Daft Property - Irish Property News

‘Hope to be bankrupt for Christmas’: Irish mortgage debtors see insolvency as way out... With one in five mortgage payments being overdue in Ireland and families across the country having their homes repossessed, some of the debtors are hoping for bankruptcy to do away with their endless fear of losing their properties. Julia Godsill, a Dubliner, can hardly hold back her tears, when retelling her not uncommon mortgage saga to RT’s Tesa Arcilla. When she bought her house the Irish economy was still the “Celtic Tiger” enjoying its boom time. After the credit crunch of 2008, Julia could only watch as her mortgage became too high for her to be able to pay, while the value of her house itself went down. “I ended up with a cash offer for 500,000. This was in 2011. And I was delighted. But the banks refused to accept the offer because the mortgage was 800,000 climbing with arrears. They preferred to bring me to court, and repossess the house instead.” The Central Bank of Ireland figu...

Noonan: no lottery style payout for mortgage debt crisis... FINANCE Minister Michael Noonan yesterday promised that the Government will act swiftly to deal with the mortgage-debt crisis -- but insisted the solution will not be a "big pool of money in substitute for the lottery". The comments came as Mr Noonan insisted it was "not realistic" to expect the Government to sanction universal "debt forgiveness" for borrowers who bought at the peak of the market or have run into trouble with their mortgages. At a meeting of the Finance Committee yesterday, Mr Noonan repeatedly stressed that he would not second-guess the work of an interdepartmental group due to report on solutions to the mortgage crisis at the end of September. But he categorically ruled out any role for universal debt forgiveness, insisting it was "not possible" and that "nobody should think there's going to be some big pool of money to be handed out as a substitute fo...

Write-offs and negative-equity loans already on offer -- just don't tell everyone The debate about debt forgiveness has raged across the nation, polarising public opinion. Laura Noonan investigates what banks are really doing to help struggling homeowners. It might surprise people to know that some banks have been embarking on forms of mortgage write-offs for quite some time. And that's not all that's been going on -- some of the other new-fangled "solutions" expected to be recommended by the Government's latest mortgage expert group, like negative-equity mortgages, are already in action, too. The reason the public don't know about these developments is simple -- the banks don't want the masses to know. Because as soon as you admit things like this are happening, you run the risk that everyone will want a piece of the action. The action so far has largely been limited to borrowers who've actually left their home by way of "volu...

Prices could fall by a further 15% if rate of decline continues into next year... ANALYSIS: Oversupply, the lack of mortgage financing and the cost of borrowing are all playing a part as property prices continue to decline THE GOOD news on the property market: July’s monthly fall in homes prices was the second smallest this year. The bad news: a single month is not enough to suggest that the deteriorating trend over the course of 2011 has been arrested. The average monthly fall in prices over the first seven months of this year was 1.4 per cent. The average of the 12 months of 2010 was 0.9 per cent. The accelerating underlying rate of price declines up to the middle of this year is cause for concern. And delving deeper into yesterday’s figures gives no reason to believe any segment of the market has been immune. The chart shows declines in prices from January to July ranged from 6-11 per cent. That has added to the already massive declines registered among every market segmen...

Taxpayer beware as Nama makes spectacular loss. Loss-making Nama has become a seemingly endless gravy train. Worse still, it has emerged as a bailout for some of the same developers who have brought this country to its knees... When it was announced by then Finance Minister Brian Lenihan during his emergency budget speech in April 2009, we were told it would get credit moving, we were promised it would not be a bailout for developers, we were told it wouldn't be a gravy train for advisers, consultants and public sector fat cats and we were told it would make a profit. Set up to save the country from the greed and recklessness of the banks and developers, including Liam Carroll, Bernard McNamara and Sean Dunne, Nama was an unprecedented development in Irish history. But, more than two years on from its inception, there is no question on all of these fronts: Nama has failed and failed spectacularly, and the taxpayer should be very concerned indeed. As last Thursday's an...

More pain as households hit with new €100 ‘property’ tax... ALMOST all households are set to be hit with a new €100 service charge to be announced this week, the Irish Independent has learned. The Cabinet will sign off on the combined water and property tax tomorrow, despite the easing of the debt burden under the new EU bailout deal. Environment Minister Phil Hogan is coming under pressure to exempt those on low incomes from the new tax, which will result in middle-income earners paying more. The Government is expecting to bring in upwards of €150m from the charge. The flat-rate levy, to be introduced next year, will be the first tough decision to be taken by the Coalition that will prove unpopular to the overwhelming majority of people. The options for the annual charge range from €100 to €200 a year. The likely outcome is a sum at the lower range of €100, with a small number of exemptions -- the solution favoured by Mr Hogan. However, this will have to be approved by the...

