How long before we see a Major Developer go down?

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ccbkd

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Surely with the chaotic state of the global Banking markets and our own internal property crash, we should start to see a Major developer tumble as banks finally accept they can't keep propping these guys up, The autumn season has been a damp squib, If it does happen I assume the bank then take the unsold stock scramble to sell it to help re-coup cash, If this likely event happens surely it will open the floodgates?
 
Major developer tumble as banks finally accept they can't keep propping these guys up
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Maybe the banks have no choice but to keep propping the developers up. If (when) a major developer goes bust, it could collapse the whole house of cards.
 
As long as the banks are able to keep rolling up the interest payments they will. Invariably smaller developers whose assets are thinner will the first to be called in. The consequences of one of the major developers going under would be disatrous for the Irish banking sector.

A number of smaller, less high profile, developers have already gone to the wall and Liam Carrolls activities last May(ish) looked like an enforced scramble for cash.
 
When the auditors have to sign off on the current value of unsold properties/proposed developments for year-end financial statements?
 
There is so much talk about the state of certain developers at the moment some of it has to be true. The state of the entire market is at a critical stage. I would say that by mid October a number of the boys will be on the ropes -- and will cause a major stir with some of the Banks. The Banks were literally throwing money at them up to last year. Some are fine but in the main most are up the creek.
 
webtax said:
When the auditors have to sign off on the current value of unsold properties/proposed developments for year-end financial statements?
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Correct there must be lengthy discussions between the auditors and the banks on the valuations of assets to liabilities. With the Enron scandal, three of the major investments houses delinquent and WA Mutual in the States on the ropes shouldn't the Central bank ensure that assets held against loans by the Irish banks are correctly marked to market with correct and current valuations.

If €150+k is lost by me because of non disclosure or full disclosure within one of the institutions, is this fair? Especially as the depositor losses nearly all, but the borrower still owes every cent.

These loans may not be technically delinquent but just non payment loans with roll over interest accruing for months and months. Fully declared revaluations whenever it happens will be unchartered financial territory and unthinkable the consequences.

When are banks next to report audited accounts for compliance?
 
ccbkd said:
Surely with the chaotic state of the global Banking markets and our own internal property crash, we should start to see a Major developer tumble as banks finally accept they can't keep propping these guys up
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I imagine this is why the government will introduce in the budget some desperate measures in an attempt to get First Time Buyers (aka Suckers) to buy some of these developers' overpriced stock. I imagine there's quite a few developers out there with some juicy stories related to their dealings with politicians, and some of them will be tempted to use the nuclear option...

P.
 
leghorn said:
Maybe the banks have no choice but to keep propping the developers up. If (when) a major developer goes bust, it could collapse the whole house of cards.
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Watched a show on an American millionaire and he said something like " If you owe the bank 1 million, they own you. If you owe the bank 100 million, you own them"
 
Think I heard that somewhere too. Wonder how AIB are fixed with a 100 million loan this Friday
 
On the way out of the port tunnel today I was struck by the number of enormous half finished apartment blocks at the North Wall. With Dublin already stuffed with completed and very empty apt blocks I guess it's just a matter of months before a developer goes.
 
I reckon we are going to see a few firesales before we see one of the major developers go. I expect to see some firesales in the next few months. The banks just can't afford to bail developers out indefinitely.
 
It's a bit of a catch22 situation.

Developers can't pay their loans back to banks because houses aren't selling

And

People aren't buying because they can't get loans from banks.
 
Interesting fact from AIB annual report.
Top 50 Loan exposures are €18.5bn up from €13.9bn in 2006, thats 370m on average.
Do you think you could start guessing 50 people who owe AIB that amount of money? wow.. large numbers & in 2007 practically all the AIB loan growth was to developers in Construction & property, it is in black & white in their annual report. They funnelled over €11bn extra into that sector in 2007!
Do you think we may see another ICI insurance situation when some of these loans are not repaid or the loan covenants are broken. It certainly will be interesting.
 
leghorn said:
People aren't buying because they can't get loans from banks.
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I think that statement is being grossly over exaggerated or misreported in the press. I have spoken to a few a people who bought in recent months and none of them had any difficulty obtaining finance.
 
room305 said:
I think that statement is being grossly over exaggerated or misreported in the press. I have spoken to a few a people who bought in recent months and none of them had any difficulty obtaining finance.
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I would definitely say that difficulty in borrowing is a major factor in house sales slowing especially with ftbs.
 
MrMan said:
I would definitely say that difficulty in borrowing is a major factor in house sales slowing especially with ftbs.
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Ya. It's definitely having some impact.
The quesion is how significant is that impact.
 
room305 said:
I think that statement is being grossly over exaggerated or misreported in the press. I have spoken to a few a people who bought in recent months and none of them had any difficulty obtaining finance.
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Were they Gardai, lawyers, accountants or civil servants? They can get loans handy enough at present as their income is guaranteed.
 
Sentiment is gone -- simple as that. Coupled with Banks more or less out of the lending business does not make the shorterm outlook too favourable.
 
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