What is truth?

Posts tagged ‘Real estate’

Comment:

Wait until the dimwits in the current government present their crushing budget .This price will be views as astronomical .As far as I can see, I see no bottom we have a long way to go to reach that dark place ! With the real unemployment figures concealed from the public I estimate it to be somewhere between 29 an 30%.The banks  are now free to crucified their own customers with penal charges and their own customers are been held hostage to ever increasing interest rates whenever they choose! The current government have washed their hands of the countless thousands of trapped citizen’s snared by toxic and corrupt bankers.

Nama is the real culprit here as they have control on the flow of sales of all types of property in Ireland now and with consent of the government they are drip feeding the sale of property, this option is however not available to the ordinary joe who has just lost his job and is forced to emigrate.

It is outrageous, most of the cheerleaders of the property boom are now employed by NAMA as “experts” and are been paid by the victims of these fraudsters. A day of reckoning is coming and it ant going to be pretty !   I am living in Lubeck In Germany , an Irish emigrant,  and I can smell the stink of this deal from over here .This has all the hallmarks of a financial stroke  by absolute gangsters  on the Board of AIB  and NAMA “Looking after insiders” with a guarantee profit .

NAMA Wine Lake

Jack Fagan has a rare weekend outing in today’s Irish Times where he reveals that a consortium of European investors has bought the four main office blocks of AIB’s Bankcentre in Ballsbridge opposite the RDS. The seller, Aviva is said to have accepted “just over €70m” for the sprawling 154,000 sq ft complex set over four buildings. The property was originally bought in April 2006, a year before the general peak in Irish commercial property, for €177m. Commercial property generally increased by just over 21% between Q1 2006 and Q1 2007 which would have indicated a notional peak valuation of €214m. A €70m price tag today represents a 67.3% decline which is in keeping with the general market as tracked by Ireland’s two commercial property indices from Jones Lang LaSalle and SCSI/IPD.

The tenant in the offices is the 99.8% state-owned AIB which has thus far cost us at least…

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Mr.Bacon has an idea! lets get the property bubble going again!

Well it didn’t take long for this insider to start flying this kite, calling for the sale of the worlds largest property portfolio to private faceless investors is just the pits. Of course the property market is still on its knees and there is no better time for Faceless capitalists to get involved as the Irish taxpayers have been carrying the can for four years and taken all the losses of course .Just like Eircon ,we the taxpayers are about to get shafted once again .Mr Bacon has made a nice life as an advisor with the Fianna Fail government and certainly hasn’t done the Irish taxpayers any favours in the past! Mr Bacon has presumably been paid for a so called report ,commissioned by none other than Treasury Holdings   and at the same time isn’t NAMA suing this same company because of questionable sales of shares in that same company?

The report looks at the economy and it urges the adoption of alternatives to current economic policies .Mr Bacon  says that a key to stimulating domestic demand is growing consumer confidence, and a key to growing consumer confidence is getting the housing market working again

Wrong Mr. Bacon ! It’s getting Jobs and job security, up-skilling of the unemployed, and investment in education, and infrastructure. Helping your paymasters get the property bubble going again is not the answer to Ireland’s economic troubles. In Germany the vast amount of people are renting and the economy is booming!

Dublin house prices ‘down almost 65% since 2006’

House prices in the in Greater Dublin area have dropped by 64.7% since 2006,  according to the latest results from the Douglas Newman Good House Price  Gauge.
This drop in value was also mirrored in the organisations 2011  House Price Gauge which recorded a fourth-quarter average price fall of 5.3%,  bringing the total annual price fall to 19.95%. As part of its analysis  for 2011, the organisation also commissioned an independent assessment of house  prices by Dermot O’Leary, chief economist with Goodbody Stockbrokers, in which  he stated that a 60% price drop would be an “appropriate level” of price falls  for Ireland.
This is based on a comparison with average property prices  and income ratios in the UK and yield analysis.

Read more: http://www.irishexaminer.com/breakingnews/ireland/dublin-house-prices-down-almost-65-since-2006-536238.html#ixzz1joIuu9MF

Ronan Lyons and time to face reality!

