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 ...

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...

IRISH house prices are expected to fall by another 20pc, according to a new report by Moody’s Investor Services. The report states that house prices have fallen by 49.9pc between September 2007 and April 2012. ''Moody's expects that house prices will fall a further 20pc from today's levels (bringing the aggregate peak-to-trough fall to 60pc)," it added. It added that the majority of Irish homeowners are now “deep into negative equity.” And it also said that he performance of Irish prime residential mortgage-backed securities continued to deteriorate during the three months ended April 2012. Given the current climate, Moody's said the Irish economy would only grow by 0.2pc in 2012. "In this weak economic recovery, it will be difficult for distressed borrowers to significantly increase their debt servicing capabilities and so arrears are likely to continue increasing,'' it warned. Independent.ie reporters

HOUSE prices will keep falling for another two years and not bottom out until at least 2013, when the average price will have fallen by 60pc to €150,000. The latest prediction comes as National Irish Bank said it would raise its variable rates by up to 0.95pc next month. However, there are renewed hopes that the European Central Bank will signal a cut in eurozone interest rates when it meets tomorrow. A cut in ECB rates may help the collapsing housing market. Ireland is currently experiencing the most violent property crash in the western world. Over the last four years, prices have fallen by 45pc to leave the average asking price at €194,000, according to the latest Daft.ie house-price index. The Central Statistics Office puts the fall from peak at 43pc. Now it has been predicted that prices are set to fall for another two years with the average asking price to hit €150,000 before the market bottoms out, according to research by housing economist Ronan Lyons of Daft. Mr ...

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...

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...

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...

Euro crisis to freeze mortgage rate for year... HOMEOWNERS will be spared mortgage increases for up to a year -- but face heavy losses in the value of their pensions as markets plunged all over the world. The deepening euro crisis means interest rates are unlikely to rise for another year -- a reprieve for those on tracker mortgages. But the short-term relief could be seriously offset by the decline in the value of pensions and investments. They were worth hundreds of billions less after all the main European markets crashed by between 3pc and 4pc. US markets also closed well down - at 4.8pc - last night. And there are fears even more losses could pile up later today. The European Central Bank (ECB) left its key interest rate unchanged and gave no signal of an imminent rise at its monthly meeting in Frankfurt. Markets reacted by betting there would now be no further rate rise until well into 2013 -- as the euro crisis means the ECB cannot raise rates due to the fragile ...

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...

300,000 are 'wiped out' by the recession... THE average Irish person is now about 30 per cent worse off than they were before the recession, a startling new report has found. The report, by economist consultants at Indecon, also found that almost 300,000 people had been wiped out financially over the last four years. These 300,000 people have seen their incomes plummet by about 50 per cent because most of them were in well-paid full-time jobs in 2007 but are now relying on the dole after the recession forced them out of their jobs. The report, which was given exclusively to the Sunday Independent, is the first to examine the toll of the recession on the everyday finances of ordinary people. Its findings come in the wake of Environment Minister Phil Hogan's decision to hit most homeowners with a €100 household charge and a new Government plan to slash the pay rates of tens of thousands of future workers in areas such as catering, hotels, retail and hairdressing. ...

Depression surge in rich suburbs over cash worries... Affluent areas see huge jump in demand for mental health services. The number of anxiety and depression disorders in the country's richest neighbourhood has more than doubled since the recession. People worried about their mortgages, losing their jobs and paying private school fees in Dalkey, Blackrock, and Dun Laoghaire, are flocking to their GPs for treatment for mental health conditions. Householders living in the affluent neighbourhood, which is home to U2's Bono, Enya, and film director Neil Jordan, are becoming ill as they struggle to pay their bills. The clinical director of the Cluain Mhuire Community Mental Health Services for Dun Laoghaire-Rathdown, Dr Siobhan Barry, said there has been a huge jump in the number of referrals to their services between 2008 and 2009, when the recession hit the country. The remarkable increase in the numbers attending the public service is also thought to be caused by an i...

HOUSE prices in Dublin have gone into a 60pc freefall from their peak and are now at levels last seen in 2002. The cost of buying a home in Dublin fell by 16pc in June compared to the same period last year. In real terms, Dublin house prices have fallen by 60.2pc, from the peak of the market in 2006, according to Sherry FitzGerald estate agents. The national market has corrected by 55.2pc and the average cost of a second-hand house in Ireland dropped by 15.3pc. First-time buyers remain the most active sector in the market, accounting for almost one-third of the properties traded in the year to date. Chief economist Marian Finnegan with Sherry FitzGerald said the falls placed the Irish property recession as one of the most significant recessions in the post-war era. "Accelerating deflation in the property market cycle is somewhat contradictory as the factors underpinning the market have strengthened with improved affordability and relatively tight supply, particularly for...

