• Due to a glitch in the old vBulletin software, some users were "banned" when they tried to change their passwords at the end of February. This does not apply after the site was converted to Xenforo. If you were affected by this, please us viua the Contact us link in the footer.

Is a further huge crash in house prices imminent?


Glucose

Well-known member
Joined
Mar 31, 2010
Messages
851
The former chief executive of Bank of Ireland Michael Soden gave an interview with Ivan Yates on the breakfast show on Newstalk just before 8 this morning.

Did anyone else hear it?

I found it extraordinary.

He basically said NAMA was continuing to cause paralysis in the property sector and that NAMA needed to start unloading its property portfolio on to the market.

Doesn't that not make a mockery of the Governments stance on NAMA?
 


nonpartyboy

Well-known member
Joined
Dec 24, 2006
Messages
6,853
The govt have just about made every mistake they possibly could, Nama was effectively designed to stop property prices falling. If you then cut the income of every person in the country, how can they be expected to afford current prices ? It's the worst of both worlds. House prices will go where they are going , it is simply inevitable but this government will have pissed away further billions in a vain attempt to prevent.
 

ballot stuffer

Well-known member
Joined
May 21, 2007
Messages
1,503
Unemployment, mortgage arrears, crippled banks, reduced wages, huge unsold housing stock the list goes on.
I can't think of any compelling reason why prices won't crash. NAMA is just delaying the inevitable.
 

firefighter

Well-known member
Joined
Sep 21, 2010
Messages
334
Nope. The social welfare system has established a rent floor. Therefore, a property's minimum value is x20 the 11 month rent.
 

McDave

Well-known member
Joined
Jul 10, 2008
Messages
13,555
The former chief executive of Bank of Ireland Michael Soden gave an interview with Ivan Yates on the breakfast show on Newstalk just before 8 this morning.

Did anyone else hear it?

I found it extraordinary.

He basically said NAMA was continuing to cause paralysis in the property sector and that NAMA needed to start unloading its property portfolio on to the market.

Doesn't that not make a mockery of the Governments stance on NAMA?
Yes, I heard it. Even if it is aimed at 'sorting out' banks, NAMA is a massive intervention in the property market. And so many vested interests in the property market (now including NAMA) want to keep prices up.

But the economy won't start moving again until prices and costs return to levels which relate to people's incomes. Wittering on about increases in exports in terms of GDP is only further evidence that the Irish state is unable to accept the facts of life the real economy.

When Michael Soden opined that property decline still has further to go, even if we may be close to the bottom, he's confirming what the dogs in the street know - that the economy is still in recession, and we're doing relatively little to rectify the problems on the ground.
 

'orebel

Well-known member
Joined
Nov 13, 2009
Messages
20,532
The former chief executive of Bank of Ireland Michael Soden gave an interview with Ivan Yates on the breakfast show on Newstalk just before 8 this morning.

Did anyone else hear it?

I found it extraordinary.

He basically said NAMA was continuing to cause paralysis in the property sector and that NAMA needed to start unloading its property portfolio on to the market.

Doesn't that not make a mockery of the Governments stance on NAMA?
The govt. stance on NAMA is a joke. The only effect NAMA is having is to keep the market stagnant. If property prices had been allowed to find their own level the market would have started moving again.
As was said above, we have the worst of both possible worlds.


NAMA money pit could be our economic Stalingrad

Inexplicably, NAMA is our economic Stalingrad and it scares all sensible people. It is based on the “big lie” that to lose here would spell disaster. In fact, the opposite is the case. Why wouldn’t you want to invest in Ireland once the banks are wound down? You get a smart population, that isn’t being mortgaged for the mistakes of the few.

The reason we must fight NAMA at every turn is because it is the economics of fanatics and the whole world can see this. It will keep money away from the country, not the other way around.
 
