Kilkenny House Prices

According to a recent Daft report they are down 44% between quarter 1 2006 and quarter 1 2011. That is leaving some buyers with a serious negative equity. You have to feel for people trying to deal with this noose around their neck. Rent prices are still steadily declining, which also will leave people with huge shortfalls if they have buy to let properties. Don't really come across much advice in the local newspapers or media for people caught up in this situation. Can't recall any local politicians coming up with local solutions for people either. They know how to save the banks and don't need any input from the people on that matter. Was reading an old Lisa O' Carroll article in the Guardian yesterday and thought it was worth posting the link as it might help someone that is at their wits end. Might make sense for younger people to explore this option.

http://m.guardian.co.uk/business/2011/feb/18/ireland-property-crash-bankruptcy-tourism?cat=business&type=article

The way I see it is that there is no one going to bail the people out, so you might as well bail yourself out.

femur61

Houses still don't be selling in Kilkenny, so many have not lowered their asking price, a lot of these sellers before prices went crazy. They don't seem to realise house prices are not making what they did a few years ago.

volvilla

Daft uses their own data as does MyHome.

Both arrive at different conclusions.

See here for recent prices in Kilkenny

The actual 'asking prices' probably lies somewhere between the two

Raze_them_all

Not saying this to troll or to cause anybody to lose their temper, but in all fairness I find it hard to feel sorry for people who paid 350000 for a house when they were only putting down 10% of so of their money( oh and 100% mortgages) The boom was clearly going to end and people just ignored it. At the time I could of got a mortgage and build a house but it would of put me into debt I wouldn't be able to pay now.

^^^^^^^^^^^
After timing alert.

You are fortunate to be in that position but the bottom line is that people bought into the dream and are now being abandoned. Why should the banks be bailed out and not the people? They will have to carry the burden of their negative equity and then if they are working also indirectly finance the bailing out of the banks. Don't think that is fair in any society. I don't have a mortgage as I live too nomadic an existence to put down roots anywhere but I feel empathy with fellow citizens who are struggling to deal with the current crisis.

catbear

My sympathy goes to those whose homes are worth less than their mortgage but I have no sympathy for 100% mortgage holders and property investors.

Investing in property is a business and businesses fail all the time. Businesses primary aim is make a profit. Those looking for the already stretched taxpayer like myself for a handout to keep their investment properties will get no help from me. No one put a gun to their heads when they signed up to multiple loans, it was their own fear and greed that motivated them.

100% mortgage holders didn't lose any of their own money so no sympathy there either. The changes to the Irish bankruptcy laws as proposed by the IMF and as practiced in the UK can discharge the personal debts of those who can no longer afford them.

Primary residences mortgages where a deposit was given should be non-recourse like on most other countries.

longshotvalue

It would be even more unfair to expect people who didnt get caught up in buying property at too high prices to pay for the people who made mistakes. The General taxpayer pays for it all in the end..

A house is just another purchase if too much was paid for it then there has to be some financial consequences for the person who decided to pay what they did, not for everyone else to share out the burden.

catbear

I agree with you aiden about the taxpayer burden but balanced against that is the needs of society.

Speculation investors as pumped up by the Fianna Fail years are anti social as they crowded out housing for those who wanted to form homes.

For many the necessity of home was strong because rental laws are extremely anti society and too pro landlord.

I stayed out of the property bubble but I don't mind funding some sort of debt write down for those in debt arrears for their primary residence. BTW, a debt write down is not a debt write off. They were prayed upon by those they were paying to serve them, Fianna Fail and their cronies. They could have, like us, stayed out of the market but that's no reason see anyones long term happiness ruined.

fabbydabby

The why should I pay for them and their stupid negative equity mess that's their own stupid fault? argument is typical Irish parochial narrow mindedness

You're not paying for Mary and Tom with the 5-bed they can't afford. You're contributing, as catbear rightly pointed out, towards the good of society to keep the bloody country ticking over as best it can.

Raze_them_all

fabbydabby wrote: »

The why should I pay for them and their stupid negative equity mess that's their own stupid fault? argument is typical Irish parochial narrow mindedness

You're not paying for Mary and Tom with the 5-bed they can't afford. You're contributing, as catbear rightly pointed out, towards the good of society to keep the bloody country ticking over as best it can.

