Frank Fahey makes me ill - Negative Equity evening in Galway


#1

I’ve just returned from the Negative Equity presentation by Frank Fahey, Sherry Fitz and extra special guest, Minister for Housing Michael Finneran.

I’ve always hated people who use the word “sheeple” in internet forums - but I simply can’t think of a better word to describe most of the attendees. Fair dues to the pinsters who tried to inject some realism into the discussion during the Q&A session, but nothing was going to get through the thick layer of entitlement and misguided optimism in the room.

Fahey opened the evening by telling everyone that he had long experience of the property market, and that - although he would advise everyone to do their own research - there was definitely value to be had in the market (he kept mentioning Tuam for some reason - does he have interests there?). He was trying as hard as possible to give everyone the impression that if they didn’t buy now, they might lose their opportunity to “get on the ladder”. It was like stepping back in time to 2006.

The EA from Sherry Fitz went next. He talked about the “fundamentals”. The medium-term outlook for the economy is strong (?). We have lots of young people. Inward immigration is strong (?). There is a “natural” demand for 52K houses per year. There are 10K surplus units in Dublin and about 20K in the rest of the country (???).

Oh, and he foresaw an easing in interest rates and mentioned an easing in interbank lending rates in the last week. He seemed to be saying that this meant the entire market would be roaring ahead again by Xmas…and that we all had a very small window of opportunity to pick up a bargain. Although, again, he mentioned the caveat about doing your own research.

Best of all was Finneran, who insisted again that there was value to be had in the market, and it was a great tragedy that young people couldn’t get at it before it was gone - because the banks were unreasonably demanding massive deposits from them before they’d give out a loan.

So, he said - as though it was his own money he was spending, rather than the tax payers - his department was going to provide young people with the credit they were “entitled to” (I kid you not, he actually said this). He pre-empted the obvious attacks on the Home Choice Loan scheme, saying that the reason it was limited to new builds was because his research showed that 70% of FTBs preferred new builds. This is such an obvious non-sequitur I was amazed he got away with it.

Then, the questions…

One woman in the back (pinster?) made a serious attempt to address Frank’s obvious vested interest. He deflected the question in true gombeen fashion by saying that he was a man who had “improved himself” through good business decisions, and that should be no barrier to a career in politics. The answer made no sense, but it got a huge round of applause from the sheeple (there, I said it). Frank followed up by saying that his shares had lost a lot of value in the last few months - thereby proving that he wasn’t a VI (?). I’m not sure where this admission of financial shortsightedness left his earlier predictions of a nearby bottom in the market.

Another person asked why the government was getting into sub-prime lending, given that the HCL scheme was the very definition of sub-prime. The answer was that it’s not sub-prime, because…well…it’s just not.

The only other challenger, was an older gentleman who tried to get Finneran to admit that this was taxpayer’s money being used to prop up the new build market and that Frank and co. were VIs trying to entice young people into debt. He fought valiantly to get a simple question answered - but was talked over by Fahey and Finneran.

None of the challengers got much, if any, support from the crowd. I seriously think people believed the rubbish that was spouted. I think they were actually happy that Frank and co. were going to help them get on the ladder.

I despair for this country. I thought people were starting to come around, but there was no light of dawning realisation in the negative equity room of the Marriot Hotel tonight - there was only the dying spasms of an entitlement culture that will eventually tear this country apart.

I’m looking at visas for countries that at least try to pretend that they’re run in the best interests of their citizens…


#2

Did ye not realise you were looking at a room filled with FF party faithful?!?

Political parties don’t have events, they have staged events…


#3

Also, don’t lose perspective here - it was one room full of people who specifically wanted to go out and buy a home - they want to hear what is being told to them. There was a whole city outside the window who probably had a much better understanding of the markets and knew to keep well enough away.


#4

Yeah sounds like a stuffed audience, don’t get too upset about it. They’d have cheered if he’d been clubbing seals at the podium.

It’s great to see that our government representatives have so much time to be promoting the purchase of property. Let’s hope they care as much about our old people and sick people when they vote for the budget.


