Daft Property - Irish Property News

Call for inquiry into property bubble... An independent inquiry is needed into the Government’s failure to control the property bubble, a State-funded academic institution said today. In a scathing report, the National Institute for Regional and Spatial Analysis (Nirsa) also demanded a full investigation into charges of cronyism in the planning process. Furthermore, the body which examines how the country is developing, claimed the National Asset Management Agency (Nama) is a worrying organisation set up as part of a response to protect developers potentially at the expense of taxpayers. Professor Rob Kitchin, director of Nirsa, which is based in NUI Maynooth, said an inquiry into planning decisions and alleged close links between politicians and property speculators was necessary if the housing market was to recover. “An independent inquiry is needed to investigate all aspects of the planning system and its operation within and across different agencies and at all scales in Ireland in...

Selling off state assets on the cheap is just madness... This Government will not contemplate selling property just in case it would bankrupt the banks. The State's argument is that the market is depressed so if we were to sell the land, we would not get a fair price for it. So we will postpone the problem: we get NAMA -- a financial skip into which the banks throw their worthless mistakes -- and you pay. The logic of NAMA and this Government's central strategy is to wait for the value of land to improve before selling. Whether you agree with it or not, this is their logic. It can be summed up by: "Don't sell land in a depressed market." Yet at the same time, the Government has just announced that it will sell real assets via privatisation in a similarly depressed market. So why can it sell ESB -- a real company with real assets -- and not a field in Athlone which is worthless and should command the price a farmer would pay you to put a donkey grazing on it? Why i...

Be prepared for a double whammy of property and water levies... PROPERTY tax isn't going away -- and it might be introduced at the same time as water charges. Homeowners who thought they would be spared the controversial taxes for the foreseeable future have been told that they are still firmly on the Government's Budget agenda. As the Cabinet prepared to meet for its final session before the summer break, Justice Minister Dermot Ahern reignited the debate over domestic taxes. It had been believed that property tax would be shelved, despite the Government's need to make a €3bn adjustment in December's budget. But yesterday, Mr Ahern said: "That may include a property tax and charging for water - which are in every other European country." Dragged He also warned that low paid workers could be dragged back into the tax net. "There's a relatively small percentage of people who are paying tax. But 50pc of people are not paying a bob of tax. That is not su...

And They're Off... The Hook Again... As the Nama smoke begins to clear, it is apparent developers deemed too big to fail are being bailed out just like the banks... Last week, there was the ritual sacrifice. Seán FitzPatrick "bowed to the inevitable" as he said himself, and petitioned to be declared a bankrupt. From here on in, if he is to enjoy any luxury in his life, it will be as a kept man. His wife, who never worked a day in Anglo Irish Bank, enjoys half a pension pot somewhere north of €3m. She is also part owner of a number of properties, which is just as well for the FitzPatricks, if they are to continue living in the style to which they have become accustomed. There is little sympathy for FitzPatrick. In a country where so many are struggling, he has become the pantomime villain. As a result, there was no way that Anglo Irish Bank was ever going to accept a private deal to settle his debts. The public would have been outraged. But what of all the rest? FitzPatric...

Ireland is staring down the barrel of bankruptcy... Why are interest rates for Irish debt rising? Because the risk of a blowout here is rising -- it really is that simple IN THE summer of 1787, determined to show foreign ambassadors the might of Russian power in the newly subjugated Ukraine, Catherine the Great organised a boat trip down the Dnieper, past modern-day Kiev. Her trusted field marshal -- who was also her lover -- Prince Gregory Potemkin organised a series of mobile villages to appear as soon as the imperial barge, stuffed with innocent and gullible foreign dignitaries, came into view. When the boat came within earshot of the river bank, the villagers would break into a spontaneous, sycophantic chorus of praise for the empress, giving the perplexed foreigners the impression that not only had Russia pacified Ukraine, it had also managed to win over the local peasantry -- which was no mean feat in the 18th Century. As soon as the imperial barge turned the corner, the villager...

Caging Tiger-think key to Ireland's economic revival... OPINION : Stimulus and mass job creation is a must as we leave behind crazy, jargon-filled days of boom and pursue a more concrete reality THREE YEARS ago, it seemed Ireland was doing very nicely. And then suddenly it all changed. Our lifestyles were threatened; our wealth and dreams shattered. People had to try somehow to understand and come to grips with the frightening new reality of a rapidly deteriorating economy and a property market about to crash. Jules Henri Poincare wrote: “To doubt everything or to believe everything are two equally convenient solutions; both dispense with the necessity for reflection.” We have spent a lot of time since, necessarily so, reflecting on a continuous flow of appalling information about banks, developers, Nama, frozen credit, failing businesses, negative equity and a collapsing economy, accumulating in an astonishing and calamitous increase in unemployment. But unlike WC Fields’ comment ...

