Media articles from THE REPUBLIC OF IRELAND

[Democorruptcy]

Calls for property tax exemption

http://www.irishexaminer.com/business/cwkfcwmhidcw/rss2/

The buyers of newly built homes should be exempt from paying property tax for 10 years, the Construction Industry Federation (CIF) argues in its pre-budget submission to Government.

The CIF says the tax holiday can be justified arising from the Vat and development contributions paid up-front for building the new home.

The builders’ body also said such a move would act as a stimulus for the new housing market.

And the Professional Insurance Brokers Association (PIBA) called for mortgage interest relief for both first- time and non-first-time buyers to be extended for a further two years, and not be abolished in 2013 as planned, so as not to hinder recovery in the market.

The PIBA is also calling for an end to an anomaly whereby those who are building homes and drawing down mortgages, currently cannot benefit from tax relief on the portion of the mortgage that would be drawn down after Dec 31.

The CIF said the banks should have mandatory lending targets for new mortgage lending imposed on them.

The federation also wants:

* A reduction in the Vat rate of 13.5% to 9% for construction services on a temporary basis;

* The fast-tracking of the programme for installation of water meters so that all meters can be installed early in 2013 to enable metered water charging to be introduced next year;

* Local authority development charges to be revised downwards to reflect the reduction in construction activity and the lower market values of new developments.

CIF director general Tom Parlon said: "The budget offers an annual opportunity for the Government to announce a wide range of measures that will help the economy.

"Among their considerations we are urging them to include measures that will help get the construction sector working again.

"We have put forward a range of policy suggestions which if implemented could have a major impact on the construction sector — a sector which continues to be a major employer in this country, despite the declining level of activity.

"Most of these are practical initiatives which would help stimulate construction in this country and would not involve a major cost to the exchequer."

[yadayada]

I am in the selling house business not the buying house business.

If you view some of them you can see what can go wrong. However, not in all cases. Some, what would appear to be very good stock is also selling at that price too.

So thanks to Colliers we now know what a house is worth. Or would do if I could find them on their website.

(I'm in business, where the objective is to make money.)

[Belfast Boy]

Some, what would appear to be very good stock is also selling at that price too.

The question is who is buying them? Because if it is BTL investors and they let to anyone - they risk their good stock being destroyed and the area becoming a less desirable area. With the resultant effect on house prices in the area.

I have seen the effect that 1 family can have on a development.

[Shotoflight]

Bank of Ireland believes property prices have stabilised

Bank of Ireland believes residential property prices have stabilised following a fall of 55%.

http://www.rte.ie/news/2012/1101/bank-of-ireland-believes-property-prices-stable-business.html

BoI Chief Executive Richie Boucher said it had 16,000 mortgage customers who had either mortgage forbearance or restructured mortgages.

Speaking at the Joint Committee on Finance, Public Expenditure and Reform, he said that 86% of borrowers were able to meet the revised repayment terms.

He said this showed that changes made to mortgages were working for distressed borrowers.

Mr Boucher also said he believed that commercial property had stabilised after a 65% drop in prices.

Edited November 1, 2012 by Shotoflight

[Shotoflight]

Big increase in cost of registering house sales

http://www.irishtimes.com/newspaper/property/2012/1101/1224325963190.html

FEES RISE: FEES FOR REGISTERING new ownership of a home are to go up by as much as 86 per cent next month.

From December 1st, there will be a substantial hike in the fees for the registration of a transfer on sale at the Land Registry based at the Property Registration Authority (PRA).

The fee for the sale of a house between €51,000 and €200,000 will increase by 60 per cent from €375 currently to €600.

From €200,000 to €255,000 it goes up from €375 to €700, an increase of more than 80 per cent. This is the bracket for most house purchases in Dublin.

From €255,001 to €385,000, the increase is from €500 to €700 or 40 per cent.

Solicitor Richard Lee, of Lee and Sherlock, described the increases as “frightening stuff” when the property market was still so fragile.

He estimated the Land Registry fees hike would add 13 per cent to the cost of fees associated with buying an average house costing €240,000. The increases will go from €2,489 to €2,814.