In Oscar Wilde's Importance of Being Earnest, Lady Bracknell memorably remarks that: "To lose one parent… may be regarded as a misfortune; to lose both looks like carelessness." The Euro-zone's need to rescue three of its members (Greece, Ireland and Portugal) with three others (Spain, Belgium and Italy) increasingly eyed with varying degrees of concern smacks of institutionalised incompetence. Executed with Northern European creativity, charm, flexibility and humility and Mediterranean organisation, leadership diligence and appetite for hard work, the European rescue plan – "the grand compact" - is failing. European Debt Crisis returns In little over a year since the announcement of Greece's debt problems, the European debt crisis has ebbed and flowed with markets oscillating between euphoria (resolution) and despair (default or restructuring). The European Union's (EU) "confidence-boosting", short-term "liquidity enhancement...

Struggling families flock to care centre for meals... ENTIRE families are going to homeless centres for their dinner every evening. Before the recession, the Capuchin Day Centre for the homeless in Dublin would rarely have seen children coming through its doors -- but now up to 10 families a day are coming coming in to get fed. Many of the families are struggling to pay large mortgages taken out during the boom. They are worried about losing their homes and literally do not have enough money to put bread on the table, says Brother Kevin Crowley, who runs the shelter. He says that there are four times the amount of people arriving today compared with a few years ago. Some of those now seeking help are professionals such as engineers and architects who would have been earning a very good wage during the boom years. "It's not just homeless people who come to us, its anyone who is in need. We are getting lots of families with children coming in," he says. "...

Number of homeowners in arrears soars to 50,000... THE number of homeowners in arrears on their mortgages has jumped by 5,100 to almost 50,000 in the first three months of the year. The arrears figure represents 6.3pc of the 782,429 residential mortgage accounts, according to the Central Bank. Meanwhile, another 36,600 homeowners, who are not in arrears, have made arrangements with their lender to reduce their repayments. This means that a total of 86,211 homeowners -- 11pc of all mortgage-holders -- were struggling to meet their repayments in March, the Central Bank said. While the trend is worrying, eight out of every nine mortgage holders are still meeting their original repayment commitments. Frank Conway of personal finance website MoneyCoach added that although the growth in the arrears was unfortunate, there was no rapid deterioration in the rise in rate of arrears. "These latest statistics largely include the effects of the introduction of the universal socia...

WELCOME TO THE HOUSE OF PAIN: The ECB headquarters in Frankfurt... What will the ECB rate rises mean to your mortgage? THE Independent Mortgage Advisers Federation (IMAF) has done the sums to show how much more you will pay for your mortgage if the ECB rate rises. The figures assume that the ECB rate increases by 0.5 per cent to 1.5 per cent by the end of this year -- and by another 1 per cent to 2.5 per cent next year. The figures also assume that lenders pass on the full extent of the ECB rate rises to standard variable customers. (ECB rate rises are automatically passed on to tracker customers.) €200,000 MORTGAGE €2,200 a year more If you've a 25-year standard variable mortgage of €200,000 with Permanent TSB, your mortgage repayments work out at €1,191 a month. If the ECB rate increases by 0.5 per cent, your monthly repayments will increase to €1,251 -- another €60 more a month, according to Michael Dowling of IMAF. If the ECB rate hits 2.5 per cent by the end of 2...

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,...

Nama: the truth it's a bailout for developers... The National Asset Management Agency (Nama), which was set up to cleanse the banking system of toxic debts, has been revealed to be solely a bailout for builders and developers. The stark truth of the agency's core objective emerged this weekend as the Government's banking strategy lurched towards outright nationalisation. The deepening crisis in European stock and currency markets forced the Educational Building Society (EBS) into state control as it failed to find private investors, and now market analysts say that AIB, the country's largest bank, will be effectively nationalised by the end of the year. The unravelling of the Government's banking strategy -- which was designed to avoid nationalisation -- came as Frank Daly, the chairman of Nama, announced that its "core objective will be to recover for the taxpayers whatever it has paid for the loans in addition to whatever it has invested to enhance property a...