Property Price Floor

http://www.rte.ie/news/2012/0508/nama-launches-pilot-scheme-to-protect-homebuyers.html

The product, the agency hopes, will protect buyers from decreases of up to 20% in the value of their property over the next five years.

The pilot phase of the programme will see the initiative available on more than 115 houses located in 12 developments in Dublin Meath and Cork.

Three banks - Bank of Ireland, AIB (through their subsidiary EBS) and Permanent TSB bank will participate in the initiative.

NAMA says that potential buyers interested in houses available under the scheme should approach one of the nominated banks

Under the scheme, a purchaser would seek a mortgage of €180,000 and pay a deposit of €20,000 on a property linked to a NAMA loan for sale for €200,000.

NAMA then agrees to defer the payment of 20% of the current value of the property, in this case €40,000. Should the property be worth €200,000 or more after five years the buyer's repayments will continue to cover the €40,000.

Doing their best to make property a one way bet and they have no problem using your money to do so.




I ask simply, where will it all end?

Degsy

blindjustice wrote: »

http://www.rte.ie/news/2012/0508/nama-launches-pilot-scheme-to-protect-homebuyers.html

Doing their best to make property a one way bet and they have no problem using your money to do so.




I ask simply, where will it all end?

They never give up with thier proeprty obsession.

rodento

Crazy idea, why don't they just let the crash happen and be done with it, I can't be holding out forever to buy a house:rolleyes:

superluck

I think it's fantastic the government are buying overpriced property from developers. Once the loses are passed onto the tax payer in the form of austerity and tax increases, the government can place those properties back on the market at reasonable prices. And shure, if the same people that caused this mess want to buy back the property later, it's no problem.Great idea.

christmas2012

ya i agree there is an unhealthy obsession with property here in ireland - an over reliance on it ,and now there itching to drive back up prices again where there going to price people who now cannot afford out of the market..

can they think of anything else to get our economy booming like creating more jobs?

Sleepy

/head desk

/head desk

/head desk

dsmythy

Lessons unlearned.

MadsL

Speechless. A Junior cert maths student could see the problem with this.

rodento

Does this not discriminate agains't those who can't afford the current prices :mad:

washman3

They are willing yo stoop to any low to re-ignite the property bubble.
The worrying thing is that they are answerable to nobody:mad:

rodento

Anyone know if this will result in a massive fall in price of non nama properties:eek:

Welease

I think people are being somewhat harsh on NAMA with regard to this effort..

1) People want NAMA to secure the best market price for property it controls
2) People want NAMA to liquidate the property it controls, but they don't want a firesale on prices and NAMA racking up a huge losses.
3) There a likely a lot of people who intend to buy property but are holding out to ensure prices don't drop further, and this is causing further stagnation (and price drops), which makes 1 & 2 very difficult.

This plan lessens the potential impact of 3.. which allows 1 & 2 to happen..

While it's not the best plan possible, I don't see it as an attempt to create a new property bubble (or any other similar claim being thrown about). It's an attempt to break the cycle of uncertainty, which may allow some normality to return to the market for usable/required properties. If this happens then NAMA can liquidate some of these assets.. Its 115 houses as part of the pilot, so no major commitment either way.. but we may learn something useful.

Doing nothing so far.. has achieved .. nothing..

GetWithIt

rodento wrote: »

Does this not discriminate agains't those who can't afford the current prices :mad:

Not really. This only applies to NAMA properties.

115 houses located in 12 developments in Dublin Meath and Cork

What do you think the effect of this will be on non-NAMA properties nearby?

Which property would you buy? How much would the non-Nama property need to drop it's price in order for you to purchase it? 20% maybe?

Either these properties are currently 20% overpriced or the net effect will be to immediately reduce the rest of the market by 20%. Most likely the first option.

This is what's known as marketing.

There is no net loss to the taxpayer if the property drops from it's sale price. We've already taken that loss. What NAMA are doing are effectively getting an interest free loan from the buyer for 4(?) years with an option on the first 20% of any profit (actually 25%) made in the period.

hmmm

The news today said that NAMA introduced this because "there was no demand for the property on their books". WTF? This property was not made available to the public. Can I make it clear to NAMA that I will buy anything on their books if it is made available at the right price, instead now as a taxpayer I'm subsidising purchasers of overpriced property.

washman3

superluck wrote: »

I think it's fantastic the government are buying overpriced property from developers. Once the loses are passed onto the tax payer in the form of austerity and tax increases, the government can place those properties back on the market at reasonable prices. And shure, if the same people that caused this mess want to buy back the property later, it's no problem.Great idea.

