Buying a house!! Will price go down?!!!

kinetic

Dont touch it at anything near that price!

Anyone selling between now and spring is stuck and has to sell.Offer low threes for it and maybe its value at that, but not necessarily so as things seem to be going from bad to worse.

ohnoigotsick

DJDC wrote: »

Maybe this might make you slightly more demented. You are going to spend 10s of thousands on a mortgage on a house over the next 3-5 years that you dont even want, in a location that you dont even want to live in.Prices arent going to rise in real terms in that time period, theres a 80% probability of that.You are basically holding a depreciating asset that is accelerating in devaluation.Unlucky!

or i can live my life instead of looking at it as a balance sheet

Firetrap

You can live your life whatever way you want. For most people, buying a house is the biggest purchase they'll ever make and the biggest ongoing expense in their lives. It's very hard not to think about balance sheets when there's a sizeable chunk of your salary going out of your bank account every month.

Climate Expert

ohnoigotsick wrote: »

or i can live my life instead of looking at it as a balance sheet

So why don't you just spend all your money now on having fun, forget the financial implications.

I can't stand the attitude that personal finances are there to be ignored.

Tom123

If you pay 380k for a place advertised at 410k it going to fall significantly in value over the next 5 years.

ohnoigotsick

Climate Expert wrote: »

So why don't you just spend all your money now on having fun, forget the financial implications.

I can't stand the attitude that personal finances are there to be ignored.

i don't ignore my personal finances and go out on the lash and waste my money away but i am of the attitude that i have to live somewhere and have to live my life instead of waiting and waiting for a price to come down and pay rent which goes to pay someone elses mortgage.

if i sell my house anytime soon , i won't be in a rush to buy the next house, but i won't wait around forever to buy it either

Theboinkmaster

ohnoigotsick wrote: »

i don't ignore my personal finances and go out on the lash and waste my money away but i am of the attitude that i have to live somewhere and have to live my life instead of waiting and waiting for a price to come down and pay rent which goes to pay someone elses mortgage.

if i sell my house anytime soon , i won't be in a rush to buy the next house, but i won't wait around forever to buy it either

"and pay rent which goes to pay someone elses mortgage" that old chestnut eh

why don't you do some research here and on the propertypin.com as you are just so wrong

SkepticOne

I think there's still significant downside risk in the current market based on the vast build up of inventory despite few properties coming onto the market per month. We are still in the denial phase - a sort of Mexican stand-off - and this could go on for years with a backlog of both buyers and sellers building up.

So far my guess is that most people who got into the market late with investment properties are still trying to hold on to them in the hope that the market picks up. We need to see the end of this phase before we can see the market picking up but there's no telling how long it will take. The lowering of interest rates recently may have the effect of dragging out the length of time we will have to wait.

Firetrap

Better to pay someone else's mortgage for a year or two than to lose tens of thousands of your own money IMHO.

Tom123

Firetrap wrote: »

Better to pay someone else's mortgage for a year or two than to lose tens of thousands of your own money IMHO.

Especially since the interest you will be paying to the bank will be more than the rent you would be paying.

Magic Pips

El Stuntman wrote: »

oh well...when you put it like that...sold!

I see you're in Johannesburg, what would 375k get you there in a nice suburb (Sandton maybe)?

Haha, yea could get a well nice place - 10 foot walls, electric fence, electric gates... ya know all the 'frills'! Problem over here is their interest rate is up around 14%! If i were to buy here it'd be cash all the way! Maybe a nice lil place in Blairgowrie or so!

Anyways... OT... OP - go in with an offer of 365 for the place, see what the owner comes back with, in this market if somebody is looking to sell - chances are they need the money!
good luck!

SimpleSam06

SkepticOne wrote: »

We are still in the denial phase - a sort of Mexican stand-off

A Mexican stand-off implies that both sides have just as much at stake. This is not the case, most buyers can happily wait for the next decade without too much trouble.

This would be more like a ghost town after the gold rush in the old west. Nobody really cares anymore.

ntlbell

ohnoigotsick wrote: »

i don't ignore my personal finances and go out on the lash and waste my money away but i am of the attitude that i have to live somewhere and have to live my life instead of waiting and waiting for a price to come down and pay rent which goes to pay someone elses mortgage.

Ever buy new clothes?

You were paying someones mortgage.

Ever eat in a restraunt?

You were paying someones mortgage

Own a mobile phone?

your paying someone's mortgage.

