Daft Property - Irish Property News

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

New blow for house price hopes as market set to fall 60pc from 2007 peak... HOPES of property prices settling down have received a new blow, with a prediction that values will plunge by 60pc from the peak. Prices have already halved, but now credit ratings agency Fitch said they are set to keep falling. A fall of 60pc from 2007 would mean the average house price falling to €125,600 from €314,000 at the peak. There had been some optimism in the last few weeks that prices could be reaching a floor, particularly in Dublin. But the latest official figures show that property prices fell in June, dashing hopes that the market was close to stabilising. The fall of 1.1pc in prices in June recorded by the Central Statistics Office reversed a rise that was recorded in the previous month. Prices have halved from the peak of the market almost five years ago. The CSO figures indicate that the average home is now priced at €156,000, having collapsed to half of its value since the boom that came a

THERE was further gloom for homeowners after property prices plunged again last month. Prices have been diving now for almost four years. And there is no let-up in sight, with economists predicting prices will keep going down next year. The average residential property has lost almost €150,000 in value since the peak and is now worth around €169,000, according to the latest gloomy figures. Around €232,000 has been wiped off the value of houses and apartments in Dublin as the capital continues to suffer much sharper price declines than the rest of the country. The new figures from the CSO also show that the annual rate of decline in prices jumped to 15.6pc in November. Prices fell by 1.5pc last month and are now down 46pc from the peak of the market in early 2007, the official figures show. The CSO only gives percentage changes, but analysts have calculated that the price of an average property is now just €169,000. This is down from €314,000 when the property bubble was at its m

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.

NAMA's fire sales show cruel reality... WHEN NAMA put for sale signs on hundreds of the properties in its extensive portfolio last week, it gave a glimpse of the abyss into which the Irish property market has fallen. But it really was no more than that - a mere glimpse into the as yet uncharted depths of a catastrophe that has the potential to devour the country's economy and impose penury on the population. On Thursday, NAMA announced its first set of annual accounts, which showed the ' bad bank' made a loss of €1.18 billion - that's one thousand and eighteen million - last year. The good news though is that it's mostly a 'paper' loss - we might not really be down by that much, it just depends on how the property market fares over the next few years. Given that the value of property in Ireland declined by a massive 2.1 per cent in July alone, there's not much reason to be overly optimistic there though. At the same time as announcing its annua

Nama proposes negative equity scheme... Nama is proposing a deferred payment scheme to protect property buyers against the risk of negative equity in an attempt to kick-start the property market. The agency wants to introduce a scheme where Nama would waive 20 per cent of the purchase price on one of its 8,000 Irish residential properties after five years if the property were to fall further in value. Customers will deal with the banks on the scheme and will have no engagement with Nama. Chairman Frank Daly said the agency was in talks with the Minister for Finance and the Department of the Environment about the agency’s proposals. “We are teasing this through. We want to analyse the full impact of it and we would hope to make an announcement early after the summer,” he said at the launch of the agency's 010 annual report. The State loans agency, set up to take the most toxic assets out of the banking system, has loans on its books linked to 12,000 houses and apartments

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

House prices still falling - Dublin tops the list... House prices in Dublin are nearly 47pc off their peak in early 2007 compared with 39pc in the rest of the country, according to the Central Statistics Office. In the year to June, residential property prices at a national level fell by 12.9pc. This compares with an drop of 12.2% in May and a decrease of 12.4pc recorded in the twelve months to June 2010. In Dublin, residential property prices decreased by 2.4pc in June and were 12.6pc down compared with a year ago. House prices in the capital fell by 2.4pc last month and were 11.9pc lower on an annual basis. But economists believe that while the jobs market remains weak, within five years house prices should improve but very slowly. “The bottom line is that the property market remains very ‘soft’ at the moment,” said Alan McQuaid, chief economist at Bloxham Stockbrokers. “ But looking further ahead, we think house prices should increase on a five-year view as the labou