And there my friends is the whole concept of Nama in the first place.!!
Good post superluck.;)

Sleepy

Just took a look at on-line listings for the Dublin properties and wouldn't touch any of them with a bargepole...

creedp

superluck wrote: »

I think it's fantastic the government are buying overpriced property from developers. Once the loses are passed onto the tax payer in the form of austerity and tax increases, the government can place those properties back on the market at reasonable prices. And shure, if the same people that caused this mess want to buy back the property later, it's no problem.Great idea.

That's capitalism Irish style at its best! When the curve is up the entrepreneurs make a killing because of the risks associated with putting their money into creating wealth and jobs for the masses but of course when the curve turns downwards the State must intervene and socialise the entpreneurial risk .. so now its our money. Best of both worlds.

Its funy then when there are proposals from the Govt to intervene to stimulate the property market the capitalist jump up and down saying that the Govt should stay out and let the market find its equilibrium. Presumably this could mean that the same (busted) entrepreneurs who were bailed out by NAMA (i.e. positive Govt intervention!) can get back in and buy up same property at 'market prices' to make a killing (Mark II) down the road. Its a great game really!

snubbleste

Surely it is a property price ceiling
Nama sets a "fair value" price, therefore all units in the area that are above this mark are effectively overvalued.
In effect this Nama move creates a maximum price limit ie. a ceiling.

paddy0090

creedp wrote: »

...NAMA (i.e. positive Govt intervention!)

Honestly

The faster a market bottoms out the faster it recovers. Nama seems determined to stop this, and it's actions are distorting the market. The govt. didn't intervene to help the wider public or the property market, they intervened to bailout the banks(bad property loans). IMO the side effects will be negative.

Dan_Solo

creedp wrote: »

That's capitalism Irish style at its best! When the curve is up the entrepreneurs make a killing because of the risks associated with putting their money into creating wealth and jobs for the masses but of course when the curve turns downwards the State must intervene and socialise the entpreneurial risk .. so now its our money. Best of both worlds.

Just like the banks' old motto: privatise the profit, mutualise the risk.
This has come to mean "nationalise the risk" of course. Can't get more mutual than that!
Scrap NAMA please.

Amberman

Welease wrote: »

Doing nothing so far.. has achieved .. nothing..

Well, doing nothing has acheived a few things:

1. Lets the market establish a non-centrally manipulated clearing price for property to allow the market to reach a bottom and recover faster. In the UK, prices dropped 2.4% after they removed the stamp duty giveaway. All these givernment actions typically do is pull forward demand and string out the slide over a longer period.
2. Doing nothing let people who were priced out during the artificial boom get a house at the present clearing rate
3. Doing nothing typically saves tax payers money from hair brained interventions like this one.

Doing nothing is what governments are supposed to do in free markets.

NakedNNettles

creedp wrote: »

When the curve is up the entrepreneurs make a killing because of the risks associated with putting their money into creating wealth and jobs for the masses.

I wouldn't really associate the style of developers we have come to know as being entrepreneurs, they have in more in common with three card trick men.

Farmer Pudsey

rodento wrote: »

Crazy idea, why don't they just let the crash happen and be done with it, I can't be holding out forever to buy a house:rolleyes:

How much do you want/expect to pay for a house?

This is not going to suddenly overinflate the market. Nama are putting at present 150 houses onto market like this and has about 1500 houses on there books I believe. It looks like that most cities do not have a stock of completed houses in hand. Will there a sudden glut ogf houses on the market.
Houses have fell 50% approx how much do people expect them to fall if they fall another 20% will some people still expect them another 20%.

BornToKill

Dan_Solo wrote: »

Just like the banks' old motto: privatise the profit, mutualise the risk.
This has come to mean "nationalise the risk" of course. Can't get more mutual than that!
Scrap NAMA please.

