Glut of repossessed houses could depress prices ‘by up to 25%’

As I said earlier the debt for equity swap seems the best option. Nobody should be put out of their primary residence. Politicians have a hell of a lot to lose if 4 and 5 year olds are crying on the steps of their home after their parents were put out. The equity swap would avoid the moral hazard of people not paying their mortgage.
It would also release spending money into the local economy which is really needed.
The property and water charges will fold many people. They are big chunks of money that people will have to have at their disposal.

Villa05 wrote: »

http://budget.gov.ie/budgets/2013/Documents/Summary%20of%202013%20Budget%20Measures%20Policy%20Changes.pdf

Good god, that's budget 2013. I'm talking about when the minister announces 2014. I didn't think I'd have to explain that.

cookie1977 wrote: »

You've also no real evidence (other than here-say) of people living in property for free. If you have give us it.

If you are living in a mortgaged house and not paying the mortgage, you are living in the property for free.

In arrears of 720 days is 2 years rent free and were this in Dublin would amount to 10.000 * 23523 = €235,230,000

Resedential
In arrears 181 to 360 days 24,0634
In arrears 361 to 720 days 27,829
In arrears over 720 days 23,523

BTL is where the real comedy starts 7,754 in arrears of 2 years or more. Are these people receiving rent from tenants and not passing it to the banks.

An indirect payment from the taxpayer to landlords and property owners have the brass neck to make comparisons with the famine regarding their plight.

Delusional!!!!!!!

Buy to Let
In arrears 181 to 360 days 6,830
In arrears 361 to 720 days 9,075
In arrears over 720 days 7,754

http://www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2012q4_ie_mortgage_arrears_statistics.pdf

StillWaters wrote: »

In fairness, all forthcoming and planned taxes and charges are in the Programme for National Recovery and the Programme for Government together with timelines.

While we know the figures we do not know the specifics

Villa05 wrote: »

@cookie1977
If everyone in arrears is unemployed, what other solution would you propose other than repossession and some write off? Renting back is to the detriment of the mortgage holder as they are long term unemployed in the area they are living, they need to move/upskill

If those in arrears are in employment, why are they not paying interest only. Think about how many holidays one could have for the the average rent in this country.

If banks are not moving on BTL's when there is no payment forthcoming for over 2 years. I would suspect they are not moving on those people who have a job and are choosing not to pay

All this forbearance is costing alot of money, as a result banks are increasing mortgage rates, pulling more customers into the arrears problem.

The only hope for stabilisation is that a new entrant will come in without all the baggage of Irish banks and lend at fair rates. This will not happen because no institution will lend on an asset that they can't take back if the borrower can default and keep the utility of the asset

This is a vicious spiral all stemming from the failure of banks to repossess in the first place.

If a person is 2 years or more behind in their mortgage (even 1 year), the game is up, there is no other solution other than repossession and some debt write off. Cut your losses and move on.

If those in arrears that are unemployed (and that means all adults with no employment in a single household) and there's no hope of a job soon then they probably will have to have their property repossessed. BTL's if they cannot be refinanced longterm under MARP then they too will probably have to go. I would also have liked to have seen some write down of the difference between the sale of the repossessed property and the total debt/mortgage but I dont think that's coming in under the new laws unfortunately.

But the PDH/PPH's held by people with a job/income need to be looked at closer as to what can be done. It does not mean that because they are not paying they are living it up for free. A myriad of things could be causing problems. One is fear, fear of repossession and lack of understanding of the situation they are in or the options open to them (we see them on a daily basis here on boards, people that if they'd understood they could have gotten help early then they may not be in such bad a situation). Costs of childcare or maintaining their very existence (food, bills etc...). Maybe only one person has lost their job and they can no longer meet their costs.

The fact is I dont think enough has been done to help PPR/PDH of people/familys. More focus has been on resurrecting the banks and ensuring our nations debt is paid in full. I would like to see some imagination on the topic of helping PPR/PDH of people/familys rather than just flat out repossession as the burden of this still falls on the state once the properties are repossessed.

cookie1977 wrote: »

I wouldn't agree. Look at the evidence of renters on the forum. Many talk of struggling to get properties as when they arrive for a scheduled viewing they're told it's already gone. Dublin property prices have also been rising. To be honest everyone is a "vested interest" not just the media but there is enough evidence out there now to point to shortages of certain types of properties in Dublin.

16,000 vacant apartments in Dublin city alone. That's Dublin minus DLR & Fingal. It's on page 39.

A rather surprising snippet from Colm McCarthy in the Sindo today.

It is insufficiently understood that Ireland is not having a sub-prime mortgage crisis comparable to what went on in the USA. Unemployment amongst those in mortgage arrears is half the national average. The economically weakest section of the community did not, as in the USA, get access to mortgage finance in this country.