Just about every single time money comes out of your pocket into someone else's your paying someone else's mortgage.

What you get in return for the money is a service/product

the clothes/the phone etc

The service in this case renting is a lot cheaper than the service a bank is offering you by lending you money to buy a home and charging you roughly the same price of the home or more on interest.

If the rent is cheaper than the interest the bank charges on the mortgage

where do you think the 'dead' money's going?

probably paying someone else's mortgage

ohnoigotsick

ntlbell wrote: »

Ever buy new clothes?

You were paying someones mortgage.

Ever eat in a restraunt?

You were paying someones mortgage

Own a mobile phone?

your paying someone's mortgage.

Just about every single time money comes out of your pocket into someone else's your paying someone else's mortgage.

What you get in return for the money is a service/product

the clothes/the phone etc

The service in this case renting is a lot cheaper than the service a bank is offering you by lending you money to buy a home and charging you roughly the same price of the home or more on interest.

If the rent is cheaper than the interest the bank charges on the mortgage

where do you think the 'dead' money's going?

probably paying someone else's mortgage

i appreciate that when i buy clothes etc, i pay for the service and the goods etc , and that goes towards a salary which may or may not pay a mortgage.

so after 20/30 years of renting what have you got to show for it ?

thats my opinion that rent money is dead money and that you have to live somewhere and yes the first few years of the mortgage are 95% interest payments alone

The_Conductor

ohnoigotsick wrote: »

so after 20/30 years of renting what have you got to show for it ?

The satisfaction of having had a much higher standard of living than you might otherwise have been able to afford- living in a bigger, better house than you can afford, with more disposable income to spend as you choose. While I accept that at the end of the day if you purchase you have the asset- you do pay through the nose for it, in comparison with renting, and as the expression goes- "there are no pockets in a shroud". Ultimately the two universal constants come into play, death and taxes. You can enjoy life to the full- or you can risk the taxman taking a bite out of your hard won assets.

When asset prices were rocketing- it was a no-brainer. Not anymore........

ntlbell

ohnoigotsick wrote: »

i appreciate that when i buy clothes etc, i pay for the service and the goods etc , and that goes towards a salary which may or may not pay a mortgage.

so after 20/30 years of renting what have you got to show for it ?

thats my opinion that rent money is dead money and that you have to live somewhere and yes the first few years of the mortgage are 95% interest payments alone

It's only dead money if the rent is more expensive than the interest on the mortgage

Renting is not always the right option, but it's not always the wrong option, it's not _always_ dead money.

But _always_ assuming rent is dead money is _always_ the wrong option.

ohnoigotsick

ntlbell wrote: »

It's only dead money if the rent is more expensive than the interest on the mortgage

Renting is not always the right option, but it's not always the wrong option, it's not _always_ dead money.

But _always_ assuming rent is dead money is _always_ the wrong option.

i'll agree with you that is not always right to assume it's dead money.

i'm calling it dead money in comparission to rent V Mortgage etc

gurramok

ohnoigotsick wrote: »

so after 20/30 years of renting what have you got to show for it ?

Save the difference in money and then buy when prices return to normal.

ohnoigotsick wrote: »

thats my opinion that rent money is dead money and that you have to live somewhere and yes the first few years of the mortgage are 95% interest payments alone

Ah yes. The brigade of paying for a house in Portarlington and commuting the rest of your life to Dublin as one cannot afford to buy in the capital.
Of course, this dead money has nothing to do with cheaper rent in Dublin resulting in a better standard of living than it would be to buy.

spockety

Renting is a very valuable service, and it suits a lot of people for a multitude of reasons. However, I'm not sure it makes long term sense.

In the rent vs buy debate, the pro-rent debaters point out issues of the monthly cost of renting vs buying the same property. However they do not take into account the fact that the initial monthly cost of a mortgage will in most cases remain fairly static over the 25 years of the mortgage. In the case of a renter, the rent will/should rise in line with inflation etc. After 25 years, there is no way that the monthly rent will be anywhere near as low as the monthly mortgage payment on a 25 year old mortgage.

After 25 years of mortgage payments, you then stop paying, and you own the asset outright. This usually coincides with retirement, which means your monthly pension income will go further than if you had to continue monthly payments on your home.

Pro-rent arguers will also point out that if you lose your job or your income for whatever reason, and you have a mortgage, you are pretty screwed because there is a huge risk of bank foreclosure on your home. However they don't say what happens if your loss of job/income means you can no longer pay your landlord his rent...

