Daft Property - Irish Property News

Morgan Kelly predicts further unforseen losses for banks... Kelly warns billions owed by small number of big developers UCD economist Morgan Kelly has predicted that bad debts of a small number of wealthy buy-to-let property investors could lead to previously unforeseen losses for the banks. Professor Kelly claims this group could cause major problems, even if the overall number of people not repaying home loans does not rise drastically. However, Prof Kelly, who is renowned for his doom-laden analysis of the housing market, admitted he had no idea how big the resulting losses could be if these 'super-investors' cannot repay their loans. Prof Kelly, who forecast the original property bust, says in a new academic paper that many wealthy buy-to-let property investors have multiple loans and if they get into trouble that losses will be magnified. In the paper, published on the UCD website, the economist said there could be as few as 2,000 mortgages of more than €1m tak...

Mortgage forgiveness 'would cost €6bn'... A debt forgiveness scheme to relieve homeowners in mortgage distress would cost “in the region of €5-€6 billion”, UCD professor of economics Morgan Kelly has said. In a keynote address to the Irish Society of New Economists in Dublin yesterday, Prof Kelly delivered what he described as some “good news”. “We are talking sums in the region of €5 billion to €6 billion which would be necessary to spend on mortgage forgiveness, which by our standards are not very large,” he said. “This sum to sort out tens of thousands of people with big problems does not seem enormous.” Prof Kelly, who has been praised for forecasting the property crash, has also provoked sharp criticism from some commentators for his analysis of the recession. “The good news is that if you leave investment mortgages out [of total mortgages owed], which are largely the banks’ problem, and look at mortgages people have on their own houses, there are about €55 bil...

FORMER Taoiseach Bertie Ahern has pointed the finger of blame firmly at the bankers for the country's economic problems in a new RTE series. The TD is interviewed alongside economic heavy hitters former UK chancellor Alistair Darling, Central Bank Governor Patrick Honohan and Minister for Finance Brian Lenihan in the new series Freefall. The programme investigates the banking system failures and the widespread collapse of the property bubble which fuelled the economic recession. Bubble Coinciding with the second anniversary of the controversial Government bank guarantee, the two-part documentary series tells the story of how a huge property bubble, fuelled by the lending practices of the banking system, brought the economy precariously close to the edge. Former Chancellor for the Exchequer in Britain Alistair Darling said Europe must learn from the mistakes and that every part of society should take a portion of the blame. "If we walk away from it, it will happen again and the...

Warning that house prices may fall by 80%... HOUSING MARKET: IRELAND WILL see more demolition than construction of houses over the next decade, as the economy struggles to recover from the collapse of the housing market and the emergence of “zombie” banks , UCD economist Morgan Kelly told the conference. In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from peak to trough in real terms. “Construction, but not demolition, of residential and commercial property will fall to zero for the foreseeable future,” he said. Low levels of education among those employed in construction – where worker numbers peaked at about 280,000 – meant retraining would not be straightforward. Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.” Mr Kelly said he had been hailed as being extremely prescient as a result of his warnings in relation t...