Obsession - englightenment please!

talkingclock

Dear all,

I'm German and I have a question: could someone please explain to a foreigner why Irish people are obsessed with buying houses?

I have a 21 year old colleague here and he is talking about nothing else then if it would be better buying a house or a flat with his fiancé. FFS he's just 21! He has his full life in front of him and doesn't know what's going to happen in 5 years with his job or the Irish economy...He has to repay his mortgage for 30yrs!

A lot of us from the continent (not only Germans, let's say west European foreigners) are just baffled about this determination to buy a property...

Could someone please lift the veil for me?

THX!
TC

talkingclock

Nereid, thank you for your helpful posting and your valued advise. Would you please explain "integration" related to "why are you obsessed with buying properties" a bit further?

I'd love to talk about bollywood blockbusters and cars. But would the Accomodation/Properties board the right place for it? How is it related to my question?

Thank you in advance!
TC

CiaranC

Traditionally, a huge part of it is because tenants have so few rights in this country compared to somewhere like Germany that people feel the need to buy property to feel comfortable where they live, that its 'home'.

Calina

Nereid, that is a hugely unhelpful response to be absolutely blunt. The guy has a valid criticism about life in Ireland and your response is to tell him to shut up or put up. It's typical of this country actually. I'm Irish and I actually agree with him and just because he questions our view on property does not mean he is not integrating. I lived in Germany in the 1990s and frankly you would be ashamed by how many Irish people living in Germany at the time didn't even bother to learn to speak German - some way of integrating, I would say. I would venture to say that any non-national who can come on a message board like this and write fluent English is making a better stab of integration than many Irish did when they were on the emigration trail.

OP, there are several reasons. One of the most popular reasons given is historical. In the past - in the long time past - there was a saga involving landrights, land ownership, based on absentee landlords in the UK holding land in Ireland, problems with eviction and a major lack of security of tenure. Because of this, culturally, the Irish attach a lot of importance to owning their own property. That is one reason although I suspect it is no longer the most important.

The second reason is that currently, tenancy legislation is far less protective of the tenant in Ireland than equivalent legislation in either Germany, France or Belgium (I have experience of this countries myself). Security of tenure is limited to 56 days in a base case scenario if the landlord wants to sell or occupy the property him/herself. As such, most people in Ireland find it too precarious for planning. Additionally, we now have a lot of amateur landlords who do not know their obligations under current (less than onerous) legislation and behave accordingly. I am speaking from the experience of getting 2 weeks notice from a landlord when according to the law I was entitled to 8 weeks, for example.

Third reason is the horrific capital appreciation we've witnessed here for the past ten years or so. If you bear in mind that apartments in the estate I live in went up in market value by 100,000E in the last 18 months, you might understand a prevailing fear that if people don't buy as soon as they can afford to, they may be (and have been) priced out of the market. This does not lead to very rational behaviour given the second reason I cited above.

Fourth is this idea that rent is somehow a waste of money. That's kinda naive I think. It's tied in with "and I don't want to pay someone else's mortgage either". Effectively they are short term points of view in some ways, long term in other ways. The problem - as I see it - is as an excuse that only works if you are living in a property that a) you love and b) suits you for the long term. Unfortunately most small apartments in Ireland rarely fall into that category and many people at the limit of affordability, that's what they are buying.

Yes it's an obsession and we don't all have it to the same degree. However, my view is that obsessions can destroy you and this one is not going to be any different.

bringitdown

/edit: Looks like Calina got the point across whilst I was a-typing.

Good crap nereid that was totally uncalled for.

Lets for the sake of argument say the OP was not German and instead a "lovely" oirish person, their question is just as valid and would not attract that kind of response.

OP I guess there is no straight answer, some would say its a throw back to when we were under British rule and we land-lorded over so to speak, some would say we have too much money and no sense, some would say its is just nice to have a house that you can always fall back on.

The idea of paying a landlord for the rest of your life, given that you have little or no long term leasing here and that they have the power (thanks to archaic laws dating back to ... !) it just doesn't appeal to most people.

That said I am happy as larry to rent right now, it is more flexible, incurs no debt on my behalf etc etc. I guess I'll WANT a house when I really need one.

