House repossession in 2015 and its effect on the market

Cuddlesworth

An article on the Irish Times has suggested that 2014 saw around 8k repossession orders applied for, where as 2015 has seen 7k in the last 2 months. Thats a 5 fold increase on the rate of repossessions?

Do you think this could have a strong effect on the market in the next two years? Do you think the banks themselves are trying to cash in on a dead cat bounce? Are you the_Spider and believe that prices will rise regardless?

mr_seer

Cuddlesworth wrote: »

An article on the Irish Times has suggested that 2014 saw around 8k repossession orders applied for, where as 2015 has seen 7k in the last 2 months. Thats a 5 fold increase on the rate of repossessions?

Do you think this could have a strong effect on the market in the next two years? Do you think the banks themselves are trying to cash in on a dead cat bounce? Are you the_Spider and believe that prices will rise regardless?

The repos should have happened 6 years ago but unfortunately successive administrations have made sure that the can kept getting kicked down the road. We have now pretty much run out of road. I am quite sure that Inda, Baldy and co will come up with some pre election wheeze to ensure that defaulters (strategic or otherwise) are the winners and renters/the prudent are the loosers

ted1

Cuddlesworth wrote: »

An article on the Irish Times has suggested that 2014 saw around 8k repossession orders applied for, where as 2015 has seen 7k in the last 2 months. Thats a 5 fold increase on the rate of repossessions?

Do you think this could have a strong effect on the market in the next two years? Do you think the banks themselves are trying to cash in on a dead cat bounce? Are you the_Spider and believe that prices will rise regardless?

Ubthink the phase dead count bounce is outdated and completely wrong.

As regards banks cashing in, they don't profit they just get what is owed to them. If they get less they are owed the balance by the mortgage holder. Selling when market is low and not in the interest of the mortgage holder

ted1

mr_seer wrote: »

The repos should have happened 6 years ago but unfortunately successive administrations have made sure that the can kept getting kicked down the road. We have now pretty much run out of road. I am quite sure that Inda, Baldy and co will come up with some pre election wheeze to ensure that defaulters (strategic or otherwise) are the winners and renters/the prudent are the loosers

6 years ago the house would have been sold at Rock bottom prices. The banks would be worse off as would the person who owes the bank the balance

Cuddlesworth

ted1 wrote: »

Ubthink the phase dead count bounce is outdated and completely wrong.

I don't think its wrong simply that in the perspective of the housing market, shifts can take years to happen.

Cuddlesworth

mr_seer wrote: »

The repos should have happened 6 years ago but unfortunately successive administrations have made sure that the can kept getting kicked down the road. We have now pretty much run out of road. I am quite sure that Inda, Baldy and co will come up with some pre election wheeze to ensure that defaulters (strategic or otherwise) are the winners and renters/the prudent are the loosers

I don't want this thread to turn into a whine about past policies or politics.

The banks are pushing repos hard now. Properties from last year are going to hit the market this year, 2016 will most likely see thousands of new sales. This will be market movement on a scale not seen in 10 years.

Cuddlesworth

ted1 wrote: »

6 years ago the house would have been sold at Rock bottom prices. The banks would be worse off as would the person who owes the bank the balance

Depends on how you want to look at it. Everybody else in this country for the last 6 years has been paying those people's mortgages to try keep some operating profit for the bank. Even sold now, it's unlikely the banks will make anything. 6 years of accrued interest and court costs will chew into any perceived profit. Remember, they borrowed the money to pay for those mortgages.

Glenbhoy

ted1 wrote: »

6 years ago the house would have been sold at Rock bottom prices. The banks would be worse off as would the person who owes the bank the balance

It would have been irrelevant to the bank, however, the mortgagee would definitely have been worse off as they would have owed the balance regardless. Incidentally, 6 years ago, most metrics would judge prices to have been higher than currently.

What should have been done is difficult to call, however, the course of actions taken by banks and govts thusfar are unlikely to have been the right course of action imo.

mr_seer

ted1 wrote: »

6 years ago the house would have been sold at Rock bottom prices. The banks would be worse off as would the person who owes the bank the balance

Essentially what you are saying is that the only reason house prices have risen is because market clearance did not happen. I agree with you. Starting with that premise, you have to see that current prices are therefore false and when the inevitable supply response happens it will at the very least wipe out all of the false gains in price made since 2012

MarkAnthony

mr_seer wrote: »

Essentially what you are saying is that the only reason house prices have risen is because market clearance did not happen. I agree with you. Starting with that premise, you have to see that current prices are therefore false and when the inevitable supply response happens it will at the very least wipe out all of the false gains in price made since 2012

That's not what was said at all.

