Daft Property - Irish Property News

Half of us now in negative equity misery... HUNDREDS of thousands of Irish homeowners could face negative equity as early as June. A report from NCB stockbrokers has outlined that as many as 45pc of householders could owe more on their mortgage than their house is worth. NCB economist Brian Devine says that house prices, as officially measured, are still overvalued. "Our estimate for Ireland suggests the number of homes in negative equity ranges between 29pc and 46pc depending on the price decline assumed," Mr Devine outlined. NCB believes prices are already 35pc below their peak, meaning close to one in three homeowners are already in negative equity. "There is little reason to believe that house prices will not continue to fall as future employment prospects remain bleak, further tax hikes are in the pipeline, confidence remains low, emigration is likely and there remains a large supply of properties for sale," the NCB report claimed. "Affordability may have ...

As the government continues to pump billions into our much discredited banking system, many Irish people unable to find work here are facing into a future outside of this country. John Downes, News Investigations Correspondent, spoke to some of the new Irish diaspora about their recent experiences of emigration... By any stretch of the imagination, they were a startling set of figures, prompting echoes of a past which we thought we had left behind. According to ESRI data released last week, we can expect net emigration of 60,000 in the year to this April – and a further 40,000 by April 2011. That's almost 1,000 of our best and brightest leaving every week. Yet the ESRI's predictions are simply the latest – if most stark – indications of a return to mass emigration among Ireland's unemployed, as the downturn has continued to take its toll. In September, for example, the Central Statistics Office revealed that Ireland witnessed a return to net emigration for the first time si...

Being strangled by the monthly mortgage noose... OVER the past number of weeks and months, we have become used to speaking in billions. Seven billion to recapitalise AIB and Bank of Ireland; a €22bn cash injection into Anglo Irish Bank; €81bn worth of developer loans transferred to NAMA -- the list and amounts of money appear to be endless. But for many, the only real amount that matters is the one they need to pay each month to keep a roof over their head. Unfortunately, for tens of thousands of Irish families, this amount is far greater than their income and the mortgage rope around their neck simply gets tighter and tighter each month. According to the Financial Regulator, more than 28,000 homeowners have not been able to repay their mortgage for more than three months. Another 30,000 have been forced to renegotiate their mortgages. I suspect this figure of almost 60,000 is merely the tip of the iceberg and will only increase. Considering that more than 230,000 people have been made...

The great property scam is back to rip us off again... They're back! The creeps, the snake-oil salesmen and spoofers who condemned a generation to negative equity are cheerleading again. The advertisers are salivating too because the "property porn" industry sees a chance to sell its fantasy again. The papers are once more displaying "dream homes" replete with doctored photographs and Mediterranean blue skies -- all at "knock down" prices. It's time to buy again, or so I'm reliably told by those who were so reliable last time that they gave us NAMA! I am not saying that property won't recover ever, of course it will; but not from here. Irish property is still extortionately expensive. It is expensive not just on a comparative basis but, more crucially, it is expensive on the basis of what is happening in the economy. Any government that is urging people to buy houses right now clearly has no intention of learning anything from the mistakes ...

Cuffe backs demolition of some 'ghost' estates... NEW GREEN Party Minister of State for the Environment Ciarán Cuffe yesterday said the blame for unfinished, or “ghost” housing estates lay with “the ‘cargo cult’ of rezoning for all the wrong reasons” that drove development in recent years. In his first major speech since taking office last month Mr Cuffe said “selective demolitions will be a necessary part of the tasks required to tackle the legacy of one of the more unsavoury aspects of Ireland’s building boom”. Addressing the annual conference of the Irish Planning Institute (IPI) in Tullamore, Co Offaly, he said: “I have no doubt that some loans that will come into the possession of the Nama will result in the demolition of badly designed buildings in inappropriate locations.” But demolition would not be the only option. “We now have to look quite realistically at the future use of unfinished estates and the needs of residents . . . It’s not as simple as sending in a bulldoz...

Demolition the only way to build a better future... WITH THE building frenzy of the last decade and a half, who would have thought that we would be thinking of knocking some of it down again? But Brendan McDonagh, chief executive of Nama, probably got it right when he talked about the need to demolish some of the surplus stock in out-of-the-way locations. Everyone now knows that some of these estates will never be lived in, because they are not within easy commuting distance of jobs, or because there simply was never a market for them in the first place. It wasn’t just the bankers and the developers who got it wrong. The planners in the various local authorities have also made grave errors in allowing many of these estates to be developed in one horse towns and obscure villages. These developments – many of them large executive-style homes – simply did not make sense, even in buoyant times. Some of them are now an eyesore, and could disappear even faster than it took to build them. The...

