Finfacts: Up to 40,000 FTBs face negative equity

No conjecture there then. :unamused: Still, it saves him admitting that he doesn’t have a clue.

FTB one gaff tough station but not the end of the world

BTL investor started building portfolio since 2002 or bulk bought since multiple properties with PPR at risk… that’s where the pain is my friends… Particularly if primary income is in construction or related service industry…

Know of a couple of people in this boat…

sunk below the waterline and shipping water faster than they can bail…

EACH is the important word here.

They’re assuming two earners, with a combined negative equity position of around €36,400.

That is a serious immobilising anchor around people’s necks. The Springfield Nuclear Plant demotivational plaque comes to mind. “Don’t forget: you’re here forever”.

It also assumes that only 20,000 FTB couples bought into the peak. I would imagine the real figure is considerably higher than that given that completions hit 90,000 in 2006.

And then there is 2007.

It assumes that only 20,000 FTB couples bought with no deposit and a 100% mortgage at the peak.

Interesting they want to make a comparison with the UK.

Now the article is clear in its refernece to relative levels of unemployment, which was around 2% higher in the UK at the top of the cycle in the lat 1980s. Have a look at unemployment trends in the UK from Jan 1990 and compare with Ireland from March 2008.


But what if it is not the level of unemployment that counts, but the change in the unemployment rate? Bear in mind this comment:

Meaning it is the rate at which people are moving from being in employment to being unemployed. How is Ireland faring there? Let’s look at the recent Irish experience in comaprison to the UK in 1990 on that basis. This chart contains the same data, but shows the diference in the unemployment rate in any month less the unemployment rate at its approximate low point in Jan 1990 and Mar 2008). Ireland in **red, UK in **blue **

https://i241.photobucket.com/albums/ff247/Geckko/UE2.jpg**

Lyons said first-time buyers might change their plans to sell so as to avoid making a loss.

IT’S A HOUSE PEOPLE. YOU LIVE THERE. IT’S NOT FIVE SHARES OF MICROSOFT.

“puts head in hands and considers career break for a year in the south pacific to maintain sanity”

You also can’t sell a house with negative equity unless you pay off the mortgage first. If house sells for less than the value of the mortgage then the owners have to come up with the balance. Thus you are trapped in the house even if you want to sell (and take a loss).

A great period of discovery is upon us I feel :confused:

Tough station???

Hard Station more like…

Hey Mr. Businessman
Please take me as I am
I’m ready to go straight
But it’s not easy
When you don’t have no money
And if you take a chance
I know you won’t be sorry
Hard times all around
Hard Station in the town
She came to me this morning
Came to my brother’s place
Cards laid out on the table
Tears streaming down her face
So Mr. Businessman
Please take me as I am
I’m ready to go straight
But it’s not easy
When you don’t have no money
So listen to me please
I know you won’t be sorry
Hard times all around
Hard Station in the town
Round here you get downhearted
It’s more than a man can take
Friends making propositions
That was my first mistake
So Mr. Businessman
Please take me as I am
I’m ready to go straight
But it’s not easy
When you don’t have no money
So listen to me please
I know you won’t be sorry
Hard times all around
Hard Station in the town

I think negative equity is likely to be far more of a problem for FTBs in the urban areas than in rural areas for a very simple reason: they are far more likely to want or need to trade up and much property selling in urban areas in the past 4 years has been based on the trade up model.

If you’re not wanting to move and don’t really need to refinance, then negative equity is more a pride thing than anything else. Outside the commuter belts I think you’ll find that the need/want to move will be much less because far fewer FTBs went into small apartments relying on capital appreciation to get them on the ladder.

Of course, if we’d built proper apartments in the first place…