http://online.wsj.com/article/SB10001424052748703415804575023483097973538.html

Key take-away…”The venture had been struggling for months to restructure the debt but capitulated facing a massive debt load and a weak New York City economy that has undercut rents and demand for high-priced apartments. ”

And

By some accounts, Stuyvesant Town is only valued at $1.8 billion now, less than half the purchase price. By that measure, all the equity investors—including the California Public Employees’ Retirement System, a Florida pension fund and the Church of England—and many of the debtholders, including Government of Singapore Investment Corp., or GIC, and Hartford Financial Services Group, are in danger of seeing most, if not all, of their investments wiped out.

Re the students, Galway in particular seems to be cyclical. If those cities are short on NAMA-esque properties, they may level well before some parts of Dublin with plenty of recent construction.

R

Also, looking at the second chart the two other groups, ‘other cities’ looks to be cyclical corresponding to the academic school year, high in summer months, low in school months. I would expect that with college students renting on campus and then living at home in the summer. As for the rest of the country line…well if you like the countryside, you can rent cheap!!!

Just too follow up on Treasa’s point, it appears that the maximum rental payments payable by DSFA now exceed rents in many areas. If the DSFA were to reduce rent supports by say 10% wef June 2010, then it must have a serious influence, particularly in Western Dublin and beyond. All those FF landlords must be praying that Ms. Hanafin keeps writing the cheques!

The second point is emigration. There will be substantial net emigration in 2010 and I think it is clear that this also was the position in 2009. Emigration now includes substantial numbers of the traditional core Irish renters, those just out of college or coming to Dublin to work. With effectively no Public Service recruitment, there will be no “culchies” to fill all those vacant flats.

Finally, how much of the reduction is down to the withdrawal of properties from the market as owners consider what to do, rather than occupied accommodation filled with happy rent paying tenants? There still is serious discounting going on, as can be seen in some of the more recent reviews on http://www.irishpropertywatch.com

Peter Schiff

Here’s the proof from CNBC, of course, Bernanke says it wasn’t even possible that monetary policy could have caused the crisis!

http://www.youtube.com/watch?v=Z0YTY5TWtmU

Thanks for the comment – on your second point (about 2007 as a base year), the data go back to 2002 for the rental market so the analysis can be extended. Without a formal graph to hand, I can say though that it wasn’t that much of an outlier from previous years in terms of general levels of stock and flow (particularly compared to 2008 and 2009). The relative balance was certainly different though, hence rents rising at 12-15% per annum – as per the reasoning outlined in the post.

Your first point, on state-supported rents, is one well-made and one I haven’t explicitly factored into the analysis yet. I’ll look into it.

R

in general, I don’t see any mention of the HSE rental support which may be providing a floor in rents. I can see in my own area in Dublin that rents have levelled off at approximately the level matched by government support.

2007 is a bad baseline year to take in my opinion because it represented a supply blip. Supply tightened late 2006-2007 as stock moved from rental to sales markets. This fed into rents which rose quite a bit compared to previous years. I’m only voicing this as someone who was a tenant at that time and saw rents in my area in North Dublin rise by about 25% in that period having been static at the government supported level for the previous three or four years.