Daft Property - Irish Property News

The 10 new rules for first-time buyers... 100 per cent mortgages are gone, so are long-term loans – and the easily-flipped starter home is a thing of the past... WITH HOUSE prices down by as much as 50 per cent, property has never looked as affordable – or has it? While prices may have plummeted, people’s incomes have also been slashed, due to a combination of higher taxes, pay cuts and the disappearance of discretionary income such as bonuses, while getting a mortgage has become more difficult as banks tighten up their lending practices. Nevertheless, the collapse in prices means that first-time buyers are slowly coming back to the market. But what lessons should they have learnt from the crisis? 1 ASKING PRICE NOT SALE PRICE What’s a house or an apartment actually worth these days? In the absence of official sale price data and with estate agents prevented from publishing prices (house prices are covered by the Data Protection Act) it is difficult to find out what is is really happen

A group of 46 economists has signed an article in today’s Irish Times calling on the Government to reconsider the National Asset Management (Nama) project. They argue that Nama should pay the banks only the current market value for the loans it will assume. In response, economist Alan Ahearne, special adviser to Minster for Finance Brian Lenihan, said last night that a number of claims in the article were incorrect. He added that most of the economists in the country had not signed the article drafted by Prof Brian Lucey of Trinity College. Prof Lucey said he had contacted about 250 lecturers in economics and not one had come back to say they disagreed with the views expressed in his draft. He said a number did not sign because they did not want to get involved in a round-robin exercise. In the article, the economists say the Government will pay significantly above market value for the bad loans advanced by the banks. “The key difficulty facing the Government is that to pay prices now

Why do we always get things wrong? I know, it's the Brits, the Brits, the Brits... As this State flounders towards collapse again, let's ask: why do we always get things wrong? Sure, I know three reliable answers: the Brits, the Brits and the Brits again. Indeed, entire university faculties are given over to discourses on Hibernian victimhood, with self-pity intellectualised through the impenetrable verbal mud of Foucault, Derrida and Fanon. This whingeing school of thought has an academic brand name, Field Day, and a caste of articulate laureates who specialise in the plaints of our woebegone Irish identity . Yet no one considers the possibility that there might be something genetically askew with too many Irish people for us to create an ordered, predictable society that does not fall apart every 15 years or so. So, has our still-small population been cursed with some genetic fault from our founding population which came from Spain 4,000 years ago? A baleful genetic legacy ne

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

THE average price of a house in Ireland is now €70,000 less than at the peak of the property boom, according to new figures. Dublin and commuter belt homeowners have been particularly badly hit by the ongoing downturn in house prices. The latest Permanent tsb/ESRI monthly figures on house sales show the average price of a house nationally in June was just over €240,000. This is down from €311,000 in February 2007 when the market peaked. In Dublin, the average price of a home is now just under €320,000. This is a drop of over 15pc on the same time last year, considerably worse than the 10pc average fall outside of the capital. It is expected that the trend will continue for the immediate future, said a spokesperson for Permanent TSB. "The index today confirms the pattern of recent months. Poor demand and significant oversupply have combined to cancel out the benefits of lower interest rates to mean that prices continue to weaken. This pattern is likely to persist for some time,&qu

Building a case for survival without a solid foundation... IN a certain fairytale, a vain emperor struts through the streets showing off his "new clothes". The adoring crowd applauds the naked emperor until a small child cries out: "But he has nothing on!" Yesterday, Judge Peter Kelly, head of the Commercial Court, gave short shrift to developer Liam Carroll's "fanciful" scheme to turn a €1bn-plus loss into a €300m profit in three years. Liam Carroll, a reclusive director of 203 companies, is the developer least likely to exhibit any degree of vanity. But he is naked. He is broke. His companies are insolvent. Not only insolvent, but so interconnected in a "byzantine" corporate structure that if one company falls, the empire does too. Carroll knows this. The Government knows this. Carroll's benign lenders, who are rolling up his interest with "great forbearance", know this. These are the same banks, incidentally, who are hammerin

