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

Hubertj wrote: »

Speaking of which this lad crawled out from under his rock

https://m.independent.ie/irish-news/ronan-ryan-puts-financial-woes-behind-him-and-starts-afresh-with-new-dublin-4french-themed-bakery-and-cafe-40310972.html

I was going to try it out tomorrow but have changed my mind. I’ll keep my few euro and pay some extra off my mortgage next week.

"His battle with vulture funds over his family home".

This is the sort of horsesh*te printed by a supposedly objective 'media' that has led to where we are.

schmittel wrote: »

The arrears stats are always worth a look.

There's a heap of detail in there, but basically there are just over 97,500 PDH mortgages classified as either in arrears over 90 days or restructured (we can assume that your mortgage is well past 90 days in arrears by the time you get into restructuring).

That is the guts of 100,000 second hand houses that in a normal market would have been sold either voluntarily by the owner realising that they could no longer afford such a house or repossessed and sold by the bank.

To put that into context - in the whole of 2019 a little over 45,000 second houses were sold.

So the arrears/restructured properties are the equivalent of two years supply. Which is quite a lot. IMO.

Re the fact that housing the occupants will become the states problem if the properties are repossessed: assuming each property houses 2.75 (national average) occupants that is almost 275,000 people who will be added to the housing list.

Is it plausible that there an additional 275k people who need social housing in addition to the high numbers who already receive it?

If it is plausible then maybe our economy is not in the rude health (pre Covid) we were led to believe.

Looking at the December 2020 report is it not 120k ish between arrears and restructured? 54,986 arrears + 72,866 restructured? Restructured is interesting - how sustainable are they, etc. Am I correct in thinking banks took a long time in coming around to restructuring which worsened the arrears? Is restructuring common in other countries?

I suppose the problem for some people was they lost their jobs for a period of time, spent all savings, fell into arrears, then they get a new job and have to start again. Mortgage repayments aren’t the problem, it’s the couple of years arrears that need to be addressed in some way.

I’d like to think the can pay won’t pay, stay as long as possible without paying is a small % but I keep coming back to Irish people not being good at personal responsibility

schmittel wrote: »

If you look at the restructures section there is Chunk counted as both in arrears and restructured, which is why I excluded them.

A few years ago the banks were all quizzed on the subject of arrears by an committee, and the put the estimates of strategic default at about 25%.

Whatever about the PDH classification, over 2000 BTL mortgages out of just under 98k are in arrears of over 10 years. If ever there was low hanging fruit.... indeed the number has increased from 1500 last December which is a significant increase in one year

Reins wrote: »

KCB leaving the Irish market lessons the competition for future mortgage applications etc etc and nothing will change immediately but given yesterdays announcment will it have any immediate impact on new applications or drawdowns from our remaining lenders? Or is it just business as usual?

From the buying thread:
"We're in the same boat as above, AIP from KBC with an LTI exception valid for just 2 months. Got a call from our broker to say they're halting LTI exceptions, and that we really had this week to get something across the line to be in with a chance to get an offer with the exception."

How much of an impact this has depends on whether the same applicant would have got an LTI exemption from AIB/BOI, and would have the same bidding capacity now.

Browney7 wrote: »

On a proportionality basis though, the level of arrears in BTL mortgages is incredibly high - nearly 6500 BTL mortgages out of 96k in the dataset have arrears of more than 5 years. The PDH equivalent figure is 16k out of 732k in the dataset. If ever there was an argument for "strengthening" the repo legislation from a political perspective it would be to put out a few stories of delinquent landlords pocketing ten years of rent whilst not paying a penny and how this "cheats us all".

I don't doubt the legal position on repos has a large impact on banking and lending. But so too does the billions in tracker mortgages at razor thin margins sold in the boom which are subsidised by new lending. This is to generate any sort of return on the overall capital which banks have to deploy to operate in this market which in of itself is another debate!

The current legislation allows receivers to be appointed which diverts the rent away from the landlords. In other cases the landlords are paying a interest and some of the capital but is is defined as arrears because they are not clearing the principal sum due fast enough.
In the period from 2008 rents fell by an average of 30%, vacancy rates rose with longer intervals between lettings, the NPPR was brought into being, mortgage interest was cut and the bansk refused to roll over interest only mortgages. It is hardly surprising that many BTL mortgages went into arrears.
Since covid many BTL landlords have lost their income from other businesses as well as having high vacancy rates and (in Dublin) lower rents.