[Shotoflight]

Our average debt is almost €10,000 now

We owe four times more than we did in 2008

http://www.independent.ie/business/irish/our-average-debt-is-almost-10000-now-3281762.html

James Treacy, managing director of the Stubbs Gazette Credit Bureau, said the figures reflect "the inability of consumers to service loans taken out when the economy seemed to be stronger and earnings more secure".

"The figures are proof the problems go beyond Dublin," said Mr Treacy. "In the smaller counties, a higher proportion of lending comes from credit unions, which have a tendency to more vigorously pursue bad debt through the courts".

Unemployment is another reason behind the explosion of consumer debt. For example, the average consumer debt in Limerick, Clare and Tipperary -- counties which would have been hit hard by the closure of the Dell plant in Limerick a couple of years ago -- is now more than five times what it was in 2008.

Noeline Blackwell, director general of the State's Free Legal Advice Centres, cited the raft of new housing developments in commuter counties as a reason behind the build-up of debt there.

In Laois, for example, the average debt is now almost six times what it was in 2008. "People living in those counties are often commuting to Dublin so have two cars -- and can't keep up the repayments on those car loans," said Ms Blackwell. "Utilities across the board are a huge problem. People are taking chances with utilities and letting the debts slide."

Ms Blackwell said the new figures proved that people were trying to juggle other debts on top of their mortgage debt.

[Shotoflight]

Blame and shame in Ireland over financial crisis

http://www.bbc.co.uk/news/business-20207064

Ever since international lenders bailed out Ireland in 2010 to the tune of 85bn euros ($110bn; £70bn), Ireland's four-and-a-half million people have lived under a regime of punishing austerity and plummeting property prices.

The country is still coming to terms with what many see as the collective madness that gripped both ordinary people and the financial world in the run up to the economic crisis - leaving banks ruined and many householders owning property worth much less than the mortgage they owe on it.

David McWilliams, one of the few economists in Ireland to warn of the economic collapse ahead of time, says it is unfair to point the finger at Ireland's homeowners.

Most were young families struggling to buy homes: "To implicate those people in complicity seems to be far and away from what actually happened, which is that they were terrified onto the property ladder, terrified."

Pub-owner John Cleere agrees that Ireland's property developers were to blame for much of what went wrong and that ordinary people were innocently caught up in the property bubble.

"I remember one guy... lining up to buy a house and the following week it had gone up by 35,000 [euros]. But the property developer had no qualms about it. His answer was 'the market can take it, the market can take it'."

Others think the Irish people still hold property developers in too much awe. One woman says until that mindset changes, public shame won't be imposed.

"We still have rallies for the big developers supporting them. I think it is embedded in the Irish psyche that we admire these people more than we disapprove of them."

Prof Black, a veteran of many prosecutions of finance executives, says only the threat of prison frightens them into considering their actions.

"Prison is a mind numbing and terrible experience and it is the only thing they fear.

"There are thousands of senior executives between the United Kingdom and Ireland who should be going to jail - and it is the only thing they fear. Fines are nothing."

[Shotoflight]

Bank agrees to write off €110,000 mortgage debt

http://www.independent.ie/business/personal-finance/property-mortgages/bank-agrees-to-write-off-110000-mortgage-debt-3285228.html

A SUBPRIME lender has agreed to write off €110,000 if a family sells its home, in a move that shows that some mortgage providers are prepared to give up on debts they know they will never collect.

Pepper, which took over the mortgages of GE Money, has agreed to the settlement, a letter seen by the Irish Independent shows.

The couple, whose house is on the Malahide Road, Co Dublin, owes the lender €200,000. This money includes the outstanding mortgage on the property and arrears.

But in a letter to the couple's solicitor, Pepper outlines that it is prepared to allow the sale of the house for a minimum of €90,000. The money from the sale of the house will go to the bank and the couple will then be able to walk away totally debt-free.

[BelfastVI]

Bank agrees to write off €110,000 mortgage debt

http://www.independent.ie/business/personal-finance/property-mortgages/bank-agrees-to-write-off-110000-mortgage-debt-3285228.html

A SUBPRIME lender has agreed to write off €110,000 if a family sells its home, in a move that shows that some mortgage providers are prepared to give up on debts they know they will never collect.

Pepper, which took over the mortgages of GE Money, has agreed to the settlement, a letter seen by the Irish Independent shows.

