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

belcampprisoner

http://www.irishexaminer.com/ireland/glut-of-repossessed-houses-could-depress-prices-by-up-to-25-224964.html

TheOldHand

I don't think we will ever see a reasonable number or repossession in Ireland. The mass delusion is set to continue and with the government controlling all the main banks there is nobody from the outside to change this. I always try my best to berate and exclude people I know that are staying in properties for free.

who_ru

TheOldHand wrote: »

I don't think we will ever see a reasonable number or repossession in Ireland. The mass delusion is set to continue and with the government controlling all the main banks there is nobody from the outside to change this. I always try my best to berate and exclude people I know that are staying in properties for free.

i tend to agree with you. Govt/NAMA/Banks all acting to keep property prices artificially high. Especially NAMA.

But Ulster Bank may change the course of events if they start to reposes. as stated in the examiner a mortgage in arrears for 12months has very little chance of getting back on track.

the banks failure to act has made everybody's situation much worse.

Galego

But in the cases of repossessions and having to write debts off..........who is going to pick up that bill? Taxpayers again?

Tigerandahalf

Repossessions only suit the bank.
Who picks up the tab for rehousing?
Ordinary joe of course.

TheOldHand

Tigerandahalf wrote: »

Repossessions only suit the bank.
Who picks up the tab for rehousing?
Ordinary joe of course.

Repossessions suits everybody. This is the only way you can fix the market. What you are advocating is a horribly unfair system of social housing that benefits only a small section of society. People staying in properties with no regard for the area, size or value of the property. They've essentially jumped to the top of the housing list and we pay for it. I'd rather occupy some of these properties and i would be payig far less in mortgage or rental payments if the market finds its real level.

lima

I went to see a property today for 230k. Knowing that repossessions need to occur, I choose to wait until prices are further corrected before I make a commitment to purchase by first property. Repossessions can't come soon enough.

D3PO

lima wrote: »

I went to see a property today for 230k. Knowing that repossessions need to occur, I choose to wait until prices are further corrected before I make a commitment to purchase by first property. Repossessions can't come soon enough.

why did you bother going to see a property if your waiting.

testicle

D3PO wrote: »

why did you bother going to see a property if your waiting.

to see if he liked it obviously!

Galego

testicle wrote: »

to see if he liked it obviously!

Or to see how much it is really worth!

cookie1977

D3PO wrote: »

why did you bother going to see a property if your waiting.

So they could post on here later

The Bishop Basher

lima wrote: »

I went to see a property today for 230k. Knowing that repossessions need to occur, I choose to wait until prices are further corrected before I make a commitment to purchase by first property. Repossessions can't come soon enough.

So timing has been good to you. Well done. Unfortunate that you choose to turn your good fortune into some kind of smug satisfaction. Maybe you really were smarter then everyone else but I doubt it. Lets hope when you get your house and the next recession hits, you don't find yourself on the wrong end of a bank repossession. No doubt there would be someone just like you waiting in the wings to gloat about taking your home for a song.

D3PO

Swanner wrote: »

So timing has been good to you. Well done. Unfortunate that you choose to turn your good fortune into some kind of smug satisfaction. Maybe you really were smarter then everyone else but I doubt it. .

he wasnt smarter. He let slip he had mortgage approval in the boom. Why would he apply for mortgage approval if he thought they were overpriced....

he likes to think he was smart though

Zamboni

Tigerandahalf wrote: »

Repossessions only suit the bank.
Who picks up the tab for rehousing?
Ordinary joe of course.

As one of the many tax paying ordinary joes, I don't have a problem with this.

Tigerandahalf

Lot of lads hoping to pick up a bargain and clearly hoping that repossessions will aid that. Just be careful you dont get a stone put through the window or worse when you move into your bargain buy. Some people may resort to that.
Anyway I dont see large scale repossessions. A likely solution will be the banks taking a stake in the house for debt writeoff.

Zamboni

Melodramatic much?

Barracuda1

I don't see large scale repossessions as they will only take back those who are worth selling to make a profit.

