Daft Property - Irish Property News

No magic bullet for banks' property crisis... It is going to take more than a decade to unwind the excess property assets financed by the banks during the noughties THE BANKS in Ireland, including IBRC and Nama, have more than €30 billion of Irish loans relating to property which they need to unwind over the next five to seven years in order to meet the Basel capital adequacy requirements and also repay the temporary ECB loan support. This unwinding process has started by the sale of overseas assets and loan books but is mainly outstanding in Ireland. Can this deleverage be achieved? What will be the timescale and what will be the nature of the property market during the process? Should the Government provide further help to the industry? These are key questions for all close to the banking and property industries. In a comprehensive discussion note* I have tried to join the dots of the many intertwining factors. I have drawn on two recent studies on the overall European property ...

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...

McNamara, FitzPatrick facing bankruptcy 'in weeks'... TWO of the Celtic Tiger's highest fliers -- developer Bernard McNamara and banker Sean FitzPatrick -- face bankruptcy within weeks. The Irish Independent has learned that Mr McNamara, once worth almost €240m, is facing a fresh attempt by a group of private investors to force him into bankruptcy. The group is pursuing up to 40 properties owned by the Clare-born builder, records show. Meanwhile, Anglo Irish Bank will veto any plans by FitzPatrick -- who owes the bank €110m -- to reach a private deal with his creditors. Both men are now facing the real prospect of having all their assets, including their family homes, seized and sold off. Pursued Bankruptcy in Ireland lasts for 12 years, with those declared bankrupt facing travel restrictions, curbs on their ability to borrow money and/or run a business. Mr McNamara is already being pursued by investors arising from the disastrous Glass Bottle site investment. But now a sec...

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 ...

Don't blame us for 170,000 house surplus, say builders... BUILDERS yesterday denied that too many houses went up at the height of the boom -- insisting they built to the demand that existed. Hubert Fitzpatrick, director of housing and planning services at the Construction Industry Federation (CIF), made the comments after a new report claimed 170,000 more houses were built than were needed during the property bubble. The organisation is now calling on the Government to conduct a national audit to provide "accurate" data on the number of empty homes. It argues that a definitive account of the situation has not been presented -- because reports probing the issue are measuring housing stock in different ways. The latest report into housing published yesterday by University College Dublin (UCD) and Dublin Institute of Technology (DIT) found a total of 345,000 homes -- or 17pc of all housing -- were currently lying empty. It said that even without considering holiday homes and...

Names of top 10 borrowers in first wave of Nama transfers revealed... ANGLO IRISH Bank will transfer close to €10 billion in loans into the National Asset Management Agency (Nama), accounting for the largest amount owed by the top 10 developers moving to the agency in the coming weeks. The Irish Times has established the identities of the top borrowers being moved in the first wave of transfers to the State agency. They are developers Liam Carroll; Bernard McNamara; Sean Mulryan of Ballymore; financier Derek Quinlan; Paddy McKillen, owner of the Jervis Street Shopping Centre; Treasury Holdings, which is owned by Johnny Ronan and Richard Barrett; Cork developer Michael O’Flynn; Joe O’Reilly, the developer behind the Dundrum Shopping Centre in Dublin; Dublin builder Gerry Gannon, co-owner of the K Club golf resort in Co Kildare; and Galway businessman Gerry Barrett, owner of Ashford Castle in Co Mayo and G Hotel in Galway. More than €16 billion in loans linked to the top 10 are being mov...

Builders? You can afford them now... JUST WHEN the construction industry thought the news couldn’t get any worse, it suddenly did. Several reports published this week have painted a bleak picture for an industry already on its knees after the property sector meltdown ... They indicate that prices for big and small construction jobs have fallen almost as dramatically as jobless numbers in the sector have risen. Although homeowners will have sympathy for individual tradesmen who have lost their jobs, they will relish the consequential price drops and the sudden availability of tilers, plumbers and carpenters who could not be got for love nor ridiculous sums of money at the height of the boom. “Builders were making money hand over fist for years and even at a 30 per cent discount they are still making money and don’t let anyone tell you any different,” one industry source unsympathetic to the plight of builders told The Irish Times this week. The Construction Industry Federation stoutly r...