Ronan Lyons has posted a new item, ‘Time to face reality, as rents start to rise
for family homes’

The latest Daft.ie Rental Report, released today, found that rents nationally
rose in the third quarter, for the first time since early 2008. The urban-rural
difference in trends persists, though. This post looks at trends by bedroom
number, finding rising rents for family homes in most urban segments. A
persistence in thinking about one national property market, however, will
prevent the response required to keep an adequate supply of competitively priced
accommodation.

You may view the latest post at
http://www.ronanlyons.com/2011/11/15/time-to-face-reality-as-rents-start-to-rise-for-family-homes/

concern within the Government over Nama plans

CARL O’BRIEN, Chief Reporter

THERE IS concern within the Government that plans by the National Asset Management Agency to encourage the purchase of thousands of residential properties could artificially inflate the property market.

The agency wants to introduce a scheme where it would waive 20 per cent of the purchase price of a home on its books if values were to fall further over the next five years.

Nama has suggested the scheme could eventually apply to 5,000 houses and apartments

full article at source:http://www.irishtimes.com/newspaper/frontpage/2011/0928/1224304858445.html?via=mr

Ronan Lyons take on the latest property fire-sale

Ronan Lyons has posted a new item, ‘Is Ireland running out of cash buyers?

Insights from another property fire-sale ‘Last week saw the third of the so-called “fire sale auctions” in Ireland in recent months. While there are those who are set
against these types of auction
, viewing them as some sort of return to the evictions which haunted the Irish countryside in the 1800s, most see them as the crystallization of what everyone knows, i.e. that property prices have fallen dramatically in Ireland over the last five years. There are those, such as myself, who believe they offer a unique insight in to real transaction prices.

In particular, on previous occasions, I’ve used the model of the Irish property market that
I’ve developed for my academic research (which is related to the model that
underpins the Daft.ie Report) to see what we can infer from these auctions
about exactly how far Irish property prices have fallen and where the fire-sale
prices are relative to current asking prices.In this post, I’ll do the same analysis on the sixty or so residential properties sold last week and I’ll also take stock of the three auctions so far, and see if there are any trends.

Full article at source: http://www.ronanlyons.com/2011/09/27/is-ireland-running-out-of-cash-buyers-insights-from-another-property-fire-sale/

UK Housing Market: Sellers Forced to Cut Asking Prices

By: Nadeem_Walayat

Since my May 2011 analysis, further research into the reasons for the differences in asking prices against valuations between areas has revealed the following possible explanations that are just as valid for most UK cities as they are for Sheffield:

Sellers

Grossly over valued properties will fail to sell, thus sellers risk chasing the market ever lower remaining just out of reach of   buyer interest. Therefore sellers need to get multiple valuations to get a more   realistic price and if their property fails to attract any interest to not delay   in cutting their asking price by a significant margin i.e. in steps of 10% so as to attract buyer   interest. Else you risk wishing you had cut earlier and thus obtained a higher   final sale price.

read full article at source here: http://www.marketoracle.co.uk/Article29357.html

Buyers

Given that the average asking price is estimated at 16% above valuations, It seriously pays for Buyers to do their own research, look at what similar previous properties actually   sold for in the area you are targeting. If a house looks fairly priced compared   against others in the area then ensure that there is not a reason why it differs   in price, which may be due to issues such as the property is leasehold instead   of freehold, or that there is an issue for instance with flooding.

