Irish Property Market chat II - *read mod note post #1 before posting*

I have a question for you guys.

One of the constant themes I read on here, this thread and others, is the difficulty lenders face in repossessing a home. I read this article (Fcuk me I can't post links again) Google "Start Mortgages gets possession order for family home over €60,000 debt" and was wondering if every repossession is this lengthy?

Even after all this time the judge has stated some form of reconciliation may be possible and it will probably take another 2 years to get possession of the home! Am I reading any of this wrong?

In the UK you will lose your home in a year, and in most cases likelier quicker than that.

For my school work experience I spent 2 weeks at a branch of Bradford and Bingley. Literally the first job they had me do was to put repossession threat letters into envelopes. Welcome to banking!

A lot of what I hear on the topic of repossession tends to be your typical conservative welfare queens hate mongering.

If you go into arrears frankly it’s good if we have laws that force banks into making something work over just taking your house and basically destroying you financially. Frankly that would probably be cheaper for taxpayers in the long run also if you’re really worried about such things.

There seems to be this ridiculous perception that reposing homes will free them up for good hard working people, and that it will also lower interest rates. The former is imo an abhorrent classist point of view, that ignores the reality of poverty and blames victims in general (do you think everyone in arrears just decided they plain old didn’t feel like working anymore?). I’ve yet to see any compelling evidence for the latter.

So are repossessions happening or not? If they are, then what’s the problem? If you mean most people going into arrears aren’t poor, then why does it happen? Maybe there is a problem with reckless lending for instance, if so maybe we should tighten lending rules.

I don’t want to get hyper fixated on the word poor. I think it’s a reach to claim most poor people can’t affords mortgages therefore there are hardly any poor people in mortgage arrears. I’d be interested to see the data to back that up.

It's definately slowing down, I've had calls from 3 different estate agents trying to shift stock that is not moving as quick as the sellers were led to believe it would!

Honest question, how did they post if they were banned?

Anyway they made a valid contribution. Here's the link posted that may be pertinent to our market in time, especially regarding institutional investors.

https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html

There are consequences. Just because your house isn’t repossessed doesn’t mean there are not serious consequences to mortgage arrears. It’s still probably in everyone’s best interest to have you continue to pay back as much as you can, and if you really cannot pay back anything to not immediately make you homeless.

Besides show me some evidence of all the people that are having a great time while in mortgage arrears if it’s really so endemic that it is a significant drain on supply/dictates how interest rates are set. Heck even show me some data on the latter alone. I guess more crucially to you comment, I’d like to see evidence that the moral hazard argument actually works. That enough people in arrears would otherwise not be if they had just been sufficiently frightened by the moral hazard. That making an harsh example of some people is really a good thing to deter bad behaviour.

I’m really ready to be corrected on this since I honestly don’t know. But I would assume mortgage interest rates are set as monetary policy by the central bank based on a number of factors, and unless arrears are at alarming levels then they really shouldn’t be impacting the rates that much. Please share me any evidence to the contrary. I assume the most significant factor on mortgage rates by far is from rates set by the ECB. I’m gonna preempt the argument that other countries in the euro have lower rates by arguing that is not necessarily to do with repossession regulations per country, it’s more likely down to relative amounts of public debt in general per country or many other factors. But if you have some data that proves otherwise I would be happy to consider it.

I really don’t mean to be rude. I just feel like many people are getting angry at the wrong target because they’ve been fed a narrative that feels intuitively right. And that makes me a bit mad. Even if there is something to the argument, I think it bears a lot more scepticism. Because the political consequences of such thinking could be pretty abhorrent.

I have noticed that too. Nothing on my watch list has moved. The introduction soon of hybrid working I would think are making folks take account of what and where they want to buy coupled also with unrealistic advertised prices.

Nothing cures high prices like high prices. Central bank lending rules are slowing or stopping price rises continuing. The mortgage exemptions word all be used up at this stage. There may be a slight correction where the top is taken off the price rise of the last 3-6 months in Dublin.

Property outside Dublin is still holding and selling fairly fast. High building prices will also discourage people from doing extension's home improvements which may push this labour into the new house market. Expect slightly more property to start coming onto the market.

I cannot see a crash rather a stabilizing at a price level 10% below peak

It not just the cost of the default with the ancillary costs associated with it. Accross Europe if you do not make repayments the equity you put up is repossessed in timely (12-18months) fashion.

We have situations where people have no repayments made for 5-10 years and still no repossession. Banks themselves are loath because if the publicity to continue down this line so they sell the loss making loans at a 50-80% discount.

If there margins after costs is 0.75% on a mortgage that means that a loss making loan may swallow the profit on 100 preforming loans and that is before the added cost of managing these non preforming loans for 5-10years

one of the major costs is the capital cost of arrears as banks are required to hold more capital Incase of default... the more arrears increase the overall capital cost of the loan book which is passed onto every mortgage. The longer accounts are in arrears impacts this and is the main reason that banks will try and get these loans off their books

I already saw that bonkers link. It does not provide much detail, throwing out a few figures comparing us to Denmark etc. without any context, and not conclusively linking higher repossessions to lower interest rates.

There is a detailed report on the impact of repossession across Europe that provides some context of the complexity of even comparing two countries with entirely different legal and economic systems and concluding something like well less repossession and higher interest rates, correlation must equal causation. Unfortunately my account is not old enough on board to directly link… It on feantsa.org if you’re interested. “Evictions in Europe: Useless, Expensive and Preventable”

I have. I’ve explained in detail where claims I’m refuting are lacking in context and why. I’m also being clear I’m not an expert in the topic and and willing to accept evidence if anyone could present any. I’ve also mentioned a report on the topic that provides more context than a few poorly referenced blogs/articles. But because I used the word “feel” I’m being emotional? Cop on.

if anyone is driven by feelings over facts surely it’s the people that believe repossessions will lower interest rates and are incapable of proving it in any meaningful way other than it feels right, and if you look at a few out of context numbers you can twist them to support your feeling. I said from the start I’m willing to accept the argument, but it demands more scepticism than anyone here presents because the social impact of some policies for those affected could be immense. You can choose to ignore that or not care about those facts.

For what it’s worth I’m a renter in my 30s who cannot afford my first house.

I think it’s abhorrent to push for policies that target the weak. We know evictions lead to a terrible human cost; broken families, and higher suicide rates. But you’re all so eager to ignore that if it could save you (potentially!) a few grand. Just makes me angry people are this selfish tbh.

Stark numbers there bass, there'd be marches on the streets demanding repossessions if more people knew them. Thats game , set and match I reckon 12345, stick with the emotive stuff!