Sponge Bob

talkingclock wrote:

I'm German and I have a question: could someone please explain to a foreigner why Irish people are obsessed with buying houses?

It goes back to the 19th century The Famine and the Evictions After the Famine and the Land Wars

Basically if you owned your own land then you might not starve to death like 1m Irish did between 1845 and 1849. That sort of explains the basic obsession with owning not renting , in ireland 80%+ own where in Germany 80%+ Rent.

In very recent years our banks have done some very stupid lending which has gone on overpriced property in MittelEuropa and Bulgaria and Cape Verde and anywhere else that has a property bubble nowadays.

These banks stupidly believe their money is totally secured on 'valuable' Irish property and also that the whole of the new EU want to be 'property owners' like the Irish .

Moonbeam

There are plenty of reason.

Rent is dead money,you can't do up a rented house.
There is also pride in having your own house and for the last few years they have also been a good investment.

If I wanna go travel the world I can sell ym house and travel on the profits that I have made:)

Obelisk29

talkingclock wrote:

I'm German and I have a question: could someone please explain to a foreigner why Irish people are obsessed with buying houses?

TC

You could start by reading J B Keane's The Field (or even renting the video) - something akin to the German concept of heimet.

It may have started with <yawn>800 years of being under the British jackboot</yawn> but latterly it's more a case of crazy capital appreciation and the opportunity to borrow money from the Germans to buy German cars

Zambia

Please ignore Jade goodys previous post. I saw no complaint against Irish society its a valid piont.

Basically we are all told from a very young age by our parents that we have to get on the property ladder. We are also told that rent is dead money you are only paying a landlord.

There was also large periods of time , when tenents rights where a huge issue under british rule. Some would say we still lack in this respect to this day.
Absentee landlords created much hardship. See here for an example

Boycott

Hence we are a little obessed with land especially since the last ten years has seen investment property give such good returns. Not to mention everyone likes to see there property rise in value. Whereas if you are renting you simply worry will your rent go up.

All in all these factors IMO opinion have lead to the current interest in property. Not to mention that ireland is now ranked as one of the richest countries in the world by rational that we own the most of our own property, Plus we own more property in europe per capita head than any other country.

Right or wrong mate thats how it is over here. Im sure i have left something out but I am equally sure someone will enlighten us

I suggest you have your friend look at the Bubble Bursting thread (20 pages long) where so far no-one has come up with a good case for house prices not falling this year. He is a braver man than me if he is going to buy a flat this year.

Calina

Moonbeam wrote:

There are plenty of reason.

Rent is dead money,you can't do up a rented house.
There is also pride in having your own house and for the last few years they have also been a good investment.

If I wanna go travel the world I can sell ym house and travel on the profits that I have made:)

Rent is not dead money, it is payment for a service. Unfortunately Irish people tend not to recognise the value in that service for different reasons.

Because of the nature of the rental market in Ireland, you can't do up a house. You could if there was more security of tenure and if, as in Germany, the only requirement was that you redid it as you got it when handing it back. As most property in Ireland is furnished, this is difficult. Someone mentioned that this was linked also to landlords trying to limit security of tenure - in the past - apparently - you had more rights as a tenant if you furnished the property yourself rather than using the landlord's furniture.

Pride is not a valuable asset because it can be misplaced. You can have pride in your own place certainly, but most pride - latterly - is linked to its monetary value, not its utility value. This has led to the ridiculous commuting society we have right now. We attach more importance to owning the house rather than the practicalities linked with the location of that house.

If you want to go and travel the world, you can sell your house, yes, but there are transactional costs - which mean rebuying later will cost disproportionately more, and if you decide to rent it out, you're one of those am landlords contributing to an unstable rental stock. You also - at this stage - cannot rely on profits on housing as market values are stagnant and, in many cases - falling.

Idleater

Ok.

I was quite harsh in my post.

However, at the risk of pointing out the obvious, there is a huge number of threads with a huge number of posts.

namely Housing Bubble bursting in which the question that the OP is asking is answered.