Can you explain maybe how the scrapping would work? Are you intending to write off the €32bn NAMA paid for the loans or do you think these should transfer back again to each bank? What would scrapping NAMA achieve do you think?

creedp

paddy0090 wrote: »

Honestly

The faster a market bottoms out the faster it recovers. Nama seems determined to stop this, and it's actions are distorting the market. The govt. didn't intervene to help the wider public or the property market, they intervened to bailout the banks(bad property loans). IMO the side effects will be negative.

My point was that NAMA was a positive Govt intervention from the NAMA rescued entrepreneurs perspective in that it allowed them to offload their failed investments while protecting their other assets to the greatest extent possible. However, these same [bust!] entrepreneurs/free marketeers would now like a no intervention policy to crash prices in order to get in at the bottom of the market. Its funny how Govt intervention is necessary in some instances to assist the market but then when it suits the Govt should stay out and let the market do its thing! Let's be clear though that NAMA was certainly not a positive intervention for the ordinary taxpayer who will be paying for it for a long time, certainly long after the busted entrepreneurs are back in the good time again

creedp

NakedNNettles wrote: »

I wouldn't really associate the style of developers we have come to know as being entrepreneurs, they have in more in common with three card trick men.

Im sorry to keep repeating the word 'entrepreneurs' but I was sick of listening to that term being ascribed to our home grown world class developers during the good auld Celtic Tigers times - "the Irish are buying up New York", whereas now they are seen as something altogther different- we are a fickle race!!

creedp

Farmer Pudsey wrote: »

How much do you want/expect to pay for a house?

This is not going to suddenly overinflate the market. Nama are putting at present 150 houses onto market like this and has about 1500 houses on there books I believe. It looks like that most cities do not have a stock of completed houses in hand. Will there a sudden glut ogf houses on the market.
Houses have fell 50% approx how much do people expect them to fall if they fall another 20% will some people still expect them another 20%.

I think at this time some people think the market price should be 100% lower that it was at the peak! It would be fantastic of course as then we wouldn't need the banks at all. Problem solved and everybody happy

Degsy

Read this gushing nonsense from the Independant

http://www.independent.ie/business/personal-finance/property-mortgages/nama-homes-come-with-celtic-tiger-luxuries-but-recessionproof-prices-3103858.html

IF NAMA's deferred payment scheme is designed to get nervous buyers off the fence and down to their mortgage lender, then the houses viewed by the Irish Independent yesterday should do just that.
The scheme, which effectively removes a chunk of the negative-equity risk of buying a new home, would appear to be a fair deal for both cautious consumers and for developers keen to offload stagant housing stock.
The only catch for the prospective house hunter is whether you want to buy a home in one of the limited number of developments included in the pilot phase of 115 units in Cork, Dublin and Meath.
Take Loughmore Square on Killeen Castle estate, just outside Dunshaughlin, Co Meath, for instance.
These are homes with Celtic Tiger-type specifications at recession-proof prices. The three-bed showhouse, which is priced at €320,000, boasts three en [COLOR=#009900 !important]suite[/COLOR] bedrooms, with Villeroy and Boch sinks and baths, while the kitchen includes fully integrated white goods as standard, along with granite tops and a Miele oven.
The showhouse, which measures 149 sq metres is fully furnished, with all contents included in the sale price and features other lavish extras such as surround sound and mood lighting. The kitchen alone would cost an estimated €50,000 to install.
But if the bank won't let you reach that far, you could opt for a identically sized three-bed townhouse with standard fittings and for €275,000. They still throw in all the white goods and granite surfaces in the kitchen.
The development overlooks the Jack Nicklaus-designed golf course and has a wooded walk, fishing lakes and gated security. In the same area, a three-bed bungalow in its own grounds is selling for €310,000 and a four-bed detached home is priced at €285,000.
In Carrickmines, south Dublin, Douglas Newman Good is offering three- and four-bed townhouses from €275,000, through the deferred-payment scheme.
Pearse Construction built the 271 homes in the Carrickmines Manor development just over four years ago. About 70 failed to sell at price tags which dropped from a high of €795,000 for four bedrooms in 2007 -- and were rented out. It is those that are now available.
Upstairs are three double bedrooms, all en suite, while downstairs is a relatively small kitchen, spacious [COLOR=#009900 !important]living room[/COLOR] and a courtyard area to the rear.
But, with the four-bed, 138 sq metre townhouse priced at €295,000, these homes compare very favourably with other similar houses available in the area.
A three-bed home in a nearby development is priced at €425,000.
According to DNG senior negotiator Gina Kennedy, the aim of the new scheme is to encourage fearful buyers to take the plunge.
"It is a lack of consumer confidence which has been key, although that has picked up somewhat already. But there is a whole section of people who have been sitting on the fence for the past four or five years," she said.
Padraig Sherry of Sherry Fitzgerald, which is handling the Killeen development, does not believe the scheme will skew the market because it is too limited in scale.
"I welcome any initiative which is aimed at stimulating a stagnant market but the most important element is liquidity. The banks have to start lending to people," he said.
Meanwhile, in Cork, where 62 of the properties are located, Rowan Hill in the plush Mount Oval development should also prove a strong draw.
The estate has its own commercial centre and there are multiple schools and creches nearby. Just minutes from the city's main South Link access route, and the city centre, the townhouses tick most of the boxes for first-time buyers.
However, just 10 two-bed townhouses are available under the NAMA scheme -- the more popular three- and four-bed homes have not yet been included.