While this is true alot of people see it as paying for other peoples stupidity, I know my parents do especially with what the various cuts and new taxes that have been introduced

randylonghorn

Raze_them_all wrote: »

I find it hard to feel sorry for people who paid 350000 for a house when they were only putting down 10% of so of their money( oh and 100% mortgages) The boom was clearly going to end and people just ignored it.

I can feel sorry for people who paid 200 - 350k for a normal house because the estate agents / media / banks / government all seemed to be telling them that it was going to keep going up and up, and if they didn't get a foothold now, it would only cost more later.

I sometimes wonder (and I wondered then) what the hell they were all thinking, esp. the banks and the government. Like you, I refused to take the bait. But I can feel sympathy for people in that situation.

I find it a lot more difficult to feel sorry for the couples with 0 / 1 / 2 kids who sold the normal 3 / 4 bedroomed house with the adequate garden for 300 - 350 k. and bought the 5 / 6 bedroomed house with the quarter acre garden and the conservatory for 550 - 700 k.

There's not as many of them out there by any means, but there's a fair few.

I also find it a lot more difficult to feel sorry for those like the guy in the quoted article who bought three houses speculatively / to rent out. Yes, the banks shouldn't have given him those loans, but he shouldn't have sought / taken them either.

I actually wouldn't mind so much my taxes helping to ease the burden on the first grouping.

I would resent though my taxes going to bail out those who got themselves into the mess through snobbishness and / or greed.

Not that it really matters what I think ... by the looks of it, we're all going to be paying the price for all of those people, one way or the other, for decades to come.

Welcome announcement by AIB this morning regarding this subject, http://www.irishtimes.com/newspaper/frontpage/2011/0413/1224294555716.html.

I think this covers the concerns of most of you that people that need it most will be helped. I can understand that people have little sympathy for those that were motivated by avarice but we live in a capitalist society and they were sold a dream. I'm not defending their greed but can see how easily the dream consumed them. I know a lot of people that went from being regular people to 'developers' overnight. Unfortunately a lot of them lost their souls along the way and I can understand how people would take enjoyment in seeing them come crashing back to reality. That guy in the original article epitomized the lunacy that was taking place. What really baffled me was people getting 100% mortgages and interest only mortgages on holiday homes here and abroad. Was recently reading where the Russians are now snapping up Irish owned properties in Bulgaria at half the price they were bought for. I would love to see the portfolio of holiday homes our banks have on their books now that have to be off loaded. I'm sure someone has come up with a figure for this somewhere.


We can flog a dead horse and berate them for their behaviour but it is in the better interest of this country to see people get out of this financial mess. You also need to look at the behaviour of some of the elite developers in NAMA and their blatant disregard for a fair process. The Government needs to set a precedent and make an example of these people. All transfer of assets to spouses and family members should be reversed and the monies from their sale discharged against their debt to the Irish taxpayer.

If a solution is found, it has to in the long run be more beneficial to each of us individually. Less taxes,more money for public services, etc...

Also over in the Independent today is a local flip side to what is being discussed http://www.independent.ie/national-news/courts/businessman-selling-home-to-clear-debt-2617697.html

Also in the news a new NAMA initiative http://www.examiner.ie/ireland/nama-plans-low-cost-property-loans-151333.html

catbear

Interesting stuff davidian but I must highlight that AIB and NAMA are institutions bailed out and set up purely for the protection of property owners equity and not for the good of society. There are still too many people not held to account for me to believe anything emanating from government and its nationalised banks are to be trusted. Sean Fitzpatrick should be charged by now. He's not.

AIB are nationalised so therefore any directive is from Gov HQ who in turn are bankrolled by IMF/EU. Social stability is the primary drive of the EU, they have plenty of battlefields commemorations to remind them of that priority.

No matter which way the Irish government try to fight it, prices are going to tumble, especially in places like kilkenny where regional unemployment rates are near 20%.

Bankruptcy reform is essential for transition out of this mess yet nothing is happening. Ireland is at odds with European social stability as Ireland offers landlords more rights than the taxpayers who rent or are in detrimental debt.

More maddening than that is that few realise that corruption hurts everyone. Lowry.

