The Irish squatters taking on empty homes and a bankrupt system. Authorities refused to publish house price warnings in 2004. This post was written by Frank Barry Anthony Murphy, now at the Dallas Fed, is a renowned Irish econometrician with a strong research interest in housing markets.
Back in 2004 he was commissioned by the National Competitiveness Council to study the competitiveness implications of the housing boom. The first paragraph of his report read: “Ireland’s booming housing market has attracted and continues to attract a considerable amount of attention, both domestically and internationally. Irish house prices are extremely high by historic and international standards, both in absolute terms and relative to incomes. The strength and duration of the house price boom is unique. Ireland's house prices at lowest levels since 2000. Houses in Dublin, where prices have crashed in the past five years.
Photograph: Barry Mason/Alamy Property prices in Ireland are in freefall, according to housing analysts, whose latest figures show that prices in Dublin have collapsed by 65% in five years and by 60% across the country. Irish banks face mortgage strikes. It's been a tough time to be Irish.
The boom years are a distant memory and now there's just austerity and a long haul back to recovery for a nation crippled by the reckless lending of its banks. Central Bank of Ireland - Central Bank Publishes New Research on Mortgage Arrears and Negative Equity. The Central Bank of Ireland today publishes new economic research on “The Distribution of Property Level Mortgage Arrears”.
The research analyses the position of mortgaged households in the areas of arrears and negative equity. The analysis in the paper draws on loan-level data collected for the March 2011 Financial Measures Programme Report. This data records the arrears position of each of the loans in the four institutions’[i] books as at end-2010. The equity position of each household is updated to September 2011, using the CSO house price index. London property bubble is good news for NAMA. As shares across the globe tumble investors are fleeing to safe havens such as gold and the Swiss franc.
But they are also turning to trophy properties in London, which is why the National Asset Management Agency (NAMA) may have been right earlier this year when it let slip it was launching a £16.5bn firesale of all its London properties which include the Citigroup tower in Canary Wharf, part of Leicester Square and the Louis Vuitton building in Bond Street. Critics believe the Irish bad bank would have been better holding on to London assets for the long term as yields on rent and prospects for capital growth are good, unlike Dublin, where offices lie empty throughout the city and chances of price increases are nil to slim over the next five years. But it turns out this week that NAMA is looking very prescient. Ireland’s speculative mania. His reasoning seems to be two-fold. 1. everyone is guilty (so, effectively, no one is) 2.
In the report (pp. 96) he makes the point that "There is regret, incredulity and guilt among them [the authorities, bankers] at the lending and funding policies pursued and the lack, at the time, of any recognition of what was happening. Morgan Kelly warns of new middle-class debt default. Irlande: le pays des maisons fantômes. Leur nombre n'est pas encore connu précisément, mais le phénomène lui est tristement célèbre en Irlande.
Les "ghost estate" ont fleuris un peu partout à travers le pays: des logements construits en nombre et aujourd'hui simplement abandonnés. Un fonds de 5 millions d'euros a été mis à disposition des autorités locales, par le dernier gouvernement pour régler le problème des "ghost estate". Des complexes immobiliers construits dans les années 2000 et aujourd'hui abandonnés, souvent mal ou pas entretenu. Ils ont été estimés à près de 2800 par un rapport du Ministère de l'Environnement en octobre dernier.
Cela n'inclut pas les 20000 chantiers qui n'ont jamais été terminés et les 23000 maisons terminées mais inoccupées. L'insalubrité guette Dans le courant du mois de février, un autre rapport montre que près de 400 bâtiments abandonnés sont vétustes à deux doigts de s'effondrer. Les restes du Celtic Tiger. Ireland Sets Up Its 'Bad Bank' Agency. Ireland's little secret - tracker mortgages. No soothing mood music from Bank of Ireland concerning mortgage holders who are in difficulty.
Bargain time as thousands of houses to be sold - National News, Frontpage. BARGAIN hunters will be tempted by thousands of cut-price houses and apartments over the coming months as NAMA offloads a huge stockpile of assets. Finance Minister Michael Noonan yesterday ordered the agency to start selling both commercial and residential property -- worth up to €2.7bn -- as soon as possible. Repossession: why we need a new bank directive. Repossession's terrible toll. Repossessions affect homeowners from all walks of life.
Photograph: Peter Macdiarmid/Getty I met a lady last week, a lovely lady with two children, whose husband had taken his own life. They had borrowed on a family home, gone into arrears and remortgaged to clear the arrears on a previous mortgage. 16/10/2011: Negative Equity and Debt Restructuring. This is unedited version of my article in Irish Mail on Sunday (October 16): This week, we finally learned the official figure for what it would cost to address one of the biggest problems facing this country.
According to the Keane Report - or the Inter-Departmental Mortgage Arrears Working Group Report - writing off negative equity for all Irish mortgages will cost “in the region of €14 billion”. Doing the same just for mortgages taken out between 2006 and 2008 would require some €10 billion.