Daft Property - Irish Property News

A NEW law allowing banks to repossess homes and investment properties comes into operation today. Thousands of homeowners and investors are expected to be threatened with having their properties seized. Justice Minister Alan Shatter signed a statutory instrument which puts the provisions of the Land and Conveyancing Law Reform Act 2013 into operation. Banks had been unable to threaten repossessions following a ruling in the High Court in 2011. The new legislation overcomes the so-called Dunne judgment that put a block on repossessions. Now many of the more than 54,000 residential homeowners who are more than a year in arrears face the real threat of repossession. Banks are likely to try to take ownership of around 30,000 buy-to-lets that are in arrears. Almost half of these mortgages are having only the interest payments made on them. Davy Stockbrokers has estimated that up to 43,700 letters threatening repossession have been issued by banks, despite their bein

A surge in the number of home repossessions is on the cards after the Central Bank decided to change the rules. Debt-ravaged homeowners will no longer have one year's protection from having their houses repossessed. The 12-month ban on banks taking back properties from homeowners in arrears is being cut to two months. The move and other changes to regulatory rules for how struggling borrowers should be treated by lenders have been condemned by David Hall, of the Irish Mortgage Holders Organisation, as a "banker's charter" that will lead to a spike in repossession. He claimed: "The banking dogs are set to be unleashed on mortgage holders in arrears." The move to change the Central Bank's code of conduct on mortgage arrears – a rule book for how banks are to treat borrowers behind on their payments – is to be radically changed. The revised code is set to come into operation from next Thursday with a number of changes that banks have lobbied

HOUSE prices could decline by another 20pc from their current levels while variable rates are due to go up again, an international agency has warned. And ongoing rises in mortgage arrears mean borrowers in this country are effectively on strike, credit ratings agency Fitch said. But despite this, there is likely to be a moderate rise in lending to first-time buyers this year. The agency, in a report on the global mortgage market, said property prices here could fall as much as 20pc, but it has assumed a 10pc decrease. Since the bursting of the property bubble, prices have dropped by 50pc, to take the average value to €160,000. Another 20pc fall would take the average price nationally to €128,000. The agency, which rates the economic solidity of countries and companies, said there were signs that prices have stabilised, but a glut of unoccupied properties outside the cities and muted mortgage lending meant price rises were likely to be limited this year. The number of

How the great Irish fairy tale hides the true horror story... Gene Kerrigan's new book presents an alternative view of the economic crisis, suggesting that some people are actually benefiting from austerity policies. We've been subjected to the Big Lie. We are not all in this together, as this extract reveals By now, they can recite the fairy tale in their sleep. Politicians, their media fans, tame economists and hired mouthpieces use the fairy tale to explain what happened. Like all stories, the details can be changed from time to time, but the basic fairy tale about the Celtic Bubble, the crash and the recession is pretty consistent. And it goes like this. Once upon a time, the Irish people threw off the shackles of the past that held us back. We began to work hard, to innovate, to find within us the talents we always had but which had been suppressed or neglected for too long. In the bad old days, you see, the Brits held us back, or perhaps the Catholic Church sti

Number of mortgages in arrears hits new peak of 14pc... ONE in seven mortgage holders is now in arrears, according to calculations by a leading ratings agency. Large numbers of these homeowners are understood to be avoiding getting into talks with their banks on restructuring their mortgages. Moody's also said house prices would fall another 20pc. The rating agency said its calculations show 14pc of residential mortgage holders are now in arrears, which works out at 107,000 households. This is a new peak, it said. Figures released by the Central Bank last month showed 10.2pc of mortgage holders were three months or more behind on their payments. "The steep decline in house prices since 2007 has placed the majority of borrowers deep into negative equity," it said. "Irish house prices have already fallen by 49.9pc between September 2007 and April 2012, and Moody's expects that house prices will fall a further 20pc from today's levels." Central Bank figu

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

Ireland’s property boom was the biggest, and our crash the most violent. In a week that brought news of a further drop in house prices, Economics Editor DAN O’BRIEN explains why the market won’t recover any time soon... ‘THE FUNDAMENTALS of the property market are sound, going forward.” This mantra was repeated constantly during the boom by those who believed that no risks were attached to soaring property prices. If any reminder was needed of how badly wrong this view was, it came this week with new official figures showing yet another fall in residential property prices in August. This, according to statisticians, brought the total decline since the property-price peak, in late 2007, to more than 43 per cent, one of the biggest drops in the world. The latest figures from the auctioneer Sherry FitzGerald, also published this week, are worse still, suggesting that average prices are down by a huge 58 per cent since the bubble burst. The belief that property was a one-way bet b

