Ulidia

Yes - Ulster Bank is part of the RBS Group and, furthermore, underwent an extensive integration programme in 2006 so now uses RBS systems i.e. the Cash ISA product is held on the same system as that of RBS. That said, Ulster Bank retains its own responsibility for interest rates (of savings and loans) i.e. the pricing decisions are taken in Belfast so that's the reason for the disparity. In actual fact, the disparity may not be so significant as I think the higher rates for RBS / Natwest ISAs include an additional one year bonus of 2% (only applies to ISA funds transferred in, rather than new business). The Post Office's 6.25% rate is probably the best in the marketplace.

Great post .... echoes my sentiments 100% but in a more articulated, considered fashion

Good luck with the investment. However. please note that the developer may not have full discretion over price i.e. any price reduction may need approval from the supporting bank(s).

True that prices are continuing to fall. However, the difference between the US and NI is that houses are continuing to sell in US if priced realistically. For example, sales of houses in San Diego during Sept 2008 were up 65% from the Sept 2007 total. Admittedly, Sept 2007 was a particularly bad month and, furthermore, most sales in Sept 2008 were repos ..... but it illustrates that, if the price is right, people will buy. I find it hard to generalise about the US property market since its so regional i.e. cities such as Miami, San Diego, Las Vegas and Phoenix have been hit much harder than the national average since there was alot of focus upon new build condos whereas other cities such as Chicago have held their value during the slump.

I purchase condos in South East Asia. Is it safe? Hell no .... but I understand and appreciate the risks. In terms of financing, I use Asian banks - however, the possibility to gear is fairly limited since its usually rare for a foreigner to obtain more than 50% / 60% finance in these markets.

Interesting article. I wonder as to the fall-out of the collaspe of the construction business upon the local banking industry since 80%+ of non-personal lending was to that sector.

Back here for a few weeks. I love Northern Ireland but it can be a difficult place to love. Interestingly, Belfast got a great write up in the NY Times on Sunday .... full front page and middle page double spread of its Travel Section so expect a few more US tourists over the coming months

Great perspective In terms of other owners, I don't know ..... but, as an investor in high-rise condos elsewhere, if I can be of any assistance, just ask.

I assume that the developer is either worried about setting a precedent or, alternatively, that his / her bankers would need to give authority for a price drop. Unlike most on this forum, I'm an apartment fan and I think it would be great to see a few high quality high-rise residential buildings in Belfast. That said, the price for these developments was much too high and, furthermore, I fear for their viability i.e. they were conceived to appeal to a non-discerning BTL market that is no longer here.

Just thought that I would kick-start this thread again, since I arrived back into Northern Ireland this morning (I'm on annual leave) after two weeks in San Diego, one of the cities that has been most impacted by the US property boom / crash. My partner is from San Diego and still owns a house there .... she bought it for $125k or so in 1994 and, at the height of the boom, it was worth circa $700k. At present, similar houses in the neighbourhood are selling for circa $450k - and, yes, they are selling if priced at that sort of level. $450k will buy a 1910s/1920s bungalow which is larger than most NI houses (ie circa 1500 sq ft), has front and back gardens and is within 1 to 2 miles of the central business district. In comparison, real estate in UK (esp NI) remains bad value for money. I go to Southern California often and, this time, the credit crunch really did seem to be having an impact .... ie each Sunday when in San Diego, we usually go to a great diner for breakfast. Its usually a case of queuing for 15 mins or so but, this time, there were many empty tables. Similarly, we went to a downtown cinema on the first evening showings of Religulous and W and the theatres were never more than 25% full. For me, the credit crunch has some good aspects. I am a collector of rare NY Yankees memorabilia and was able to pick up some real bargains last weekend. Interesting (and accurate) that the media attributed the low prices to the credit crunch: http://www.cbsnews.com/stories/2008/10/18/...in4530875.shtml

Manila could offer that option since Citi's services located there are not to support Asia but, rather, primarily the US market .... with the result that most of their staff work shifts ranging from 12am to 9am or 3am to 12noon !!! Business Processing / Customer Service Centre buildings in Manila are usually much busier in the twilight hours, rather than the normal daytime

Obviously not a like-for-like comparison, but Citi has recently been closing some of their large business processing / customer service departments in Manila, Philippines (English-speaking staff, university educated, paid in the region of $20 per 12 hr shift). That said, labour laws in Philippines mean that they can make decisions like that much easier than most of the western world.

Northern is owned by Danske Bank of Denmark. Denmark has been suffering its own house price decline (following from years of significant prices rises) so the situation appears similar to UK. In addition, similar to RBS, Danske Bank has had an aggressive expansion and acquisition strategy in recent years so I'd imagine capital is in short supply there too. Whilst Ulster Bank retains its own banking licence, Northern Bank's RoI counterpart (National Irish Bank) no longer has its own banking licence and its rumoured that Northern Bank will surrender their onw banking licence in due course also. First Trust Bank is a part of the AIB Group and, obviously, Bank of Ireland is a part of the UK subsidiary of the overall Bank of Ireland Group. AIB Group is better diversified outside of the island of Ireland than Bank of Ireland so may be better placed to withstand the downturn. Personally, I would imagine that one low-level consequence of the current financial markets turmoil will be that the NI banks will no longer be allowed to issue their own banknotes. This right is allowed for under 19th century legislation and the notes issued do not need to be fully backed with the Bank of England (in practice, they are only backed over the weekend .... which has the consequence of the NI banks obtaining interest-free funds from the BoE for 5 days out of every 7). HM Treasury had already been looking at this, and the rights of the Scottish banks to issue notes, but it was "parked" by Gordon Brown, as Chancellor, as he was concerned lest he upset the powerful Scottish political lobby in the run-up to becoming Prime Minister.