Tigerandahalf

Barracuda1 wrote: »

I don't see large scale repossessions as they will only take back those who are worth selling to make a profit.

It may well be the banks's preference but would cause trouble for the politicians. People would cry foul straight away about people being treated differently.

Tigerandahalf

Zamboni wrote: »

Melodramatic much?

Maybe, maybe not.
Would an insurance company insure a house that had previously been burnt to the ground deliberately?

Zamboni

This forum is becoming an extension of AH.

Tigerandahalf

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.

wexie

Barracuda1 wrote: »

I don't see large scale repossessions as they will only take back those who are worth selling to make a profit.

there aren't likely to be many of those in the current market...

Ipso

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 its the banks house and do they expect a free house?

hfallada

It takes a long time and it's extremely costly to repossess a property in Ireland. It's like not Nevada in the us where the bank takes it and in a few weeks it's sold. Like if Nama aren't unloading their books quickly why would the banks do the same.

With the huge shortage of houses in Dublin city the price drop won't be any where near 25 %.

Galego

One question. If someone who is in arrears knows for a fact that his/her house is not going to be repossessed then which is the incentive for that person to pay the mortgage?
More than a year in arrears should mean repossession, sorry but that is the only solution.

Ipso

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.

Well theyre supporting them now financially.

Tigerandahalf

Most of the houses that may be repossessed are not in Dublin anyway. They are in the commuter belt upto an hr from the city. Not too many people will be keen on those.
Only solution is debt writeoff for equity in the house. That may be one of the reasons why Europe is realising that austerity cant solve these problems and getting people back to work through infrastructure projects is the way forward.

heyjude

With the government pegging property tax rates to property values, it gives the government yet another reason/incentive to do whatever it can to stop anything that may cause property prices to fall further. As such, while they can proclaim that measures they take to stop mass repossessions, are being introduced to protect homeowners by keeping families in their homes, in reality, if it wasn't so already, they now have a sizeable vested interest in maintaining/increasing property values. Higher property values = higher property tax payments.

gurramok

Tigerandahalf wrote: »

Most of the houses that may be repossessed are not in Dublin anyway. They are in the commuter belt upto an hr from the city. Not too many people will be keen on those.
Only solution is debt writeoff for equity in the house. That may be one of the reasons why Europe is realising that austerity cant solve these problems and getting people back to work through infrastructure projects is the way forward.

How do you know that most are outside Dublin?

Your debt solution is not fair to buyers, nice to see your bias.

Tigerandahalf

gurramok wrote: »

How do you know that most are outside Dublin?

Your debt solution is not fair to buyers, nice to see your bias.

Here you go.
http://www.independent.ie/business/personal-finance/property-mortgages/one-in-five-mortgages-now-in-big-trouble-according-to-ratings-agency-28811933.html

Cavan and Laois have highest rate of mortgages in difficulty compared to Cork and Dublin who have least.

The_Conductor

heyjude wrote: »

With the government pegging property tax rates to property values, it gives the government yet another reason/incentive to do whatever it can to stop anything that may cause property prices to fall further. As such, while they can proclaim that measures they take to stop mass repossessions, are being introduced to protect homeowners by keeping families in their homes, in reality, if it wasn't so already, they now have a sizeable vested interest in maintaining/increasing property values. Higher property values = higher property tax payments.

Not at all- the government only have to add a flat rate percentage to each band, to match a reciprocal fall in property value and they still get their pound of bacon. Whether prices fall or not- matters not one iota to the government- come what may, they will get their money......

cookie1977

smccarrick wrote: »

Not at all- the government only have to add a flat rate percentage to each band, to match a reciprocal fall in property value and they still get their pound of bacon. Whether prices fall or not- matters not one iota to the government- come what may, they will get their money......

And there in lies some of the problems with massive repossessions. If the government continue to squeeze people tighter and tighter it's not going to help the state or the economy. You've got people even now (pensioners in particular) struggling to keep going, and even going to shopping centres to stay warm as they cannot afford the heating in their own property's. If as I'd suspect, the banks initially go after BTL's all that's going to release predominantly is apartment's I'd imagine (particularly in the major population areas around the country). There prices are already not dropping due to NAMA's lack of releasing existing stocks of apts that they've taken control of.