As always catbear I welcome your rational viewpoint and common sense approach.Unfortunately this country does not deal in common sense.The elite are always afforded protection by the system.I have written to Michael Lowry and told him that he is a disgrace and guilty of treason, as you can understand I never received any reply.He only answers to his constituency apparently.The system needs changing before people can start to have faith in it again.I'd be sceptical of that happening.Before this gets totally side tracked, my initial posting was to offer a possible solution for people under pressure.I still believe there are social solutions to deal with this problem but Government never listen. I think you are spot on about prices of property in Kilkenny going to tumble even further and there are a lot of people still in denial about this.They will soon see reality when auctions like this http://www.allsop.co.uk/283/Irish-auctions become par for the course in Ireland.

Anyway more on this today in the Independent.


Q & A: Lenders may forgive part of mortgage - but at a price

By Laura Noonan
Wednesday April 13 2011
DEBT forgiveness, or the writing off of debt for struggling borrowers, might sound like manna from Heaven. But anyone hoping for a no-strings-attached write-off from the banks could end up disappointed.

How would this debt forgiveness actually work?
The reality is we don't know, but you could be looking at something like the following scenario: you owe €300,000 on a property that's now worth just €150,000, and you're struggling to meet mortgage repayments of €1,100 a month.

The temptation in that hopeless scenario is to give up, stop paying the mortgage, and wait for the case to work its way through the long repossession process.

Under debt forgiveness, the bank would agree to "forgive" a portion of your loan, say €150,000, so that you now only owed €150,000 and your monthly repayments fell to an affordable €550.

Sounds great for me, but what's in it for the bank?
Instead of getting nothing from you every month, or having to go through a lengthy and costly battle to repossess your home, the bank gets €550 a month. And the "forgiven" debt could be recovered down the line.

You mean 'forgiven' debt isn't forgiven forever?
Probably not. A scheme is likely to include a clause that would see your mortgage increase again if things picked up. If your property was worth €250,000 in 10 years' time, your mortgage might then increase to that level.

If you got a new job and or a pay rise, your mortgage might go up too. Or if you later sell your home at a profit, you might have to share some of the money with the bank.

What are the pros and the cons?
The biggest pro for hard-pressed homeowners is that debt forgiveness offers a way out of a situation that could seem hopeless at the moment.

It also means that if the value of your property never recovers, and if your income never recovers, then you might never have to pay back the full value of your mortgage or another loan.

The biggest pro for the banks is that the scheme could incentivise people to make paying their mortgage their top priority. If people think they're going to lose their home anyway, there's a massive temptation to simply give up. Debt forgiveness offers them hope and a reason to keep paying.

It also makes the prospect of widespread repossessions less likely.

Won't everyone just claim they can't pay their mortgage and ask for it to be written down?
That's always the risk, but the banks will be determined to make sure this doesn't happen. Those applying for debt to be written off will be carefully assessed to see if they're a genuine case.

Are they allowed to actually do it -- use one taxpayer's money to forgive someone else's mortgage?
State-owned banks like AIB will have to get permission from the Government, and the Central Bank is likely to be consulted as well. Given the many pitfalls a scheme could face, getting a sign-off could be an uphill battle. But it is possible.

So is it worth the hassle?
The banks seem to think so. Around 44,500 mortgage holders, or 5.7pc of all borrowers, are already in arrears. And with the ECB hiking interest rates, that level is only going to increase.

If swathes of houses are repossessed, the impact for the economy would be catastrophic.

With stakes that high, banks and policymakers will be exploring every avenue possible to defuse the situation.

- Laura Noonan

hi5

So the banks will reduce their rents by 50%.
So normal rents would also go from €1100 to €550 which in turn would bring property values down even further,a properties true value is based on what it can earn for you.
A race to the bottom.
I rent so I'm all for that:)

catbear

Good post Davidian, there seems between the two routes discussed on this thread an emerging option. Some may be able to bankruptcy shop in the UK, get clear of their debts and start from scratch. Others can choose the debt forgiveness route but they could end up opting for the bankruptcy option when property prices become more depressed and there are no advantages to ownership left.

As Hi5 said the forgiveness scheme will drive down valuations, but more of a drag is the surplus of houses which regardless of government interference with NAMA will continue to grow as more and more parental homes enter the market.

For those wishing to get a grip and the velocity of price drops in Kilkenny this site may be of use http://www.collapso.net/search.html

I've had two conversations with people in their thirties this morning who are planning to leave within the next six months. The housing bubble was a monumental own goal.