Cuts, tax and emigration the harshest medicine... IT'S often been said that the best cure for poverty and unemployment is a job. But the reality of the modern Irish economy is that the best cure is emigration. The Economic and Social Research Institute (ESRI) said yesterday that 100,000 people would leave Ireland this year and next, keeping a lid on already high unemployment and helping to relieve some of the budgetary pressures on the Government. The loss of 100,000 mainly young people is hardly something to celebrate, but the reality is that without this safety valve the Irish economy would be mired in levels of unemployment last witnessed in the 1980s. The ESRI calculated yesterday that if the amount of people in the labour market had not fallen over the last year via emigration, the rate of unemployment would be about 16pc not the current 13.4pc. Ireland is shipping out its young people to countries like Canada, the US, Australia and the UK, thereby easing the pressure on the e...

Don't bet your house on end of price falls... Lenihan says we can buy in confidence now prices are realistic -- not according to some valuation models. THE speed of the housing market crash is slowing, the Daft.ie house price report has suggested. It may be losing pace -- but contrary to Brian Lenihan's upbeat take on it, few people think that the market has bottomed out yet. "The residential property market will now be stabilised at a realistic level," Mr Lenihan said after the 47 per cent Nama discount was announced. "You can now buy in confidence that the price is realistic." The wider view is that prices could get a whole lot more realistic before they completely floor. Is there much worse to come? By some calculations house-price values could have far further to fall. One internationally recognised valuation model reveals potential overvaluation in the Irish market of up to 60 per cent -- even after the massive price drops that have already occurred. Du...

Blow for homeowners as BoI to hike mortgage rate... BANK of Ireland will today reveal that it is increasing mortgage rates for thousands of hard-pressed homeowners. The move comes despite the European Central Bank (ECB) leaving its rates unchanged yesterday -- for the 11th month in a row. Homeowners who are vulnerable to rising mortgage rates are now being warned that they have seven days to act. Experts are advising new buyers -- as well as those who are coming off a fixed rate or are on a standard-variable rate -- that they should lock in now. Bank of Ireland (BoI) and its subsidiary, ICS -- which between them have one in four mortgages in the country -- are to announce that they are increasing their standard-variable rates for existing customers by 0.5pc. They are also raising fixed rates by up to 0.7pc for existing customers who want to fix, the Irish Independent has learned. The change in the standard-variable rates will add €80 a month to the repayments of someone on a €300,000 m...

Government has sold us out to neo-gombeen man... Over 100 years ago, JM Synge described the gombeen man as follows, "groggy patriot/publican/ge-neral shopman who is married to the priest's half-sister and is a second cousin once removed of the dispensary doctor ... the type that is running the United Irish League anti-grazier campaign, while at the same time they are swindling the people themselves in a dozen ways and buying back their holdings and packing off whole families to America". When we see the closing of businesses and the emigration of our neighbours and relations while deeply entrenched "insiders" disguise national robbery in the emotional language of patriotism, it is not difficult to conclude that the gombeen man never went away. Even in terms of the detail of Synge's gombeen man buying up the peasants' holdings, it is obvious that, for NAMA to work, the State will have to trade land cheaply at some stage in the future. And guess what? To g...

Two in five executives fear 'double dip' recession... Almost 40 per cent of Ireland's top chief executives fear the country may face a "double dip" recession, according to the Sunday Independent Business Leaders Survey, a poll of Ireland's top 300 businesses. Economists have suggested the recession may technically end this year, with modest growth pencilled in, as Ireland piggybacks on a global recovery. But this growth may be short-lived as spiralling public debts, shattered consumer confidence, rising unemployment and potential interest rate hikes drive the country back into recession. The survey found that 39 per cent expected a "double dip", just ahead of 38 per cent of respondents who forecast that Ireland would escape a second recession. Almost 23 per cent were undecided. The American Chamber of Commerce estimates that up to 40 per cent of Ireland's corporation tax comes from US subsidiaries based here, and, if the recession deepens in the ...

Developers’ castles may be built of sand as flood of debt rises... And what of builders and property developers? There’s no doubt that these Celtic Tiger characters have taken a serious hit to their fortunes. It may have completely wiped out large chunks of their wealth. We suspect that many are just treading water, but we really don’t know exactly how bad it is. Firstly, we don’t know how much they have borrowed and how bad their land and assets are worth. Development land in some parts of Ireland may have fallen by 95 per cent in value. This means that the banks — or rather Nama — owns it. Crucially, we don’t know the level of personal guarantees given by the developers. If they have put everything on the line for a loan, they are toast. If not, they may still retain some shattered vestige of their former wealth. How the likes of developer Johnny Ronan can blow €60,000 on a holiday in Morocco we honestly cannot imagine. But he must have made serious money in the good times — and one ...