The couple, whose house is on the Malahide Road, Co Dublin, owes the lender €200,000. This money includes the outstanding mortgage on the property and arrears.

But in a letter to the couple's solicitor, Pepper outlines that it is prepared to allow the sale of the house for a minimum of €90,000. The money from the sale of the house will go to the bank and the couple will then be able to walk away totally debt-free.

It saves them the cost of bankrupting the couple and all they would have got out of that was the pleasure of bankrupting them.

An even better solution, albeit setting a dangerous precedent, would have been to resize the debt to the new level, or £10k above it, and allowed the couple to remain with a 50% clawback on uplift when they sell.

[Shotoflight]

Once valued at €700,000 each, now all 14 townhouses are going for just twice that

http://www.independent.ie/national-news/once-valued-at-700000-each-now-all-14-townhouses-are-going-for-just-twice-that-3286130.html

AN UPMARKET estate that would have sold for millions in the boom has sparked huge interest after going on the market for just €1.4m.

The 14 townhouses in the gated estate of Bun na Leaca in Galway city could once have commanded up to up €700,000 each.

Now, under the control of NAMA, they are set to sell in one lot for an asking price of €1.4m -- which would have covered just two of the units when they first came on the market.

[Democorruptcy]

Average price paid for a home drops as 1,152 new transactions are recorded for October

The Property Price Register marked its first full month in operation last week, and recorded 1,152 new transactions for the month of October.

Interestingly, this represents a 24.6 per cent fall in transactions on the same period last year and a 36.6 per cent fall from October 2010.

The average price paid for a home during October was €181,295 – down from €214,868 a year earlier and €241,035 in the same month of 2010. Dublin recorded the highest average transaction price at €257,776.

The upside for the market is that with 16,803 transactions so far this year, it’s likely the number of sold properties could equal or surpass last year’s total of 18,058 house sales.

http://www.irishtimes.com/newspaper/property/2012/1108/1224326287761.html

[Shotoflight]

Negative equity: a positive outcome

http://www.irishtimes.com/newspaper/weekend/2012/1110/1224326395823.html

While the couple in the accompanying piece feel understandably distressed at how a collapsing property market has swallowed up their €100,000, they can also count their blessings.

[PJ1977]

Bank agrees to write off €110,000 mortgage debt

http://www.independent.ie/business/personal-finance/property-mortgages/bank-agrees-to-write-off-110000-mortgage-debt-3285228.html

A SUBPRIME lender has agreed to write off €110,000 if a family sells its home, in a move that shows that some mortgage providers are prepared to give up on debts they know they will never collect.

Pepper, which took over the mortgages of GE Money, has agreed to the settlement, a letter seen by the Irish Independent shows.

The couple, whose house is on the Malahide Road, Co Dublin, owes the lender €200,000. This money includes the outstanding mortgage on the property and arrears.

But in a letter to the couple's solicitor, Pepper outlines that it is prepared to allow the sale of the house for a minimum of €90,000. The money from the sale of the house will go to the bank and the couple will then be able to walk away totally debt-free.

Pepper bought the GE book at a massive discount so in that respect the loss had already been recognised and borne by GE.

[Shotoflight]

Landlord locks himself in bar as IBRC swoops on 'indebted' pubs

http://www.independent.ie/national-news/landlord-locks-himself-in-bar-as-ibrc-swoops-on-indebted-pubs-3290672.html

THE landlord of an iconic Dublin pub, Quinns of Drumcondra, has virtually barricaded himself into his premises after IBRC -- the former Anglo Irish Bank -- tried to seize control of it.

Eoin Quinlan has been living in the upstairs office of his pub ever since agents for the bank mounted a dawn raid on his premises last Thursday. He said the bank claims that he owes it €250,000 in rent arrears, which he disputes.

The pub is one of several licensed premises of which the bank tried to take control last week. They were once owned by the bankrupt Sean Quinn and his family but are now under the control of the nationalised bank now known as Irish Bank Resolution Corporation (IBRC).

The family and the bank are currently locked in battle over a disputed €2.3bn debt. But on Thursday morning, the battleground quietly switched from the courtroom to the pubs the family once owned.

In a dawn raid, the bank organised agents to take back control of several Dublin pubs for alleged non-payment of rent. They included The Cat & Cage in Drumcondra and Messrs Maguire on Burgh Quay. However, the bank got more than it bargained for when its agents arrived at Mr Quinlan's premises.

