2021 Irish Property Market chat - mod warnings post 1

standardg60 · 20-04-2021 10:02PM

Deleted User wrote: »

I think rising savings will make many people spend less because when you get what you never had you starting think not spend it and try save more.
I was spending money for live in pleasure from 2004 to 2009 and did not have any savings
4 years of unemployment after and work for different CE skims made me think differently
I created some savings in last 10 years and I cant spend any extra penny because I remember how hardly those money was saved and I dont want stay with empty pockets again
Many people has same life style and many of them brain was badly damaged by 2008 recession
Dont think people will get rid of them savings easily as government and PA hope

Good point, the expected 'avalanche' of retail spending once restrictions are lifted may not materialise, we are creatures of habit and now people realise they can survive without retail therapy they may not return.

TobyHolmes · 20-04-2021 10:03PM

Hubertj wrote: »

https://www.businesspost.ie/houses/seven-dundrum-apartments-leased-for-social-housing-have-been-empty-for-17-months-5cb77c5d

I know people will want to blame the gubbernment but this is a failure of public servants. There is no accountability for the person(s) responsible for this. Instead they get salary increases (“restoration”). It doesn’t matter who is in government or what the policy is if there is no accountability for those charged with implementing and executing the policy. There won’t be accountability because unions will not allow it. Laughable.

can someone explain to me how the county council can lease luxury apartments for the purposes of social housing and leave them empty? maybe the article explains but its subscription only.

standardg60 · 20-04-2021 10:09PM

Hubertj wrote: »

https://www.businesspost.ie/houses/seven-dundrum-apartments-leased-for-social-housing-have-been-empty-for-17-months-5cb77c5d

I know people will want to blame the gubbernment but this is a failure of public servants. There is no accountability for the person(s) responsible for this. Instead they get salary increases (“restoration”). It doesn’t matter who is in government or what the policy is if there is no accountability for those charged with implementing and executing the policy. There won’t be accountability because unions will not allow it. Laughable.

Yep, probably be another 'review' from which lessons will be learnt.
I don't think people realise how much our union led state is leading us into a big black hole. Didn't Avant launch into the mortgage market directly targeting the public service?

Timing belt · 20-04-2021 10:15PM

schmittel wrote: »

But what is the biggest factor affecting the make up of the the banking books in Ireland vs their euro counterparts?

I'd say it is the difference in capital requirements. Do you disagree?

it will be capital requirements but that only explains part of the margins Irish banks are charging...the other big drivers are tracker mortgages, banks being to small and a lack of competition in the market....it can’t all be blamed on the banks ability to repossess property or the capital requirements that have increased due to the risk models taking account of 08 crash.

Timing belt · 20-04-2021 10:20PM

TobyHolmes wrote: »

i suppose it depends on who you bank with re your first point
re your second point yeah you are exactly right - the amount of money people used to spend. most of mine went on travel lol anyway its great not to spend and save save save is the new motto.

There are a lot of people claiming pup and still doing cash job...saving the pup and living off the cash..

Timing belt · 20-04-2021 10:25PM

L1011 wrote: »

I'd doubt that - the nature of current accounts being cleanable out by card skimmers and zero interest, but legally defined as savings accounts taking actual seconds to set up with most banks would leave only a few willing to carry vast sums in their current account

Just look at the central bank break down there is practically zero with any term or notice that would push the funds out 30 days and outside the liquidity window that bank would not need to hold bonds or place funds with central bank.

Yes there will be some interest bearing accounts but the bank will still need to hold HQLA as the funds are on call.

PropQueries · 20-04-2021 10:34PM

The housing minister said today that there will be over 90,000 households in receipt of HAP or RAS this year.

That’s a lot of private landlords being subsidised by the state IMO

Link to article in Irish Times here: https://www.irishtimes.com/news/politics/minister-unsure-if-target-of-12-500-social-housing-units-will-be-met-1.4542958

20-04-2021 10:35PM

TobyHolmes wrote: »

can someone explain to me how the county council can lease luxury apartments for the purposes of social housing and leave them empty? maybe the article explains but its subscription only.