#5

Very interesting thanks for sharing. Its a pity people havnt come round yet. But there are only a few( but increasing) number of dissenting voices against the perceived wisdom of the boom times.

I really hate that word sheeple because of its origins. Its mainly used by conspiracy nuts to describe those who dont believe their nutty ideas.


#6

thanks for the update. The audiences’ attitude seems odd. I’d share TUG’s view. Did they seem like a set of first time buyers? Did many ask questions you’d expect ftbs to ask? Did they know each other?

The whole idea of this Q&A session seems contrived.


#7

From the members interests


#8

Fair play to the pinsters who spoke up.

Excellent summary, Gronlander. You also captured the atmosphere in the room. I got talking to the person next to me: turns out he’s a developer. Couldn’t help wondering how many more developers were in the room. Certainly a lot of folks in the room were neither pinsters, nor young first-time buyers…

Fahy came across as being thick as thieves with builders and developers. He tried to portray himself as someone whose hobby is the property market, but he really comes across as a spokesman for developers.

Mr Kavanagh was there from Sherry Fitz Kavanagh, as was Mr Murray, from, I think, the Murray and Spelman outfit.

Some choice quotes: “Homechoice would be better than going subprime”(Murray). (Murray, Finneran and Fahy went to some efforts to dispel the popular view in the media that these are subprime loans).

Kavanagh: “Natural demand for property will be about 52,000 units per annum between now and 2021”.

“Interbank lending rates have dropped by -4% in the last week” (Kavanagh).

Minister for housing said that no decision has been made yet on whether a new house built on one’s own site would qualify, but that a decision on that would be taken within a week. He also said that 6 billion and eventually perhaps 10 billion would be put aside for this racket. He says that at the moment they have 500 million ready to rock and roll (scheme kicks in during second week in November), which would cover the first 2000 loans. I got the impression that anyone who’d ask for a loan would receive, as long as they fulfilled the normal loan criteria, bar having massive initial deposits.
“It won’t cost the taxpayers” (Finneran).

Four local authorities will administer the scheme, including Galway Co Council.

Finneran said that 70% of people who buy houses buy new ones cos it works out about 15% cheaper.
“The list of brokers will be made available in each area.”

He also referred to a “rental acommodation scheme for longterm rental properties”. (Is that the Co Council scheme already in existence?). In addition, he mentioned a scheme whereby people on under 20,000 a year can avail of an incremental loan scheme where they can buy back a council house if they can come up with 30% of the value of same.

Fahy notably plugged the following: Clybaun Road, were some housing is available for 200,000; Merlin Woods, Vicar’s Church in Tuam. Yes, he certainly plugged Tuam bigtime, but then, houses in Tuam are the best value anywhere. I’d agree with that.

Fair play to the lady at the back who referred to Fahy’s prop portfolio, and the assertive gentleman at the back who was the person who spoke most sensibly.

I didn’t speak up myself as I have a fear of public speaking and am generally useless at it anyway.


#9

I might have leaned a bit heavy on my own frustration there. And i share the distaste for the word sheeple. Internet browsers should be modified to detect when a forum poster is trying to use the word, and pop up a dialog box asking: “You are trying to be a condescending asshole. Allow/Deny?”

Anyhow, I’m sure there were a fair few political plants in the audience. But there was an unexpectedly large turnout, which implies interest beyond the party faithful. Also, most of the non-challenging questions were from people who wanted the HCL restrictions relaxed to let people on incomes below 40K to borrow. One woman wanted to buy the local authority house she was renting, and was annoyed that the LA had valued it at 300K, which she couldn’t afford. I really do think these were real people, most of whom were of limited means.

I know this crowd was a self-selecting sample of wannabe FTBs, but even among this group, I would have expected some scepticism.


#10

Thanks for the summaries folks.

Sadly it went as I expected. I’d say I wished I could go, but I’d be lying. If I went I’d probably end up with a public order offence against my name :angry:

There isn’t a snowballs chance in hell of this happening.

It doesn’t fit in with the general theme of helping the poor auld developers(scum), get rid of their empties.


#11

Gronlander has summed the evening up in a nutshell. I’m sure the people who applauded were plants!
I got a few choice quotes from the evening all the same.