Absolutely sickening. This reads more like a press release from an Estate Agent than an impartial artcile in a national newspaper.

And tbh the prices being asked are absolutely sickening...Kileen is in the middle of nowhere and carrickimines they're looking for 300 grand for an aprtment.

This sort of bullshiit shouldnt be allowed to continue..let the market find its own level through market forces and without the intervention of the vested interests,estate agents and national newspapers.

Dan_Solo

BornToKill wrote: »

Can you explain maybe how the scrapping would work? Are you intending to write off the €32bn NAMA paid for the loans or do you think these should transfer back again to each bank? What would scrapping NAMA achieve do you think?

Precisely. Back to the banks and let them collapse.

thebman

The problem is that it isn't a lack of consumer confidence.

Consumers have never been more confident that they can get a better deal than what is being offered by waiting a little longer.

creedp

thebman wrote: »

The problem is that it isn't a lack of consumer confidence.

Consumers have never been more confident that they can get a better deal than what is being offered by waiting a little longer.

Long may it last I say .. so that the rental market remains strong!

paddy0090

creedp wrote: »

My point was that NAMA was a positive Govt intervention from the NAMA rescued entrepreneurs perspective in that it allowed them to offload their failed investments while protecting their other assets to the greatest extent possible. However, these same [bust!] entrepreneurs/free marketeers would now like a no intervention policy to crash prices in order to get in at the bottom of the market. Its funny how Govt intervention is necessary in some instances to assist the market but then when it suits the Govt should stay out and let the market do its thing!

Well if swimming with sharks means you're liable to get bit....don't swim with sharks. The government would have been off better letting the market sort out the entrepeneurs.

In fairness to Alan Ahearne I think he's a solid economist, and a bad bank is a standard solution to recapitalising a banking system. But a bad bank on that scale so heavily involved/exposed in the property sector can only create a mission creep that f*cks up the market. I'm sure someone else can point out why being in the euro messes it up even more.

The RBS loan book handled by allsops has helped establish a floor for prices. Though IMO some people there are getting blinded by the chance of a bargain instead of actually picking up a bargain. No govt intervention required. The kicker is most of the money(they are mostly cash sales) in thoses auctions ends up overseas.

Rents are only really up in the greater Dublin area. The price of renting in Donegal is so low that any increase makes f*ck all difference. But yeah long may it continue!

rodento

Farmer Pudsey wrote: »

How much do you want/expect to pay for a house?

This is not going to suddenly overinflate the market. Nama are putting at present 150 houses onto market like this and has about 1500 houses on there books I believe. It looks like that most cities do not have a stock of completed houses in hand. Will there a sudden glut ogf houses on the market.
Houses have fell 50% approx how much do people expect them to fall if they fall another 20% will some people still expect them another 20%.

More a case of too many variables in the market at the moment for me to risk a morgage.

For one I don't beleive the government about not requiring a second bailout and if that were to happen, I can see my salary been hit with further tax's, levy's and cuts

Would like to see what will happen to the Euro, if we go back to punts I wouldn't like a loan over my head tied to the euro

And finally with over 80,000 in mortgage difficulty and nama having to release all their housing stock, prices can only to one way cause there just isn't a market for all of those properties

BornToKill

Dan_Solo wrote: »

Precisely. Back to the banks and let them collapse.