Council offices been closed under Level 5 lockdown rulles.Same as property agents can't meet people for viewing same council clerks could't do them job with public.
Oridinary politicians games for seats in county concil buying sanfwiches for journalists which taking money from those who order and those who has to pay if want read full article.

20-04-2021 10:39PM

PropQueries wrote: »

The housing minister said today that there will be over 90,000 households in receipt of HAP or RAS this year.

That’s a lot of private landlords being subsidised by the state IMO

Link to article in Irish Times here: https://www.irishtimes.com/news/politics/minister-unsure-if-target-of-12-500-social-housing-units-will-be-met-1.4542958

What will be the best choice then ?
Have 90K landlords which will stop pay mortgage and government will have to save banks again having at least 150K homeless
Or support landlords not saving banks and having 150K under the roof ?
Less money less hassle

standardg60 · 20-04-2021 10:43PM

Timing belt wrote: »

it will be capital requirements but that only explains part of the margins Irish banks are charging...the other big drivers are tracker mortgages, banks being to small and a lack of competition in the market....it can’t all be blamed on the banks ability to repossess property or the capital requirements that have increased due to the risk models taking account of 08 crash.

The lack of competition is entirely due to the capitol requirements, and the capitol requirements are entirely due to the inability to repossess, be they trackers or variables.
No bank leaving the sector has given trackers as a reason for doing so.

PropQueries · 20-04-2021 10:45PM

[Deleted User] wrote: »

What will be the best choice then ?
Have 90K landlords which will stop pay mortgage and government will have to save banks again having at least 150K homeless
Or support landlords not saving banks and having 150K under the roof ?
Less money less hassle

No

If the landlord truly believes the “market rent” is e.g. €1,500 per month, tax him €750 per month until it’s rented out.

Taxpayer wins, private renters win, banks win. Even the landlord wins as he’s getting the “market rent”, or whatever the real “market rent” is after the taxpayer subsidy is removed

Timing belt · 20-04-2021 10:59PM

standardg60 wrote: »

The lack of competition is entirely due to the capitol requirements, and the capitol requirements are entirely due to the inability to repossess, be they trackers or variables.
No bank leaving the sector has given trackers as a reason for doing so.

The capital requirements are manly due to the financial crisis still being embedded in the risk models and not repossessions. Most of the banks have sold there bad books but still have high risk weighted assets which drive the capital requirements.

hometruths · 20-04-2021 11:02PM

standardg60 wrote: »

The lack of competition is entirely due to the capitol requirements, and the capitol requirements are entirely due to the inability to repossess, be they trackers or variables.
No bank leaving the sector has given trackers as a reason for doing so.

Exactly. Whatever way you spin it, lack of repos are the root of the problem.

For example:

Timing belt wrote: »

The capital requirements are manly due to the financial crisis still being embedded in the risk models and not repossessions. Most of the banks have sold there bad books but still have high risk weighted assets which drive the capital requirements.

The reason the financial crisis is still embedded in the risk models is because the banks did not repossess the security on the problem loans.

Villa05 · 20-04-2021 11:08PM

standardg60 wrote:

Didn't Avant launch into the mortgage market directly targeting the public service?

Risky policy to assume that pot of gold will last forever given spending plus debt
At least its a foreign bank taking that risk

Hubertj · 20-04-2021 11:15PM

Villa05 wrote: »

Risky policy to assume that pot of gold will last forever given spending plus debt
At least its a foreign bank taking that risk

I don’t think it was targeting public sector - I think they required LTV less than 60% or something like that.

Timing belt · 20-04-2021 11:16PM

schmittel wrote: »

Exactly. Whatever way you spin it, lack of repos are the root of the problem.

For example:

The reason the financial crisis is still embedded in the risk models is because the banks did not repossess the security on the problem loans.

The probability of default that is calculated based on historical data has nothing to do with repossession. Pre 2008 The banks chose to adopt the advance method in calculating risk as this gave them lower RWA’s as the historical data showed a lower probability of default than the standard method...then 08 came and they still had to use the same models. The banks have enough excess capital over there reg requirements to be able to pay dividends.. they are getting this from the margins they charge.

