10% deposit agreed with the participating banks, is this legal?! What deposit do you need normally 30%, 40%, more? This I think will distort “the market” more so than the 20% after five years. Also we have still no SELLING price data so how is a valuation arrived at?!!
House prices in this country are primarily a function of how much the banks are able and willing to lend out for them. This often has far less to do with the house itself than with how much the banks think the borrower (in the context of the social and environment he inhabits) is good for.
Everything else is fluff designed to conceal this fact. ie. NAMA guarantees, Establishment media campaigns, Concerted measures to restrict supply, Concerted measures to hype demand, EA collusion, So called independent valuers in bed with EA’s and other property players, Institutionalisation of so called valuers, Price databases or lack thereof, Cultural lifestyle memes propagated, the list goes on and on…
It is a rigged game. No one really called ‘halt’ when the previous funding for this game temporarily dried up. Now, the game is back on again - slightly different setup to account for new realities, but essentially the same. Whoopee.
Somewhere in-between, depending upon your personal expectations as to where prices will fall to.
But one thing is for sure, the property for €130k cannot compete with a similar GuaranteedNAMA* property at €130k (whatever about €125k).
The private seller must now reduce their price further to compensate for the extra NE insurance offered by NAMA.
As I just mentioned in my post above 'Once again, the favoured few enjoy privilaged selling conditions to the average Irish homeowner who (more than likely) is paying for the whole debacle to begin with.'
Any thoughts on the offering? I suppose the positives are that these properties aren’t the worst (they appear to be houses, they aren’t too far from employment areas, the locations are ok, although not especially desirable). At the same time, I know that the market in areas like Douglas, Rochestown, Ballincollig and Crosshaven is at a standstill, and that prices are down at least 50% from peak. I will probably kick the tyres and see what NAMA are looking for, although I have a feeling that they’re going to be asking for more than the market rate.
Could this lead to a death spiral? NAMA offers to sell for 125K with 20% N.E. risk insurance. Private seller now has to drop to 100K to compete with NAMA. Potential buyer now looks at NAMA and sees that prices are already down 20% so the N.E. insurance that comes with their overpriced property isn’t worth anything. NAMA has to drop their price, and still offer insurance … and the spiral continues.