I cannot see a huge decrease (if any at all) in prices in major population centres for the properties most in demand (3-4 bed houses).

Galego

cookie1977 wrote: »

And there in lies some of the problems with massive repossessions. If the government continue to squeeze people tighter and tighter it's not going to help the state or the economy. You've got people even now (pensioners in particular) struggling to keep going, and even going to shopping centres to stay warm as they cannot afford the heating in their own property's. If as I'd suspect, the banks initially go after BTL's all that's going to release predominantly is apartment's I'd imagine (particularly in the major population areas around the country). There prices are already not dropping due to NAMA's lack of releasing existing stocks of apts that they've taken control of.

I cannot see a huge decrease (if any at all) in prices in major population centres for the properties most in demand (3-4 bed houses).

But how long can the government keep this fake market going? Why invests so much money and resources holding stock? Why not let it fall to the button and then deal with it from there?

The longer they keep this lie going the worst the fall will be. 90,000 homes in arrears in a 4.5m people country. IMO this is insane!

The_Conductor

Recent surveys have shown that far from pensioners struggling to keep going (though doubtless many are), young families, where the parents work, have been hit far harder financially than any other demographic group. Most people selectively heat rooms, and at night prioritise their children now- its what has to be done. Pensioners going to shopping centres so they don't have to heat their homes- its far from just pensioners in this boat now.........

Yes- there is a limit to how much blood you can squeeze from a stone- the point I was trying to make is that its irrelevant to the government whether prices rise or fall- they'll simply move the goalposts so their income from property tax is whatever they mandate the kitty should be. Its how its always been done with other taxes- why should property tax be any different.

There were rumblings that the property tax should be structured to encourage older pensioners downsize to properties more suitable to their needs now. In Dublin, for example, there are more pensioners without families in 4 bedroom (and larger) homes than there are families (in similar) (according to the NUI Maynooth population stats). Why should older people be encouraged to stay in large properties that are more expensive to run- when younger families can't find suitable accommodation (to rent or buy). In other countries pensioners are actively encouraged to downsize- and in the Scotland they have now tax incentivised old folk to do so (they don't consider the proceeds of the family home when assessing means for residential care- for example- though English rules are a lot less generous than Scottish rules!)

We are refusing to look at the whole issue of residential tax in a holistic manner- though hopefully we may develop our systems to address this in time.

cookie1977

Galego wrote: »

But how long can the government keep this fake market going? Why invests so much money and resources holding stock? Why not let it fall to the button and then deal with it from there?

The longer they keep this lie going the worst the fall will be. 90,000 homes in arrears in a 4.5m people country. IMO this is insane!

It's a tough situation as I do believe a lot of people struggling now could be accommodated and allowed to pay back their debts if given time and or a proper deal. As someone else mentioned, a debt for equity swap could work for many.

I'd be seriously concerned about mass repossessions and the long term psychological and financial burden this could have on the state. Looking at Greece and Spain, this is already very much evident (and to be honest I suspect many of our own national increases have to in part be due to the recession).

http://www.policymic.com/articles/7263/greece-suicide-rate-on-the-rise-shows-austerity-s-toll

http://www.euractiv.com/specialreport-future-european-he/austerity-hikes-suicides-opens-d-news-515262

The Greek Ministry of Health reported an increase of 40% in suicides during the first half of last year, compared to the same period in 2010, McKee said.

In Spain, there has been a marked increase in attendances at general practitioners by those with mental disorders, especially depression

With the BTL's, these should be repossessed if there's no solution to them.

washman3

This 'housing shortage' in Dublin is a complete and utter myth fabricated by auctioneers,estate agents,various vested interests and indeed the government. when the American and English economies improve immigration will rocket, it will dwarf what we have witnessed so far to Oz and Canada.
And those economies will recover far far sooner than the Irish ecomony, mark my words. we are set for many,many years of stagnation, in spite of Michael Noonans waffle that we will 'take off like a rocket'. Utter tripe that the media have locked on to.
With the introduction of Property tax and water charges i expect house prices to fall at least 10% over the next 12 months.

lima

D3PO wrote: »

why did you bother going to see a property if your waiting.

