Just where to begin pointing out the flaws in this madness isn’t easy.
With so many
Someone has forgotten to take their pills.
The debris from the
In Canada, which counts the US as its biggest trading partner, a peak in housing prices during the summer has already turned into a rout, with anecdotal evidence from cities such as Edmonton, that homes are now sitting on the market unable to find buyers in what was just months ago a sizzling-hot property cauldron.
A euro on steroids and prospects for capital appreciation in the city have provided the catalysts needed to attract old money, new money and the par-venu hoping to gain credibility. Owing an apartment in
And the Irish have taken chunks out of the Big Apple.
The buyers read like a who’s who of Irish society. Among those who have famously splashed out on pads include Derek Quinlan, who two years ago paid an astonishing $26m for a cavernous townhouse on
But others have followed suit. Domhnal Slattery of Claret Capital, Ciaran Haughey, son of former Taoiseach Charles Haughey, and his sister Eimear Mulhern have all been buying apartments in
Others amassing Stateside portfolios include Galway solicitor Patrick Keane, who last month sourced a $1.37m mortgage from Anglo Irish Bank to buy an apartment at West 48th Street. From Limerick, Patrick Cheeser of Cheeser Auctioneers recently obtain a $2.8m mortgage to buy on East 63rd Street; and James McEvoy, an auctioneer in Newbridge, Kildare, who earlier this year obtained a $1.36m mortgage to buy on 5th Avenue.
In fact, even as the credit crunch bites, Anglo Irish Bank has continued to dole out tens of millions of dollars worth of mortgages to Irish buyers.
But how long will this last? However long, it certainly won’t be enough to support the
Last week, however, Associated Press reported that there’s a “rally in the struggling housing market driven by foreign investors”.
“European investment is likely to pick up,” the piece quotes Mark Vitner, chief economist with Wachovia as saying. “Now is the time to come over and take advantage”.
Without doubt, a feeble dollar makes the prices wholly attractive. But the financial woes of late, and the prospect of more to come, must surely be enough to make even the most experienced of investor think twice.
“The theory goes,” adds the Associated Press, “that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.”
Irish investors aren’t buying the Graysons’ four-bedroom in Charlotte that’s been sitting on the market for the past six months, or any other similar property – they’re buying newly-developed apartments in major urban areas such as New York and Chicago – the result of which has no impact on helping existing home-owners elsewhere in the US to sell their properties.
Irish and other investors simply can’t save the
Is Anglo Irish Bank digging a hole for itself? Maybe not. It has strict lending criteria, and its clients can generally afford to hang on to property for the longer-term, even if they happen to take short-term hits.
But even Anglo Irish Bank can’t be expected to save the
Even its former executives aren’t finding these easy.
One-time Anglo Irish Bank chief operating officer Tiarnan O’Mahony is the latest to feel the fallout pain.
His International Securities Trading Corporation (ISTC), which he founded two years ago, announced yesterday that it has delayed its results announcement, taken a €70m ($102m) charge, and suspended grey trading of its shares.
ISTC borrows money from mainstream lenders and then uses the funds to lend the same money to borrowers, making its profit from the difference between the interest rates it pays, and the higher rate it charges to its own clients. Among its investors are former Anglo chief executive Sean Fitzpatrick.
ISTC has €210m in SIV capital notes which have either been downgraded or listed for review by Moody’s Investor Services. It has also cancelled a convertible bond issue.
Seems there’s enough problems at home without having to rescue the