Similarly people have different opinions

callina wrote:

Rent is not dead money, it is payment for a service. Unfortunately Irish people tend not to recognise the value in that service for different reasons.

moonbeam wrote:

Rent is dead money,you can't do up a rented house.

The OP is not going to get an answer on an internet forum, in the same way that they are not going to get an answer from the person in work.

L.

Calina

nereid wrote:

Ok.

I was quite harsh in my post.

However, at the risk of pointing out the obvious, there is a huge number of threads with a huge number of posts.

namely Housing Bubble bursting in which the question that the OP is asking is answered.

Similarly people have different opinions




The OP is not going to get an answer on an internet forum, in the same way that they are not going to get an answer from the person in work.

L.

The OP has already gotten quite a number of valid answers on this forum at least. Directing him towards HouseBubbleBursting is not a helpful response as it is becoming a garagantuan thread dealing with why prices should be coming down, and not why the obsession exists in the first place.

Your response was not just harsh, it was rude and unhelpful. You could have just ignored the post but you didn't and your latest doesn't justify your earlier post, end of story.

talkingclock

Dear all,

thanks a lot for the input and the positive encouragement. Ye all mention the famine and the landwar as a reason. in a bigger historical context, of course. But you're not expecting a new land war or famine, don't you?

It helps me now a bit more to understand...

Re the low tenant rights: just read the other thread "a tenant demolished a wall by hammering nails in it". I now totally understand...

But back to my observations. Those who lived in Germany will maybe understand if I am astonished to see so many people buying houses and living in estates where all houses looks as the same, with no infrastructure and where internal walls are build of Sheetrock and without infrastructure in the estate for a just horrendous price that is not mirroring the actual value of the dwelling (ever seen a house without cracks in the wall?).

You might be wondering why I'm so observant. After four years now on Emerald Island I made up my mind and might share your obsession But i definately will wait a bit longer

EDIT: I read already the Housing Bubble Bursting thread with high interest for a certain reason - see my last sentence.:)

CiaranC

Nereid, why are you posting in this thread? Youve contributed nothing other than flaming, trolling, directing the poster to threads with hundreds of replies and suggesting that internet forums are pointless. Stop posting.

Calina

talkingclock wrote:

thanks a lot for the input and the positive encouragement. Ye all mention the famine and the landwar as a reason. in a bigger historical context, of course. But you're not expecting a new land war or famine, don't you?

It helps me now a bit more to understand...

Re the low tenant rights: just read the other thread "a tenant demolished a wall by hammering nails in it". I now totally understand...

But back to my observations. Those who lived in Germany will maybe understand if I am astonished to see so many people buying houses and living in estates where all houses looks as the same, with no infrastructure and where internal walls are build of Sheetrock and without infrastructure in the estate for a just horrendous price that is not mirroring the actual value of the dwelling (ever seen a house without cracks in the wall?).

Those of us who lived anywhere other than Ireland or the UK....

There is some scope to assume that there will be wholesale war when the chickens come home to roost, the housing market crash, negative equity stalks the land and people demand to know why other people told them it couldn't happen, that you couldn't lose money on property.

As for the housing stock: political will in this country is against one off housing (or popular will) on environmental grounds, but planning is done piecemeal. Me, I'd like to see gated/walled estates banned and apartment blocks built as streets and avenues rather than in nameless estates which are difficult to serve by public transport. As for the build quality, ahem, don't get me started. Even we complain about it...but not enough, and because of the massive excess of demand over supply lately, builders have been able to pretty much do what they like.

Don't much like it myself, to be honest.

Zambia

talkingclock wrote:

Re the low tenant rights: just read the other thread "a tenant demolished a wall by hammering nails in it". I now totally understand...

That was a simple case where the tenant had damaged the property , no european country would have allowed it , Surely?

talkingclock wrote:

But back to my observations. Those who lived in Germany will maybe understand if I am astonished to see so many people buying houses and living in estates where all houses looks as the same, with no infrastructure and where internal walls are build of Sheetrock and without infrastructure in the estate for a just horrendous price that is not mirroring the actual value of the dwelling (ever seen a house without cracks in the wall?).

Ok can you tell us what the property market is like in Germany? Remeber something is worth what people are willing to pay for it. It would be like saying the mona lisa is just some paint and canvas.