Last edited:

Glucose

Well-known member
Joined
Mar 31, 2010
Messages
851
Nope. The social welfare system has established a rent floor. Therefore, a property's minimum value is x20 the 11 month rent.
What Michael Soden is basically saying is that there needs to be a firesale/auction of the vast quantity of property assets NAMA is amassing to get the property market out of paralysis.
 

LeDroit

Well-known member
Joined
Mar 11, 2010
Messages
1,771
Nope. The social welfare system has established a rent floor. Therefore, a property's minimum value is x20 the 11 month rent.
+1

The Govt through the SW system have set a false floor in rents and through NAMA have set up a false floor in purchase prices. Through their refusal to address existing commercial upward only leases, they have also set a false floor in commercial rents causing business closure and unemployment in the SME sector.

The Market will not be bullied and will not be conned which is why we have stagnation across economy. Let the false floors go. The Market will re price, re boot and return to activity. Otherwise we will be sitting on a slow puncture deflationary bubble for decades.
 

Glucose

Well-known member
Joined
Mar 31, 2010
Messages
851
Yes, I heard it. Even if it is aimed at 'sorting out' banks, NAMA is a massive intervention in the property market. And so many vested interests in the property market (now including NAMA) want to keep prices up.

But the economy won't start moving again until prices and costs return to levels which relate to people's incomes. Wittering on about increases in exports in terms of GDP is only further evidence that the Irish state is unable to accept the facts of life the real economy.

When Michael Soden opined that property decline still has further to go, even if we may be close to the bottom, he's confirming what the dogs in the street know - that the economy is still in recession, and we're doing relatively little to rectify the problems on the ground.
Thank god someone else heard it. I was more shocked hearing Michael Soden talk this morning then when i heard Brian Cowen on Morning Ireland last week.
I literally looked at the radio.
 

karldaly

Well-known member
Joined
Feb 26, 2009
Messages
465
"He basically said NAMA was continuing to cause paralysis in the property sector and that NAMA needed to start unloading its property portfolio on to the market."
.
There could be a very good reason why NAMA is having a problem unloading its property portfolio on to the market and it could have something to do with 'title.'
 

Dreaded_Estate

Well-known member
Joined
Sep 5, 2007
Messages
3,719
Nope. The social welfare system has established a rent floor. Therefore, a property's minimum value is x20 the 11 month rent.
I think a 5% yield on property is too low but even at that the average rent is €757 and falling. That would put the average property at €166k still significantly below the current price
 

the_rebubblican

Well-known member
Joined
Mar 24, 2010
Messages
344
With the state essentially holding through NAMA a huge portfolio of property assets the remaining "free market" is an artificial one and not fully reflective of true forces of demand and supply. Dublin houses for young families are seeing some demand in certain postcodes especially in the south of the city. If NAMA's portfolio affects this nascent demand it will certainly trigger a further collapse. I'm not sure what range of properties NAMA has to affect these properties however the real threat to residential demand are I'd imagine apartment complexes within Dublin. As the property market is almost totally opaque to systemic analysis due to a dearth of clear indicators the age old tradition of spin and story will replace hard facts. The commercial market is certainly in peril though. The quicker NAMA has a fire sale of those assets the better.
 

Glucose

Well-known member
Joined
Mar 31, 2010
Messages
851
"He basically said NAMA was continuing to cause paralysis in the property sector and that NAMA needed to start unloading its property portfolio on to the market."
.
There could be a very good reason why NAMA is having a problem unloading its property portfolio on to the market and it could have something to do with 'title.'
You still hear Government ministers saying NAMA will make a profit. Hasn't the former Chief Executive of Bank of Ireland now let the cat out of the bag.
 

captainwillard

Well-known member
Joined
Mar 2, 2010
Messages
2,897
The housing bubble started in 1996/7. It was in full swing by 1998 and after a brief pause in 2001, really took off again for a further five years.