Eurozone governments in last-chance saloon to save the single currency... All of the metaphors have been used -- from edge-of-a-cliff, meltdowns and hanging threads -- but the real terror confronting the eurozone is that its banks, out of fear that other banks' solvency is threatened by default on sovereign debt, could stop lending to one another. This would bring the credit system to a halt and the ensuing liquidity crisis would, if left unresolved, result in insolvency and default. European economies could languish in deep recession for a decade or more and this is how a euro crisis would play out -- in sets of insolvency, uncertainty and illiquidity. So what exactly happened to the eurozone officials over the past 10 days? First, finance ministers admitted there may need to be a default on sovereign debt. They did not specify for which country or in what form. Instead, they tried to duck out for their summer holidays and said the details would be announced in September. ...

Banks tell families -- no loans for homes... Mortgage approval plummets by 90% as banks hoard bailout cash A RECOVERY in the property market is being stopped dead in its tracks by the banks, which are turning down at least half of all mortgage applications -- mostly from people who are highly creditworthy. With many experts now convinced that the market has gone below bottom, the difficulty in accessing credit for even high-quality applicants has reached crisis point. Banks are continuing to reject applications for credit and 2011 looks like posting the worst mortgage-origination figures in four decades. On Friday AIB, which is to merge with Educational Building Society, won conditional approval from the European Commission for yet another capital injection -- this time of up to €13.1bn. It is part of more than €19bn that was approved after the latest bank stress tests and comes on top of billions in taxpayers' money that has already been pumped into the banking sector bu...

Dublin protest over EU-IMF bailout... Thousands of people are expected to participate in a protest in Dublin this afternoon against the EU-IMF austerity programme. The protest, organised by the Enough Campaign, is being supported by trade unions, TDs, political organisations and groups seeking to maintain education and health services in their areas. Participants are scheduled to meet at Parnell Square at 2pm. The Enough Campaign said suggestions that the State’s implementation of the EU-IMF austerity programme was going well were badly misplaced. People Before Profit TD Richard Boyd Barrett, an organiser of the march, said he expected a good number of people who were “enraged” by the austerity programme to take part. "It is absolutely mystifying how the EU-IMF delegations 'approval' of the Government’s implementation of austerity in this country is being portrayed by the government and some commentators as a 'good news' story," he said. "We...

Irish debt cut to 'junk' status as euro zone crisis deepens... Irish debt was cut to “junk” status by credit rating agency Moody’s, last night, hours after the Minister for Finance said that measures to aid Greece proposed by euro zone finance ministers on Monday night would benefit Ireland. Moody’s appeared to contradict the Minister last night saying the measures being contemplated for Greece had increased the chance that Ireland might default on some of its debts if it has to seek another bailout from Europe. The resulting downgrade is expected to lead to a sell-off in Irish bonds when markets open today as many lenders will only hold bonds considered to be investment grade by privately owned rating agencies such as Moody’s. Bloxham analysts said the downgrade would prompt some forced selling by investors who are not allowed to hold non-investment grade securities, and would be dropped from some of the bond indices. “In our view this latest move by Moody’s is cynic...

Noonan spells out high cost of our rescue... THE IMF and EU will make a €9bn profit over the lifetime of the bailout loans to Ireland. Finance Minister Michael Noonan last night revealed for the first time just how much the international agencies will make if the €85bn in loans are drawn down in total. The British government is also entitled to send auditors and accountants here to check the books as part of its bilateral deal to Ireland, the Irish Independent has learned. It is also insisting that if Ireland ever leaves the euro the UK must be repaid in full and in sterling -- and not in any new Irish currency. The developments come as the IMF-EU bailout team arrives back in Dublin today to begin the latest examination on whether the Government is meeting the terms of the €85bn programme of aid. The progress of public sector reform and changes to wage-setting systems for low earners will be discussed in talks with IMF-EU bailout team. And it also appears likely the Gover...

Is your money safe in Euros if the Greeks default? A big fat Greek default is on the cards and the Lehman's style spillover might have a dire domino effect on Ireland and the euro. People are worried about Argentina-style hyperinflation making their money worthless or a government smash and grab on their precious savings if everything falls apart. What to do to protect money is the hot topic of the hour. "This is being discussed at the board tables of business, charities, you name it," says Niamh Cahill of Irishdeposits.ie. "The deposit rate of interest has been very much relegated as the most important concern, what's important now is safety." So, if the worst came to the worst, what might happen? "It could be one of two things," says Cahill. "The Government could say 'as of tomorrow we're going to devalue all deposits and loans on the balance sheets of banks in Ireland'. Or else they could say 'we're going to de...

Ireland left to count the true cost of euro dream... An exclusionary venture that values banks ahead of ordinary people – this is not what we signed up for. JUST THREE years ago we were being bamboozled into voting for the Lisbon Treaty, the then latest stage in the creation of a wondrous European project that would consolidate peace on the continent and promote yet further wealth creation. It would also give Europe a voice in world affairs corresponding to its financial clout, give greater administrative cohesion to the decision-making processes in the union and incorporate the industries of war (defence industries) into the corporate structure of the union. The Lisbon Treaty had arisen from the refusal of the French and Dutch electorates to approve a draft European constitution. The new treaty was devised to give effect to the purpose of the draft constitution, while avoiding the tiresome ordeal of obtaining electoral approval anywhere, except Ireland. The Irish electorate, a...