Bit late for that now. Could have been done back before the blanket guarantee. Pay the deposit protection to the limit (€100,000) then in force. Bondholders and deposit holders above that amount lose out.

Instead of this the total guarantee on all deposits saw us paying everyone and caused a massive shift of wealth from lower and middle income people to those who were wealthiest and held the largest deposits in the banks. We didn't directly hand them over money but by staving up the banks we prevented them losing their deposits so that amounts to the same thing.

creedp

paddy0090 wrote: »

Well if swimming with sharks means you're liable to get bit....don't swim with sharks. The government would have been off better letting the market sort out the entrepeneurs.

But they didn't and post intervention we are left with plenty cash rich investors (many with cash stashed safetly abroad which they accumulated during the property boom) like pirhana's buying up distressed property. You would think the world was coming to an end when you see these auctions in action. Even so apparently the market hasn't resolved the problem and we are left wiht no movement in the market except for these massively publicised feeding frenzy's. All in really bad taste in my view. In reality these cash rich investors are making a killing but the ordinary joe still can get a house because he can't get a mortgage. How long do the non-interventionists think this game of cat and mouse will go on?

In fairness to Alan Ahearne I think he's a solid economist, and a bad bank is a standard solution to recapitalising a banking system. But a bad bank on that scale so heavily involved/exposed in the property sector can only create a mission creep that f*cks up the market. I'm sure someone else can point out why being in the euro messes it up even more.

So what's the alternative? Let the market resolve the matter? How does that work and who does it benefit?

The RBS loan book handled by allsops has helped establish a floor for prices. Though IMO some people there are getting blinded by the chance of a bargain instead of actually picking up a bargain. No govt intervention required. The kicker is most of the money(they are mostly cash sales) in thoses auctions ends up overseas.

Didn't the RBS get support from the UK Govt and presumably this enabled them to offload their Irish problems at a high cost. I seem to remember the UK warnig NAMA not to firesale their UK properties as this would impact on UK property prices. OK to dump property in Eire but not on the mainland! I also seem to remember the entry of RBS in the Irish market resulted in a relaxing of the criteria for awarding mortgates by Iriah banks as they attempted to compete with RBS who were winning significant market share .. but that the market. I'm not sure in hindsight if we shold thank RBS for that competition.

Rents are only really up in the greater Dublin area. The price of renting in Donegal is so low that any increase makes f*ck all difference. But yeah long may it continue!

Sorry only through in than remark in response to the constant catcalls for further 'slashing' of property prices. However, Im sure people delaying buying a house is giving some buoyancy to rental rates.

Farmer Pudsey

creedp wrote: »

But they didn't and post intervention we are left with plenty cash rich investors (many with cash stashed safetly abroad which they accumulated during the property boom) like pirhana's buying up distressed property. You would think the world was coming to an end when you see these auctions in action. Even so apparently the market hasn't resolved the problem and we are left wiht no movement in the market except for these massively publicised feeding frenzy's. All in really bad taste in my view. In reality these cash rich investors are making a killing but the ordinary joe still can get a house because he can't get a mortgage. How long do the non-interventionists think this game of cat and mouse will go on?

QUOTE]

I know a few of these cash rich investors they are not people who stashed it abroad or made a killing in the boom but rather fairly savvy middle class small landlords who did not get caught in the tiger feeding frenzy and now have a little bit of cash I/H and are ready to invest now. They see value at these auctions and have access to Cash. Most of the auctions are selling single units so it suits these guy's.

There are a lot of other savvy investors who are waiting for another 20% fall in property prices and if this happens they will wait for another 20% and then another 20%.

Who is right I do not know. Some guys who can get Mortgage's are awaiting for it to fall more???

paddy0090

creedp wrote: »

But they didn't and post intervention we are left with plenty cash rich investors (many with cash stashed safetly abroad which they accumulated during the property boom) like pirhana's buying up distressed property. You would think the world was coming to an end when you see these auctions in action. Even so apparently the market hasn't resolved the problem and we are left wiht no movement in the market except for these massively publicised feeding frenzy's. All in really bad taste in my view. In reality these cash rich investors are making a killing but the ordinary joe still can get a house because he can't get a mortgage. How long do the non-interventionists think this game of cat and mouse will go on?

