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The First Time Buyer Syndrome.
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Exactly. I've gone almost blue in the face trying to explain this to people who are of the mindset that rent is always dead money. I fully intend to buy when I feel I'm getting value for money and when I can get a place I want to live in rather than this ridiculous "first step on the ladder" mentality that's arisen in recent years.
im one of the few lucky people who saved for rainy day and can prob go tomorrow and buy some cheap starter place in cash
BUT
i really don't know if i want to stick in Ireland for the longterm, the way things are going its tough decision....
especially considering i can work anywhere in world with electricity and internet connection, and there are cheaper/warmer place then here
so ya theres my 2^24 euro-cents
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im one of the few lucky people who saved for rainy day and can prob go tomorrow and buy some cheap starter place in cash
BUT
i really don't know if i want to stick in Ireland for the longterm, the way things are going its tough decision....
especially considering i can work anywhere in world with electricity and internet connection, and there are cheaper/warmer place then here
so ya theres my 2^24 euro-cents
.
I agree. A mortgage is a trap that people have to live with for 30 years of their lives. People bought into the "buy before prices go up" attitude during the property boom before thinking it out clearly.
Anyone with some knowledge would have pointed out the housing bubble was going to eventually burst thus having reduced property prices. The prices have dropped between 30 and 40%. Demand is still not there so I can see these dropping even further with also the cost of construction to decline even futher.
Somewhere in the line of 70% reduction would be similar to the property prices decline in other countries that have went through property bubbles. Even then many people will be unemployed in the country so demand will still be weak.0 -
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ok. i didnt realise AARRGH that we were talking about mortgages lasting only from 2005 to 2008. And that people have only bought houses in those years. Or is it just you talking about that.
You do know that mortgages are much longer terms than that dont you? And that people bought house in other years too?
Maybe they should have invested their money in the stock markets during those years instead.
I just hope they stayed away from the banks
Or any stocks come to think of it. 0 -
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TaxiManMartin wrote: »ok. i didnt realise AARRGH that we were talking about mortgages lasting only from 2005 to 2008. And that people have only bought houses in those years. Or is it just you talking about that.
You do know that mortgages are much longer terms than that dont you? And that people bought house in other years too?
Maybe they should have invested their money in the stock markets during those years instead.
I just hope they stayed away from the banks Or any stocks come to think of it.
OK at the current market level, people who bought say pre-2003 are not in negative equity but the market has further to fall. If you think it can't fall much further, just look at this graph of Japan house prices:
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OK at the current market level, people who bought say pre-2003 are not in negative equity but the market has further to fall. If you think it can't fall much further, just look at this graph of Japan house prices:
Oh I believe it has further to fall alright.
Im only trying to make the point that not everyone who bought a house is going to end up in the red. Some here seem to think this applies to all house owners.
I also believe people are purposely cherry picking the worst years and the worst crashes (as above) for dramatic effect.
Any other examples out of the dozens of property crashes in the world?
Did any more last that long or did you just pick Japan because it was the worst one? How long do they normally last. Thats like someone posting up a graph of the shortest property bear market, isnt it. It means nothing in the wider context.
How about an average of about 10 of them.0 -
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It doesn't apply to all but when you consider 50% of Ireland's housing stock has been built since 1994, I'd bet there is an enormous feck-load of them out there.TaxiManMartin wrote: »Some here seem to think this applies to all house owners.
Again, you're making the mistake of assuming that we're saying property is always a bad investment, when in fact what we're doing is countering your argument that property is always a good investment.TaxiManMartin wrote: »I also believe people are purposely cherry picking the worst years and the worst crashes (as above) for dramatic effect.TaxiManMartin wrote: »Any other examples out of the dozens of property crashes in the world?
Did any more last that long or did you just pick Japan because it was the worst one? How long do they normally last. Thats like someone posting up a graph of the shortest property bear market, isnt it. It means nothing in the wider context.
How about an average of about 10 of them.