How Cowen took a €440bn shot in dark... Government snub for own advisers: THE Government was in the dark about the true scale of the banks’ massive losses when it ignored its own advisers and pushed ahead with a €440bn blanket state guarantee. Losses at the banks have ended up being double the amount the Department of Finance assumed at the time of the bailout. The €440bn bailout was undertaken on the basis that the banks had assets of €500bn. But in reality these assets were worth far less because of the property crash. If the guarantee was called in at any time, taxpayers would face colossal losses that would dwarf the banking bill to date. The startling revelations are revealed in newly released documents from a Dail committee investigating the banking crisis. The documents revealed: ● Contingency plans to nationalise Anglo Irish Bank and Irish Nationwide were in place before the controversial guarantee was agreed on September 29. ● A special lending scheme proposed by advisers Merr...

We're paying high price for blind eyes and denial... No event in the past 40 years, apart from the Arms Crisis of 1970, has been shrouded in as much state secrecy as the bank guarantee scheme introduced on the night of September 28, 2008. While everyone knows the outcome of the various meetings -- €485bn of liabilities were ultimately guaranteed -- only a small circle knows precisely what happened during the shuttle diplomacy between the banks and Brian Cowen's Government that night. Two books have been written, several newspaper accounts have been published and one or two of the participants have even spoken briefly about that fateful evening. But detailed, minuted information about the key decisions and key moments leading up to the guarantee has never been released. In fact a slew of Freedom of Information requests seeking these details has been flatly rejected, with the Department of Finance using highly charged language to explain why the public and the media cannot see su...

Property tax plan to help fill '€3.5bn hole'... IMF urges help on mortgages and new tax on bank salaries: THE Government is considering a flat-rate property tax as the International Monetary Fund (IMF) warns an extra €3.5bn may be needed to meet budget targets. In a detailed analysis of the Irish economy, the IMF predicted the Government may not enjoy the hoped-for "bounce" from the recession. The Department of Finance believes that forecast is too gloomy. The difference between the two views amounts to 2pc of the country's output (GDP) and that comes to almost €3.5bn over the next five years. However, government officials agreed that a property tax would be a good way to make the public finances more stable. That is revealed in a new report from the Washington-based fund. Despite claims that a property tax is "off the agenda" in the next two Budgets, the Government told the IMF a flat-rate tax on property was under consideration "in the transition...

5,000 will leave each month over job crisis... 120,000 to emigrate by end of next year, ESRI predicts: MORE than 120,000 people -- or 5,000 a month -- will emigrate by the end of next year to escape unemployment at home, the State's economic think tank warns in its latest report. That means the equivalent population of Cork city will leave over the next 18 months. The figure is 20,000 more than the Economic and Social Research Institute (ESRI) estimated in its last report, just three months ago. Jean Goggin, a co-author of the report, said: "It's quite significant -- we expect 70,000 to leave in 2010 and a further 50,000 in 2011." Unlike last year, most of these emigrants will be Irish, the figures suggest. Many foreign workers -- mostly in construction and retailing -- whose jobs disappeared have already left the country. "In the two years 2008 and 2009, the number of non-nationals employed in Ireland fell by 87,500," the report says. "The biggest adju...

House prices will keep falling this year despite growth... HOUSE prices will continue to fall this year despite a return to economic growth, the Government has warned. And a report from the Department of the Environment warns that almost 200,000 homeowners are facing negative equity by the end of the year -- where one-in-four mortgage holders will be forced to pay off loans that exceed the value of their homes. The Housing Market Overview 2009 also says price recovery will take longer outside major urban centres, and that the downturn may be "longer or more severe" than expected . This means that demolition could be the only option for the thousands of housing units due to come under the control of NAMA because they are unlikely to ever sell. Unsold Officials from the department have begun a count of the number of unsold housing units across the country, with some estimates saying up to 300,000 may be empty. "The International Monetary Fund has analysed house-price cycle...