Record 70,000 now behind on mortgage payments... MORE borrowers will be pushed into arrears on their mortgage payments because of rising unemployment, a ratings agency predicted yesterday as new figures show the number in trouble surged to 68,248 in July. That figure represents an increase of 12,485 in the numbers who are behind by three months or more on their mortgage payments when compared with last April. Overall, almost 9pc of homeowners are now in arrears. Ratings agency Moody's said it expected more borrowers to be pushed into arrears as jobless numbers increase. Moody's figures tend to be more up to date that those of the Central Bank which last month said arrears had risen to 7.2pc in June, leaving 55,763 homeowners three months or more in arrears. The Moody's figures imply that 22,231 have not paid their mortgage for a year or more, calculations based on their statistics show. These homeowners are at serious risk of losing their homes, home-loan experts

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

Mortgage rescue deal could cost you up to €50,000... But it is still only option for thousands. STRUGGLING homeowners who make deals with lenders to reduce their mortgage payments face paying tens of thousands of euro in extra interest charges. New figures show that almost 70,000 people have now restructured their mortgages -- mostly by extending the repayment period or switching to 'interest only' payments. The Irish Independent can reveal that those with a typical €200,000 home loan who extend their mortgage term by just five years face paying €34,000 more in interest charges. And borrowers could end up paying more than €50,000 in extra interest for the same €200,000 mortgage. The startling figures have been produced by personal finance expert Brendan Burgess. They reveal the huge long-term costs for families seeking to ease the burden. But the Central Bank, which has been leading the way on policies to ease the mortgage crisis, admitted it had "no figures&qu

They presided over the crash -- but no one was ever fired. An "endemic culture of rewarding failure" in Ireland has meant that not one person in the Department of Finance, the Central Bank or the Financial Regulator's office has been sacked for their role in the worst financial and economic crisis in history. While their former political masters in Fianna Fail were slaughtered at the polls in February, it has been confirmed to this newspaper this weekend that not a single official or adviser was laid off for their failure either to adequately prepare for the crash, or for their failure to deal swiftly with it when it happened. "Nobody in the Department of Finance has been fired since January 2008," a spokeswoman told the Sunday Independent. Friends First chief economist Jim Power said that while many of those who were in key positions during the crash have since moved on or retired, their departure has come at a significant cost to the taxpayer. "

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

Government won't write off struggling homeowners' debt... THE Government is not considering a 'debt-forgiveness' scheme to write off billions of mortgage debt for struggling homeowners, Tanaiste Eamon Gilmore confirmed yesterday. The comments came as public demand grows for a mass mortgage write-off. One homeowners' group is claiming 60,000 people face losing their homes unless a solution to the mortgage crisis is found. The clamour follows last week's claim by renowned economist Morgan Kelly that a debt-forgiveness scheme to rescue those in severe difficulty with their mortgages would cost just €5bn or €6bn. But Mr Gilmore yesterday moved to calm growing expectations that a scheme was imminent, saying the Government was not considering "some kind of blanket write-off or mortgage debt forgiveness, as is being suggested by some". It is understood that many senior cabinet figures, including Finance Minister Michael Noonan and Public Expenditure

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

IT could be years before the mortgage market recovers, economists said yesterday. They were reacting to new figures that showed just a trickle of new home loans were issued between April and June. Mortgage lending has seized up, with just 3,550 new mortgages granted in April, May and June. This is half the number issued in the same quarter a year ago, and a fraction of the 41,000 issued in the same three-month period in 2007, figures from the Irish Banking Federation show. Housing economist David Duffy, of the Economic and Social Research Institute (ESRI), said the mortgage market is unlikely to recover until consumers had some certainty about the financial hit they are set to take in December's Budget. "We are looking at a fairly weak market this year and next year unless something big happens which can bring about certainty," Dr Duffy said. Uncertainty around the global economy is also holding back buyers from committing to a massive purchase like a house.

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