Link

gaius c wrote: »

16,000 vacant apartments in Dublin city alone. That's Dublin minus DLR & Fingal. It's on page 39.

A rather surprising snippet from Colm McCarthy in the Sindo today.

Link

I though I was pretty clear in saying that the shortage of property is in relation to 3/4 bed houses in Dublin.

In the case of Dublin City, there were approximately
two vacant apartments for every vacant house in
April 2011.

The data is only up to and including 2011 and with little or no property being built between then and now surely you'd accept that the number of vacant properties has decreased by now. In relation to Colm McCarthy's comment, you don't need to be unemployed to be struggling with paying your mortgage.

I read McCarthy's article. He has no proof just 'anecdotal' evidence from 'bankers'.
Undoubtedly some people are playing tough but among them are people paying off other bills - hardly living it up and it is debt in another area that is paid down.
McCarthy admits in the article that the vast majority of mortgages in trouble will need a writedown or equity swap of some sort.
Giving a straight writedown is dangerous as why should 2 working parents striving hard to meet their payments get no writedown. Those in mortgage trouble will have to give something too.

Qualitymark wrote: »

The country that has successfully dealt with the housing bubble and is now back trading as normal, with money circulating in its economy as people have enough to spend, is Iceland. They decided a notional value and then cut all outstanding mortgage debt to 110% of that value, and told the banks to take a hike on the rest. Ireland could easily do the same, as we own the banks.

I wouldn't say Iceland is the perfect model.

Iceland, in fact, spent more as a percentage of gross domestic product than any other country apart from Ireland in rescuing its banks, according to the OECD.

http://www.irishtimes.com/business/economy/europe/iceland-questions-its-model-on-handling-crisis-1.1319615

The krona has lost about 10 per cent against the euro since an August peak. It is down 4 per cent versus the dollar in the same period. That's spurred inflation, and left households worse off.

http://www.smh.com.au/business/crippled-iceland-set-to-vote-20130310-2fu1t.html

Icelanders question their lauded economic recovery

http://www.reuters.com/article/2013/02/21/us-iceland-economy-idUSBRE91K0JN20130221

When talking about repossessions though isn't there a BIG difference between repossessing someone's family home and taking a buy-to-let 'investment'?

I can imagine sympathy for most people put out of their home but repossessing a BTL might be an easier sell - politically, morally etc. Surely BTLs are the low-hanging fruit? I can't see them doing anything to cause a 25% drop from where they are at the moment mind...

cookie1977 wrote: »

Are you saying you don't see a big difference between repossession of a family home and a BTL?

No I've edited there . Entirely opposite to what I meant, my mistake. I'm basically saying the IS or should be a big difference between repossessing a home & a BTL.

Tigerandahalf wrote: »

I think people are thinking that people will gladly allow their house to be repossessed. That wont happen. A lot of people will gladly support homeowners who are being repossessed.

But will they ?
Never underestimate the power of Irish begrudery.
And especially when people are expected to cough up for someone elses continued lifestyle.

Tigerandahalf wrote: »

As I said earlier the debt for equity swap seems the best option.

Best option for who ?
The ones who often can't be bothered trying to repay their debts because their "investment" is now worth less than their loans ?

Whilst a debt for equity swap may work for some cases, there is no way it should be used for people who are in massive arrears or haven't been bothered trying.

Tigerandahalf wrote: »

Nobody should be put out of their primary residence.

Remember the old couple in Dalkey/Kiliney who the media and all the lefties didn't want to be put out of their primary residence ?
There are, I bet, a fair few more of these type of people who had hocked their primary residence upto their eyeballs in debt so that they could fund their property empires.
Do these people deserve to maintain their primary residences ?

Tigerandahalf wrote: »

Politicians have a hell of a lot to lose if 4 and 5 year olds are crying on the steps of their home after their parents were put out.

Ahh won't someone think of the children. :rolleyes:
What about the children of the taxpayers just scraping by who are paying off their debts ?

cookie1977 wrote: »

I though I was pretty clear in saying that the shortage of property is in relation to 3/4 bed houses in Dublin.

Sure but if apartment stock is being withheld, single folk in their 20's or young couples will houseshare and compete with families for the limited housing stock, instead of living in apartments like they do in every other European country.

It's not difficult to find the empty apartment blocks in Dublin. My personal favourite is Clancy Quay in Islandbridge.

The data is only up to and including 2011 and with little or no property being built between then and now surely you'd accept that the number of vacant properties has decreased by now. In relation to Colm McCarthy's comment, you don't need to be unemployed to be struggling with paying your mortgage.

Only if the population of Dublin city centre increased in that time and available sources indicate that it's the commuter belt that saw population growth, not the city centre. 16,000 apartments is a lot of supply. It's twice the max peak of Daft rental supply for the entire of Dublin city (back in 2008).