David McWilliams predicts further 50% fall in house prices

ntlbell

spockety wrote: »

The monthly cost of renting increases over the years in line with inflation (or booms and busts )

The monthly cost of a mortgage is relatively fixed, so by the end of a 25 year term the monthly repayments should be relative pittance compared with the cost of renting the same property for a month.

This is not something that people seem to take into account when they say "renting is cheaper than buying". It might be, if you compare monthly repayments in the first year of the mortgage/lease.

The above assumes normal economic conditions and historic levels of inflation

you have to balnce it off with various other costs

maintenance of the house
management fee's
all sorts of insurance.
non financial costs like the freedom to move as you change jobs etc

it really is a very personal thing and very hard to put figures on

SoupyNorman

eoinshan wrote: »

Another option is to just act if you think the market is going to drive prices further down. If you're worried about prices falling more, why not just offer what you think/fear it might be worth when prices do reach the bottom? The worst that can happen is rejection.

The air is still full of blind ignorance, for one reason or another sellers are sticking to their guns, for example 2beds in Cannon hall are starting at €269k. I looked at these in January out of interest, recently the GF inquired about availability and she was nearly pulled through the phone by the agent for a viewing.

So what would you advise here, offer €100k less then the asking? It wouldnt be accepted in a million years but for me it's not worth €169k but if the asking price was €169k then you might get me half interested as then you start your offers in the €145 area.


Bottom line is, why should I strain myself running around looking for a bargain when I believe both the current market forces and time will do it for me.

sneakyST

I think the only "regret" I have in buying is not clearing the mortgage when I had the chance. I worked out that if the wife and I had of put 2k a month into it - it would have been cleared in 8 years. Oh well we had a ball instead

eoinshan

SoupyNorman wrote: »

Bottom line is, why should I strain myself running around looking for a bargain when I believe both the current market forces and time will do it for me.

Fair enough. It depends on your circumstances and I'm sure a lot of people are happy to wait. I am too actually, but I'm still going to make a low offer when I find the right place. The market dictates the prices. Whenever buyers are comfortable offering what they feel a house is worth, prices will follow. Vendors still have the right to refuse, withdraw the property from the market, etc.

It might seem ridiculous given where we were three years ago, but there's nothing to stop you saying to an estate agent "That house is listed at 380k. I'll give you 220k for it - take it or leave it. If the vendor wants to wait a year to get a better offer, they can, but then it could be worth 200k"

SoupyNorman

eoinshan wrote: »

It might seem ridiculous given where we were three years ago, but there's nothing to stop you saying to an estate agent "That house is listed at 380k. I'll give you 220k for it - take it or leave it. If the vendor wants to wait a year to get a better offer, they can, but then it could be worth 200k"

You could adopt that approach with almost any new build property at the moment but you'd probably never get an offer accepted, you are essentially trying to overtake market prices but to be fair the prices are hurtling downward at breakneck speed as it is. It may not seem that way to the impatient because it's big news and we are analyzing it on a daily basis but had you been locked in cupboard since last August and came out today you'd collapse, not only from malnutrition but from what you'd see as an epic drop in property prices.


If you are patient, you'll be rewarded.

seven-iron

Fear not. Anyone facing negative equity should'nt worry as long as they can meet the repayments for the next two-four years. Prices will pick up.

If you have a good property in a good location even better. Yes supply outweighs demand, yes many people are unemployed and straddled with debt but once Foreign Direct Investment picks up and is directed back into Ireland jobs will be created. FDI is cycical and Ireland is still one of the best places to do business. Low tax rates allows multi-nationals to organise their business in a way that pays the least tax. We speak English. We're close to both Europe and America. Also because our Govt. are not indebting future generations means we will be one of the first countries to benefit from the upturn.

oceanclub

seven-iron wrote: »

Fear not. Anyone facing negative equity should'nt worry as long as they can meet the repayments for the next two-four years. Prices will pick up.

If you have a good property in a good location even better. Yes supply outweighs demand, yes many people are unemployed and straddled with debt but once Foreign Direct Investment picks up and is directed back into Ireland jobs will be created. FDI is cycical and Ireland is still one of the best places to do business. Low tax rates allows multi-nationals to organise their business in a way that pays the least tax. We speak English. We're close to both Europe and America. Also because our Govt. are not indebting future generations means we will be one of the first countries to benefit from the upturn.

Da fundamentals are sound?