IMF warns on extent of 'correction' facing State... THE INTERNATIONAL Monetary Fund (IMF) painted a bleak picture of the “unprecedented economic correction” facing Ireland, describing the stress on the State as exceeding that being faced by any other developed nation. However, in a positive diagnosis of the Government’s response, the global financial watchdog has said that on the two fronts that matter most – fixing the banks and the public finances – the Government has “moved in the right direction”. The IMF said losses faced by Irish banks could top about €35 billion, or 20 per cent of GDP, to the end of 2010, though it added that the Government “did not formally produce any estimate for aggregate bank losses” during the fund’s recent fact-finding trip to Ireland. The Department of Finance was quick to point out that “the vast majority” of these losses would be absorbed by the banks’ risk capital and ongoing operating profits. The IMF endorsed the Government’s plans for the r

Home debt-trap hits 340,000... Massive rise in borrowers caught in negative equity AS many as 340,000 people could now be in negative equity following a sharp fall in house prices. New research which reveals up to a third of a million people owe more on their mortgage than their homes are worth is considerably higher than recent estimates that found 250,000 homeowners were in negative equity. Being in negative equity means you cannot switch mortgages for a better deal, fund a move to a larger home to start a family, or move house to take a job somewhere else. Economist with property website Daft.ie Ronan Lyons has calculated that 340,000 people, or one in five homes, are now in this predicament. "That's 340,000 homes where if the homeowners have to sell, they will not be able to pay the bank back solely through the money they get from selling the house," Mr Lyons said on his blog site (ronanlyons.wordpress.com). The findings are broadly in line with a survey by Amarach

The justice minister's declaration on national television that the budget is merely a statement of intent confirms our worst fear: they don't mean what they say. If only they'd told us before... Mystery solved. We now know why Dermot Ahern found nothing on Ray Burke when he was up every tree in north Dublin. It's because he wasn't actually looking. One day long, long ago, the taoiseach summoned him to his office and said "Dermot, I want you to carry out an exhaustive investigation to establish once and for all if Rambo's been on the take from the builders." "Righto, boss," said the future minister for justice, and off he scampered to fetch his climbing boots. But not a whiff of a brown envelope did he detect among the abundant sycamores and great oaks of Swords and Malahide. Why? Because he kept his eyes closed all the time he was looking. Well, if Humpty Dumpty was your boss, would you take his instructions literally? Even pedantic, pettifo

Recession: the bad luck of the Irish... It was once hailed as the best place to live in the world. Now it’s in the grip of a terrifying economic storm. Could Ireland be the first euro country to go bust? In Ireland, the biggest funerals take place in the smallest churches. St Mochta’s, on Dublin’s western fringes, is little bigger than a front room. So many mourners turned up for the funeral of Patrick Rocca that they spilt out onto the pavement. Anyone who is anyone in modern Ireland was there, huddled together under a sky the colour of a day-old bruise. Politicians, pop stars, billionaire developers, horsemen and the sporting elite. Even the paparazzi. Rocca would have liked that. The 42-year-old was the self-styled poster boy for the new, resurgent Ireland, with a glamorous wife, private planes and helicopters, and a property business worth, at its peak in 2007, €450m. But one morning in January, he snapped. The first sign that anything was wrong was when neighbours saw him walking

Dublin Property Market Draws Low Marks for European Investment... Feb. 2 (Bloomberg) -- Dublin, capital of the first euro-region country to report an economic recession, offers the worst real estate investment prospects among Europe’s major urban markets, Pricewaterhouse Coopers LLP said. The Irish capital ranked last among 27 European cities judged for their property investment and development opportunities, according to the annual survey of 520 real estate professionals. Dublin also came second to last, after Moscow, as the riskiest market. Irish commercial real estate values declined almost 24 percent in the 12 months ended Sept. 30, according to London- based researcher Investment Property Databank. The collapse of the housing market and restricted lending by banks contributed to Ireland’s slower economic growth, which in turn curtailed demand for commercial space. The Irish “were the longest at the party and now have the biggest hangover,” John Forbes, PwC’s head of real estate, s

