Property Market Rigged

http://www.independent.ie/business/irish/investors-find-irish-market-shut-2388887.html

FUND manager Josh Brayman visited Ireland earlier this year with a chequebook, ready to snap up bargains in the Irish property market. A few months later, he left frustrated and empty-handed to hunt for deals elsewhere. He's not alone and he blames NAMA for his problems.

Many blame an overwhelmed National Asset Management Agency (NAMA) for distorting the market and making it all but impossible to buy and sell land.

Lenihans stated aims for NAMA:

Putting a floor under prices

https://www.youtube.com/watch?v=pWlz1IKWfw4

Lenihan wants you to pay higher rents & higher house prices than is necessary and he is making you pay higher taxes to keep these prices high. He is withholding all the empty propertys from the market because he doesnt want prices & rents to drop as much as they could.

You pay no matter what you do. Lenihan has made it so.

In the meantime taxes go up wages go down and the cost of buying and renting property is rigged. Even with all the building we did and all the empty properties we are still no 1 when it comes to the number of people living in the one house:
http://www.nationmaster.com/graph/peo_ave_siz_of_hou-people-average-size-of-households

This is how it is in other countries:

http://www.independent.ie/world-news/europe/berliners-strip-in-protest-at-citys-skyhigh-rents-2389240.html

Berliners strip in protest at city's sky-high rents

Although the rent for a very well appointed apartment in one of the capital's more fashionable inner-city districts can occasionally reach up to €1,000 a month, the current average for a two bedroom flat in these areas is €640 a month.

Over in the US for the craic:

https://www.youtube.com/watch?v=x4o-TeMHys0

This is a major factor in why we cant compete.
We should reform the bankruptcy laws, release these properties onto the market so that we can gain the benefits of a lower cost of living through more jobs and economic growth.

To hell with Lenihan and propping up failed banks, rents & property prices

jimmycrackcorm

So you think that all the nama property should be dumped in one go? You do realise that nama had to try minimize the loses on the properties otherwise we end up paying more.

jimmycrackcorm

jimmycrackcorm wrote: »

So you think that all the nama property should be dumped in one go? You do realise that nama had to try minimize the loses on the properties otherwise we end up paying more.

yeah i realise that hence why i said in the post lenihan makes you pay no matter what you do. But yeah dump the property on the market the sooner we put this behind us the sooner this country can move on. Everything so far has been about kicking things down the road. We should of faced up to all of this back in 2008 and by now we actually would have "turned a corner"

OMD

Deleted User wrote: »

In the meantime taxes go up wages go down and the cost of buying and renting property is rigged. Even with all the building we did and all the empty properties we are still no 1 when it comes to the number of people living in the one house:
http://www.nationmaster.com/graph/peo_ave_siz_of_hou-people-average-size-of-households

Oh the beauty of statistics.

But hey if you believe these figures then the obvious conclusion is there is substantial pent up demand for both renting and buying property. Wow we are going to see a boom in house prices and rents:eek:.

I mean it is not as if those living in the houses could be children. I mean Ireland has a very young population and a rapidly rising birth rate.:rolleyes:

Deleted User wrote: »

This is how it is in other countries:

http://www.independent.ie/world-news/europe/berliners-strip-in-protest-at-citys-skyhigh-rents-2389240.html

Berlin should be ignored when talking about rents and property prices. It has laws and rent controls that don't apply to most other population centres.

growler

Dumping a large property portfolio on the market would be a dangerous move, would likely result in nama achieving a worst case scenario price for the assets and would put thousands more into negative equity.

Why allow prices to dive in such a way so that "fund managers" like Brayman can snap up a load of undervalued assets and then continue to rent them back at inflated rates to the public? As normal people can't get mortgages the only beneficiaries would be those with enough cash to buy them outright, just what we need a new overclass of property magnates.

Such a sharp readjustment would make little sense politically or financially for the country, drip feeding and allowing a slower adjustment makes sense.

OMD

OMD wrote: »

Oh the beauty of statistics.