So you think they should now swim with Piranha? I didn't buy in the boom and bought a house for 2010/11 for 40% of the value that the house across the road was sold for during the boom. Does this make me a piranha? Like many people I had the sense to wait for the market to settle and ignore the spin and mania. I have no interest in seeing prices fall much further(I own a house and have a stake in some other investments), but I think they will fall a bit more. The main thing is though I don't want another property bubble or more govt initatives to re-inflate the market. As it will only be temporary, and likely end in NAMA 2.0

I've been to a few of the allsop auctions. The media attention might be constant but they're more business like now then the circus they were at the start. There's stilll better value in the open market probably due to the absense of foreign piranha.

Some of the buyers at the auctions are foreign - with weird names and funny accents like - this is a good thing. It's FDI! Some buy these places sight unseen, which to my mind is nuts, but this is a good thing. It's helping to establish a floor in the market. A failed entrepeneur replaced by a new one. It's a shame that so much of the money goes abroad is what I was saying.

Who cares where the money is it's all Euros, ask the govt.

Pull off your green cape and get your inner scoundrel under control for a minute and tell me this. Who would you rather invest your money with:

1. The Irish Govt
2. Jonny Foreigner

I'd buy off the brits(HBOS loan book is coming on the market soon) before I'd consider any of NAMAs latest offers!

So what's the alternative? Let the market resolve the matter? How does that work and who does it benefit?

Everyone! If the govt wants to intervene it might better regulate the sector and introduce a registry for prices to help people get a better idea of where the market is. Of course that interferes with their ability to play kingmaker so they don't like that. I'm not an anarcho capitalist I just think this intervention will lead them into places they shouldn't be, doing things they shouldn't be doing.

Didn't the RBS get support from the UK Govt and presumably this enabled them to offload their Irish problems at a high cost. I seem to remember the UK warnig NAMA not to firesale their UK properties as this would impact on UK property prices. OK to dump property in Eire but not on the mainland! I also seem to remember the entry of RBS in the Irish market resulted in a relaxing of the criteria for awarding mortgates by Iriah banks as they attempted to compete with RBS who were winning significant market share .. but that the market. I'm not sure in hindsight if we shold thank RBS for that competition.

If the Irish banks lost the plot chasing the British banks whose fault is that? If NAMA got scared by the British govts empty threat that's our problem! Most of the'r best assets are overseas, actually makes no senses to dump them.

Sorry only through in than remark in response to the constant catcalls for further 'slashing' of property prices. However, Im sure people delaying buying a house is giving some buoyancy to rental rates.

Yeah it is. But that's natural, it's how the market evens itself out. Rents can only go so high before people will (conditions permitting) buy. What catcalls?

Sponge Bob

Some of you should try simple math.

Mortgage lending in 2006 was €40bn

Mortgage lending in 2011 was €2bn

95% down.

Prices are set on the margins so where is the money coming from to support prices....exactly.???

creedp

There are a lot of other savvy investors who are waiting for another 20% fall in property prices and if this happens they will wait for another 20% and then another 20%.

Who is right I do not know. Some guys who can get Mortgage's are awaiting for it to fall more???

I know a few of them myself and you are correct not all have the money stashed abroad. I was talking to 2 over the past couple of weeks who are are farmers who sold 'development' land during the boom for €9m and €7m and are still farming the land becasue not a block was laid. They can and are going out to hoover up land and property to store for the next 'bubble'.

On the point of the 'savvy middle class investors' these are the same people who bought houses and shares during the good times and encouraged a lot of poor ejits to follow them. Unlike many others some of these now cash rich savvy juys were lucky to get out while the going was good. They are now the guys who will benefit most for the stagnation in the market as many 'heretofore savvy middle class investors' are ever more desperate to offload property. Personally, I think many more would benefit from trying to get the market moving that would from letting the market do its think .. all that wil do will allow the 'savvy cash rich guys' hoover up even more.

However, I'm fully supportive of not creating a new property bubble! In the same way as I'm not in favour of creating the problems associated with excessive wage inflation in the building industry due to 'full employment' linked only to unsustainable building activity. That doesn't mean to say I think its a bad think to try and stimulate the building industry and try a create additional employment.

creedp

Sponge Bob wrote: »

Some of you should try simple math.

