Daft Property - Irish Property News

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

Half of us now in negative equity misery... HUNDREDS of thousands of Irish homeowners could face negative equity as early as June. A report from NCB stockbrokers has outlined that as many as 45pc of householders could owe more on their mortgage than their house is worth. NCB economist Brian Devine says that house prices, as officially measured, are still overvalued. "Our estimate for Ireland suggests the number of homes in negative equity ranges between 29pc and 46pc depending on the price decline assumed," Mr Devine outlined. NCB believes prices are already 35pc below their peak, meaning close to one in three homeowners are already in negative equity. "There is little reason to believe that house prices will not continue to fall as future employment prospects remain bleak, further tax hikes are in the pipeline, confidence remains low, emigration is likely and there remains a large supply of properties for sale," the NCB report claimed. "Affordability may have

Being strangled by the monthly mortgage noose... OVER the past number of weeks and months, we have become used to speaking in billions. Seven billion to recapitalise AIB and Bank of Ireland; a €22bn cash injection into Anglo Irish Bank; €81bn worth of developer loans transferred to NAMA -- the list and amounts of money appear to be endless. But for many, the only real amount that matters is the one they need to pay each month to keep a roof over their head. Unfortunately, for tens of thousands of Irish families, this amount is far greater than their income and the mortgage rope around their neck simply gets tighter and tighter each month. According to the Financial Regulator, more than 28,000 homeowners have not been able to repay their mortgage for more than three months. Another 30,000 have been forced to renegotiate their mortgages. I suspect this figure of almost 60,000 is merely the tip of the iceberg and will only increase. Considering that more than 230,000 people have been made

The great property scam is back to rip us off again... They're back! The creeps, the snake-oil salesmen and spoofers who condemned a generation to negative equity are cheerleading again. The advertisers are salivating too because the "property porn" industry sees a chance to sell its fantasy again. The papers are once more displaying "dream homes" replete with doctored photographs and Mediterranean blue skies -- all at "knock down" prices. It's time to buy again, or so I'm reliably told by those who were so reliable last time that they gave us NAMA! I am not saying that property won't recover ever, of course it will; but not from here. Irish property is still extortionately expensive. It is expensive not just on a comparative basis but, more crucially, it is expensive on the basis of what is happening in the economy. Any government that is urging people to buy houses right now clearly has no intention of learning anything from the mistakes

Don't bet your house on end of price falls... Lenihan says we can buy in confidence now prices are realistic -- not according to some valuation models. THE speed of the housing market crash is slowing, the Daft.ie house price report has suggested. It may be losing pace -- but contrary to Brian Lenihan's upbeat take on it, few people think that the market has bottomed out yet. "The residential property market will now be stabilised at a realistic level," Mr Lenihan said after the 47 per cent Nama discount was announced. "You can now buy in confidence that the price is realistic." The wider view is that prices could get a whole lot more realistic before they completely floor. Is there much worse to come? By some calculations house-price values could have far further to fall. One internationally recognised valuation model reveals potential overvaluation in the Irish market of up to 60 per cent -- even after the massive price drops that have already occurred. Du

House prices 'set for further 10pc fall' says leading economist... House prices will fall by another 10pc before the market hits rock bottom next year, a leading economist predicted today. Jim Power, chief economist of Friends First, believes while the recession is likely to end around the middle of this year, consumer confidence and spending will continue to be undermined by wage cuts, an uncertain labour market and further reductions in state spending. The finance house revealed six out of 10 consumers are not confident in the Government's ability to revive the economy, with a third backing a Fine Gael/Labour coalition to do the job. Mr Power said it was difficult to be convinced the economic situation will improve considerably in the near future. "The Irish economy is going through an extremely difficult adjustment and the situation remains precarious. It is way too early to sound the all clear," he warned. "A fundamental reform of taxation and spending is

Over 30,000 homeowners renegotiate mortgages... More than 30,000 struggling homeowners have negotiated alternative mortgage repayment options with banks and building societies in a bid to hold onto their homes, according to estimates from the Irish Banking Federation. A spokesman for the IBF said that mortgage customers in financial difficulty had negotiated a range of agreements with lenders, including payment breaks, longer mortgage terms and interest-only periods. ‘‘Things are difficult and people are under pressure, but it’s a case of picking up the phone and discussing the options with your lender in good faith," he said. The IBF will launch a new consumer guide to dealing with mortgage repayment difficulties this week. It recommends that mortgage customers in financial difficulty should contact their lender as soon as possible, and be sure to respond to letters or phone calls in relation to arrears. Under the statutory code of conduct on mortgage arrears, lenders must wait a

