if offense was taken..

I'm reading this as John Cleese's voice in my head for some reason

handlemaster

handlemaster wrote: »

Government paying for Hap while someone has bought a property.... not likely
It doesn't take one year between offer on a property and getting the keys.

Government pay HAP to people who buy own property at the time when they moving to own property as first time buyers from rented property
From my experience it does ! Because property market in Ireland is corrupt ! Same as insurance industry.My friend had pay rent before he got keys 11 months after from property he bought.He spent around 9000 euros for rent before he moved to his own house.
And from member of my family experience in Finland it takes only 3 days from day of mortgage approval and getting keys of the property.

Guys My deep apologies for things I will speak about
We all talking about property market in Ireland the problems of it and possible solutions
The only one question How many years took bring postal codes to Ireland when most of Europe and world had it already ?
That is all about and property market
We will live in this mess and nothing gonna change.Well might be one day same as postal codes came we will have something better ?
But problem is that nobody does not work on it and if somebody does this gonna take ages.
The market in 2021 will be the same as in 2022 or 2024 the difference will be only in amount of buyers with money and without

combat14

Hubertj wrote: »

You sound surprised taxes will increase? You’d want to be a bit dim to think they won’t increase over the coming years, in my opinion.

im sure alot of so called ordinary "dim" people planning to buy at the moment havent factored increased taxes in when valuing their houses

anything that significantly impacts affordability and ability to repay is a huge potential drag on future house prices, substantially increased government taxes included

ionapaul

To me the prospect of general taxes increasing would encourage me to place a greater % of my net worth in my principal private residence, not less! What is more likely to be hit hard; your savings and investments, your pension pot, your PAYE and investment income, your home residence? The first three are easier targets IMHO, knowing what I do of this country. Property taxes on primary residences may rise, but will not be struck as hard as other sources of wealth or income. IMHO anyway.

standardg60

ionapaul wrote: »

To me the prospect of general taxes increasing would encourage me to place a greater % of my net worth in my principal private residence, not less! What is more likely to be hit hard; your savings and investments, your pension pot, your PAYE and investment income, your home residence? The first three are easier targets IMHO, knowing what I do of this country. Property taxes on primary residences may rise, but will not be struck as hard as other sources of wealth or income. IMHO anyway.

You have basically explained the housing issue in a nutshell.
We have turned the realistic expectation of providing a roof over ourselves and our children at a manageable expense into a state funded pension scheme.

Nothing less than mé feinism, a curse of our culture.

PropQueries

ionapaul wrote: »

To me the prospect of general taxes increasing would encourage me to place a greater % of my net worth in my principal private residence, not less! What is more likely to be hit hard; your savings and investments, your pension pot, your PAYE and investment income, your home residence? The first three are easier targets IMHO, knowing what I do of this country. Property taxes on primary residences may rise, but will not be struck as hard as other sources of wealth or income. IMHO anyway.

It does make sense if we quickly go back to 2019. I think it all depends on the outcome of those global tax reforms which we should know c. mid year.

If John Fitzgerald is right and it may end up costing us c. €6 billion a year, that’s a lot of lost revenue to be made up from the old reliables.

Throw in the possible permanent increases in health, welfare and the negative multiplier impact of forced reduced government spending and we’re probably looking at a permanent yearly shortfall of c. €10 billion per year going forward IMO

Income taxes are already taxed to the hilt from a low level, so significant increases in property taxes are the only one left IMO. They will probably use the USA as an example on how little we pay and ramp them up to their levels fairly quickly IMO

Link to John Fitzgerald article on possible €6 billion annual tax hit in Irish Times on Friday here: https://www.irishtimes.com/business/economy/john-fitzgerald-corporation-tax-changes-may-pack-more-punch-than-covid-1.4538632