But hey if you believe these figures then the obvious conclusion is there is substantial pent up demand for both renting and buying property. Wow we are going to see a boom in house prices and rents:eek:.

I mean it is not as if those living in the houses could be children. I mean Ireland has a very young population and a rapidly rising birth rate.:rolleyes:

Adult Children maybe
http://www.irishtimes.com/newspaper/frontpage/2010/1009/1224280703014.html

and lets compare ourselves with other European cities.......you say not to compare with Berlin because it has different laws and regulations - isnt that the problem in Ireland? Our planning, laws & regulations are all screwed? Lets compare with Berlin and if your able to rent in the center of Berlin for 640 a month then why is it and how do we get rents that low?

growler

growler wrote: »

Why allow prices to dive in such a way so that "fund managers" like Brayman can snap up a load of undervalued assets and then continue to rent them back at inflated rates to the public?

who gives a damn about Brayman - what about the average irish man or woman who wants a decent rent or price to buy a property?

Cookie_Monster

Its rigged as such that there is an artificial floor due to the insanely high rent allowance the gov gives out to everybody. 50% of rentals come under this apparently and until its reduced by large amounts rents will continue to stay very high.

OMD

Deleted User wrote: »

Adult Children maybe
http://www.irishtimes.com/newspaper/frontpage/2010/1009/1224280703014.html

Did you read that article first:rolleyes:. It says:

"The proportion of Irishmen aged 25-34 who live with a parent (32.2 per cent) was in line with the European average of 32 per cent. The proportion of Irishwomen living at home in this age bracket (17.9 per cent) is under the European average of 19.6 per cent."

Just under 35% of our population is aged under 24. The vast majority of these would live at home. That is why we have a high occupancy rate. But hey, as I said if you believe otherwise then we have massive pent up demand which will eventually push up house prices.

Deleted User wrote: »

and lets compare ourselves with other European cities.......you say not to compare with Berlin because it has different laws and regulations - isnt that the problem in Ireland? Our planning, laws & regulations are all screwed? Lets compare with Berlin and if your able to rent in the center of Berlin for 640 a month then why is it and how do we get rents that low?

Well for example this article shows the top 20 cities to rent in Europe. As you can see Dublin does not make the top 20.
http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=507450&in_page_id=8

SkepticOne

I think we need to accept that now that NAMA is pretty much in place, any form of dumping of properties on the market in such a way as to bring prices down will be politically impossible. This will be the case regardless of who is in power.

OMD

SkepticOne wrote: »

I think we need to accept that now that NAMA is pretty much in place, any form of dumping of properties on the market in such a way as to bring prices down will be politically impossible. This will be the case regardless of who is in power.

It is not really politics at this stage however. As you say NAMA is now in place and their job is to make as much/loose as little money as possible for the tax payer.

ei.sdraob

OMD wrote: »

It is not really politics at this stage however. As you say NAMA is now in place and their job is to make as much/loose as little money as possible for the tax payer.

Alot could be changed in NAMA at this stage

transparency would be one for example

SkepticOne

OMD wrote: »

It is not really politics at this stage however. As you say NAMA is now in place and their job is to make as much/loose as little money as possible for the tax payer.

Except that NAMAs attempts to minimise losses to the tax payer will have to be paid for by (you guessed it) the tax payer in the form of higher rents and house prices. It does not bring any additional money in to the country and merely serves to keep the country uncompetitive.

I can see some merit in not dumping all the properties at once; it would be better if they were disposed of over a number of years, but the problem with NAMA is that any release of properties onto the market except at an extremely slow rate will be politically unacceptable despite it being what the country needs. It will probably be sovereign default that forces the governments hand in the end.

SkepticOne

ei.sdraob wrote: »

Alot could be changed in NAMA at this stage

transparency would be one for example

Unfortunately that is not going to happen. NAMA needs to be viewed as a gigantic business and like all businesses it keeps information to itself and away from its enemies (in this case the public). There are so many billions at stake that politicians are not going to interfere.

jmayo

At the moment we have property prices being kept at artifical level and one of the reasons is NAMA.