  • Population Growth and Decline– Some areas of the city are witnessing falling or stagnant populations, which usually effects the mid range properties of an area rather than those at the higher or lower end, such as the East and the South of the City, which results in those seeking to sell properties over inflating asking prices as they compare general price trends across the city against their own properties expectations. The effect can be as serious as making the difference between 50% price increase over 10 years and zero increase or even a price fall.
  • Local Schools Changing Performance – House prices can be effected in both directions if the local schools improve or decline in performance over time, which may fail to register with home sellers as their children may have grown up many years ago.
  • Rivers – Up until June 2007 when Sheffield was hit with the Great Flood, many Sheffielders had never taken the issue of flooding seriously, however that no longer applies where the path of Sheffield’s many rivers has negatively impacted on house prices that are deemed to be at risk of flooding and therefore likely to incur difficulty in insuring, which effects both affluent and the poorer areas equally, where a matter of a 100 metres can effect similar houses to the difference of as much as 25% in price as well as resulting in greater supply on the market as these flood risk housing is more likely to remain on the market for far longer than properties elsewhere. The same holds true for all of the UK’s major cities that are built on canal and river water ways.
  • New Houses – New housing stock usually from the low to middle price range areas of the city are unlikely to appreciate much during the first 10 years. Which can result in over valuations by sellers as they price their houses in terms of how average properties in their area’s have appreciated.
  • Cluster of Valuations – Over valuations and realistic valuations tend to cluster by area’s because   home sellers tend to look at what price others in an area are also selling for and therefore price according to the competition.
  • Competing Estate Agents – There may be greater competition in overvalued areas between estate agents for   business therefore a tendency to give properties higher valuations so as to   secure business and shut out other agents, then a few months down the road when   properties have failed to sell ask clients to cut asking prices.
  • Crime Rates – Even a  few bad crime stories of shootings and killings can have a significant and lasting effect on buyer demand for an area as well as the longer-term trends for crimes such as burglaries.
  • Social Housing – Areas with more social housing will tend to see less appreciation in house prices, which may not be reflected in asking prices.
  • No or Negative Equity – Home owners trapped into no or negative equity properties will find it difficult to price their properties at a level that the market will bear. Those most likely to be in negative equity will have many of the contributing factors as listed above and be unwilling to accept less than their outstanding debt.
  • National Events Skewing Seller Expectations – One off national events can impact on Seller expectations such as is with the case of the Olympics in London, which has resulted in an estimated 10% inflation in asking prices even allowing for rising selling prices. The question mark is will London Sellers still be pricing in an Olympics premium after the Olympics? Meanwhile they can enjoy the boost for another year.
  • Public Sector Recession – Just as the Olympics are boosting London, so is the public sector recession as a consequence of 500,000 planned job losses to depress areas where public sector works tend to reside and that impacts harder on Northern UK cities such as Sheffield, Liverpool, Newcastle than Southern cities. Therefore Sellers in cities such as Sheffield may not be taking into account the consequents of a contracting public sector which will hit those areas of the city that rely more heavily on the public sector for employment i.e. the middle income bracket areas, hence expectations for sharply higher supply could result in a very wide margin of difference between seller expectations and what the market is prepared to pay.
  • Artificially Low Interest Rates – The current rate of inflation is 5% whilst the base interest rate is 0.5%. This results in low seller financing costs for mortgages and therefore reluctance for Sellers to market their properties in line with market demand. However sellers are playing a dangerous game as once interest rates do start to rise then they will see sharply higher debt financing costs, especially as market interest rates will move ahead of the base interest rate as well as coupled with less buyer interest as they are also similarly squeezed in terms of what they will be able to afford.

The net effect of the prevalence of over valued asking prices is for an ever increasing supply of property that will further put downward pressure on house prices especially in specific areas of cities, this is reflected in official statistics which show that 70% of properties  on the market have failed to sell this year hence sellers starting to cut asking prices.

Ireland’s property market (Ronan lyons latest posting)

By Ronan Lyons

The spectacular and painful bursting of Ireland’s property market bubble since 2007 has brought to an end what one could term Property Market 2.0 in Ireland. The country’s “Property Market 1.0” was built in the late 19th and early 20th centuries, when successive London administrations made huge amounts of credit available at preferential interest rates so that tenant farmers could buy their plots. Throughout the 20thcentury, the urban poor remained as tenants while only the tiny but growing urban middle class took part in any sort of mortgage market.

“Property Market 2.0” emerged in the 1980s and 1990s, as competition among banks and building societies brought mortgages to the masses. Barely had this transformation time to take hold, though, then Ireland was a member of the Eurozone, with inappropriately low interest rates and a practically infinite supply of credit from global credit markets. Along with lax regulation of the banking and building sectors, the result was perhaps the biggest national property market boom and bust of the modern era.

Learning from the (recent) past

What will “Property Market 3.0” look like? As yet, nobody knows. It is safe to guess that, at least in its early days, it will be haunted by what has just happened. The worry is that initial prudence will eventually decay away, as institutional memory fades. The nightmare scenario is that at some point in the future, the 2020s or the 2060s, the lessons we’ve learnt are thrown away with a simple “Well, that could never happen now/This time it’s different/Insert self-deception here”.