‘Wrong-Headed’ RBS, Danske, HBOS Lose in Irish Bubble... Jan. 28 (Bloomberg) -- It’s not just the Irish who are being stung by the collapse of the property market in what was once Western Europe’s most dynamic economy. Royal Bank of Scotland Group Plc, which bought Dublin-based First Active in 2004 in what was the largest overseas takeover of an Irish bank, said on Jan. 26 it will cut 750 jobs. Danske Bank A/S said provisions for impaired Irish loans rose by more than 10 times in the third quarter. “They were chasing the bubble, and now they are paying the price for it,” said Alex Potter, an analyst at Collins Stewart in London. “Their timing was absolutely wrong-headed.” Ireland’s economy is shrinking at the fastest pace in the euro area as the real estate market dives. The demise of the “Celtic Tiger” forced the government to seize control of Anglo Irish Bank Corp., which lends mainly to property developers, and to promise Allied Irish Banks Plc and Bank of Ireland Plc, the two bigg

We're getting back to basics in these recessionary times... ANYONE WHO, like me, has only recently learned to appreciate the wonders of Lidl will not be surprised by Ulster Bank's recent revelation that spending took the biggest nosedive since 1983 in the first three quarters of this year and Irish consumers continue to spend cautiously in the run up to Christmas. There was a time when the stark lighting, the anaemic decor (would a cheery sunburst yellow colour scheme be out of the question Mr Lidl?) and that curiously earthy smell once you hit the door (what is that?) was enough to have some of us running to the more sweet smelling Superquinn for cover. But our priorities are changing and we're discovering that rampant parsimony has its thrills. The psyche of a nation, formed over 10 years of profligate spending, is under review and it's not just property we're holding back on, but household goods, which Ulster Bank attributes to the weakness in the housing market,

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

Does the following sound fimilar?... " This is an extraordinary period...Over the past few weeks, many...have felt anxiety about their finances and their future. I understand their worry and their frustration . We've seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse , and some have failed. As uncertainty has grown, many banks have restricted lending. Credit markets have frozen. And families and businesses have found it harder to borrow money. We're in the midst of a serious financial crisis ... First, how did our economy reach this point? For more than a decade, a massive amount of money flowed ...from investors abroad, because our country is an attractive and secure place to do business. This large influx of money to... banks and financial institutions -- along with low interest rates -- made it easier...to get credit. These developments allowed more families to borrow money for cars and homes... some for the

Uncertainty over jobs after record market fall... AS grave uncertainty hangs over the future of thousands of jobs at Irish branches of recession-slammed US firms, markets are not expected to rebound quickly from yesterday’s record-breaking fall. At home, the ISEQ index of Irish shares’ closing figure was its lowest for more than five years. Across Europe, the trend was similarly dismal for a second day, with the FTSE Eurofirst 300 index falling 2.6% to its worst close since May 2005. The stock market shock waves followed the collapse of investment bank Lehman Brothers, the 158-year-old fourth largest financial institution in the US. In response, central banks around the globe pumped funds into the money markets, including €70bn from the European Central Bank, $50bn (€70.5bn) from the US Federal Reserve and £20bn (€25.2bn) from the Bank of England. Lehman’s bankruptcy filing, the biggest in US history, followed Merrill Lynch & Co’s decision at the weekend to sell itself to Bank of A

The 'Fannie and Freddie' factor faces our banks too... If the two biggest American mortgage banks can go bust and be bailed out by the US government, could the same happen here? When the US government intervened to save Freddie Mac and Fanny Mae on Monday, it put the world on notice. We are now in a new era where our banks are the single biggest weakness in the economy and the State (meaning the taxpayer) will be expected to save them. The developments in America have serious implications for Ireland. If anything, our property boom was more ridiculous than that of the US. So the obvious question now is whether one of our banks might go bust. It could happen , but is it probable? We don't know; but if it wasn't a possibility, why has the share price of Irish banks fallen 60pc in the past year? The reason share prices have collapsed is that investors are afraid their money will disappear. Like the rest of us, they don't believe the banks' management. They have lo