Mortgage lending in 2006 was €40bn

Mortgage lending in 2011 was €2bn

95% down.

Prices are set on the margins so where is the money coming from to support prices....exactly.???

Which is the biggest contributor to this massive drop - house prices being too high or banks not operating as going concerns?

creedp

paddy0090 wrote: »

I didn't buy in the boom and bought a house for 2010/11 for 40% of the value that the house across the road was sold for during the boom. Does this make me a piranha? Like many people I had the sense to wait for the market to settle and ignore the spin and mania. I have no interest in seeing prices fall much further(I own a house and have a stake in some other investments), but I think they will fall a bit more. The main thing is though I don't want another property bubble or more govt initatives to re-inflate the market. As it will only be temporary, and likely end in NAMA 2.0

Well good luck to you, especially on the timing of your decision. Many other people would like to be in your shoes now also, i.e. be abel to buy a house for 40% of its peak price but are not able to becasue they can't get a mortgage. This is a big problem for many people. Its not the price that is stopping them . its the lack of credit. The spin and mania is now related to falling prices with the 'experts' saying prices will fall and will keep falling. Sound familiar but no as only a couple of short years ago many of these same 'experts' were talking about prices increasing and even when the crash was nigh they still talked about soft landings ... the fundamentals are strong and such like. I didn't believe them then and am seriously wondering about this 'advice' now.

Pull off your green cape and get your inner scoundrel under control for a minute and tell me this. Who would you rather invest your money with:

1. The Irish Govt
2. Jonny Foreigner

I'd buy off the brits(HBOS loan book is coming on the market soon) before I'd consider any of NAMAs latest offers!

Are you talking to me here? I'm not sure what kind of green cape you are referring to as like you I have a house already and hopefully will not have to sell in the near future but I don't think the current constant negativity is any use either. I'm not sure either what's the story with Jonny Foreigner or HBOS. I couldn't care less to be honest. If someone want to spent money in this country thats to be welcomed .. all I was referringto was the spectre of the 'distressed auction' and the idea that they are somehow positive. Why would you prefer to buy off the Brits? Surely you would buy what suits your needs irrespective of who is selling it .. if you are a savvy investor that is

If the Irish banks lost the plot chasing the British banks whose fault is that? If NAMA got scared by the British govts empty threat that's our problem! Most of the'r best assets are overseas, actually makes no senses to dump them.

Yeah that's how the market works!

Sponge Bob

creedp wrote: »

Which is the biggest contributor to this massive drop - house prices being too high or banks not operating as going concerns?

Had house prices NOT been too high then the banks WOULD be going concerns. Their books are loaded with worthless cack.

Mr. Loverman

I emigrated a year ago and have been somewhat out of the loop on the economic shenanigans in Ireland. I can't believe nothing has changed in the past year.

What a joke. It's beyond embarrassing at this stage. It really makes me wonder if we're capable of governing ourselves.

creedp

Sponge Bob wrote: »

Had house prices NOT been too high then the banks WOULD be going concerns. Their books are loaded with worthless cack.

So the banks f*cked up and are busted and have been bailed out by the State. Yet still they don't operate as going concerns. How much more intervention is required to make them going concerns? The point made earlier that it was not RBS's fault that the Irish banks lost the run of themselves. That fine but they did lose the run of themselves and are now busted .. whose at fault? The guys who know simply want a bank to lend them money on a sustainable basis or the banks who even though they have been massivley supported by the State so Ireland can have a functioning banking system still don't provide this functioning system? I can only presume the logic behind wanting to have a functioning banking system is that banks do what banks do, i.e. take in deposits and lend money.

MysticalRain

creedp wrote: »

The spin and mania is now related to falling prices with the 'experts' saying prices will fall and will keep falling. Sound familiar but no as only a couple of short years ago many of these same 'experts' were talking about prices increasing and even when the crash was nigh they still talked about soft landings ... the fundamentals are strong and such like. I didn't believe them then and am seriously wondering about this 'advice' now.

I don't see that at all. From what I can see, the experts who are currently telling us that prices have fallen too low and a recovery "is just around the corner" are the same vested interests who were predicting a "soft landing" before the bust. The experts who are telling us that prices will fall further are the same ones who said prices were too high. They haven't changed their tune.

