IRISH PROPERTY MARKET WON'T FALL US SUB-PRIME ROUTE - The US housing and mortgage market remains a mess and news emerged this weekend that the number of unsold homes is rising. The doom is spreading and Irish property prices are also falling. This morning UCD's Smurfit Business School hosts a conference on fast changes in the market.
Robert Van Order, a Professor of Finance from Michigan University, says that Ireland's property market won't see a recession, but will experience a slow-down as the economy here slows down. He says he doubts the market will see a full-blown downturn and if it does, it will be a very small downturn. He adds that property values are at risk, however.
The Professor says people who bought property some years ago are in 'good shape'. He says that while they will see property values fall, they are falling from very strong levels. However, he says that people who bought houses recently are at risk and may see a significant part of their wealth disappear.
Mr Van Order says that the sub-prime market in Ireland is quite small, and the deposits are relatively large. He says that one of the problems in the US is that the market was expanded very quickly to borrowers with poor credit history who had to put up low deposits. He says he believes that Ireland is different. As long as the market does not expand too rapidly and people continue to keep equity in their homes, the Professor says that the US problem will not be replicated here.
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MORNING BRIEFS - Two months ago huge queues formed outside Northern Rock branches as depositors withdrew their money in droves. The problems at the bank have not gone away. Britain has lent the bank €33 billion and now pressure is coming on the Chancellor of the Exchequer, Alastair Darling, who is due outline his plans on the issue today.
*** After years of talks, work above ground on the National Convention Centre in Dublin's Spencer Dock starts today. It is already taking its first bookings for when it opens in 2010. Tourism Minister Seamus Brennan said business tourism is worth €0.5 billion annually to the Irish economy. But he says with the opening of the new Convention Centre, the target is €1 billion by 2013.
*** The Irish Bankers Federation has confirmed it is to hold talks in the coming weeks with the Law Society about loan applications received with solicitors undertakings. The undertakings short circuit property conveyancing. The move follows two Dublin legal practices being shut after they used undertakings to obtain multiple mortgages on single properties. According to reports, Permanent TSB and EBS have now told brokers they won't accept the undertakings if the solicitor is the borrower.
*** Some mortgage lenders are tightening criteria for first time borrowers. Permanent TSB will no longer offer 100% loans, where people borrow the full value the property, to people buying apartments with two or more rooms.
*** The euro is worth $1.46 and 71 pence sterling this morning.
