Daft Property - Irish Property News

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

Country now paying for 'one hell of a borrowing binge'... WE HAVE been on "one hell of a borrowing and spending binge" in recent years and now we have to face up to a radical change in our standard of living and expectations , the Céifin conference heard. Jim Power, chief economist with Friends First, said the Government's role in allowing spending to grow by 10-12 per cent a year in recent years was "absolutely criminal" and we would now pay for that mismanagement. Personal debt rose from €20 billion to more than €140 billion between 1999 and 2007, he said. "That is . . . one hell of a borrowing binge." Asked about the role of the banks in fuelling spending, Mr Power said he had worked as a banker for 20 "very unhappy years" and the incentivisation structures always worried him. "You were incentivised on the quantity of what you sold, not on the quality. I think the incentivisation structure did encourage irresponsible behaviour

It's Dire Straits and and new tune called "Time To Tighten Belts In Ireland!" The Irish Independent reports "Double trouble on fuel, house prices... Last night economists warned that consumers will have to "tighten their belts" and avoid all luxury purchases if they want to ride out the economic slowdown. Figures from the latest Permanent tsb/ESRI index revealed that house prices fell by 1.1pc in April, bringing the annual decline in property prices to 9.2pc. And an Irish Independent survey showed that the price of diesel has shot through the €1.40 barrier -- it has now increased by an average of 9c a litre in just two weeks. Friends First chief economist Jim Power said: "I wouldn't be recommending to anybody to be going out there taking debt on board at the moment or living beyond their means. "Definitely we are in a belt-tightening environment for the next couple of years. Anybody who behaves differently is being very naive and foolish."

Acconding to a new report, by the Central Bank of Ireland, Mortgage growth in Ireland has now hit a new 14yr low! Surpise, surprise!!!

More good news today? (...well for hopeful home buyers anyway!) Irish House prices look set to fall by at least 5pc in 2008. This is according to Austin Hughes (an IIB group Homeloans economist,) during a presentation on the housing market outlook in Ireland for 2008. He also added..."The housing slowdown has been a good bit more severe than I had anticipated."