FDI is "cyclical"? So tell me in what circumstances will multinationals pull out from Eastern Europe and come back to Ireland? Only if house prices do not "pick up". That's the last thing we need.

P.

partyguinness

seven-iron wrote: »

Fear not. Anyone facing negative equity should'nt worry as long as they can meet the repayments for the next two-four years. Prices will pick up.

If you have a good property in a good location even better. Yes supply outweighs demand, yes many people are unemployed and straddled with debt but once Foreign Direct Investment picks up and is directed back into Ireland jobs will be created. FDI is cycical and Ireland is still one of the best places to do business. Low tax rates allows multi-nationals to organise their business in a way that pays the least tax. We speak English. We're close to both Europe and America. Also because our Govt. are not indebting future generations means we will be one of the first countries to benefit from the upturn.

I have the feeling that the pensions timebomb and the bank bailout is doing just that.

seven-iron

Apart from Dell, how many multi-nationals have gone to Eastern Europe?
How many Multi-nationals have stayed. Those that are thinking about it are probably already too late and have decided to stay. Would I be incorrect to take that as a good endorsement for this country investment wise.

oceanclub

seven-iron wrote: »

Apart from Dell, how many multi-nationals have gone to Eastern Europe?
How many Multi-nationals have stayed. Those that are thinking about it are probably already too late and have decided to stay. Would I be incorrect to take that as a good endorsement for this country investment wise.

"already too late" for what?

P.

rorysllvn

we will soon be able to buy houses 2 a penny :D

seven-iron

to late to get the required ROI from decentralisating operations.

oceanclub

seven-iron wrote: »

to late to get the required ROI from decentralisating operations.

I'm baffled as to what has to do with the chance of multinationals leaving Ireland in the next 5 years due to costs still being ahead of other countries. What is "decentralisating"?

P.

SoupyNorman

oceanclub wrote: »

I'm baffled as to what has to do with the chance of multinationals leaving Ireland in the next 5 years due to costs still being ahead of other countries. What is "decentralisating"?

P.

Seven-Iron has me just plain baffled.

whizzbang

seven-iron wrote: »

Fear not. Anyone facing negative equity should'nt worry as long as they can meet the repayments for the next two-four years. Prices will pick up.

If you have a good property in a good location even better. Yes supply outweighs demand, yes many people are unemployed and straddled with debt but once Foreign Direct Investment picks up and is directed back into Ireland jobs will be created. FDI is cycical and Ireland is still one of the best places to do business. Low tax rates allows multi-nationals to organise their business in a way that pays the least tax. We speak English. We're close to both Europe and America. Also because our Govt. are not indebting future generations means we will be one of the first countries to benefit from the upturn.

Am I reading you right that you think house prices will be back to where they are now in 4 years? Or just that we will have turned the corner in 4 years?

oflahero

seven-iron wrote: »

to late to get the required ROI from decentralisating operations.

Maybe that applies to Intel with their eye-wateringly expensive FABs, but what's to stop them just building the next one yonder eastwards? And that's on the extreme end of the scale. Other multinationals are far more mobile than them anyway and wouldn't blink at, eh, 'decentralisating'.

It needs to be hammered home time and again: cheaper housing = lower costs = higher competitiveness = higher attraction for FDI.

seven-iron

Am I reading you right that you think house prices will be back to where they are now in 4 years? Or just that we will have turned the corner in 4 years?

Yes, I think if your property is in a good location (as in a city or even close to it) and is a good property, it will have increased in value by 35/40%. Why?

1. FDI is cyclical. Jobs will be created in the next four years. OK Poland does have a lot cheaper labour but its CT rate is nearly 20%. And there labour rates are cheap for a reason. Ireland has one of the most educated workforces in the world due to free third level education.

2. Im betting if it is hasn't happened already, Eastern European countries will put a remittance ON MN's profits that can be repatriated because they want these funds to stay in the country and to stimulate development in order to pay back their credit lines they have used from the IMF.

We may not have seen the bottom just yet but prices will recover. Keep the chin up and chest out. Do your best to meet the repayments. Dont become fearful from listening to DMW's et al, they may be right yes in a lot of cases but they are paid to sell newspapers dont forget that.

It needs to be hammered home time and again: cheaper housing = lower costs = higher competitiveness = higher attraction for FDI.