Lisa O'Caroll tells it as it is today also,

http://www.guardian.co.uk/business/ireland-business-blog-with-lisa-ocarroll/2011/apr/13/ireland

Interesting phrase about 'debt burial' which AIB claim they will not be in a position to offer. Obviously if they did there would be carnage as AIB letter boxes would be full of jingle mail every morning but there is going to have to be a happy medium found. Something makes me think this offer of debt forgiveness is a smokescreen to lure customers in so they can gauge where they realistically stand on the matter. The bankruptcy route still looks the best alternative to the younger generation. catbear, I have immediate family and friends who have already bailed out,they just popped the keys in the post to the bank and said they had no option but to leave. A lot of them also cited the fact that there was no lifestyle left for them here in Ireland, just a financial prison.

catbear

Yeah, I was actually trembling a bit after talking with friends earlier, it's just the helplessness of it all. Our politicians made a balls of it but not to worry Andrew McGuiness got his picture in one of the local papers with a dog that drinks guinness. Darwinian I tell you!

PaulKK

randylonghorn wrote: »

I sometimes wonder (and I wondered then) what the hell they were all thinking, esp. the banks and the government. Like you, I refused to take the bait. But I can feel sympathy for people in that situation.

I find it a lot more difficult to feel sorry for the couples with 0 / 1 / 2 kids who sold the normal 3 / 4 bedroomed house with the adequate garden for 300 - 350 k. and bought the 5 / 6 bedroomed house with the quarter acre garden and the conservatory for 550 - 700 k.

Have to agree with you here. It really is hard to feel sorry for those that thought it was a good idea to be shelling out that much for those houses.

There are plenty as you said, I can think of numerous spots around town where places were going for that kind of cash (up to 750k) in new developments, and people queued for them!

Castle rd, granges rd, college rd for example.

I hear of situations still of couples with no kids currently renting 5 bed houses for 1200 a month in town, some people will never learn.


I will agree that houses are overvalued at the moment on daft also. I suppose its hard for many to admit they made a mistake and take a loss on their purchase. Human nature I suppose. Doesn't seem to be too much selling/being sold at the moment.

fabbydabby

Raze_them_all wrote: »

While this is true alot of people see it as paying for other peoples stupidity,

I pay for other people's stupidity all the time. It's one of the curses of being monumentally intelligent.

Seriously though, by that logic, our taxes shouldn't go to help disadvantaged families either, because it's not our fault they are disadvantaged.

It's not my fault some people get on heroin, but my tax money still pays for their methadone.... that's just the price you pay for living in a civilised society. It's necessary, unfortunately.

frankie2shoes

I love this attitude that its the bankers fault. Or the governments fault. Or its those evil estate agents that ruined us all.
It was everyones fault!
everyone who bought something they couldnt afford.
were they sold a donkey? yes.
were they forced to buy it? no
do we, as citizens have to help them? yes
will we like it? no
thems the breaks!!!
I, for one, didnt buy something I could'nt afford. But like everyone I'm hurting now from the tax hikes and stealth charges that we are all forced to suffer due to other peoples greed and avarice. It doesnt sit well with me that i'll be forced to help those who werent fiscally prudent or who "lost the run of themselves". But I will. I can only hope that a solution can be sought that will be fair and equitable to all.
And judging on past decisions that will definetely happen!!!!!:rolleyes:

catbear

I totally agree with you Frankie but my one reservation is that there be accountability. Too many at the top had vested interest in the banks and property. Sure the madness of crowds took over but to ensure that everyone buys into debt share then justice has to be done too. Bernie Madoff was in Jail within a year! Sean Fitz has been questioned but not charged with misleading his shareholders, something that he admitted publicly.

Hands up those of you reading this on tracker mortgages?Would love to hear your viewpoint on recent developments with banks trying to buy you out of those contracts.

Scenes from distressed property auction in Shelbourne today.
http://www.mobypicture.com/user/lisaocarroll/view/9233131

http://www.mobypicture.com/user/lisaocarroll/view/9232784

The vultures are out to pick over the corpses of the Irish residential market.

frankie2shoes

I'm on a tracker Davidian. Rumours of those on trackers being forced to switch to variable/fixed rates has been greatly exagerated! I was not approached by my bank to change any aspect of my mortgage!
several friends of mine are also on trackers and were not contacted either......
would love to hear if many had been contacted..........