A healthy rental market is invaluable, and there are loads of reasons to use it. I guess the question has to be asked is is there really a "rent vs. buy" debate at all that covers all the bases? No. "Rent vs. Buy" should be evaluated based on an individual's specific circumstances and requirements.

ohnoigotsick

gurramok wrote: »

Ah yes. The brigade of paying for a house in Portarlington and commuting the rest of your life to Dublin as one cannot afford to buy in the capital.
Of course, this dead money has nothing to do with cheaper rent in Dublin resulting in a better standard of living than it would be to buy.

i'm not of that brigade thankfully, i live in a city and it's not the be all and end all.

think i'll drive home for my lunch now !

Randi

ntlbell wrote: »

Ever buy new clothes?

You were paying someones mortgage.

Ever eat in a restraunt?

You were paying someones mortgage

Own a mobile phone?

your paying someone's mortgage.

Just about every single time money comes out of your pocket into someone else's your paying someone else's mortgage.

What you get in return for the money is a service/product

the clothes/the phone etc

The service in this case renting is a lot cheaper than the service a bank is offering you by lending you money to buy a home and charging you roughly the same price of the home or more on interest.

If the rent is cheaper than the interest the bank charges on the mortgage

where do you think the 'dead' money's going?

probably paying someone else's mortgage

When I buy clothes they are mine to keep I dont have to give them back after a month or a year. Theres a big difference in buying food, using a phone, and paying rent and a mortgage

SimpleSam06

spockety wrote: »

In the case of a renter, the rent will/should rise in line with inflation etc.

Thats your first mistake there. Rents have nothing to do with inflation - they follow supply and demand.

spockety wrote: »

After 25 years of mortgage payments, you then stop paying, and you own the asset outright.

On the other hand you could have had vastly more money if you had saved up the equivalent mortgage payments over your lifetime.

spockety wrote: »

However they don't say what happens if your loss of job/income means you can no longer pay your landlord his rent...

You move somewhere cheaper. Mobility is one of the major reasons that renting can be better than buying. If you need to change jobs or whatever, it does you no good to be paying a mortgage somewhere you can't live.

With all that said, I broadly agree with the sentiment that long term, buying is better for most people. Just not for the reasons you outline. And by long term, I don't mean "buy now and think of the long term", I mean "don't buy in the near future".

ntlbell

Randi wrote: »

When I buy clothes they are mine to keep I dont have to give them back after a month or a year. Theres a big difference in buying food, using a phone, and paying rent and a mortgage

there's no difference in anything where you use a service pay for it and at the end of it have no asset your spending money you receive a service in this case you get use of the house/apartment

land line rental
mobile phone useage
broadband useage
ntl
restraunts
hotels

you pay money use the service and poof it's gone

spockety

SimpleSam06 wrote: »

Thats your first mistake there. Rents have nothing to do with inflation - they follow supply and demand.

Every single commercial transaction that happens follows the laws of supply and demand and yet are effected by inflation! You cannot seriously be suggesting that there is any chance whatsoever that over a 25 year period in Ireland a monthly rent will not increase at all in real terms?

On the other hand you could have had vastly more money if you had saved up the equivalent mortgage payments over your lifetime.

Another often rolled out pro-rent argument. Unfortunately it never accounts for human nature, and I have never personally come across anyone who consciously saves or invests the difference in rent and mortgage payments on the property they rent. It just doesn't happen, people tend to spend the money elsewhere in their lives.

You move somewhere cheaper. Mobility is one of the major reasons that renting can be better than buying. If you need to change jobs or whatever, it does you no good to be paying a mortgage somewhere you can't live.

But the fact remains that you are out on your ear, so it's not really a fair argument/comparison. Person with zero income is out of their home no matter if they own it or rent it, in most cases.

With all that said, I broadly agree with the sentiment that long term, buying is better for most people. Just not for the reasons you outline. And by long term, I don't mean "buy now and think of the long term", I mean "don't buy in the near future".

Well now you're getting specific with respect to the Irish property bubble/crash. In a healthy market renting can make sense for some people and buying makes sense for others. It just seems to me that there are a lot of people who say 'rent no matter what, buying is stupid', and assume everyone circumstances are the same.

BTW, I rent!

SimpleSam06

spockety wrote: »

You cannot seriously be suggesting that there is any chance whatsoever that over a 25 year period in Ireland a monthly rent will not increase at all in real terms?