More pain for PAYE workers as tax hike looks likely... THE GOVERNMENT is on the brink of breaking its election solemn promise not to raise income tax. The tax rise threat emerged as the European Central Bank (ECB) hinted that it is preparing to introduce a 0.25pc hike in interest rates next month -- which will add almost €400 yearly to the average €250,000 mortgage. The blow to struggling homeowners will be further compounded by a new property tax and water charge set to be introduced in the new year. Finance Minister Michael Noonan told the Dail yesterday: "I am not going to rule out any tax initiative, or any tax increase or any tax reduction." He added that the "fraught" condition of our public finances meant he was not in a position to predict take hikes, including income tax. The minister was also forced to concede that EU states such as France and Germany are looking to take an interest in the national assets of bailed-out states such as Ireland. ...

We will default, so let's get on with it. But it's not all bad -- a top financier thinks Ireland's glass is half full and our bank debts will be shared... Ireland will default, when it does happen we should not do it alone but with Greece and Portugal; we should consider leaving Europe given how badly they treat us; we need to take a scalpel to our public sector and Ireland will take five to seven years from now to recover. Those are the views of Larry McDonald, former Lehman Brothers vice president turned international best-selling author, who was in Dublin last week speaking at the Irish Funds Industry Association. McDonald was, until September 2008, vice president of distressed debt and convertible securities trading at Lehman Brothers. He was heralded by many colleagues at Lehman for both his early 2006 call on the subprime crisis and the $46m in trading profits realised from it. I sat down with him on Friday afternoon last in the heart of the IFSC to discuss ...

Ireland is now more than 10 billion euro in the red after the latest banking bailouts, latest Exchequer figures reveal. The Department of Finance said the debt crisis would have improved significantly - by almost 700 million euro - if it had not been for massive payments pumped into Anglo Irish Bank and Irish Nationwide in March. More than three billion euro injected into the doomed lenders from the public purse is largely to blame for a deficit jump from just under eight billion euro this time last year to 10.2 billion euro. While income tax has increased - mainly because of the universal social charge - overall taxes were lower than predicted by department officials, the latest figures show. This was mainly down to a shortfall on corporation taxes, which came in 140 million euro less than calculated. There were also lower than expected capital taxes, including stamp duty. The Department of Finance said the shock corporation tax figures could be partly blamed on "timi...

Scramble to stem panic after new bailout gaffe... Alarm after Varadkar claims State will need further loans. THE Government last night scrambled to allay fears that a second bailout is on the cards, following damaging comments by a cabinet minister. Transport Minister Leo Varadkar sparked alarm and confusion when he said the Government may need to get new loans from the European Union and IMF next year. Ahead of an anticipated backlash from investors this morning, Finance Minister Michael Noonan's officials insisted the Coalition's firm plan was still to return to borrowing on the bond markets in 2012. The Department of Finance stressed there was no change in the Government's plans, as Mr Varadkar's comments were reported around the world. Mr Varadkar was also left backpedalling after he was reported as saying: "I think it's very unlikely we'll be able to go back (to borrowing on the bond markets) next year. I think it might take a bit longer......

Nama's equity plan 'is doomed by ECB rates'... Hobbs rubbishes scheme to protect homeowners, insisting any progress would be wiped out by a few interest hikes. A proposal by Nama to protect homebuyers from negative equity has been dismissed as an attempt to "manipulate property prices" and will not work in the face of rising interest rates imposed by the ECB, leading economic adviser Eddie Hobbs says. "They're trying to put a floor on the market. You would have to say that it's a positive attempt, but the history of economics is littered with various attempts to manipulate property prices. If interest rates rise, it doesn't matter what kind of floor you try to put on the market, because you'll be overwhelmed by it. "I'm in Germany at the moment and the place is absolutely hopping. The German economy is booming and inflation is rising in Europe. The Central Bank in Frankfurt is going to raise interest rates to protect the Germa...

Ireland's future depends on breaking free from bailout... OPINION: Ireland is heading for bankruptcy, which would be catastrophic for a country that trades on its reputation as a safe place to do business. WITH THE Irish Government on track to owe a quarter of a trillion euro by 2014, a prolonged and chaotic national bankruptcy is becoming inevitable. By the time the dust settles, Ireland’s last remaining asset, its reputation as a safe place from which to conduct business, will have been destroyed. Ireland is facing economic ruin. While most people would trace our ruin to to the bank guarantee of September 2008, the real error was in sticking with the guarantee long after it had become clear that the bank losses were insupportable. Brian Lenihan’s original decision to guarantee most of the bonds of Irish banks was a mistake, but a mistake so obvious and so ridiculous that it could easily have been reversed. The ideal time to have reversed the bank guarantee was a few month...