All I am saying is it’s not black and white and there are other factors but no one ever considers those.

hometruths · 20-04-2021 11:22PM

Timing belt wrote: »

The probability of default that is calculated based on historical data has nothing to do with repossession.

What historical data is used to calculate the probability of default?

Timing belt · 20-04-2021 11:25PM

schmittel wrote: »

What historical data is used to calculate the probability of default?

The actual historical data based on the % of the loan book that technically go into default...I.e. have paid nothing in 90 days

hometruths · 20-04-2021 11:34PM

Timing belt wrote: »

The actual historical data based on the % of the loan book that technically go into default...I.e. have paid nothing in 90 days

So given that is has been shown that ten years ago there was a spike in mortgage defaults caused by the threat of repossession being reduced (Dunne judgment) it it is clear the % of defaults is directly related to the lack of repossessions.

As I say, whatever way you spin it, lack of repos is e root of the problem.

standardg60 · 21-04-2021 12:19AM

Timing belt wrote: »

The capital requirements are manly due to the financial crisis still being embedded in the risk models and not repossessions. Most of the banks have sold there bad books but still have high risk weighted assets which drive the capital requirements.

Why are the current capitol requirements there if the banks have sold their bad loan books?
Surely that would have led to a relaxation if the current mortgage market is deemed to be solid, ie. the risk of default is vastly reduced compared to 08?
That doesn't make any sense.
The requirements are there now because default has no real repercussions.
Someone posted a while back about an en masse boycott of mortgage repayments.
The more i think about it, the more it makes sense. Would we be in a better place if all our homes could only be bought and sold without recourse to loans?

Timing belt · 21-04-2021 12:43AM

standardg60 wrote: »

Why are the current capitol requirements there if the banks have sold their bad loan books?
Surely that would have led to a relaxation if the current mortgage market is deemed to be solid, ie. the risk of default is vastly reduced compared to 08?
That doesn't make any sense.
The requirements are there now because default has no real repercussions.
Someone posted a while back about an en masse boycott of mortgage repayments.
The more i think about it, the more it makes sense. Would we be in a better place if all our homes could only be bought and sold without recourse to loans?

Selling the bad book does reduce the capital requirements but the difference it made was the banks failing the ECB stress tests and needing a capital injection by the government. The capital requirements on the good book are based on probability of default based on historical data. If defaults spiked due to the dunne case then this will feed in. Just to be clear I am not saying repossession is not a factor for high mortgage rates. All I am saying is there are other factors that also feed into Ireland having such high rates compared to other EU countries.....If you look at where the rates are the highest it is in countries that had worst property crash following 2008

combat14 · 21-04-2021 07:57AM

Deleted User wrote: »

What will be the best choice then ?
Have 90K landlords which will stop pay mortgage and government will have to save banks again having at least 150K homeless
Or support landlords not saving banks and having 150K under the roof ?
Less money less hassle

well if we are facing 90k landlords in default above, 150,000 homeless and banks in chaos again.... just shows how much the government are propping up a severly over priced and dysfunctional property market.......

Wanderer78 · 21-04-2021 08:00AM

combat14 wrote:

well if we are facing 90k landlords in default above, 150,000 homeless and banks in chaos again.... just shows how much the government are propping up a severly over priced and dysfunctional property market.......

Public bank is the only way outta this one, but they're also problematic, can't see us attracting banks in at all, until these issues are resolved

combat14 · 21-04-2021 08:30AM

Wanderer78 wrote: »

Public bank is the only way outta this one, but they're also problematic, can't see us attracting banks in at all, until these issues are resolved

the cost of everything including rents and house prices need to be driven down..

consumers can stimulate the economy spending their hard earned money in other ways

the state is facing a serious funding crisis in the not too distant future with impending changes to how international corporate tax rates are structured

RichardAnd · 21-04-2021 09:10AM

combat14 wrote: »

the cost of everything including rents and house prices need to be driven down..

consumers can stimulate the economy spending their hard earned money in other ways

the state is facing a serious funding crisis in the not too distant future with impending changes to how international corporate tax rates are structured

I liken the state to a drug addict, and this drug addict is in charge of the resources and economy of the society over which it governs. What does a drug addict do when he/she can't get their fix?