Mr Quinlan said he was tipped off that IBRC would try and seize the pub, so he stayed in the premises overnight. At 5.40am, he heard the front door shattering.

"I opened the door to be confronted by two locksmiths, a glazier, three bank officials and three to four security men. I denied them entry," he said.

As they tried to break down the door, he dialled 999. The gardai arrived. According to Mr Quinlan, the gardai eventually decided that it was a civil dispute as IBRC had no court order but simply a demand letter.

The pubs were part of Quinn International Property Management, which manages the property portfolio once owned by the Quinns and is now controlled by the bank.

On November 8, it appointed agents to take back control of Messers Maguire, The Cat & Cage and Quinns.

[Shotoflight]

Rates for deposits and loans worsening, reveals Central Bank

http://www.irishtimes.com/newspaper/finance/2012/1110/1224326409847.html

New statistics from the Central Bank offer further evidence that the deposit boom is coming to an end for savers, with the average interest rate on household deposits declining between August and September. Mortgage rates are moving in the opposite direction, however, with the rate charged on both new and outstanding mortgages increasing during the month.

With an increasing emphasis on a return to profitability, banks are looking to improve margins by decreasing the amount they pay savers for their money, and increasing the cost to borrowers.

According to retail interest rate data from the Central Bank, interest rates on outstanding term deposits fell to 3.35 per cent in September, down from 3.41 per cent the previous month. Term deposits of up to two years also fell, declining by 0.07 of a percentage point cent to 3.47 per cent, though deposits with a maturity of more than two years have remained stable over the last number of months. They stood at 2.52 per cent as of the end of September. Rates on short-term deposits continued to decline and are now down by 0.8 per cent since January at 1.53 per cent.

According to the Central Bank, deposit volumes suggest that savers are now moving out of these accounts and into longer-term deposits to avail of higher rates. But while deposit rates are falling, mortgage rates are rising. As of the end of September, interest rates on outstanding mortgages were up by 0.06 of a point compared with August, with an average mortgage interest rate of 2.9 per cent. Since the start of the year, however, rates are still down by 0.16 of a point.

When it comes to new mortgages, the average interest rate also rose, with homeowners now paying 3.12 per cent on average for either a variable rate or a mortgage fixed for up to one year. This is up by 0.21 of a percentage point on August and is higher than that across the euro zone.

Looking ahead, mortgage rates are likely to rise again.

[Shotoflight]

Families may face additional €3,000 tax burden in budget

http://www.irishtimes.com/newspaper/breaking/2012/1113/breaking33.html

The consultants expect a property tax to be levied from July 2013 at 0.25 per cent of a property’s value.

[Shotoflight]

AIB to restructure all problem mortgages within six months

http://www.independent.ie/business/irish/aib-to-restructure-all-problem-mortgages-within-six-months-3290984.html

ALLIED Irish Banks plans to have addressed all home loans in arrears within six months with either interest forbearance or other forbearance such as split and trade-down mortgages.

The bank's CEO David Duffy said the bank plans to restructure up to 2,000 mortgages a month until the end of next March as it cranks up efforts to finalise the arrears issue with over 10,000 households.

[Shotoflight]

Government on target to take €3.5bn from economy in budget, cuts 2013 growth figure

http://www.independent.ie/business/irish/government-on-target-to-take-35bn-from-economy-in-budget-cuts-2013-growth-figure-3294318.html

[Shotoflight]

Legal fees for buying a home to rocket by up to 87pc

http://www.independent.ie/national-news/legal-fees-for-buying-a-home-to-rocket-by-up-to-87pc-3296350.html

HOUSEHOLDERS buying a home will be hit with up to €325 extra in legal charges from next month.

That's because the cost of registering their property is set to soar by up to 87pc from December 1 due to new higher land-registry fees.

Consumer and legal watchdogs slated the move which hard-pressed homebuyers needed "like a hole in the head".

The price of registering the average €167,000 property is to be hiked by 60pc from €375 to €600. And for the average Dublin home now fetching €240,000, the cost will rise overnight from €375 to €700. That's an increase of €325, or 87pc more than the current rate.