So what can we do? An idea I’ve explored at length elsewhere is the importance of information. Having an official real-time database of transactions prices doesn’t just help people like me churn out research papers. It gives normal people the information with which to make informed decisions about whether to buy or rent and for how much. And in doing that, it actually reduces the chances of a bubble as bad as the one we’re recovering from now happening again. The national house price register looks like it is now government policy, so today, I’d like to focus on a couple of other ideas.

full article at source: http://www.ronanlyons.com/2011/05/31/ideas-for-building-property-market-3-0/

Comment:

Ronan Lyons has posted a new on the Irish property market

However I do not agree that home ownership in Ireland should have a significant impact of a future Irish economy as I am advocating a totally different approach to home ownership in Ireland.

Firstly I do agree, that there should be no variable interest rates on home mortgages .But I also believe that the Banks should not be involved in giving out such mortgages in the first place .I do not accept that home ownership should be subject to the commercial turbulent system  we currently are enslaved to. No we need to have a system administered by the post office and credit unions where by a citizen can take out a fixed term loan at a fixed low interest rate of not more that 2.5%.This then can be passes on to siblings of paid off with a adequate insurance police in place, this insurance should also set up by the government. The point is that home ownership should not be subject to commercial dictates whatsoever .However it will be necessary to have some rules for example the mortgage amount to be taken out will only cover that of an average price home within the state and so if the price of a property is higher then the buyer must have the difference amount themselves Banks will not be able to top up the amount and take in as security the deeds of the property as they will be excluded from doing so.  To be clear I am talking about home ownership and not commercial buildings or business .The citizens will only be allowed to get one and only one of these mortgages, Moving up the property ladder will be deemed as a commercial move and thus subject to a commercial bank mortgage. This government backed move will only be for ones first home.

This idea may have some more thought to be invested in it but I think it is well worth a shot.

The bottom line is, home ownership should not be subject to any commercial interests but cater for a social necessity.

Irish mortgage market is flat-lining

By Namawinelake

This morning the Irish Banking Federation (IBF), which represents more than 95% of mortgage lending in the State, released mortgage lending date for quarter one of 2011 – the data is here and the press release is here. The figures paint a picture of a property market that is seizing up. Superlatives come in abundance : €577m was advanced during the quarter which is 96.91% down from the peak in Q3, 2006; the average investment mortgage is now €144,000 which is 56% down from peak and indeed 24% down from the previous quarter which is indicative of fire sales or tightening in lending criteria; just 15 mortgages a day were advanced to First Time Buyers (FTBs) during the quarter. The numbers are pretty bad. Of course the stress test and bank restructuring announcements were made at the end of March 2011 so any positive effects of these announcements will not be captured in the figures released today.
As for the outlook, there is a commitment by the incoming government to ensure there is €10bn of new lending per annum in the economy over the next three years and NAMA has flown a kite that it may part-fund purchases of property from its portfolio. The economy remains decidedly weak though the ESRI broke ranks last week and suggested GDP might grow by 2% in 2011. The Allsop/Space auction on 15th April, 2011 laid bare the extent of the decline in Irish property prices with achieved results suggesting we were (unscientifically) 60% off peak actual prices. Generally falling wages, stagnant population due to emigration and the market-distorting effects of NAMA, restraint on repossessions and bank foreclosure sales are all making for a dysfunctional market at present and it is hard to see any significant recovery in lending figures in quarter two.
The IBF numbers are significant though in their implication on the rental market. If potential buyers are sitting on their funds or are unable to get loans, then renting is really the only alternative which might strengthen demand and stabilise prices. Recent data from DAFT.ie and the CSO suggests that rent levels are stabilising.
And here are the numbers. First up, loan volumes (that is, number of new mortgages advanced) – RIL means Residential Investment Loan.

Next up, the value of new lending

And lastly the average of each loan advanced. You CAN’T equate this with average house price because we don’t know the proportion of the purchase price accounted for by the mortgage (was 100% and more during the peak, is typically 70-92% now).

Commenting on the data this morning, IBF Chief Executive, Pat Farrell, stated: “The economic situation remains challenging and prudence remains the order of the day.  For customers that means manageable borrowing and for financial institutions it means prudent lending.”