I hate to break it to you but property crashes around the world all follow pretty much the same trend. All that crap you heard from the ESRI about a "soft landing"? Either they were lying or stupid enough to actually believe that something that has never ever happened would miraculously happen here in Ireland. In this graph, you can see UK house prices. Note the bubble in the early '90s and then imagine what it's going to be like coming down the other side of that huge peak you can see in 2006:
OK look I have a really big issue with the attitude being expressed by a few people here (and in other places) about property:
The idea that rent is dead money/property is a good investment etc etc fails to grasp the idea that property is not just about investment. If people want to go around hyping up the market in, say, DVD players, I really couldn't care less because DVD players are not an integral part of my life, nor are they one of my daily necessities. Property, (ie shelter) on the other hand, is right down there at the bottom of Maslow's hierarchy of needs. When you treat something too much like an investment or asset, there is a very strong risk that the poorer sections of society will not have the opportunity to acquire this item or enter the market. ie, people are priced out of the market.
In other words, I'm sick of housing being treated as something just to make money out of and not as a basic human right in this country.0 -
In other words, I'm sick of housing being treated as something just to make money out of and not as a basic human right in this country.
Taconnol`s final sentence just about describes it I think.
My reasoning for posting the original item was a genuine and still existant uncertainty as to how generations of mainland Europeans DID manage to thrive into old-age in rented acomodation ?
There is a somewhat dark shadow over the Irish property owning classes (of which I am one) going forward as to how in a contracting labour market the average blue-collar single income family will be able to service their Mortgage?
I have little doubt but that these folks are going to be faced with some very unpalatable choices such as the affordability of more children,the ability to run a second (or even a first) car and many of the aspects of modern living which we had begun to assume as "Normal".
What concentrates my mind more than anything is the extent to which external,financial sector pressures were brought to bear on a large sector of our young well educated and marketable population to turn them into a large group of hamstrung mortgage payers who now dance to the tune of a lending agency`s legal department.
I just despair of how we ended up in a situation where Renting or Purchasing one`s resedential property ended up as two diametrically opposed means to the same end,ie: the accquisition of a safe comfortable location from which one could live their full life
Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.
Charles Mackay (1812-1889)
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BroomBurner wrote: »First off, do "most continentals" rent for all their lives?
Secondly, in what countries are you looking at?
Thirdly, what is the legislation like in each of those countries regarding the availability of landspace for the building of new homes?
You need to be able to answer each of these questions, then compare it to Ireland, before you can have an answer to why people here are more concerned with buying than renting.
as for the "100% correct for a renter to rent now", that is quite a ridiculous comment to make. I could just throw out the statement "it's 100% correct for homeowners to own a home now"
Guess, you must not like renting a hotel room as after all its dead money
Firstly, yes alot do. You see, rents are normally half the price in major cites there than here hence its a cheaper option than buying there. Plus tenants have greater rights as better security of tenure. There is none of this property speculation nonsense you get here and in UK.
Countries - Germany, Netherlands, Denamrk, France, Italy etc
Landspace as far as i know is tightly controlled so as to preserve green belts due to high populations in contrast to our urban sprawl and commuter lifestyle with low densities.
Yes, it is 100% correct. Have you looked at the maths?
I will spend 10,800 on renting this year. The apt to live in if i bought will fall by greater that amount in the year as it has in the past year(at least double). Its a no-brainer to rent.BroomBurner wrote: »Someone else made the point that renters would be in more affluent areas - I actually laughed at that one. Affluent areas will hold higher rents, as they will hold higher mortgage values. Also, I'll presume for this thread we're talking about private renters, and not council renters.
Thats absolute horsepoo of a post.
I'm renting 2bed apt in D4 for 900 which as you know is one of the most expensive districts in Ireland.
An equivalent mortgage would be at least 400k at 1700per mth on teaser rates of 2% and 2300 per mth on normal interest rates of 5%.0 -
Guess, you must not like renting a hotel room as after all its dead money
Firstly, yes alot do. You see, rents are normally half the price in major cites there than here hence its a cheaper option than buying there. Plus tenants have greater rights as better security of tenure. There is none of this property speculation nonsense you get here and in UK.
Countries - Germany, Netherlands, Denamrk, France, Italy etc
Landspace as far as i know is tightly controlled so as to preserve green belts due to high populations in contrast to our urban sprawl and commuter lifestyle with low densities.
The other benefit of the lack of speculative stuff on the continent is a much lower level of amateur landlords. Investment companies own a lot of apartment blocks that are viewed as a long-term investment and they recognise the benefit of encouraging long-term renters. Here we have lots of individuals who speculated, bought a 2nd property to rent out and don't do a proper job as a landlord (not necessarily intentionally).0 -
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