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

Property prices continue to slide... House prices in Dublin have fallen nearly 50 per cent since their peak in 2007, the Central Statistics Office has said. According to the CSO’s Residential Property Price Index, house prices in the capital are 46 per cent lower than 2007, while apartment prices have fallen 53 per cent since their high in February 2007. Nationally, residential property prices fell by 1 per cent in the month of April. This compares with a decline of 1.7 per cent recorded in March. The index, which looks at property on a national level, shows residential property prices throughout the rest of the country are 36 per cent lower than their highest level in 2007. Overall, the national index is 40 per cent lower than its highest level in 2007. Dublin apartment prices fell by 1.8 per cent in the month of April and were 14.1 per cent lower when compared with the same month of 2010, while house prices fell 0.7 per cent and were 12.6 per cent lower compared to a year e

Investors snap up 'bankable' artworks... WORKS from famous landscape artists are being snapped up by investors as 'bankable' options for their nest eggs. Antiques, furniture, art, gold, stamps and coins are once again being purchased as long-term investments, according to people in the auction industry. It comes as property values continue to fall and confidence in the stock markets -- and particularly in bank shares -- remains fragile. Now those with money to invest towards their retirement are looking to the art world. "They think they (paintings) are bankable and they are probably right," said Ian Whyte, managing director of Dublin auction house Whyte's. "I remember particularly in the late '70s, when inflation was running at 18pc to 20pc a year, people were purchasing tangible art collections, antiques, furniture, stamps and coins. "People are uncertain about banks and they want to buy into something tangible. Property is no

10.8pc plunge in Irish house prices... House prices in Ireland are falling at a double-digit rate but property values in other countries are showing signs of stabilising, research indicated today. The average cost of a home in Ireland dropped by 10.8pc during 2010 as the market suffered from the fall-out of the country's economic problems, according to estate agent Knight Frank. The drop was the biggest recorded for the total of nearly 50 countries looked at by the group. The pace of the falls are also showing little sign of easing, with property losing 3.5pc of its value during the final quarter alone. Steep price falls were also seen in Dubai, with property values diving by 6.1pc during the third quarter of 2010, the latest quarter for which figures are available. But there was better news for those who have bought second homes in France, with house prices in the country actually rising by 9.5pc during 2010. The more conservative French mortgage market means that hous

Property prices now down 51pc from peak of boom... HOUSE prices across the country are now worth less than half of their value during the property boom, according to the latest price survey. The Sherry FitzGerald price index shows that average prices for second-hand homes nationally have fallen to 51.1pc of their highest value during the peak of the housing boom in 2006. Prices have dropped even further in the capital with the average second-hand home in Dublin now worth almost 56pc less than in 2006. The stark figures released yesterday reveal that the value of houses across Ireland is now back at early 2002 levels. At a comparative level it means prices -- especially in the Dublin market -- are now the same as they were 20 years ago. The grim news comes on the same day that banking stress tests released by the Central Bank yesterday predict the four leading banks will need an injection of €24bn in capital to offset future losses. Among the predictions are that they stan

Brace yourself...€200m cuts and tax rises on way. IRISH taxpayers are being warned to brace themselves for further hardship with over €200m in increased charges and spending cuts on the way. Finance Minister Michael Noonan said his 'mini-Budget' would include more cuts and tax hikes. While the Programme for Government contains a pledge not to increase income tax, there are many other indirect taxes which could be increased instead. These include charges for State services -- for example A&E charges. The Government has promised a 'Jobs Budget' within the next three months which will cost €220m to implement. But it has to raise this money in other ways to ensure that the funding from the EU-IMF bailout deal continues to flow. Wage In the Dail yesterday, Mr Noonan confirmed that the Government would need money to pay for measures such as reversing the cut in the minimum wage, halving the lower rate of employers' PRSI and reducing the lower rate of V

House prices could fall 13.4% this year in bank test scenario... HOUSE PRICES could fall by a further 13.4 per cent this year and 14.4 per cent next year before recovering in 2013 under a scenario considered by the Central Bank to stress test the banks. This would represent a 55 per cent decline in house prices from the peak of the market in 2007. But under a worst-case scenario, house prices may fall by 17.4 per cent this year and 18.8 per cent next year, which would be a decline of 60 per cent from the peak. The Central Bank, which published details of the scenarios yesterday, is testing the lenders to see how much of the €35 billion set aside in the EU-IMF bailout fund for the banks will be needed. Minister for Finance Michael Noonan acknowledged yesterday that more than €10 billion may be required, but said he had “no idea at this stage” how much more was needed. He was speaking after he and Minister for Public Expenditure and Reform Brendan Howlin met senior officials