While the rest of us work, TDs get three months off... THERE are ordinary people and then there are the people in the Dail. Dr James Reilly made the distinction while arguing against a three-month summer recess. Ordinary people, he said, could not fathom how the Government could take a three-month holiday in the middle of the biggest economic crisis in the history of the State. The Fine Gael deputy leader was doing his best to distance himself and his party from the perception that they and all the other extraordinary people in the Dail exist in some sort of parallel universe , untroubled by reality . However, the Opposition's attempts to absolve themselves by objecting to the length of the recess rang a little hollowly. In the end, they shrugged and went off on holiday anyway. Would it be too cynical to suggest that it doesn't matter a curse that the Dail will be inactive for three months due to its general ineffectiveness? When we are told that the Dail has decided this or th...

Gap in asking/selling prices of 'up to 20%'... THE gap between asking prices and selling prices can be as high as 20 per cent says economist Paul Murgatroyd. There is no way for the public to accurately determine selling prices in the absence of a national price database linked to the Land Registry, but Murgatroyd, who analysed MyHome.ie’s price survey published this week, says his view is that the figure is “anywhere between zero and 20 per cent below asking price, depending on the seller, the buyer and the property”. Myhome.ie’s figures indicated that asking prices have fallen in Dublin by 33 per cent since the peak of the property boom at the end of 2006. This followed a price index by Sherry FitzGerald saying that selling prices have plummeted by nearly 50 per cent in Dublin since the peak. Vendors and buyers are being left to figure out current property values for themselves by piecing together information from the few indices available: these include ESRI figures based on...

NAMA is now the biggest danger to property prices... If one is to take NAMA planners at their word , a wave of commercial property and development land is set to be unleashed into the Irish market, presumably driving up supply and hammering prices downward . The original idea of NAMA, that it could hoard properties in ways not open to the banks, seems to be subtly changing. Now the agency is talking about developers rapidly reducing their debts via sales of assets and in less than three years. The obvious question arises, who is going to buy all the land banks that are going to be unleashed and what will the unleashing do to prices? One view is -- who cares if prices plunge downward, the market needs to find a price floor at some point. That is all very well, but it is the biggest developers who'll be selling first, the smaller ones will come to the fire sale party late and most likely pay the price, literally. There is also the concern about overspill into the residential market, ...

They've gone, but are we safer?... IT's a sign of the times really. On this weekend in previous years we would have, by now, worked ourselves into a frenzy of outrage about the fact that, as the country faces its greatest challenges yet, our leaders are about to embark on the kind of summer holidays unknown outside the teaching or TV-presenting fraternity. Indeed, many of our leaders are teachers and one can only assume they took to politics because they knew it was one of the few other professions where grown adults get two or three months off simply because it is summer. This year the outrage is muted. This year we are all half relieved that they are all heading off for a good stretch. "There, there", we think, "let them have a little holiday and see if they feel better after that." We even secretly hope that they might be different when they come back, that they might come into contact with the real world over the summer months, and that such a shock migh...

The Merrion Street mandarins have failed us – it’s time for a shake-out... THE mid-point of the year sees the publication of the half-year exchequer returns and CSO data on the economy. This will form the backdrop to the formation of December’s budget. Next week the Department of Finance will circulate its strategic memo to shape 2011 expenditure plans. The Government has been softening up the public for tax hikes. A flat household charge of €175 for water and an average residential property tax of €1,000 per household are being promulgated. All the while, the Bord Snip Nua report continues to gather dust. Finance Minister Brian Lenihan has announced an external independent group is to review the performance of the Department of Finance over the past decade. Speculation has centred on its advice to ministers, forecasting ability and competence dealing with the banking crisis. The lack of specialist personnel has been acknowledged. Its annual budget forecasts of GDP and tax revenues hav...

Property tax: how will it work... Homeowners will have to fork out hundreds every year if the Government presses ahead with plans to introduce a new property tax... THE prospect of a property tax is looming large as the Government attempts to plug holes in the Exchequer finances. An annual tax based on the value and size of the property is what is being considered, it is understood. Taoiseach Brian Cowen said in the Dail last week that no decision had been made on the tax measure, but he did not rule out introducing the new tax either. The tax would be self-assessed. This would likely mean homeowners having to get their home professionally valued so they could make an accurate assessment of its worth. For a lower-valued house, homeowners would pay around €250 a year, while those with a pricier house in a sought-after area would pay more than €3,000 a year. However, any move to introduce a property tax is set to be hugely unpopular and may even be resisted, if calls and texts from homeo...