We have only retraced half of that period. Anyone who buys a house now will surely be nursing heavy falls in the next five years.
 

firefighter

Well-known member
Joined
Sep 21, 2010
Messages
334
Dreaded_Estate;3026112[B said:
]I think a 5% yield on property is too low[/B] but even at that the average rent is €757 and falling. That would put the average property at €166k still significantly below the current price
Depends what kind of property it is. If it's a Georgian red brick inside the canal that's been around 100 years 4%, maybe even 3% is ok.

A semi-D in Raheny is ok around the 5% or 7% mark.

Somewhere like Tyrellstown would require 8% to 10%.

Holiday homes in Sligo: well, when you sail a yacht out of the yard, you knock 50% off it's sale price. Leave it floating around in Dun Laoighaire harbour for 10 years and you'll wish you had of topped up your pension @ 41% tax relief.

I'd never buy an apartment. I'd certainly rent one and pass off all the management dealings to the landlord.
 

captainwillard

Well-known member
Joined
Mar 2, 2010
Messages
2,897
Depends what kind of property it is. If it's a Georgian red brick inside the canal that's been around 100 years 4%, maybe even 3% is ok.

A semi-D in Raheny is ok around the 5% or 7% mark.

Somewhere like Tyrellstown would require 8% to 10%.

Holiday homes in Sligo: well, when you sail a yacht out of the yard, you knock 50% off it's sale price. Leave it floating around in Dun Laoighaire harbour for 10 years and you'll wish you had of topped up your pension @ 41% tax relief.

I'd never buy an apartment. I'd certainly rent one and pass off all the management dealings to the landlord.
Wow, you are really flying around with those percentages. The difference between 5% and 7% is equivalent to more tan 30% swing on house prices.

House prices will only stabilise when it is cheaper to buy than rent property, taking into account repair, maintenance etc.
 
Joined
Aug 6, 2007
Messages
22,910
+1

The Govt through the SW system have set a false floor in rents and through NAMA have set up a false floor in purchase prices. Through their refusal to address existing commercial upward only leases, they have also set a false floor in commercial rents causing business closure and unemployment in the SME sector.

The Market will not be bullied and will not be conned which is why we have stagnation across economy. Let the false floors go. The Market will re price, re boot and return to activity. Otherwise we will be sitting on a slow puncture deflationary bubble for decades.
So you want the Govt to retrospectively tear up commercial contracts at will.

Nice BUT are you prepared for the consequences ?

A Leaseholder who suffered as a result of this would be quite correct in going to court and would quite likely WIN.

A Commercial contract exists between 2 parties and Govt has no right in retrospectively going back and siding with a single side for NO BENEFIT.

The idea that its Commercial Rents that are holding back SME's and Businesses is bogus as there will be always Leaseholders / Landlords willing to look at different terms.
 

Glucose

Well-known member
Joined
Mar 31, 2010
Messages
851
The housing bubble started in 1996/7. It was in full swing by 1998 and after a brief pause in 2001, really took off again for a further five years.

We have only retraced half of that period. Anyone who buys a house now will surely be nursing heavy falls in the next five years.
The banks will be cleansed of their toxic loans and all the tranches of loans will soon be transferred to NAMA.

What is the point of NAMA?....To keep the property sector in cryogenesis.

Michael Soden is saying the property market is in paralysis because of NAMA.

Michael Soden says NAMA needs to offload its assets. FF say NAMA will make a profit

It doesn't add up.
 

dalywise

Well-known member
Joined
Feb 23, 2008
Messages
811
Worst thing NAMA is doing is that it is interfering in the market. (The same policy that FF told use for many years was wrong).

It is stopping the true price of property being known. Property prices and renst are crucial to competitiveness. One of the reasons we lost competitiveness in the past 10 years was the price of property. It would be of huge benefit to the economy if property prices were allowed to fall to their natural level. The benefits would flow quickly to SMEs and others and especially new start-ups by way of lower rents.

Even more benefit would result if the governemnt legislated to reverse the riciculous "upwards only" rent reviews that they allowed for the past 30 years.
 

New Threads

Popular Threads

Most Replies

Top