On the other side we have residential rental market kept artifically high by the hundreds of millions been given out by government in rent allowances.

Anyone that thinks these are good things are deluding themselves.

Very few people are moving, even if they have the wherewithall because they believe property prices have not bottomed out.

Other countries let their bubbles deflate quickly and then start afresh with the hope it doesn't go the way of Japan.

Here on the other hand our government have decided we will screw ourselves long term by letting the air out over 20 years.

Of course the pretence is that it is to protect the taxpayers investment.
And NAMA has been strucutred in such a way that in order to supposedly get any of our investment back we have stifle normal market forces.

All I see NAMA achieving is a way of divesting the banks of lots of bad debts that they would have had to chase the developers for, whereas the secretive NAMA claims they will do this over longer term, but as it is so secretive we will never know what hidden little deals will be carried out.

IMHO the winners out of this are banks who get quick cash and developers who get breathing space to move their loot elsewhere.
Taxpayers just cough up the dosh necessary.

Backard_Pell

Lenihan's legacy will be that of a convincing spoofer.... but a pretty condesending one at that

ei.sdraob

SkepticOne wrote: »

Unfortunately that is not going to happen. NAMA needs to be viewed as a gigantic business and like all businesses it keeps information to itself and away from its enemies (in this case the public). There are so many billions at stake that politicians are not going to interfere.

This "business" is using our public money and is backed by us completely, unfortunately...

AckwelFoley

Deleted User wrote: »

who gives a damn about Brayman - what about the average irish man or woman who wants a decent rent or price to buy a property?

House prices have fallen. I have seen a fall of 50% locally.

This adjustment is good, however...

Do you want peoples houses to fall further and be in further negative equity?

dissed doc

Deleted User wrote: »

This is how it is in other countries:

http://www.independent.ie/world-news/europe/berliners-strip-in-protest-at-citys-skyhigh-rents-2389240.html

Berlin isn't the greatest example as it is a city with a size for 4-5 million people with a population of around 3.5 million. It's very underpopulated compared to other cities of it's size especially capital cities. Berlin is an aberation in property markets and doesn't "work" as it's esentially entirely bankrupt and maintains political and cultural power, but not the financial or industrial ones that dictate the market. IMO.

femur61

Deleted User wrote: »

This is a major factor in why we cant compete.
We should reform the bankruptcy laws, release these properties onto the market so that we can gain the benefits of a lower cost of living through more jobs and economic growth.

To hell with Lenihan and propping up failed banks, rents & property prices

But easy talk on a cyberspaced based discussion is anyone listening. Are all our arguements/talk/disagreements/frustration going to be listened to.

gurramok

snyper wrote: »

House prices have fallen. I have seen a fall of 50% locally.

This adjustment is good, however...

Do you want peoples houses to fall further and be in further negative equity?

How is other people in negative equity a prospective buyers problem? Thats a new one alright!

AckwelFoley

gurramok wrote: »

How is other people in negative equity a prospective buyers problem? Thats a new one alright!

Its not a buyers problem.

But people that have a house and in negative equity have as much right to be protected as those that are looking for a house.

To be honest, personally i dont think the issue with the market is that the houses are too expensive now, you could easily buy a nice house in Athlone for 100 - 120 k - this same house 4 years ago would have been a crazy 300k, and im sure the prices have taken a similar hit relatively in other parts of the country

The problem is not that people dont want to buy houses, the problem is that the banks are not giving loans to people. I dont care what news snippet the banks release telling us that they are giving loans - they're not! I know people looking for small mortgages, mortggages that would be considered "top ups" a few years ago, these people have good secure jobs, yet they're refused


It doesnt matter either way becuase this whole lenihan thing has no relivance on the current market, there are thousands of houses for sale at the moment without even looking at the nama "assets" and these houses are not selling.

gurramok

snyper wrote: »

Its not a buyers problem.