To see a property.

cookie1977

washman3 wrote: »

This 'housing shortage' in Dublin is a complete and utter myth fabricated by auctioneers,estate agents,various vested interests and indeed the government. when the American and English economies improve immigration will rocket, it will dwarf what we have witnessed so far to Oz and Canada.
And those economies will recover far far sooner than the Irish ecomony, mark my words. we are set for many,many years of stagnation, in spite of Michael Noonans waffle that we will 'take off like a rocket'. Utter tripe that the media have locked on to.
With the introduction of Property tax and water charges i expect house prices to fall at least 10% over the next 12 months.

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.

lima

D3PO wrote: »

he wasnt smarter. He let slip he had mortgage approval in the boom. Why would he apply for mortgage approval if he thought they were overpriced....

he likes to think he was smart though

I was not living here during the boom. I got mortgage approval last September. Approval was required to test if the banks are in a position to lend to me.

lima

Tigerandahalf wrote: »

Lot of lads hoping to pick up a bargain and clearly hoping that repossessions will aid that. Just be careful you dont get a stone put through the window or worse when you move into your bargain buy. Some people may resort to that.
Anyway I dont see large scale repossessions. A likely solution will be the banks taking a stake in the house for debt writeoff.

Probably, that would be a bitter and jealous thing to do and if it did happen I would make sure they were fully prosecuted to the full extent of the law.

cookie1977

lima wrote: »

Probably, that would be a bitter and jealous thing to do ...

Any more bitter and jealous then your remarks re helping people out in trouble?

lima

Swanner wrote: »

So timing has been good to you. Well done. Unfortunate that you choose to turn your good fortune into some kind of smug satisfaction. Maybe you really were smarter then everyone else but I doubt it. Lets hope when you get your house and the next recession hits, you don't find yourself on the wrong end of a bank repossession. No doubt there would be someone just like you waiting in the wings to gloat about taking your home for a song.

It wouldn't be my home, it would be the banks home and I wouldn't stop them taking it back if I couldn't afford it.

Anyway I am financially prudent enough not to seek a huge mortgage that would cause me to be put into that financial situation. Not my fault others weren't prudent enough when they look out loans.

washman3

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.

i certainly see where you're comimg from and i read those froums too. but how many properties are being held by NAMA in a deliberate attempt to keep property scarce thus keeping rents high. There is a massive scam going on now,especially in Dublin aided and abetted by the Government.
For example, some properties advertised for renting are already gone but are advertised regardless so as to add to the mania and fuel fear.
This is true, i kid you not. i have experienced estate agents openly boasting about it. It is a mean and dirty trick.

lima

cookie1977 wrote: »

Any more bitter and jealous then your remarks re helping people out in trouble?

I'm not jealous of people in trouble. They have nothing to do with me, I feel nothing towards them.

I'm concerned about people being let live in properties for free, despite not paying for them for over a year, when they could easily rent but are refusing to because they think they are entitled to their current quality of life.

cookie1977

washman3 wrote: »

i certainly see where you're comimg from and i read those froums too. but how many properties are being held by NAMA in a deliberate attempt to keep property scarce thus keeping rents high. There is a massive scam going on now,especially in Dublin aided and abetted by the Government.
For example, some properties advertised for renting are already gone but are advertised regardless so as to add to the mania and fuel fear.
This is true, i kid you not. i have experienced estate agents openly boasting about it. It is a mean and dirty trick.

I'd agree about NAMA. I'd like them to release all the apt property they can that way we might know true values. I cannot comment on your second point but from my own experience of renting my property all I can say is that I did get more calls from interested parties then I thought I'd get when I rented it out last year.

