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Irish Banks Can't Sell Their Biggest Product

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Apologies if there is an Ireland thread, if so, please merge. I couldn't find it.

Bloomberg: Irish Banks Face Consumers Who Don’t Want Their Biggest Product

Ireland’s banks are facing an unusual problem: hardly anyone seems to want a mortgage from them.

Allied Irish Banks Plc said home loans were the slowest growing part of its Irish lending in the first half, while Bank of Ireland issued more than double the amount of new mortgages in the U.K. than in its home market. About 60 percent of homes in Ireland are being bought without a mortgage in recent years, up from 25 percent a decade ago, the central bank said in July, indicating a sharper drop in the market for home loans than analysts expected.

While the nation’s economy has improved, consumers are still focused on paying down debt from the last crisis, as Irish households remain the fourth-most indebted in the European Union. That’s left the mortgage business at about half what analysts estimate should be normal and crimped banks’ ability to show revenue growth ahead of 2017, when the Irish government wants to sell part of its 99 percent stake in AIB and Bank of Ireland aims to reinstate its dividend.

“To a large extent, the banks’ ability to grow their business is out of their hands,” Diarmaid Sheridan, an analyst at Davy, Ireland’s largest securities firm, said in an interview.

At the height of the credit boom in 2006, Irish lenders wrote almost 40 billion euros ($45 billion) in new mortgages. Last year, that figure was 4.9 billion euros, according to industry group Banking & Payments Federation Ireland. A normal mortgage market would be 8 billion to 10 billion euros per year, estimates Philip O’Sullivan, an analyst at Investec Plc in Dublin.

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What's the phrase ? 'Debt repulsion' or similar .

once bitten twice shy, unless your British.

They use to call the Paddys Thick....I think we all know who the real idiots are.

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The reason for the lack of buyers is down to stringent rules set down by the Irish regulator. Basically, unless you're a first time buyer, you are restricted to borrowing 80% of the value of a property. The amount you can borrow is set at a max of 3.5x gross income.

https://www.centralbank.ie/press-area/press-releases/Pages/CentralBankannouncesnewregulationsonresidentialmortgagelending.aspx

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So, even though they had a pretty huge crash, you are saying that prices are still too high for normal people to buy at sensible income multiples. Sure they will cotton on to this to 5x gross income soon! :P oh, and throw in 40 years mortgages too! :P

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The reason for the lack of buyers is down to stringent rules set down by the Irish regulator. Basically, unless you're a first time buyer, you are restricted to borrowing 80% of the value of a property. The amount you can borrow is set at a max of 3.5x gross income.

https://www.centralbank.ie/press-area/press-releases/Pages/CentralBankannouncesnewregulationsonresidentialmortgagelending.aspx

The Irish took their medicine, unlike the Brits, one of the reasons for me going there.

As for the Brits being the thick ones, yeah that might explain why you don't hear Irishman jokes anymore...

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The reason for the lack of buyers is down to stringent rules set down by the Irish regulator. Basically, unless you're a first time buyer, you are restricted to borrowing 80% of the value of a property. The amount you can borrow is set at a max of 3.5x gross income.

https://www.centralbank.ie/press-area/press-releases/Pages/CentralBankannouncesnewregulationsonresidentialmortgagelending.aspx

Additionally, there are huge numbers of law firms who are not on the mortgage panels for the Irish banks because they tend to require personal guarantees from the solicitors acting whilst being exceptionally difficult to deal with in even the most basic transactions. Consequently many brokers also put them to the back of the queue as not surprisingly they prefer to receive their commission at some point before the end of time.

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Apologies if there is an Ireland thread, if so, please merge. I couldn't find it.

Bloomberg: Irish Banks Face Consumers Who Don’t Want Their Biggest Product

..obvious why...many borrowers are under water since the recession ...and house prices have not fallen to realistic levels ..why borrow in such a shaky market........they don't have a Government bribing them into a dead market... :rolleyes:

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