But people that have a house and in negative equity have as much right to be protected as those that are looking for a house.

And how do we balance that out? Its certainly not trying to price control the market as buyers will simply stay away.

snyper wrote: »

To be honest, personally i dont think the issue with the market is that the houses are too expensive now, you could easily buy a nice house in Athlone for 100 - 120 k - this same house 4 years ago would have been a crazy 300k, and im sure the prices have taken a similar hit relatively in other parts of the country

The problem is not that people dont want to buy houses, the problem is that the banks are not giving loans to people. I dont care what news snippet the banks release telling us that they are giving loans - they're not! I know people looking for small mortgages, mortggages that would be considered "top ups" a few years ago, these people have good secure jobs, yet they're refused


It doesnt matter either way becuase this whole lenihan thing has no relivance on the current market, there are thousands of houses for sale at the moment without even looking at the nama "assets" and these houses are not selling.

No offence, Athlone is a small town in the middle of nowhere, you cannot expect prices to be maintained high there. Demand is low and supply is high.

Some people are still getting mortgages, just look at the IBF stats, mortgage lending has not stopped. What banks are doing is making sure the loan is giving out to applicants who are prudent and have good history of employment and credit.

Top-ups are not relevant to a functioning house market, they are just loans getting bigger, no wonder banks refuse them now considering they can be risky in a falling market.

AckwelFoley

gurramok wrote: »

No offence, Athlone is a small town in the middle of nowhere, you cannot expect prices to be maintained high there. Demand is low and supply is high.
.

.

Most of the nation, mortgages holders and citizens are outside the capital, and as one of the larger urban centers outside dublin it is a pretty relavent example.

This is a national problem, not a dublin problem.

Our politicans are getting torched because of their apparent interest in local matters first and national second.

We are guilty of the same

I welcome the drop in house prices, houses were much too dear, on paper i lost 150k in the last 2 years.. does it bother me? No, because i didnt spend more than i could afford and i could forsee this economic crash comming

gurramok

snyper wrote: »

.

Most of the nation, mortgages holders and citizens are outside the capital, and as one of the larger urban centers outside dublin it is a pretty relavent example.

This is a national problem, not a dublin problem.

Our politicans are getting torched because of their apparent interest in local matters first and national second.

We are guilty of the same

Yes, totally agree. I still don't understand how falling prices is not beneficial to a buyer. They will stop falling at some point, its not up to any outside intervention to make that happen.

"Do you want peoples houses to fall further and be in further negative equity?"

I'm a prospective buyer(maybe next year). Should I have people's negative equity in mind when buying so that I will not help force down prices by buyng at too low a price?

AckwelFoley

gurramok wrote: »

Yes, totally agree. I still don't understand how falling prices is not beneficial to a buyer. They will stop falling at some point, its not up to any outside intervention to make that happen.

"Do you want peoples houses to fall further and be in further negative equity?"

I'm a prospective buyer(maybe next year). Should I have people's negative equity in mind when buying so that I will not help force down prices by buyng at too low a price?

Absolutely, its great that the prices of houses have fallen to a more realistic level, but its not in the national interest that there is x amount of billions of the nations finances in negative equity. Im not in negative equity, nor will i ever be, unless we have a nuclear fallout, but lenihan has to try and balance the market, i dnt think hes doing that right now, but if he floods the market with houses it will cause even further financial turmoil.

gurramok

snyper wrote: »

Absolutely, its great that the prices of houses have fallen to a more realistic level, but its not in the national interest that there is x amount of billions of the nations finances in negative equity. Im not in negative equity, nor will i ever be, unless we have a nuclear fallout, but lenihan has to try and balance the market, i dnt think hes doing that right now, but if he floods the market with houses it will cause even further financial turmoil.

The govt made a bad decision on NAMA using their price criteria. If prices continue to fall, thats their mistake and yes taxpayers get screwed.