Relatively speaking, we are still very competitive. We've a diverse, educated workforce. Low CT rate and have an infrastructure (i.e. roads, IT) that is the envy of most of our competitors (Poland, Malta, Belarus to name a few)

gurramok

spockety wrote: »

The monthly cost of renting increases over the years in line with inflation (or booms and busts )

The monthly cost of a mortgage is relatively fixed, so by the end of a 25 year term the monthly repayments should be relative pittance compared with the cost of renting the same property for a month.

This is not something that people seem to take into account when they say "renting is cheaper than buying". It might be, if you compare monthly repayments in the first year of the mortgage/lease.

The above assumes normal economic conditions and historic levels of inflation

Renting does not rise or fall with inflation, its based on supply and demand. Renting was expensive 10 years ago with regards to buying based on supply shortages.
Falling population of immigrants along with greater supply of gaffs is forcing rents down.(this may continue for many years as we are in for a long recession)

With mortgages, you are assuming they will be a re-run of the big inflation that our parents enjoyed. If inflation averages around 2%(thats the ECB goal), then the burden is not decreased with those 35yr mortgages.

seven-iron wrote: »

Yes, I think if your property is in a good location (as in a city or even close to it) and is a good property, it will have increased in value by 35/40%. Why?

1. FDI is cyclical. Jobs will be created in the next four years. OK Poland does have a lot cheaper labour but its CT rate is nearly 20%. And there labour rates are cheap for a reason. Ireland has one of the most educated workforces in the world due to free third level education.

2. Im betting if it is hasn't happened already, Eastern European countries will put a remittance ON MN's profits that can be repatriated because they want these funds to stay in the country and to stimulate development in order to pay back their credit lines they have used from the IMF.

We may not have seen the bottom just yet but prices will recover. Keep the chin up and chest out. Do your best to meet the repayments. Dont become fearful from listening to DMW's et al, they may be right yes in a lot of cases but they are paid to sell newspapers dont forget that.

Relatively speaking, we are still very competitive. We've a diverse, educated workforce. Low CT rate and have an infrastructure (i.e. roads, IT) that is the envy of most of our competitors (Poland, Malta, Belarus to name a few)

Out of all this, i laughed at the mentioning of Malta and dictator ruled Belarus as competitors plus the fact that none of our cities are connected by motorway yet!!

oflahero

seven-iron wrote: »

We may not have seen the bottom just yet but prices will recover.

Prices ARE recovering. Just in the correct, downward direction. This process is freeing up capital that can be used for productive purposes rather than being swapped around within the economy for pure speculation. Net result: boosting domestic industry, job creation, increased wealth, which will lead *eventually* to increases in house prices, which must first find their market level, and stay there until some semblance of "the fundamentals" is restored.

seven-iron wrote: »

Relatively speaking, we are still very competitive. We've a diverse, educated workforce. Low CT rate and have an infrastructure (i.e. roads, IT) that is the envy of most of our competitors (Poland, Malta, Belarus to name a few)

We are, but I'm sure I don't have to mention our recent axeing of said free 3rd-level education and education cutbacks in general. Plus, the firm where I work here in town employs many people in highly-skilled positions working here from all three countries above, and they have brains to burn. No shortage of an educated workforce out East!

Photojoe

seven-iron wrote: »

Yes, I think if your property is in a good location (as in a city or even close to it) and is a good property, it will have increased in value by 35/40%. Why?

1. FDI is cyclical. Jobs will be created in the next four years. OK Poland does have a lot cheaper labour but its CT rate is nearly 20%. And there labour rates are cheap for a reason. Ireland has one of the most educated workforces in the world due to free third level education.

2. Im betting if it is hasn't happened already, Eastern European countries will put a remittance ON MN's profits that can be repatriated because they want these funds to stay in the country and to stimulate development in order to pay back their credit lines they have used from the IMF.

We may not have seen the bottom just yet but prices will recover. Keep the chin up and chest out. Do your best to meet the repayments. Dont become fearful from listening to DMW's et al, they may be right yes in a lot of cases but they are paid to sell newspapers dont forget that.




Relatively speaking, we are still very competitive. We've a diverse, educated workforce. Low CT rate and have an infrastructure (i.e. roads, IT) that is the envy of most of our competitors (Poland, Malta, Belarus to name a few)

You are deluding yourself. The govt. are arguing that only 250K more jobs are going to be lost this year. What banks are going to lend money in that environment? And where are we going to get 400K jobs in the 4 years after that?