House prices still have at least another year two to go before they reach some kind of realistic post-bubble market price. The only people who seem to believe otherwise are the ones who have a stake in creating another property bubble to make a quick buck off of.

Mr. Loverman

MysticalRain wrote: »

I don't see that at all. From what I can see, the experts who are currently telling us that prices have fallen too low and a recovery "is just around the corner" are the same vested interests who were predicting a "soft landing" before the bust. The experts who are telling us that prices will fall further are the same ones who said prices were too high. They haven't changed their tune.

House prices still have at least another year two to go before they reach some kind of realistic post-bubble market price. The only people who seem to believe otherwise are the ones who have a stake in creating another property bubble to make a quick buck off of.

I agree.

What gets me the most is so many people (including "experts") are using bubble prices as a comparison to to today's prices to prove there is value out there. It's like an alcoholic saying things are good now because he no longer uses heroin.

Zonda999

I also agree, a 50% drop from 2006 levels doesnt really mean anything.

However, I do believe we aren't far off prices reaching a floor in certain parts of the country. By that, I mean the sort of houses middle classes buy, close to the principal population centres of the state. By this, I mean houses in southern suburbs of cork city, and those relatively close to Dublin, as in within 25km of the centre.

I think this because as far as I can see it, at this stage there are plenty youngish middle class couples with decent public sector jobs, and decent multinational/export sector jobs, who have probably been waiting a few years at this point, with an eye to buying in middle class suburbs. As soon as some of these suspect the 'bottom' is near, I am convinced they will buy. Prices are reaching 'approachability' now in some of these areas. 'Approachibility' does not equal 'value' by any means but remember plenty of these people have known nothing but celtic tiger style price rises, they have never seen a 'normal' housing market as such. just my two cents..

Dan_Solo

How can anyone say where the floor is? If you can't sell a house it's technically worth nothing. Harder and harder taxes and cuts will keep prices dropping for years to come.

king_kong_ill

Zonda999 wrote: »

I also agree, a 50% drop from 2006 levels doesnt really mean anything.

However, I do believe we aren't far off prices reaching a floor in certain parts of the country. By that, I mean the sort of houses middle classes buy, close to the principal population centres of the state. By this, I mean houses in southern suburbs of cork city, and those relatively close to Dublin, as in within 25km of the centre.

I think this because as far as I can see it, at this stage there are plenty youngish middle class couples with decent public sector jobs, and decent multinational/export sector jobs, who have probably been waiting a few years at this point, with an eye to buying in middle class suburbs. As soon as some of these suspect the 'bottom' is near, I am convinced they will buy. Prices are reaching 'approachability' now in some of these areas. 'Approachibility' does not equal 'value' by any means but remember plenty of these people have known nothing but celtic tiger style price rises, they have never seen a 'normal' housing market as such. just my two cents..

bar premium locations in dublin , thier is scope for further falls in all of ireland

Zonda999

Yeah, I meant to say that, somewhere in the middle ground, premium properites are definitely in a separate bracket IMO

http://www.bloomberg.com/news/2012-05-01/madness-in-spain-lingers-as-ireland-chases-recovery-mortgages.html

Irish home prices were unchanged in March, the first month values have not fallen since August 2010, according to the country’s statistics office. In Dublin, residential prices rose 0.7 percent in March.

Thats an interesting read, and I hadnt heard about that purported rise in March then mention

creedp

MysticalRain wrote: »

The experts who are telling us that prices will fall further are the same ones who said prices were too high. They haven't changed their tune.

House prices still have at least another year two to go before they reach some kind of realistic post-bubble market price. The only people who seem to believe otherwise are the ones who have a stake in creating another property bubble to make a quick buck off of.

Well then lets get the uncertainty over with for once and for all and ask these 'good' experts to make a call on what is the 'realistic post-bubble market proice' for your average residential dwelling in different locations around the country .. otherwise they are as problematic as the 'bad' experts. Like all gamblers (sorry experts) they are taking a punt and hoping they are right.

I also think the general view that anyone who doesn't think that property prices should continue to spiral down to somewhere close to zero has a stake in creating another property bubble pretty simplistic. But there you are