Frank Fahy :
" You can hammer more out of the builders…they’ve got their tongues out."
" We’re being impartial"
“There’s good value out there”

Tony Kavanagh (Sherry Fitzgerald) :
“We’re not far from the market bottom now”
“The medium term prospects are very strong, very healthy”
“We haven’t oversupplied the market”

Michael Finneran
“Our motive is to provide a line of credit to people who have been refused it”

Eamonn Murray (of Murray and Spelman)
“Rents are definitely around €1,000 p/m in the city”

Delighted to have met a couple of Galway Pinsters and to have got one of my little red stickers on the table where everyone was signing in. :angry:
Now for a drink. BD


#12

Good work lads, every bit helps. Keep it up.


#13

Perhaps it’s not so bad, it seems like those present had motive, but neither means nor opportunity to murder their futures.


#14

PBF…unfortunately, what was being proposed under the NE scheme was a taxpayer funded weapons handout. Finneran wants to give them the means to take the opportunities that his developer buddies have left lying empty all over the country. Motivation doesn’t seem to be a problem for people, but even if it was - that’s what the Frank Fahey roadshow was all about, whipping up the crowd.


#15

Luckily :imp: for them Fianna Fail & the Greens are now doing a nice line in Assisted Suicide for them. XX


#16

I’m just back from this evening also. I counted at least 150 people there with more behind me around the corner so maybe 170. Not that many people in their 20s - maybe 20ish. They were outnumbered by people in suits etc. Seemed to me to be a group of auctioneers, brokers and their employees etc. I did notice a few very wide-eyed youngsters who appeared to be taken in. One girl complained that the terms of the home choice loan scheme meant that you needed to be in a permanent job for 2 years and she was only in a temporary job for 6 months.

I’d say that well more than half the audience applauded Frank Fahey when he replied to the Pinster who questioned him on his vested interest. He did come back with a good line about it being a sad day for Ireland if a lad can’t try improve himself. He did go on to say that he bought most of his properties during a recession (subtext being: so off you go now and try do as good as me).

In fairness to Frank, he did say that everyone should take their time looking at houses and not rush into buying. He said that the developers “have their tongues out” and to deal with them. he suggested keeping an eye on how many houses were sold in each estate they looked at. He said that you should come back in a month’s time and see if any had moved and if not, that would tell you that things hadn’t hit bottom.
Some HCL details: You can borrow up to 5 times your earnings (ie €200k) as long as your repayments are <35% of your income.

What was interesting was that Finneran started talking about a Home Equity scheme where the Gov’t will take 20% equity in the property. It was unclear when or if the buyer has to pay this back. There were several other schemes referred to. I hadn’t heard of any of them before. He point out that the some Gov’t Loan agency can borrow €6 billion for housing and that he was raising this limit to €10billion “in case we need it”.

Tony Kavanagh from Sherry Fitz did have a clear run on “why it’s a good time to buy”. He claimed house prices in Galway are down 33% (!) - this was challenged by one Pinster as to why Daft did not reflect that and TK said that was because he was talking about sale prices. TK ran through the usual “almost at bottom, interest rates down, immigrants, yada yada” but, to me, he didn’t sound convinced himself. He seemed to be trotting through the same Powerpoint as usual without a lot of conviction.

The next guy (Spellman) tried to put us to sleep - mumbling through numbers about what your repayments would be before launching into his version of it being the right time to buy.

-rv


#17

I taped the whole thing :angry:

youtube.com/watch?v=ql744tSfnXM


#18

:open_mouth:

That is equal to a deficit of over 6% of GDP ( 7% of GNP ) on its OWN

:open_mouth:

Then again the HFA already has some of that €6bn ? €10bn ? borrowed through the NTMA so it is not all new borrowing !


#19

(Thought you were going to be at the meeting, 2Pack?)

Finneran also said that the scheme is available to “anyone who feels entitled to a loan”.

It’s the new ATM machine, like…


#20

Anyone buying a new homebonded property. Only 50% of property in Galway is homebonded, mainly urban.

In Dublin all day , soz !