Source:http://wp.me/pNlCf-1pz

Comment:

There is no reason for anybody to take out loans and commit themselves to years of misery especially when we don’t know what new taxes the government are going to invent .baring in mind we expect to have a new property tax and new water charges imposed on all of the hapless homeowners in the country .Perhaps they will introduce a new window tax and what about a shower tax ,maybe even a new tea tax !

New Residential Property Price Index

New index shows that Irish residentialproperty prices fell 11.9% in the year to March 2011By Finfacts Team
May 13, 2011 – 3:07 PM
 
Source: CSO

The Central Statistics Office today launched a new national Residential Property Price Index, pdf, which provides data from the beginning of 2005 to March 2011. The series is based on transactions which are funded by residential mortgages and covers both houses and apartments. The first index report shows that Irish residential property prices fell 11.9% in the year to March 2011.

The CSO says that on a monthly basis the overall national index grew by close to or above 1% in almost every month between the period June 2005 and March 2007. Between April 2007 and November 2007 there was little movement in the index and it was in this period that prices were at their highest, approximately 30% higher than in January 2005. In December 2007 a consistent downward movement in prices began with the rate of decline accelerating in 2009 and into early 2010. The monthly rate of decline increased to 1.7% in both February and March of this year; the largest monthly decreases since July 2009.

House prices in Dublin are now some 45% lower than at their highest level in early 2007. Apartments in Dublin are 52% lower than they were in February 2007. The fall in the price of residential properties in the Rest of Ireland is somewhat lower at just over 35%. Overall, the national index is almost 40% lower than its highest level in 2007.

The results show that

  • At a national level residential property prices in the year to March 2011 fell by 11.9%. Prices in Dublin fell by 13% in the year while outside of Dublin prices fell by 11%;
  • Residential Property Prices, at a national level, reached their highest level in mid 2007 and in Dublin somewhat earlier, at the beginning of the second quarter of 2007;
  • Since reaching their highest level, Residential Property Prices have fallen by almost 40% nationally, with Dublin experiencing the largest decline (-47%), while in the rest of Ireland prices fell at a somewhat lower rate (-35%).
  • The largest price decline was for Dublin apartments where prices have fallen by 52% since February 2007.
  • At a national level, houses have fallen by 11.5% in the year to March and by 38% since they reached their highest level in 2007. Nationally, apartments fell by 15.2% in the twelve months to March and by 51% since February 2007.

The CSO says the new index meets a national need for an official measure of the change in residential property prices and will also fulfill a new EU data requirement which obliges all Member States to produce comparable national residential property price indices on a quarterly basis from 2012. The new national index will be published on a monthly basis approximately six weeks after the end of each reference period. The next release, for April 2011, will be published in early June.

  • The permanent tsb/ESRI House Price Indexis no longer being produced.”This report is not before it’s time and will go a long way in eliminating a black hole in one important area of the property market; house prices,” said Frank Conway, a director with Irish Mortgage Corporation.First time buyers are the single biggest segment of the property market currently, making up 41% in the 4th quarter 2010 (Source: IBF/PwC Mortgage Market Profile).

    “The first time buyer market is beset by uncertainty. Property prices, job stability and access to funding make up a troika that continue to dampen appetite and peoples ability to purchase. However, the launch of the property price report from the CRO will provide certaintly in respect of property prices. Access to funding and job certainty also need to be addressed before confidence can return,” said Conway.

    On the contents of the report, Conway said this report highlights property prices are still falling. However, the aggregate falls of 40% nationally is broadly in line with similar price drop estimates issued previously and contradicts smaller price drop estimates issues by a major ratings agency in recent weeks.

  • source:  http://www.finfacts.ie/irishfinancenews/article_1022295.shtml

Comment:

I remember the last time government said that it was now time to buy a property.As for the banks, well they appear to be hounding some people to the grave now!  Don’t fall for the vested interests with 300,000 houses empty and 60,000 leaving the country every year, no jobs new property taxes, water charges and if you are stupid enough to have put something into a pension you are now been robbed again from the very people who promised to make the bondholders pay at the last election .My advice stay away from property as I expect it will have to fall at least another 35 to 45% .Just compare our prices to those of Europe!

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