Villa05 wrote: »

Renters are the oppressed minority in Ireland
Homeowners whether you paying for it or not are consistent voters
The transient nature of the rental market makes voting that bit more difficult

I see republicans are pushing through laws that makes voting cumbersome and difficult in disadvantaged minority communities in the US

Hang on a second. I thought republicans were changing voting laws as the domecrats stole the election. Are you telling me that’s not the case?

schmittel wrote: »

Sure there is low hanging fruit in the BTLs but my guess is the BTLs are not having such a significant impact on the overall market in terms of property being misallocated. The numbers are quite small in comparison to the PDHs.

No doubt some of them are vacant, but most will be rented out, either via receivers or landlords who are taking the p*ss, but assuming the tenants are paying the rent, at least the properties are providing housing to the end user at the market rate (albeit a distorted market).

Re the increase in 10 years, we can expect to see a big jump in that figure on PDHs and BTLs in second half of this year and first half of next year because in July we have the 10 year anniversary of the Dunne ruling.

This was a court ruling that stated that banks could no longer repossess until new legislation was brought in on the issue. This has been shown to have directly led to a spike in mortgage defaults.

Irish people stopped paying mortgages in their droves after a ruling blocked the banks from evicting

Enjoyed reading (honestly) that entire judgement, the following caught my eye however;

“There appears no trace, prior to 1936, of any right in any court to deny a mortgagee asserting or claiming his right to
possession, the appropriate order - though to this a qualification has to be made in that a court in the exercise of its
inherent jurisdiction for proper reason to postpone or adjourn a hearing might by adjournment for a short time afford the
mortgagor a limited opportunity to find means to pay off the mortgagee or otherwise satisfy him if there was a reasonable
prospect of either of those events occurring. Indeed, it would be to me surprising if there had been such a trace, having
regard to the fact that a legal mortgagee does not necessarily require any assistance from the court to assert his right to
possession. Moreover, a mortgagee once rightfully in possession could never be ousted by the mortgagor except on
paying off in full.”

So, while the repeal of S62(7) from the 1964 act prevents lenders applying to courts for orders for repossession, there seems to be nothing stopping them from physically securing possession themselves, entering when vacant and changing locks etc.

Of course, doing that is another can of worms, but the legal protection seems to be there.

looks like we are going to be absolutely fleeced with additional taxes in the coming years - talk has already started..

https://www.rte.ie/news/business/2021/0417/1210516-should-pandemic-winners-pay-a-solidarity-tax/

something those who are stretched currently buying over priced houses should bear in mind along with having future kids and now upcoming lack of competition in the mortgage market which will likely drive mortgage interest rates higher too

affordability here is looking ever more and more fragile

combat14 wrote: »

looks like we are going to be absolutely fleeced with additional taxes in the coming years - talk has already started..

https://www.rte.ie/news/business/2021/0417/1210516-should-pandemic-winners-pay-a-solidarity-tax/

something those who are stretched currently buying over priced houses should bear in mind along with having future kids and now upcoming lack of competition in the mortgage market which will likely drive mortgage interest rates higher too

affordability here is looking ever more and more fragile

You sound surprised taxes will increase? You’d want to be a bit dim to think they won’t increase over the coming years, in my opinion.

Deleted User wrote: »

The bigger problem in Ireland that buying and selling process taking up to 1 year.
And even if sale will agreed you will have pay for rent or live in another property before you will get keys.When in most European countries buying and selling process taking up to 1 week.Finland for example between mortgage approval and keys from property take only 3 days.
That is the one of reasons why property market in Ireland are slow and many people are homeless even if they has money for house .
In some cases government wasting money for HAPs because people cant move to property they bought.

Government paying for Hap while someone has bought a property.... not likely
It doesn't take one year between offer on a property and getting the keys.

mcsean2163 wrote: »

My response should have been more considered. You make interesting points. If you are a non native English speaker I must apologise as your English is far superior to any of my second languages, if you are a native English speaker, you make interesting points but would appreciate it if you could spend a bit more time formatting your points. I'm afraid it got to me that day in particular but please don't by put off by my rash repl for which I apologise if offense was taken..

I'm reading this as John Cleese's voice in my head for some reason

To me the prospect of general taxes increasing would encourage me to place a greater % of my net worth in my principal private residence, not less! What is more likely to be hit hard; your savings and investments, your pension pot, your PAYE and investment income, your home residence? The first three are easier targets IMHO, knowing what I do of this country. Property taxes on primary residences may rise, but will not be struck as hard as other sources of wealth or income. IMHO anyway.