I assume that he should take that as a compliment

It depends on many factors, including the Contract for Sale ... some of the contracts actually cap any loss at the amount paid out by the would-be purchaser at any given time. That said, its probably more due to a badly drafted contract, rather than generosity on the part of the developer, given that these contracts are notoriously anti-consumer. There is some legal precedent (in England, if not in NI directly) for courts not allowing developers to recover more than the amount of the deposit but the overall picture is a confusing one ... the likelihood is that there will be more legal certainty as more developers seek to recover costs of the multitude of under construction apartment buildings in the UK today. Even at that, I imagine many developers won't take legal proceedings against their clients .... given that in many cases, their clients simply won't have the financial means to complete and, therefore, its simply adding more cost for the developer. Time will tell ....

Are there indications that the development will not be constructed? I saw the show apartment and was impressed (despite my general cynicism of property showrooms). I haven't seen Victoria Place but it certainly looked better than some of the recently constructed apartment developments I've seen in Belfast (some of which are scandalous - for example, Library Square). Ultimately, over the long-term, good property management is key to a high-rise development retaining its comparative value.

I saw these listed on Property News and cannot believe that they would sell at those sort of prices in today's environment. In particular, the dimensions of the second bedrooms in both units are very small (less than 10sqm in both cases), indicating the floorplans are geared more to BTL-ers than those purchasing a unit to live in. I can only speculate that these two units were sold earlier and are now being listed again as "sale agreed" ..... to show the comparative "good value" of another 2 bed apartment in the development which is being marketed by the same EA for the lower price of £265k.

Most NI politicians have a very schizophrenic approach regarding the public sector ..... on the one hand, they claim that we need to reduce our over-reliance on the public sector by winning inward investment, increased innovation and efficiency etc. However, they are quick to shelter behind the public sector cushion when the economy is less stable Furthermore, I thought in this brave new Northern Ireland, we were going to have a fundamental reform of the public sector .... with the loss of a very significant number of jobs

I would assume that the Anglo-Irish loan book has a higher property ratio than any of the other Irish banks and I'd say it is higher than 70%. I could be totally wrong on these assumptions but commercial and property development lending was basically the only thing that Anglo-Irish concentrated on over recent years ..... and, for some years, it seemed to be an incredible success story as they ate significantly into the market share of the most established Irish banks and saw their share price increase dramatically.

Looking at the dimensions in the agent's description, its a very small house for a detached 4 bedroom property.

1 - There are signs of increased liquidity in the marketplace, but no where near the pre-credit crunch levels. Furthermore, its very bullish to say that house prices will have gone back up in a year's time and, IMHO, it would be unimaginable for house prices to revert back to their peak levels in the next 12 months (I'd say that the odds would be in the region of 1000/1). When the CEO of Nationwide, a business that relies upon a thriving housing market for its balance sheet growth, states that it will be 2010 until the housing market shows signs of recovery, your estate agent appears to have his / her head in the sand .... or will try any tactic out of desperation for a sale; 2 - This funding will be insignificant in terms of impact to house price dynamics; 3 - Its a fallacy to think that house prices cannot go down to rateable value .... in fact, in many parts of the world due to recent price falls, the value of property is actually below rateable value (New Zealand being an example in point - and with similar dynamics to the NI market in terms of steep rises, followed by sharp decline / stagnant market); 4 - There is more supply now than there was in 2005 / 2006 (and the lack of supply contributed to the bubble). However, that doesn't get over the simple issue of why buy now when the market is declining and there are likely to be further bargains / lower prices over the coming months ahead. In addition, there are many new builds that are not on the market yet so there's no risk that the supply is going to dry up anytime soon ... far from it. Furthermore, with the net migration trends (Eastern Europeans leaving etc), it can easily be argued that demand for housing is declining. Just my thoughts ....

Is that an example of bullish behaviour? Do you think asset (in this case, real estate) prices will increase or decrease over the coming years?

Sorry to hear this. In simple terms, I don't have an answer. I do, however, hold some overseas property investments and the preliminary contract is usually explicit in terms of stating if, and how, the contractual rights can be sold on to another party. In my (fairly limited) experience, its usually possible to sell the rights on so long as you have already invested a certain minimum % of the purchase price to date (this would usually be less than 50%).

I actually found that Zoom were cheap / no frills but that their actual prices were not. I was never able to price a return Belfast / Toronto flight with them for less than £550 or so and their prices for the London / San Diego route (only operated for one month before the airline closed ) were considerably higher than most transatlantic carriers (although it was the first non-stop scheduled service from UK to SD so would have been useful for me). I always found flyglobespan offered a reasonable value service for Belfast flights to Canada and, furthermore, the Continental service to Newark and the multitude of connection options from there is invaluable. I had heard much talk of another US airline coming into Belfast, given the success of the Continental venture, and more competition would be good all round but I'm assuming thats' now on the long-finger due to the economic climate.

So do they have cashflow issues or not? The reduction in unit prices would suggest to a naive person such as myself that they are looking cash quickly (or being lent on by bankers) so aren't as financially stable as some may like to think.