Mortgage timebomb will cause new banks crisis when it goes off... The recommendation that the moratorium on repossessions should be extended by a further year is another sign that the clock is ticking on our €150bn mortgage time bomb. Last year all of the main banks and building societies agreed not to repossess the homes of people whose mortgages were in arrears for at least 12 months. Now, with the 12-month moratorium about to expire for many of those in arrears, there are fears that the number of homeowners facing repossession could rocket. For some it has already happened. Entertainer Adele King (better known as Twink) revealed that her family home was about to be repossessed by her lender. Twink's statement came on the same day that the Oireachtas Committee on Social and Family Affairs recommended the 12-month moratorium on home repossessions be extended to 24 months. The recommendation comes just 11 days after the Financial Regulator extended the 12-month repossession morator

Green minister fears Greek-style crisis if banks don't get houses in order 'fast'... Ireland could be plunged into a Greek-style crisis unless the banks get their house in order "quickly''. That's the stark warning issued by the Communications, Energy and Natural Resources Minister Eamon Ryan yesterday. "The final bill for everything, that is all the madness in mortgages, the developers and general finance could be as high as €34bn," he warned. "We have done a job in projecting the Government's ability to manage its own finances. Now we have to convince the outside world that the banks have the capacity to manage their own finances," he said. Mr Ryan also noted that within Government, the view was "the sooner we do it the better''. Referring to the improved image of Ireland in the international community, he said of the banking crisis: "We have a limited window of opportunity to resolve this now. If we miss this opp

The fall in house prices left many homeowners in negative equity, but this need not necessarily prevent you from trading up... IT'S the topic no one wants to talk about, but this elephant has no plans to leave the room. Negative equity happens when the value of your property on the open market amounts to less than the sum of your mortgage. If you bought a house within the past five years, you are likely to be in negative equity to some degree. The average household is sitting on negative equity estimated at €43,000, according to Irish Independent calculations based on a recent report by Goodbody Stockbrokers. It was estimated that 116,000 households were in negative equity at the end of 2009, rising to nearly 200,000 by the end of this year, according to the Economic and Social Research Institute. However, this is a conservative estimate based on prices falling by 24pc from their peak in 2007. If house prices end up falling by 50pc, this figure would rise to 350,000. It is general

1,500 homeowners a month seek state aid on mortgages MORE than 1,500 applications for mortgage interest supplements are being lodged by struggling home owners every month, it has emerged. As a result, community welfare officers administering the scheme for borrowers are being overstretched as demand for the state-paid mortgage assistance rises. The number in receipt of Mortgage Interest Supplement has shot up by 260% since the height of the boom. At the end of November 2009, 17,500 Mortgage Interest Supplement claims had been lodged for the whole year. Up to 12,800 claims were granted during the same period. Recipient numbers have escalated since the boom, rising 260% since the end of 2007 when the total number of recipients was 4,111. A private report for a section of the Department of Social and Family Affairs, which oversees the scheme, reveals the concern by community welfare officers over the mortgage arrears crisis. The report, obtained by the Irish Examiner, puts the debt crisis

Homeowners handing their houses back to the banks... HOMEOWNERS who can no longer afford to pay the mortgage are voluntarily giving up the keys to their property as they see no other way out of the debt , according to a housing charity. Respond warned that many people in negative equity did not think it was worth trying to sell the house to repay the debt as there was no market for it. These people are simply handing their houses back to the banks, the charity said, with some leaving the country and others moving back home with family. Respond spokeswoman Aoife Walsh said figures for repossessions in the courts did not accurately reflect what is happening on the ground. "Many people are feeling hopeless because of the collapse of the housing market. They are simply handing back the keys of their home to their lender as there is no prospect of selling the home to repay the debt," she said. "These cases are rarely reported and we suspect there may be far more ‘voluntary su

That 40% drop - it's already happened... Economists have predicted that house prices have to fall by at least 40 per cent from their peak of 2006 but house builders say that’s already a reality... NEW HOMES agents have supported a claim by the Irish Housebuilders’ Association (IHBA) that selling prices for newly built houses and apartments have either bottomed out or are close to that stage in the price cycle. Dominic Doheny, chairman of the IHBA, said earlier this week that prices across the country have dropped by an average of over 40 per cent and that the level of unsold stock was between 35,000 and 40,000. He said that there are 9,000 new homes overhanging the Dublin market – a figure well below other estimates which put unsold properties at 15,000. Ken MacDonald of Hooke MacDonald said yesterday that judging by the magnitude of the price cuts and the increased number of enquiries and viewings in recent months, there was room for a guarded optimism that the market had bottomed

Families set to be ‘robbed’ of their homes... AN avalanche of repossessions "robbing" cash-strapped families of their homes will follow the creation of NAMA, opposition leaders have warned. Fine Gael and Labour joined forces to plead with Finance Minister Brian Lenihan to launch a rescue lifeline package for people falling behind with mortgages as the controversial NAMA legislation was pushed through the Dáil. Labour finance spokesperson Joan Burton predicted "reckless lenders" were only holding off on going after families in financial difficulties until they had secured the €54bn deal from the State to take toxic developer loans off their hands. "Ordinary families will be leeched by the banks and building societies as soon as they get the NAMA money. They pushed money at people at the height of the boom and now will go after them to get it back." Ms Burton said a 24-month moratorium should be extended to householders with problems who were trying to deal