Moonbeam

"Pride is not a valuable asset because it can be misplaced. You can have pride in your own place certainly, but most pride - latterly - is linked to its monetary value, not its utility value."

There is more pride in actually owning a house rather then the monetary value of the house,starting out anyway.

"Because of the nature of the rental market in Ireland, you can't do up a house. You could if there was more security of tenure and if, as in Germany, the only requirement was that you redid it as you got it when handing it back."

I wouldn't see much point in doing it up in the first place then.

I rented for about 6 years,if I leave the country for a while I have no problems renting my house out,I have nothing against rental generally but I do feel it is much nicer to go home to your own house,paint it what colours you want,put down what ever flooring you want etc

hmmm

I think it's because Irish people have only recently come into wealth as experienced by other Western Europeans. Until recently, "wealth" always seemed to be measured by property. Irish people are quite naive investors as we don't have the hundreds of years experience managing wealth Germans would have, and tend to be sucked in by investment scams and impossible promises of wealth. You see it reflected also in previously very poor countries like Spain and Portugal.

A 21 year old desperate to buy property is not a surprise, their whole experience (and the advice handed down from their parents) is to buy property. Sure you'd make more money doing something else or by renting nowadays, but that will take 20 years to sink in. It's inexperience, and it is being preyed upon by the unscrupulous (watch Irish "investors" pour millions into countries you've never heard of).

Calina

Moonbeam wrote:

"Pride is not a valuable asset because it can be misplaced. You can have pride in your own place certainly, but most pride - latterly - is linked to its monetary value, not its utility value."

There is more pride in actually owning a house rather then the monetary value of the house,starting out anyway.

"Because of the nature of the rental market in Ireland, you can't do up a house. You could if there was more security of tenure and if, as in Germany, the only requirement was that you redid it as you got it when handing it back."

I wouldn't see much point in doing it up in the first place then.

I rented for about 6 years,if I leave the country for a while I have no problems renting my house out,I have nothing against rental generally but I do feel it is much nicer to go home to your own house,paint it what colours you want,put down what ever flooring you want etc

On the other hand, I have major problems with people like you doing that because it has an impact on the rental market. The current house I live in is rented out by someone who has done just that and because there is always a risk that the owner will come back from her year out and reclaim her house I have absolutely zero security of tenure regardless of the protection afforded me in law. Occupation by landlord or family thereof is one of the reasons a Part VI tenancy can be terminated. As a result, this feeds into the issues in the rental stock and directly causes some of this obsession with property which imo is far from healthy if only because obsession in anything is usually unhealthy.

As for your point about redecorating - if there was decent long term security in this country and if it were possible to rent places unfurnished (there's a very limited market on that front here) I wouldn't actually have a problem with it. In Germany my experience was that things could be negotiated with landlords, for example. Here you can't.

In this country - at this moment - most people are expending energy on how much the value of their property has risen since they bought it. Pride in actual ownership might come back when houses cease to be seen as a get rich quick seen and then people might stop posting idiotic questions like "I've bought a house in Balbriggan, anyone know how to get to Clondalkin fast as possible". People are valuing ownership over practicality and that is a recipe for disaster.

Sponge Bob

talkingclock wrote:

Dear all,

thanks a lot for the input and the positive encouragement. Ye all mention the famine and the landwar as a reason. in a bigger historical context, of course. But you're not expecting a new land war or famine, don't you?

We do not expect a new famine but in the west of Ireland we can still see the famine fields every single day . The population in the west was decimated. Look at the differences between 1841 and 1851 here and here

We had one or two similar famines in the 1700s . In each of the great famines at least 10% of the population was wiped out. In 1741 it was possibly as high as 12% in one year, worse than the great famine in 1845-49.

In each of the great famines the popuation of the west of Ireland reduced by 25% in a short space of time. Many died while many left for Liverpool and Boston and Dublin .