The higher charges will affect many buyers rushing to complete purchases before the Government ends mortgage interest relief incentives at the end of the year.

Justice Minister Alan Shatter approved the new higher land registration fees, which are on a four-tiered scale based on the value of the property.

The Property Registration Authority which manages the land registration system said that they were obliged by law to charge fees at an appropriate level to cover the costs of providing these services.

"It should be noted there has been no increase to Land Registry fees since 1999," it said in a statement.

[Shotoflight]

Nama developer pays €3m in fees to its directors over two years

http://www.independent.ie/business/irish/nama-developer-pays-3m-in-fees-to-its-directors-over-two-years-3296799.html

NAMA builder Pat Doherty's Harcourt Developments paid its directors more than €3m in fees and other payments over the last two years, despite racking up huge losses at the property company.

Last month it emerged that Nama had paid almost €15.5m in salaries to 168 developers last year, with three earning over €200,000 and another 25 earning over €150,000.

Doherty, the Donegal builder who as a young man appeared in the Beatles video for Hey Jude, developed the massive Park West complex in west Dublin and is fronting the ambitious Titanic Quarter project in Belfast. He is a major hotelier, owning the Solis Lough Eske Castle in Donegal and the Wyndham Grand in Chelsea Harbour in London. His firm owns the five-star Carlisle Bay resort in Antigua. Harcourt is also involved with the operation of 40 Holiday Inn hotels in the UK as well as development projects in Las Vegas, the Bahamas and Jersey.

Harcourt Developments paid its directors fees of just over €1.25m last year and another €1.06m in 2010, according to company documents. Last year, Harcourt had eight directors including Pat Doherty, his son Nicholas and Brigadier Andrew Parker Bowles – former husband of Camilla Parker-Bowles, now wife of Prince Charles. In 2009, the year before hundreds of millions of loans were transferred to Nama, Harcourt's six directors shared a modest €584,000 or an average of just €97,300.

The payments to the Nama-backed property firm's directors were also bulked up by large advisory fees for certain board members.

[Shotoflight]

Just one family benefits from 'mortgage-to-rent' scheme

http://www.independent.ie/business/irish/just-one-family-benefits-from-mortgagetorent-scheme-3296800.html

A government scheme to help low-income families in mortgage arrears to stay in their home is struggling to get off the ground – almost five months after it was set up.

Only one family has successfully applied for the Government's mortgage-to-rent scheme, which was launched by the Housing Minister Jan O'Sullivan last June.

At the time of its launch, the Cluid Housing Association, a not-for-profit organisation, said it could prevent as many as 3,500 people from losing their home. However, almost half of those applying for the scheme have been turned down while hundreds are still waiting for an answer, according to figures from the Department of the Environment.

So far, 517 people have applied for the scheme – but 48 of these were turned down by one lender and another 180 were considered ineligible. Almost 300 people are still waiting for their application to be processed.

"Some lenders seem to be not full square behind the scheme," according to Simon Brooke, head of policy with Cluid. "That is matter of concern to us."

Senior policy researcher with the Free Legal Advice Centres, Paul Joyce, who was on the previous government's debt review group a couple of years ago, said: "There's only been one successful applicant – how can that be described but as a failure?"

When asked why the scheme had such a low uptake, a spokesman for the Department of the Environment said: "These are complex legal transactions involving several parties – homeowners, lenders, approved housing bodies, local authorities and solicitors."

Under the Government's mortgage-to-rent scheme, the ownership of the family home is transferred to a housing association, which then rents it back to the family.

[Shotoflight]

Tesco boss warns of austerity hitting consumer confidence

http://www.independent.ie/business/irish/tesco-boss-warns-of-austerity-hitting-consumer-confidence-3296808.html

Tesco boss Tony Keohane has urged the Government to do everything it can to boost consumer confidence in the upcoming Budget.

"People have adjusted to austerity and got used to it, but clearly it has had an impact on customer spending," Keohane told the Sunday Independent. "All of the retailers have had to fight harder. I hope the Government and the people who make the final call [on the Budget] make every effort to preserve consumer confidence."

Consumer confidence has dived in recent months as fears about the upcoming Budget – the sixth austerity budget to hit the country – increase. The Budget is expected to include a property tax, a sugar tax, motor tax hikes and cuts in child benefit.