Is property past its sell-buy date?... 10 questions currently facing wary buyers and shell-shocked vendors... Are the banks really granting mortgages? To whom, what percentage of the property price, and under what conditions? Yes, technically. Loans of up to 92%, valued under €300,000, are being granted mainly to first-time buyers from Bank of Ireland, ICS and AIB. Other lenders are giving up to 80% of the purchase price (see graph). But the qualifying conditions are becoming more stringent, and if the bank doesn't really want to grant you a loan, they'll find a reason. Anecdotal evidence suggests that, after initial approval, stringent creditworthiness checks are carried out. For example, if a would-be borrower is behind with credit card payments, the loan will be turned down. Job security is a huge factor and everyone is under scrutiny now, says Peter Bastable of Simply Mortgages. "Those occupations on the danger list are widening day by day. It's no longer just cons

Negative equity hits €43,000 as average debt soars to €130,000... Report paints grim picture of economy... THE collapse in the housing market has left the average household sitting on €43,000 of negative equity. A borrowing frenzy during the boom means Irish households are now nursing debt levels which are the fifth highest in the developed world. The average household owes €230,000 on its mortgage alone, excluding credit card, personal loans and other debts. These figures have emerged from calculations based on a new report on the economy from Goodbody Stockbrokers. Goodbody's Dermot O'Leary estimates that the bursting of the housing bubble has sent house prices down by 40pc from their peak in February 2007. This means the average house in the State is now worth around €187,000. There are 640,000 households with a mortgage, and the average household is sitting on negative equity estimated at €43,000, calculations based on the Goodbody report by the Irish Independent show. The

Average house prices are now back at January 2004 levels - report... AVERAGE HOUSE prices in Ireland are now back at the level seen in January 2004, according to the latest ESRI/Permanent TSB house price index. Prices fell by 1.5 per cent in August, according to the data released yesterday, bringing the decline in the past year to 13 per cent. According to the survey, house prices have now been falling for two full years and are 24.4 per cent lower than at their peak in February 2007. Niall O’Grady, general manager of business strategy at Permanent TSB, said the rate of decline had been more dramatic during the summer due to the low levels of activity in the market and a lack of confidence in any recovery this year. “Recently, prices have started to fall faster in the Dublin region due to the high level of surplus stock available,” he said. House prices in Dublin have fallen by 18 per cent over the past year, compared with a 12 per cent decline for property outside the capital, the sur

Emigration hits new high as foreign workers leave... FOREIGN workers have been losing their jobs in droves and leaving the country -- resulting in the first net emigration since 1996. Figures from the Central Statistics Office show that a quarter of all the jobs held by foreign workers disappeared in the 12 months to last April. Most of these belonged to workers from eastern Europe. This job loss compared with a drop of 8pc in employment overall. This reduction, and a doubling of unemployment to more than 11pc, is the steepest decline in the labour market ever recorded. It was driven by a loss of more than one in three of all building jobs -- where employment collapsed by 86,000 -- a 13pc fall in retail and wholesale, and a 9pc drop in industrial employment. Analysts say the worst of the jobless rises may be over, with increasing emigration keeping down the total. They expect unemployment to peak at around 14pc next year -- better than earlier estimates of 17pc. "These figures to

Property: making a move... With house prices set to fall even further, it's no surprise that most buyers are sitting on the fence. But for those who have no choice but to bite the bullet, think long-term... All the available data and commentary on the domestic property market suggests the continuing fall in prices still has some way to go, so it's no surprise that the majority of potential buyers are still opting to "sit on the fence". But the Irish Banking Federation (IBF) recently reported a 9pc rise in new mortgage lending in the second quarter of 2009 when compared with the first three months of the year. But with new lending still 7pc lower than in the same period last year, the IBF said it was too early to say if the market had turned a corner. Karl Deeter, of Irish Mortgage Brokers, reports an increase in applications and numbers of loans because of recent price falls. "We had felt for some time that price drops would come fast once the realisation about t

House buyers were given 100pc loans during crash... Irish banks agreed to provide 100pc mortgages to one-in-four young first-time buyers last year despite a collapse in the property market. Thousands entering the property market for the first time took out mortgages with loan-to-value ratios of over 95pc with up to 5,000 taking out the 100pc housing loan. The Department of the Environment's Housing Bulletin 2008 also revealed that the average age of those who successfully obtained a 100pc mortgage was 31 years. These loans were taken out for between 31 and 35 years, which would indicate that people would be paying back the cost of their home until they retire. Banning Earlier this year, the Financial Regulator said it was considering banning 100pc mortgages and restricting lenders offering homebuyers loans greater than three times their annual salaries. This followed the publication of a report by the British financial regulator which said there was a case for limiting the size of