These were very traumatic events , worsened by the fact that the victims were forced to pay rent to the landlords who had stolen their land off them in the 17th century. To my mind the thing that finally killed off the famine was Ireland joining the EU in 1972 and discovering Butter Mountains and Wine Lakes. The great famine had a lasting effect until about 1980 to my mind and this effect impacted on everyone born before about 1975 who would be somehow conscious of it, even if only because their grandad would refuse to eat dinner if there were no potatoes. The older you are the more profound the effect. Mussels in the west of Ireland, they were "Famine Food" for many and lots refused to eat them.

As 80%+ of the population have owned in Ireland since about 1903 after the Wyndham Act the state did have equally high priorites to protect the 20%- who rent because most own instead. In Germany the 80%+ who rent have priority when laws are made.

The laws are normally made in order to protect the majority interest , whatever the country .

talkingclock

Zambia232 wrote:

That was a simple case where the tenant had damaged the property , no european country would have allowed it , Surely?

No landlord in Germany would make a fuss about nails in the wall as this is considered as normal living... But that's not to be discussed here in that particular thread here

Zambia232 wrote:

Ok can you tell us what the property market is like in Germany? Remeber something is worth what people are willing to pay for it. It would be like saying the mona lisa is just some paint and canvas.

My hometown Erfurt (www.erfurt.de) has approx 200,000 citizens, is the capital of county Thueringen (and therefore a lot of civil servants with reasonable income) and has an unemployment rate of approx 16%. If we buy houses we first check for the square meters and then for the bedrooms. We value the house mainly for space and not for the amount of rooms. Just as a little background.

Now, house prices there reach from 180sqm living space, 6 rooms, 585sqm land for 320,000 EUR just outside the city centre but not suburban to 130sqm/145sqm, 4 rooms for 87,000 EUR in a sub urban enviroment (but with tram and bus connection). A prime location in the historical city centre would be 127sqm, 4 rooms for 235,000 EUR.

Just have a look here for a list: http://tinyurl.com/2ogvat

After all still cheaper then a flat in Ennis I guess...

Calina

talkingclock wrote:

No landlord in Germany would make a fuss about nails in the wall as this is considered as normal living...

but then, no plasterboard walls either, I guess....

and agreed about the square metrage here - the only interest here seems to be is it or is it not over 125 sq metres (stamp duty band....)

talkingclock

Calina wrote:

but then, no plasterboard walls either, I guess....

See, would you have a house built properly with a proper wall - it wouldn't fall apart

Sponge Bob

talkingclock wrote:

See, would you have a house built properly with a proper wall - it wouldn't fall apart

I had a job once in Germany installing bathrooms made completely out of a lump of plastic in through where the window was supposed to go

talkingclock

Sponge Bob wrote:

I had a job once in Germany installing bathrooms made completely out of a lump of plastic in through where the window was supposed to go

Wha?! Really? :eek: When and where? Social housing built by the government?

Zambia

talkingclock wrote:

See, would you have a house built properly with a proper wall - it wouldn't fall apart

So you admit the wall fell apart thats damage ergo - they damaged the property

Anyway thanks for that rundown.

So i gather that if myself and all my Irish investor buddies brought loads of these 87,000 euro Houses how soon could we expect to see a rise in them ?

Lads just as a matter of interest here is the current selling price of a full spec X5. 131,000

http://cbg.ie/NewCars/BMW/X5/SUV/4.8iS_Auto_Exclusive_Edition.aspx

The mind boggles

Idleater

CiaranC wrote:

Stop posting.

Done and Done...

D'oh!

L.

Sponge Bob

talkingclock wrote:

Wha?! Really? :eek: When and where? Social housing built by the government?

Munich in teh 1980s , student housing actually. I was amazed because I thought the Germans could tile .

talkingclock

That's really surprising. Was it like a fitted plastic box?

@zambia: don't do it! You and your fellas already have ruined the market for the locals in spain and south of france. The same as the germans did on Majorca...

gazzer

One of the main reasons for buying a house I would have thought is that when you retire you have the mortgage paid off so you dont have the worry of streching out your weekly pension to pay for somewhere to live. If you are still renting the money left over in your pension after paying your rent wouldnt go very far.

Calina

Sponge Bob wrote:

Munich in teh 1980s , student housing actually. I was amazed because I thought the Germans could tile .

Freimann? - they sound awfully familiar to me....