Standard thread here, OP asks a sensible question, then the same old broken records again and again.

enfant terrible

ted1 wrote: »

Ubthink the phase dead count bounce is outdated and completely wrong.

As regards banks cashing in, they don't profit they just get what is owed to them. If they get less they are owed the balance by the mortgage holder. Selling when market is low and not in the interest of the mortgage holder

But if the mortgage holder can't or won't pay the mortgage, who's to say he'll pay the balance owed.

Surely it's better for the banks to wait for prices to rise to minimize the debt owed.

The_Conductor

Cuddlesworth wrote: »

An article on the Irish Times has suggested that 2014 saw around 8k repossession orders applied for, where as 2015 has seen 7k in the last 2 months. Thats a 5 fold increase on the rate of repossessions?

Do you think this could have a strong effect on the market in the next two years? Do you think the banks themselves are trying to cash in on a dead cat bounce? Are you the_Spider and believe that prices will rise regardless?

Aside from properties that have unique selling points- or very high demand areas- property prices are now falling. They're not in freefall by any means- but small but perceptible decreases are occurring. If you look at smallish developments in Dublin's suburbs- and look at the prices achieved on property price register- look at the trends from July of last year onwards.

With a few exceptions- prices stalled completely coming into last autumn- and are now gently drifting downwards.

In this year todate- anecdotally- there are broadly a similar number of repossessions as executor sales hitting the market- and they (between them) are increasing their share of transactions at double digit percentage rates.........

I don't know just how many repossessions were actually granted since last September- there were 11,000 sought- 7,000 of which were in Jan/Feb. Feb/March/April- are always the peak months for executor sales too- tappering to nothingness in Q3 before rising again in Q4.

We have a 'zombie' property market- its the living dead.

There are still a significant cohort of cash buyers out there (I had thought they'd have been well flushed out of the system by now- but apparently not). They are willing to bid for particular properties- but there is no impetus on them to buy for the sake of buying- which might have been there to be seen previously.

Its almost as though prices peaked again last summer- and are now gently falling.

Some commentators were suggesting that the sub220k properties would be shielded from falls- by the ICB interventions in lending rules- but this doesn't seem to be the case (just about the only price rises in the sub 220k category in the greater Dublin area- is in apartments in high demand areas).

Its a very interesting pasttime- looking at the market- as someone who owns property but isn't personally buying or selling- and I have no compulsion to do either.

Personally I believe a 'floor' has been established at this stage- and any changes from here on in- other than simple inflationary tracked changes- will be driven by regulatory changes- especially any changes that impact on rental yields for investors.

The big unknowns are the general election coming down the road- and potential changes to the tax regime- this has the potential to seriously screw with market fundamentals..........

The_Conductor

handlemaster wrote: »

interesting to see if the government will provide any assurances for landlords to take on welfare tenants. .

Requoting for handlemaster- as I think his post got nobbled.......

MarkAnthony

While I'm sure the more analytical amongst you are correct in relation to prices, it's not what I'm seeing in asking prices. I've seen a massive spike in the last three months - perhaps wishful thinking on behalf of sellers given the new rules?

Bob24

MarkAnthony wrote: »

While I'm sure the more analytical amongst you are correct in relation to prices, it's not what I'm seeing in asking prices. I've seen a massive spike in the last three months - perhaps wishful thinking on behalf of sellers given the new rules?

Same here. But on the other hand they don't seem to be selling so Iwould aslo say it is an attempt to raise people's expectations.

The_Conductor

MarkAnthony wrote: »

While I'm sure the more analytical amongst you are correct in relation to prices, it's not what I'm seeing in asking prices. I've seen a massive spike in the last three months - perhaps wishful thinking on behalf of sellers given the new rules?

I really don't know. For a few properties I've been looking at- which are executor sales- the asking price is 10-15% above the valuation put on the property to probate the will- often by the same estate agent who valued the property for probate........(?)

Why would an estate agent value a property at 200k for a will probate one week- and at 220k exactly a week later when its formally put on the market......?