Gosub

What about second (holiday) homes? I've been looking for a house around Wexford and it's amazing how many are second homes. Four of the houses I looked at had just raised their prices because of debt restructuring, saying that the pressure is now off them. Is this not just kicking the can down the road a bit?

I am a cash ready buyer and surely should have been seen as a solution to some of the problems for some sellers. Instead they seem to be pushing their heads further into the sand.

In my opinion, owners in trouble kicking the can down the road in hopes of an instant recovery will only make the next price crash a lot worse. The banks that restructure these owners need to take a long look at their priorities. Reducing their troubled mortgages, where possible, should be their number one priority.... again, in my opinion.

cookie1977

lima wrote: »

I'm not jealous of people in trouble. They have nothing to do with me, I feel nothing towards them.

I'm concerned about people being let live in properties for free, despite not paying for them for over a year, when they could easily rent but are refusing to because they think they are entitled to their current quality of life.

You've no real feeling, based on your posts, for much other than your own needs to be honest. I'd stand to be shocked on that point though.

You've also no real evidence (other than here-say) of people living in property for free. If you have give us it. I'm not saying there isn't as I'm sure there are but to speculate that there's a glut of people living the high life in a free property is ridiculous. The people that are in the central banks statistics of being behind in mortgage payments of course do exist but the vast majority are not doing so for the sheer fun of it. To have this opinion is idiocy of the highest order.

washman3

cookie1977 wrote: »

I'd agree about NAMA. I'd like them to release all the apt property they can that way we might know true values. I cannot comment on your second point but from my own experience of renting my property all I can say is that I did get more calls from interested parties then I thought I'd get when I rented it out last year.

If NAMA did release apt property would a person like you receive half as many calls about a rented property? i seriously doubt it. surprised that you criticise NAMA but commend your honesty. but then again NAMA was designed to protect the big fish and has achieved this very well so far to the detriment of the ordinary decent person, both landlord and renter.

lima

cookie1977 wrote: »

You've no real feeling, based on your posts, for much other than your own needs to be honest. I'd stand to be shocked on that point though.

You've also no real evidence (other than here-say) of people living in property for free. If you have give us it. I'm not saying there isn't as I'm sure there are but to speculate that there's a glut of people living the high life in a free property is ridiculous. The people that are in the central banks statistics of being behind in mortgage payments of course do exist but the vast majority are not doing so for the sheer fun of it. To have this opinion is idiocy of the highest order.

What about this person:

http://www.boards.ie/vbulletin/showthread.php?t=2056892188

I don't understand why you seem to be sticking up for people not paying their mortgages and living in houses for free, other than to ensure your investment properties do not go further down in value due to a glut of stock when repossessions start to happen.

I think we've agreed in the past that we are both vested interests, just in far different situations.

cookie1977

washman3 wrote: »

If NAMA did release apt property would a person like you receive half as many calls about a rented property? i seriously doubt it. surprised that you criticise NAMA but commend your honesty. but then again NAMA was designed to protect the big fish and has achieved this very well so far to the detriment of the ordinary decent person, both landlord and renter.

Hard to know. Depends on where they are and the state they're in but lets say for arguments sake the bulk of it is good apt property in Dublin, then yes I'd say we'd see a drop in interest in our own apt and maybe (I'm speculating here) a drop in what we could charge for the property. I would also like to know what my property in reality is worth. As long as NAMA hold their portfolio then buyers may hold out for expected drops if when NAMA release theirs.

cookie1977

lima wrote: »

What about this person:

http://www.boards.ie/vbulletin/showthread.php?t=2056892188

I don't understand why you seem to be sticking up for people not paying their mortgages and living in houses for free, other than to ensure your investment properties do not go further down in value due to a glut of stock when repossessions start to happen.

I think we've agreed in the past that we are both vested interests, just in far different situations.

I stick by people because I dont generalise and see them all as scroungers. As I said I dont doubt there are "scroungers" out there but may be even some of them would change if they were given a suitable workable solution to repay their debt and remain in their home. As I said everyone is a vested interest but I'm also a member of the human race and can appreciate that not everyone is out for themselves.