Hundreds of repossessed homes in Ireland to be sold by auction... UK property consultancy Allsop to hold auction in April at Dublin's Shelbourne hotel: Flats in Ireland that could have fetched €150,000 in the Celtic Tiger years are to be put on the market for as little as €25,000 (£21,000) in the country's first ever mass auction of repossessed homes. And, in a sign of how wide the property crash is, the latest item to turn up in liquidation sales in Dublin is a job lot of 15 cranes, including a pair towering over Anglo Irish Bank's half-built headquarters in the city's docklands. "Tower cranes were among the most sought-after heavy plant and machinery 10 years ago," Ricky Wilson of Wilsons Auctions says. "You couldn't buy them quick enough. Now they are left idle for two or three years on sites." He has 15 cranes worth €500,000 going on sale on 26 March, with German, Dutch and Polish buyers expressing interest. But it is the auction

Grinding despair of negative-equity generation hangs over all our lives... All truth passes through three stages. First it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident. Arthur Schopenhauer Ireland, 2031. A teenager and his teacher are walking out of an economics class. "My God, what lunacy," says the teen. "I can't believe that the banks were allowed to behave like that." "I know," answers his lecturer. "Imagine, they were able to sell full-recourse mortgages to naive first-time buyers, often way over 100 per cent, without any risk to themselves whatsoever. No wonder they all went mad and pushed money on any poor sod they could." "And then when the crash came, all the big property borrowers and the banks were protected by the Government via Nama and the bank guarantee, while all the small homeowners were screwed?" "Correct, son." "That's not capitalism,

Up to 300,000 homeowners in negative equity Further 30,000 will struggle with mortgage payments after Budget tax increases kick in... THE spectacular fall in property prices is even worse than was stated by a government economic think tank last week -- up to 300,000 homeowners are now in negative equity. Expected interest rate hikes will mean another 30,000 people -- roughly the population of Dundalk -- will struggle to meet their mortgage payments by the end of the year. The recession, joblessness and rising interest rates already mean that 70,000 borrowers have missed payments or renegotiated their mortgages. Now financial institutions are expected to increase their standard variable rates. It is also widely expected that the European Central Bank will increase its interest rate before the end of the year. This would also hit those on tracker mortgages. Michael Dowling, of the Independent Mortgage Advisors Federation (IMAF), said: "With rising unemployment, higher

Hard Times You know times are bad when you can overhear elderly ladies on the bus using phrases like “the current budget deficit,” as I did recently, on a pleasant autumn morning in Dublin. You know times are really bad when one of them just about knows the figure: “Oh, God, it’s 30 percent or something.” In fact, the Irish government’s deficit for 2010 hit 32 percent of GDP, more than 10 times the legal maximum for countries in the euro zone. It’s hard to find a parallel to such public excess anywhere in the Western world. The effects of our crisis are everywhere you look. The bus that morning was almost empty. Barely two years ago it would have been packed with Polish and Lithuanian hard hats, dressed in work boots and high-visibility jackets and heading for their construction jobs. Now many of the migrants have gone back home. Construction has halted, and much other work besides. Fine restaurants now offer three-course lunches for just €15. Newspaper lifestyle supplements are fu

FF's parting gift of corporate welfare will sink the country... A farmer told me he had just taken €53,000 out of the local bank and put it under his bed YESTERDAY was the feast of the Immaculate Conception. In many other Catholic countries, particularly in Belgium and southern Holland, this is also the week that Santa comes and leaves presents in children's shoes. For many, both the Immaculate Conception and Santa Claus are simply not believable. For me as a child, December 8 was a day off school and that's all that counted. What would Christmas be without Santa, or Catholicism without the Immaculate Conception? You can't have one without the other. Even if you don't believe, sometimes it is easier to pretend. The Budget was akin to the Government playing a big game of 'let's pretend'. Let's pretend that the banks are solvent. Let's pretend that the problem in Ireland is 'social' welfare rather than 'corporate' welfare (because t