The mortgage market has been virtually wiped out but what do electricity workers care – they’re among the highest paid in the world on an average pay of €73,ooo
As the Big Freeze gripped the country for the third day it emerges workers at the Electricity Supply Board are getting free electricity. Staff including its €700,000 boss Padraig McManus are entitled to the benefit, according to the Irish Independent today.
Nice perk. Electricity workers in Ireland are the best paid in the world bar none with an average wage of €73,000, according to a recent survey by Fine Gael.
While discounts are common in the public sector, today’s report will add to the growing pressure for a review of the Croke Park agreement which guarantees pay at the public sector, particularly at the upper echelons.
Padraig McManus is the highest paid semi-state boss in the country. The head of the Dublin Airport Authority isn’t far behind him.
I’ll be returning to this subject before next Tuesday’s budget, so if you have any views or historic data on public sector pay email firstname.lastname@example.org.
I’m particularly interested in comparing levels of pay in the public sector outside Ireland.
Meanwhile new figures from the Irish Banking Federation confirm anecdotal evidence the mortgage market in Ireland has been virtually wiped out with an 87% drop in the number of homeloans issued since 2006.
The IBF report shows that just 7,621 mortgage were originated in the third quarter of 2010 compared to just over 54,000 in the third quarter in 2006.
” This is as much of a market wipeout as one could have feared just 4 short years ago,” said Frank Conway, director at Irish Mortgage Corporation.
Year Units Originated
“While the year-on-year mortgage comparisons look very grim, it is multi-year trend that best highlights the true carnage,” added Conway.
The buy-to-let market has been virtually completely gone. No surprise, given the glut of empty homes in ghost estates, but the figures show there those in the market aren’t able to sell on.
This will fuel fears of a third wave of toxic debt in addition to NAMA debt and mortgage debt.
The buy-to-let market has not been factored in in any major way to the debate on personal debt, but there could be significant defaults in this area.
A government spokesman confirmed today there are 319,000 registered second homes in Ireland, a number inflated by the equity release binge in the boom years when it seemed easier to make money from investing in property than earning a salary or building a new business.
Some of these will be holiday homes, some rental properties, and others just empty properties in ghost estates in places like Leitrim where the wealthy bought purely for the generous 10-year tax relief, known as Section 23. One fifth of second properties are in Dublin.
In Mayo, the property binge was so bad, it is estimated that one fifth of all homes are second homes.
Many home-owners who splurged out in 2005, 2006, or 2007 will be looking at a 45 per cent decline in value of their second property and could now be struggling to pay that mortgage at a property they can no longer rent, or rent at a sufficient level to cover costs.
Back to the IBF figures. In the third quarter of 2006, there were almost 8,000 buy-to-let loans. In the third quarter of 2010, this had to just 254, representing a fall of almost 97%.
The only market that shows some sign of life is the first-time buyer market – “it’s down but it’s not out,” said Conway.
Landmark case against sub-prime lenders
The figures aren’t as alarming however as those in the repossession court in Dublin where about 70 to 90 cases are listed every Monday.
This week there was a glimmer of hope for an unemployed builder who won the right to make a high court challenge over whether UK sub-prime lender, Start Mortgages, should be able to lend in the Irish market.
Robert Gunn’s family have been in their family home in Lyre, County Kerry, for more than 300 years but fell in to arrears after he lost his job.
Newbeginning, a new free legal aid service set up by a group of barristers to help those facing repossession won a judicial review on his behalf.
The case is due to be heard on December 16 and could have implications for thousands of mortgages granted by Start.
Gunn’s counsel argued in the high court that Start Mortgages was not legally authorised to lend in Ireland as its assignation as an official “credit institution” was given by the financial regulator. His legal team said that only the central bank had the power to prescribe an entity as a “credit institution”.
Start denied the claim and argued it had been prescribed as a credit institution in 2004.
With a big helping hand from our friends Fianna Fail and their cronies in the Dail the next big disaster is about to hit us and that is the deluge of mortgage defaults heading our way and again another black hole to be stuffed with borrowed money the taxpayers will have to find from their ever diminishing salaries.at the same time not everybody is helping out some are being well looked after along with their bosses
- Mortgage market ‘wiped out’ in Ireland (guardian.co.uk)
- The Irish want to punish builders, bankers and politicians. On Tuesday, they’ll get an austerity budget (guardian.co.uk)
- Europe shouldn’t pick at Ireland’s bones | Nick Cohen (guardian.co.uk)