I didn't say it wouldn't increase, I said it didn't follow inflation. Inflation might go up or down, but if the landlords can't rent their properties, rents go down. If there aren't enough properties, rents go up. Since you don't need to supply a property with anything other than the odd dose of elbow grease, this is largely independent of inflation. Thats what make rental rates different from most other goods or services.

spockety wrote: »

have never personally come across anyone who consciously saves or invests the difference in rent and mortgage payments on the property they rent.

I think a lot of people are starting to learn the importance of savings. It will take a while to sink into the heads of some, mind you.

spockety wrote: »

But the fact remains that you are out on your ear, so it's not really a fair argument/comparison. Person with zero income is out of their home no matter if they own it or rent it, in most cases.

You're saying, if you're broke, you're in trouble? Hmm.

The major difference is if you are broke while renting, you won't be declared bankrupt and marked as such for life. Furthermore, if you are broke while renting, you probably won't have a huge loan hanging over your head.

spockety wrote: »

It just seems to me that there are a lot of people who say 'rent no matter what, buying is stupid', and assume everyone circumstances are the same.

For most cases, they are right for the short term.

ZYX

SimpleSam06 wrote: »

I didn't say it wouldn't increase, I said it didn't follow inflation. Inflation might go up or down, but if the landlords can't rent their properties, rents go down. If there aren't enough properties, rents go up. Since you don't need to supply a property with anything other than the odd dose of elbow grease, this is largely independent of inflation. Thats what make rental rates different from most other goods or services.
.

Almost everything follows supply and demand but all together add to inflation. Prices don't follow inflation they are infact inflation. |Oil prices go up and down based on supply and demand but variations in oil price effects inflation. Potatoes go up & down in price based on supply & demand and that variation adds to inflation. Rents go up & down based on supply and demand but then affect inflation .

drunk_monk

I rented various homes for 6 years in Dublin and now live in my own property. Yes renting was a lot cheaper but it was hell. You move in then find damp appearing in bedrooms, mice, washing machines fail. Yes this can happen in your own property but it's down to you to fix it. Have you ever tried to get your landlord to fix it? Then when you find somewhere nice the landlord wants you to move after the years contract! In all I had to move 5 times in 6 years. Never ever again.

How you could put up with that for 20 plus years I'll never know

Climate Expert

drunk_monk wrote: »

I rented various homes for 6 years in Dublin and now live in my own property. Yes renting was a lot cheaper but it was hell. You move in then find damp appearing in bedrooms, mice, washing machines fail. Yes this can happen in your own property but it's down to you to fix it. Have you ever tried to get your landlord to fix it? Then when you find somewhere nice the landlord wants you to move after the years contract! In all I had to move 5 times in 6 years. Never ever again.

How you could put up with that for 20 plus years I'll never know

If you consistantly chose to live in ****holes for 6 years then you've only yourself to blame.

Then when you find somewhere nice the landlord wants you to move after the years contract

You have rights to stay in tenancy for a number of years.

drunk_monk

Climate Expert wrote: »

If you consistantly chose to live in ****holes for 6 years then you've only yourself to blame.


You have rights to stay in tenancy for a number of years.

Well I lived in what I thought were nice places in Kilmacud, Stilorgan, Clonskeagh. Problems only appeared once we had moved in. These were not cheap places either between €1000 - 1250 a month. What I'm trying to say is if something goes wrong then your more than likely in for a bad time trying to get it fixed.

SimpleSam06

ZYX wrote: »

Almost everything follows supply and demand but all together add to inflation. Prices don't follow inflation they are infact inflation. |Oil prices go up and down based on supply and demand but variations in oil price effects inflation. Potatoes go up & down in price based on supply & demand and that variation adds to inflation. Rents go up & down based on supply and demand but then affect inflation .

Oil prices go up and down based on stock market trends. Potatoes are influenced by oil prices, since that affects the price of the fertiliser the farmer has to truck into his farm and the price of the diesel used in the distribution network. And of course behind it all is the almighty dollar, which dictates inflation more than almost anything else, since most basic commodities are traded internationally in USD (oil, gold, food etc), and when they print more, inflation rises globally as the value of other things is diluted.

However the point that was being made was that it is quite possible for inflation to increase at 3% per year for 10 years, and rental rates to drop by 10% over the same period. This is because you don't need to supply much of anything to keep a rental property going, its to an extent independent of the greater economic picture.