TaxiManMartin

Photojoe wrote: »

You are deluding yourself. The govt. are arguing that only 250K more jobs are going to be lost this year. What banks are going to lend money in that environment? And where are we going to get 400K jobs in the 4 years after that?

Wow. Someone who believes something the government tell us on the economy. A rare breed.
Id be careful of this. Our government really dont have aclue about the economy. They pull figures out of each others arses.

Photojoe

TaxiManMartin wrote: »

Wow. Someone who believes something the government tell us on the economy. A rare breed.
Id be careful of this. Our government really dont have aclue about the economy. They pull figures out of each others arses.

That is my whole point, they were arguing the figures down to suit themselves. A previous independant report put them much higher than that.

seven-iron

And where are we going to get 400K jobs in the 4 years after that?

did you not read my posts.

but I'm sure I don't have to mention our recent axeing of said free 3rd-level education

it doesnt mean people will hand back the qualifications and experience they've already obtained.

i laughed at the mentioning of Malta

people laughed at the mention of Ireland in the early 90's.

Photojoe

seven-iron wrote: »

did you not read my posts.

So you think we are going to create at least 100K jobs a year once this recession has 'corrected'? nearly 10K jobs a month? Come off it.

enry

SoupyNorman wrote: »

Where does it say he is buying up property?


To be fair,

You're a Taximan whose sister has a friend whos friends with the authors wife..


Purple-monkey dishwasher, tbh.

TAXIMAN PURPLE-MONKEY DISHWASHER

Hilarious

Mugatu

I think this is worth a read:

http://www.daft.ie/report/


Basically beware of the economists and especially the keyboard economists saying with certainty where prices are going.

Not that peoples input and opinion on boards like this are not interesting and also thought provoking.

seven-iron

People, is it at all possible that you are only looking for reasons as to why we cannot come out of this slump.

So you think we are going to create at least 100K jobs a year once this recession has 'corrected'? nearly 10K jobs a month? Come off it.

Nobody will know when the recession will be 'corrected', it is not one single event or day in time. We will be well into a period of growth before we realise were out of it. However I do believe many jobs will be created yes. Once investment starts to flow back in small amounts, it will have a larger affect on the rest of the economy. It is called the multiplier effect. More profoundly though, once this starts to occur, people like yourself may actually believe there is a light at the end of the tunnel and that each individual can make things happen for themselves and improve their situations, as long as their not doing because their neighbours getting rich.

SouperComputer

smccarrick wrote: »

'Rent-is-dead-money' is another one that comes to mind (blood slowly beginning to boil)........

I guess in a way its now true. If you are expecting rental income that is.

Photojoe

SouperComputer wrote: »

I guess in a way its now true. If you are expecting rental income that is.

I would nearly laugh but some of those who have bought and have spouted that line at renters for years have now taken their own lives.

SoupyNorman

seven-iron wrote: »

People, is it at all possible that you are only looking for reasons as to why we cannot come out of this slump.



Nobody will know when the recession will be 'corrected', it is not one single event or day in time. We will be well into a period of growth before we realise were out of it. However I do believe many jobs will be created yes. Once investment starts to flow back in small amounts, it will have a larger affect on the rest of the economy. It is called the multiplier effect. More profoundly though, once this starts to occur, people like yourself may actually believe there is a light at the end of the tunnel and that each individual can make things happen for themselves and improve their situations, as long as their not doing because their neighbours getting rich.

There is light at the end of the tunnel, but it's a long tunnel.

oceanclub

seven-iron wrote: »

Yes, I think if your property is in a good location (as in a city or even close to it) and is a good property, it will have increased in value by 35/40%. Why?

So you honestly think we're going to see Celtic Tiger Mark 2 in a few years time, with 10% per annum property price increases again??

P.

SouperComputer

Photojoe wrote: »

I would nearly laugh but some of those who have bought and have spouted that line at renters for years have now taken their own lives.

I didnt quite mean it that literally!

As a sidenote, probably the best thing most people can do "negeq" or not is pay their Mortgage off as quick as they can. Add up all your payments for the full term of the mortgage and you might find that the "equity" you are loosing is the least of your worries!

The_Conductor

SouperComputer wrote: »

I didnt quite mean it that literally!

As a sidenote, probably the best thing most people can do "negeq" or not is pay their Mortgage off as quick as they can. Add up all your payments for the full term of the mortgage and you might find that the "equity" you are loosing is the least of your worries!

