…ANY SUBSTANTIAL “fire sale” of residential or commercial property could result in prices falling by 50 per cent or more, the head of the Construction Industry Federation (CIF) has claimed. The organisation’s director general Tom Parlon said the prospect of major banks seeking recovery of their debts from developers would have a disastrous effect on property prices and the economy. He said the whole rationale of establishing the National Asset Management Agency (Nama) was to prevent such a scenario…
Regardless of what Parlon says [and what NAMA may hope], a 50% fall is on the cards one way or another!
I have never trusted this devious turncoat but are we now getting to the real crux of the situation? The real reason for NAMA, not to save Banks of systemic importance, but to place a floor under the falling property market, whilst simultaneously protecting VI’s?
And, in reality can any Government really prevent a property bubble popping? It seems to me that many have tried Internationally and attempts only ever served to worsen the extent of the crash. Perhaps we don’t see it now but NAMA could be the Irish equivalent of the British Poll tax which put the throttle down on the late eighties UK crash.
If that is the case, Sandbags won’t stop this tsunami, they’ll invite it. Keep on talking Tom!
You have fallen into the old trap xman.
If prices have a further 50% to go, then they are currently 100% overvalued.
(Technicially you are correct with at least 50% … but I know what you meant xman … I know what you meant !!)
The wheels are coming off and Tom and company are touching cloth, “dont you just love firesales” .
Hold on a minute, how can it be a firesale if prices are only returning to the mean? Surely if the developer paid the builder too much to build thats his problem, its not a firesale until its prices from the previous decade Parlon.
Property worth is not based upon its cost, it is only worth what someone is willing to pay for it.
Parlon is admitting that people are only willing to pay 50% of the current price.
Consequently, property is only worth 50% of its current price.
With regards to your shop analogy, yes.
Perhaps that is why the shop went into liquidation in the first instance.