Cyrus · 21-04-2021 09:26AM

Nice house this, cant make up my mind if the price makes sense or not, there are some amazing houses on harbour road but they are on the other side of the road. No views that i can see from the pics but nicely finished.

https://www.myhome.ie/residential/brochure/tradewinds-bullock-harbour-dalkey-co-dublin-a96ff85/4496304

PropQueries · 21-04-2021 09:28AM

combat14 wrote: »

the cost of everything including rents and house prices need to be driven down..

consumers can stimulate the economy spending their hard earned money in other ways

the state is facing a serious funding crisis in the not too distant future with impending changes to how international corporate tax rates are structured

Definitely. And rents (both residential and commercial) are the source of many of this country's high cost of doing business problems at the moment IMO

A good example reported in the Limerick Leader this week was that:

"The owners of nine derelict buildings in Limerick haven’t paid a cent of the more than €500,000 they owe to the council for over a year. Under legislation, introduced in 2015 to deter property owners sitting on empty sites, landlords can be charged up to 10% of their annual commercial rates bill, in the hope it might persuade them to act."

This just goes to show that there is a real cost to me and other home owners of leaving properties vacant. There are plenty of small business people who would gladly rent this space if it was available and affordable (i.e. real market rents).

So, that's c. €16 million per annum the local council lost out on from just 9 vacant properties if they were actually used as the article says "If operational, these would generate more than €16m for council in rates a year".

Imagine how much DCC or Cork City Council are losing? And the shortfall will most likely be made up from increases in residential property taxes IMO

Increase it from 10% to 50% and all problems solved IMO

Link to article in Limerick Leader here: https://www.limerickleader.ie/news/home/626200/limerick-council-to-pursue-owners-of-vacant-properties-over-unpaid-levies.html

Wanderer78 · 21-04-2021 09:31AM

combat14 wrote: »

the cost of everything including rents and house prices need to be driven down..

consumers can stimulate the economy spending their hard earned money in other ways

the state is facing a serious funding crisis in the not too distant future with impending changes to how international corporate tax rates are structured

...and the main reason behind the rising cost of living, is primarily due to our dysfunctional fire sectors(finance, insurance and real estate), whos main aim is to consistently drive up property and land prices

citizens will only truly spend their hard earned cash when these sectors are stabilised, giving confidence to do so, we currently have the opposite in these sectors

the state is not facing a serious funding issue, as the ecb has given the union the backing to pretty much 'do whatever it takes', we need to move on from this childish, and frankly dangerous thinking, budgets need to be balanced, governments are not like house holds!

plough on with the borrowing, and get the economy going!

hometruths · 21-04-2021 09:33AM

Cyrus wrote: »

Nice house this, cant make up my mind if the price makes sense or not, there are some amazing houses on harbour road but they are on the other side of the road. No views that i can see from the pics but nicely finished.

https://www.myhome.ie/residential/brochure/tradewinds-bullock-harbour-dalkey-co-dublin-a96ff85/4496304

Nice house - exterior, size, layout, garden but those stairs would have to go.

yagan · 21-04-2021 09:40AM

Wanderer78 wrote: »

...and the main reason behind the rising cost of living, is primarily due to our dysfunctional fire sectors(finance, insurance and real estate), whos main aim is to consistently drive up property and land prices

citizens will only truly spend their hard earned cash when these sectors are stabilised, giving confidence to do so, we currently have the opposite in these sectors

the state is not facing a serious funding issue, as the ecb has given the union the backing to pretty much 'do whatever it takes', we need to move on from this childish, and frankly dangerous thinking, budgets need to be balanced, governments are not like house holds!

plough on with the borrowing, and get the economy going!

Doesn't ploughing on with borrowing contradict your appeal for balanced budget?

2021 Irish Property Market chat - *mod warnings post 1*

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2021 Irish Property Market chat - mod warnings post 1