Dublin overhang of 16k apartments (Tribune quotes AIB)

Sorry no link up yet but I have to right this or I will explode.
Front page of the Trib business nice picture of Eugene Sheehy quotes

If you want me I’ll be in my room :frowning:

I hope for your sake that room is padded!

The above quote from the conference call makes me wonder just how educated Sheehy is? What he saying is not going to solve any problem, rather just transfer it from the fryer to the frying pan. Quiet how this is some from of silver bullet defies me. If the borrower cannot rent out the oversupply in apartments how are repayments going to be made? Your back to square one with the oversupply issue.

Well clearly we cant have them going on the market at “firesale” prices, can we. I mean, if they were offered at €10,000 euro each sure people would purchase them and drive down prices and probably rent. And that would be a bad thing,…

Yo! Eugene !

“It’s The Empties Stoopid”

Its not about the purchaser or the economy, its about the banks balance sheet.
Its only an issue of oversupply if you own the property.
The banks currently do directly or indirectly but foisting this onto a load of gullible punters means ownership and therefore oversupply is someone elses problem.

Which looks better; 16k mortgages at ‘affordable’ rates to individuals who have paid a deposit/secured lending against another property the dump the shite onto NAMA or,
16k empty flats will full finance outstanding owned by, say, 20 developers…

This Sheehy guy is basically saying ‘Its about the bank. Everyone else can go fuck themselves’.

Sheehy is educated enough to know that if he can convert the business debts into personal debt by selling the properties. Then the bank stands a much better chance of getting money back on it.

Look at the difference between Business bankruptcy & Personal Bankruptcy in Ireland, which would you rather have happen if you owned the debt ?

“Spread the debt” should be the motto!

Now give the guy a break. What he’s saying makes perfect sense.
What do we do with these empties? Either knock them down or use them. For ghost estates down the country the only option is the former. However there is a strong market for Dublin apartments.

I work in Dublin but spend a lot of time in the west so I’d be interested in a 2 bed apartment in say, Northern Cross.
One bed for myself and one if I want to have friends / family to stay.
I’d say there’s a significant market for Dublin apartments in that niche alone.
In a climate of falling wages and rising taxes, I’d pay 3-4x average industrial wage - about 120K.

The apartments in question are currently on the market for between 270K and 320K.
When the price is right, I’ll be down to Eugene, enthusiastically converting his developer debt to mortgage debt.

tribune.ie/business/news/art … partments/

Not really, join the EU YES and it will sort itself properly:

translate.google.co.uk/translate … -bruxelles

Eugene says that Dublin is suffering from almighty property bubble hangover and the only cure is to give us a big fuck off loan and for us all to go on the batter.

Sounds like a good idea.

After all what could possibly go wrong?

It’s tangental, I know, but aren’t AIB the country’s largest bank?

In the end what NAMA is about is the self beliefs of bankers.
The two core self beliefs of Sheehy and crew is that a) the sun shines out of their arse and b) their shit doesn’t stink.
NAMA going through as planned will simply prove that Sheehy was right to believe a) and b) above.

But he doesn’t mention what pricing would be appropiate for these potential 16k mortgages at all !

From his POV he’d love them all to be sold at 80% of current asking prices; but equally he’d probably be happy enough to see them sell them at 80% LTV, 2-3x annual salaries of the buyers, say 120k to 200k .

What he wants is the debt eradicated & moved somewhere where the banks can start earning from it; even if its only at a very low yield.

I think BOI recently passed them out. Or rather AIB passed BOI on the way down!

Well Eugene if we look at the grand total of apartments sold by Liam Carroll this year as an example and if there were ten Liam Carrolls in Dublin then it could take 20 years to work off that overhang and that’s assuming not a single new apartment is built and the existing ones haven’t decayed into ruin in the interim.

Unfortunately if they are Carrol built then that is pretty unlikely.

An oversupply of 16,000 is a genuine shock. Daftwatch shows roughly 2,000 apartments for sale in county Dublin. We would have known that many of these listings represented multiple apartments in a development. But I am still shocked by this figure.

This will surely make dismal reading for anyone who has bought an apartment during the boom. You would have to wonder how much longer it will be before we see apartments for sale at fractions of the peak prices.

Daft has 1664 apartments listed in Dublin out of 6278 total for the City. So by daft there are almost 3 houses for every apartment for sale. So a basic extrapolation would be that if there are 16k apartments there are 62k properties overall. This is very rough as:

  1. there are probably more vacant apartments than houses; each house listing might be for one house while each apartment listing might have several apartments;
  2. we can’t exactly trust what is said by a bank manager.

However, if there are the same number of houses as apartments then that’s over 30k. So the banks are looking for 50-60 thousand “young professionals couples” to buy up all the properties, and they’d be lucky to get 10k.

Two for the price of one.

Better still, four!