As well as grappling with lower disposable income, Irish consumers are struggling with higher food prices. The price of potatoes has increased by almost a fifth over the last year, while the price of beef, pork and flour is at least six times more than the rate of inflation. A spike in the price of commodities, such as grain and oilseed, has helped to push up food prices.

Asked if consumers were facing years of higher food prices, Keohane said: "If commodity prices stay high, there will be some impact on prices."

Keohane – who addressed a lunch of Irish exporters last Friday – believes that the baby boom will be good for retailers. "The population is growing, so that will be a growth area," said Keohane.

[Shotoflight]

Property prices down by 0.6%

http://www.irishtimes.com/newspaper/breaking/2012/1126/breaking23.html

Residential property prices fell in October, bringing an end to a three month upswing in house values.

The Residential Property Price Index, published by the Central Statistics Office, shows that residential property prices were 15.1 per cent lower at the end of last month than at the same point in 2011.

Residential property prices fell by 0.6 per cent in October, following on from rises of 0.2 per cent in July, 0.5 per cent in August and 0.9 per cent in September. The values of such properties have fallen by 8.1 per cent so far this year.

The figures suggest a two-tiered market is operating in the State, with property values outside Dublin down by 0.9 per cent in the month and 8.9 per cent on October 2011.

The market in Dublin continues to be more stable, with house prices falling by 0.2 per cent in the month. House prices in Dublin are 7.8 per cent lower than at the same point last year, with apartment prices 7.1 per cent lower.

The data shows that house prices in Dublin are 55 per cent below the high point recorded in February 2007, with the value of apartments in the city now 63 per cent lower than they were five and a half years ago.

The CSO figures are based on mortgages and do not take into account cash transactions.

[Shotoflight]

1,100 ghost estates need urgent work to finish them – report

http://www.independent.ie/national-news/1100-ghost-estates-need-urgent-work-to-finish-them-report-3309520.html

MORE than half of the 1,770 unfinished housing estates across the country are in a "seriously problematic condition" and need urgent works to complete them.

The Department of the Environment says that more than 1,100 of these ghost estates are lacking basic services including roads, street lights and sewage treatment systems and will need to be upgraded.

And the report says there is almost 17,000 completed houses and apartments which are currently lying empty.

However, progress is being made on tackling the problem with 300 developments substantially completed in the last year.

Housing Minister Jan O’Sullivan said that while some housing estates would be “commercially unviable” and may have to be demolished, a final decision would not be taken until next year.

“About 1,100 are considered to be particularly problematic and we want to address the issues,” she said. “There is real engagement with stakeholders, including residents, and we will have a plan to address the estates with significant difficulties by the Spring.

“Bulldozing is going to be an issue, but we expect just a fraction of the 1,100 estate will be affected. It might not be entire estates, it may be areas of them.

There is also the possibility of using the homes for other uses, such as schools or nursing homes.”

The county with the highest proportion of unfinished units is Leitrim, where there is 35 vacant units per 1,000 households.

This compares with two in Waterford City and Limerick City.

[Shotoflight]

Wealthy OAPs to be hit but hope of deal for house buyers

http://www.independent.ie/national-news/wealthy-oaps-to-be-hit-but-hope-of-deal-for-house-buyers-3311699.html

Meanwhile, Mr Noonan is also weighing up how to assist the property market and incentivise buyers.

The minister is adamant that he is stopping mortgage interest relief for first-time buyers at the end of the year and colleagues feel he will not change his mind.

However, he is believed to be looking at a number of proposals which have yet to be decided:

-- A VAT refund for first-time buyers of a newly built house.

-- A property-tax holiday for first-time buyers.

-- Tax discounts on the cost of home improvements.

He may also choose to leave the market alone as it shows tentative signs of recovery.

On the property tax, it looks like there will be a three-year freeze on the amount to be paid by homeowners. This would allow for the owner to carry out improvements without affecting market value.

There is some hope for people who bought during the boom and are saddled with high mortgage repayments on a limited income.

Single people on an annual income less than €20,000 and couples on less than €30,000 may be able to defer payment of the property tax. But they will be expected to pay the tax if the property is sold or their financial situation improves.

Mr Noonan is also hoping to boost the construction industry by cutting VAT in this sector from 13.5pc to 9pc.