Nama turns us into a nation of speculators... OPINION: Builders and developers have finally managed to shape the country in their own image... THE DRAFT National Asset Management Agency (Nama) legislation runs to 136 pages, so it’s not too surprising that most people have missed the interesting section 201. It reads as follows: 201.1: Henceforth, all male children shall be called Seán, Seánie, Paddy, Mick, Tom, Joe, Gerry, Liam or Bernard. All female children shall be christened Seona, Patricia, Michaela, Tomasina, Josephine, Geraldine, Wilma or Bernadine and shall be referred to de facto as Seán, Seánie, Paddy, Mick, Tom, Joe, Gerry, Liam or Bernard. 201.2: From the coming into force of this legislation, all citizens shall be required to receive a daily dosage of testosterone and cocaine to induce feelings of competitive aggression and megalomaniacal omnipotence. 201.3: All male citizens shall wear a pink shirt as a declaration that said citizen is so macho that he can wear pink and n...

NAMA: The €90bn gamble Sweeping powers for 'bad bank' 1,400 loans from 50 top developers THE Government last night gave its 'bad bank' sweeping powers over developers and judges as it unleashed a €90bn plan to rescue banks and kickstart the economy. But Finance Minister Brian Lenihan admitted it could take up to 30 years for the new National Asset Management Agency (NAMA) to sort out the toxic bank assets. The State will effectively become one of the biggest property owners in the world as NAMA is granted extensive powers to take over land and development projects from borrowers who are not keeping up with their repayments. Among the more controversial provisions in the proposed new legislation -- described by Fine Gael as a massive gamble -- is a radical series of rules and procedures to ward off legal attacks that could be disastrous for taxpayers. But the plans, which include limited appeals to the Supreme Court and a clampdown on injunction proceedings, have alarmed...

Government to publish Nama legislation today... The Government will today publish legislation setting up the controversial National Asset Management Agency (Nama), the State’s new toxic assets agency. The €90 billion “bad bank” scheme will use Government bonds to buy property loans at a discount from banks, which will then be able to cash the bonds with the European Central Bank. The draft legislation will be published at 5pm today on the Department of Finance website, but the Government intends to amend it next month when it is debated by the Oireachtas. The complex draft laws run to 150 pages and contains more than 200 sections. Nama will operate under the aegis of the National Treasury Management Agency. Banks will have one chance to appeal the price put on their loans by Nama to “a valuations panel”, which will advise the Minister of Finance Brian Lenihan, but the final decision will be his, the Department of Finance has said. Officials expect that loans to the 50 largest property ...

New rules may force 'firesale' of 70,000 houses... BUILDERS could be forced to dramatically slash the prices of more than 70,000 new houses that are now lying empty across the country, a leading construction advisor has warned. In a damning new analysis -- obtained by the Irish Independent -- it is claimed that developers will have to offload the massive volume of vacant homes in a 'firesale' before the Government's new energy guidelines come into effect on July 1. The new study found the number of new homes lying empty in 'ghost' estates is far larger than was previously estimated. The findings reveal there are at least 100,000 'surplus' homes -- far higher than the 30,000 estimated by construction industry chiefs and estate agents. According to the analysis, carried out by Tony O'Brien, head of business consulting for accountancy firm Grant Thornton, market conditions suggest some 30,000 of these will be sold in the current economic climate. Bu...

The golden triangle – FF, the builders and the banks... Despite last week's bail-out, some of the country's most ambitious redevelopment plans are still in jeopardy... It was Fianna Fáil's best friend, Bob the Builder, who propelled the banks into the liquidity crisis and caused the historic post-midnight sitting of the Dáil. After a decade of swaggering around the corridors of power and inside the Fianna Fáil tent, many of those feted builders are now expected to put their most extravagant plans on ice and sit out the recession, cushioned by the citizens' guarantee to the financial institutions . "We're not so much talking about a golden circle as the golden triangle – Fianna Fáil, the builders and the banks," says Labour's Joan Burton. Irish banks are owed €110bn by the property and construction sector. It accounts for €60 of every €100 that residents have on deposit. As 28% of all borrowings, it is significantly greater than the 25% construction p...