Continuing as it is, not releasing NAMA properties onto the market is maintaining an artificial floor in local markets. For example, if there are houses i know of that have not reduced in price because NAMA want to drip feed them, why should I buy them knowing that the price I pay is artificially too high? A fair whack of buyers ain't stupid.

To sum up, maintaining that artificial floor on pricing is prolonging the pain as the property market will never recover at that rate. If they release all the NAMA properties tomorrow, it will take a few years for prices to recover from the collapse(from todays prices) instead of many more years of stagnation.

AckwelFoley

gurramok wrote: »

The govt made a bad decision on NAMA using their price criteria. If prices continue to fall, thats their mistake and yes taxpayers get screwed.

Continuing as it is, not releasing NAMA properties onto the market is maintaining an artificial floor in local markets. For example, if there are houses i know of that have not reduced in price because NAMA want to drip feed them, why should I buy them knowing that the price I pay is artificially too high? A fair whack of buyers ain't stupid.

To sum up, maintaining that artificial floor on pricing is prolonging the pain as the property market will never recover at that rate. If they release all the NAMA properties tomorrow, it will take a few years for prices to recover from the collapse(from todays prices) instead of many more years of stagnation.

I dont fully disagree with you to be honest. Personally- as i said i dont think the money is there, going back to the athlone example, there are buyers there, there are cheap houses there - unfortunatey the money is not been made available because the banks dont have it - and more so in Dublin as the prices of houses are higher

I know a mate of mine paid nearly 500k for a 3 bed apt along the Quays in Dublin. Personally, i wanted to give him a kick in the head, but alas hes now in serious negative equity. Real value of that apt? In my opinion 200k

The banks are making the correct decision to hold back on giving out mortgages right now for several reasons primarily the budget deficit - wages will decrease and or taxes will increase. Uncertainty. Give out a mortgage now you may find it has a higher chance of defaulting should the buyer lose their job in a cut back or lose the ability to repay the loan should taxes increase too much or wages decrease etc etc

growler

growler wrote: »

Such a sharp readjustment would make little sense politically or financially for the country, drip feeding and allowing a slower adjustment makes sense.

A sharp adjustment allows people to get back to work quicker. Why drag this out over 10 years plus? losing a generation to emigration while we are at it? Take our medicine now. Jobs and getting GDP growing again should be the priority......negative equity is secondary to our problems and will resolve itself when we start earning again as a nation.

audi4444

just on the rent allowance sure that was brought in pay fr all ministers and td's rented houses:D oh wat a circle our money does

murphaph

snyper wrote: »

I know a mate of mine paid nearly 500k for a 3 bed apt along the Quays in Dublin. Personally, i wanted to give him a kick in the head, but alas hes now in serious negative equity. Real value of that apt? In my opinion 200k

Your mate, and many thousands of people like him, are a major reason our economy overheated and we had such a massive property bubble. 500 grand for a flat along the quays?! Ireland is fcuked because there are a heck of a lot of stupid people like him in it.

If we have people stupid enough to shell out 500 grand (for a LEASEHOLD presumably) then it's no wonder the same stupid people elect a stupid/greedy/corrupt government. Things won't improve in Ireland until the populace at large wises up some!

gurramok

snyper wrote: »

I dont fully disagree with you to be honest. Personally- as i said i dont think the money is there, going back to the athlone example, there are buyers there, there are cheap houses there - unfortunatey the money is not been made available because the banks dont have it - and more so in Dublin as the prices of houses are higher

I know a mate of mine paid nearly 500k for a 3 bed apt along the Quays in Dublin. Personally, i wanted to give him a kick in the head, but alas hes now in serious negative equity. Real value of that apt? In my opinion 200k

And a work colleague of mine is buying at the moment. Its the sheer number of buyers that have fallen of a cliff as too many did buy in the mania and some extended themselves which is not a buyers problem.

That mate of yours is not Alison O'Riordan? Yes, they were fools but they bought at a price that was worth to them so any complaints of falling prices is not my problem.

BJ's post above shows what we need to do nationally.