If you sit down and factor in negative inflation- everything else being equal- your mortgage is 6-7% more per annum, in real terms, the opposite to using inflation to bring down the value of your outstanding mortgage.

You are right though- if people can afford it- they should use the current low interest environment to knock lumps out of their principle, if they can afford to do so. With inflation of -7% and interest rates ~2%- its a no brainer....

enry

Developers, auctioneers and bankers these boys were treated like some kind of gods in this country they were a shower of fools

The auctioneers put up prices like no tomorrow they sold houses to people under the pretence that others were bidding against them even when they weren't (disgraceful behaviour)

Those smart developers bought property and it simply went up in value they had to do nothing, these boys have no brains there only builders.

The bankers handed out the money like no tomorrow they had their sales meeting every week and clapped each other on the back everytime they lent out another million. think about it these lads are bring there customers in to tell them how to trade during a recession and they spent the last ten years building up assets within there own business that are currently worth fu*k all.

So to be honest I hope Paul Williams is right because what is for worse then the above are all those people who went out and bought into the bullsh*t and purchased a 2 bed house in Dublin 24. for 350,000. these are the fools who ultimately destroyed our country and its only right that their assets are worth nothing considering the rest of us are going to end up paying for it.

SoupyNorman

enry wrote: »

So to be honest I hope Paul Williams is right because what is for worse then the above are all those people who went out and bought into the bullsh*t and purchased a 2 bed house in Dublin 24. for 350,000. these are the fools who ultimately destroyed our country and its only right that their assets are worth nothing considering the rest of us are going to end up paying for it.

Is that because they all became criminals of the underworld and were covered by Paul in the Sunday World?

I think you may have your Williamz's a little confused!

enry

SoupyNorman wrote: »

Is that because they all became criminals of the underworld and were covered by Paul in the Sunday World?

I think you may have your Williamz's a little confused!

Thanks soupynorman for pointing that out its been a long day.

whats the Sunday World ?

D3PO

spockety wrote: »

Ignore it.

I have never, ever, EVER seen someone who argues against the likelihood of various price drops back up their argument with any logical reasoning whatsoever.

You are wasting your breath.

try reading my earlier posts on the subject. i think my points are valid. tell me what is illogical about what ive said

D3PO

smccarrick wrote: »

'Rent-is-dead-money' is another one that comes to mind (blood slowly beginning to boil)........

Well its not just something to brainwash people into buying, it can and is true (obviously not all the time)

i did a quick calculation of rent versus owning my house to see which would be better

assuming €600 per month rent my rent would have totaled €27,000

Ive paid approx €41,000 to the bank in interest in that period

So straight up id be €14,000 worse off

However take away the TRS ive recieved minus what Id get in rent refief approx €5,000

making me €9,000 "worse off"

Ive partaken in rent a room scheme which has yeilded me €21,000

So straight up Im €12,000 better off owning my own property than if I rented for the same period.

So rent can be dead money or can be financially viable depending on the situation

Jack479

I've just read this entire thread from start to finish. jesus it's late.......

Still thinking of buying a 2 bed m50 apartment though

SoupyNorman

enry wrote: »

whats the Sunday World ?

A brand of toilet paper that is only sold on Sunday.

The_Conductor

D3PO wrote: »

Well its not just something to brainwash people into buying, it can and is true (obviously not all the time)

i did a quick calculation of rent versus owning my house to see which would be better

assuming €600 per month rent my rent would have totaled €27,000

Ive paid approx €41,000 to the bank in interest in that period

So straight up id be €14,000 worse off

However take away the TRS ive recieved minus what Id get in rent refief approx €5,000

making me €9,000 "worse off"

Ive partaken in rent a room scheme which has yeilded me €21,000

So straight up Im €12,000 better off owning my own property than if I rented for the same period.

So rent can be dead money or can be financially viable depending on the situation

If you factor a large fluctuation in asset value into the equation- it destroys your figures though....

My apartment is officially at 2000 values for mortgage purposes (according to Bank of Ireland- who despite insisting on an independent valuation by a valuer from their approved panel- are now knocking another 30% off their values)........ I bought in 2000- its now worth what I paid then (and it was overpriced even then, to be totally honest).

When did you buy?

sneakyST

seven-iron wrote: »

Relatively speaking, we are still very competitive. We've a diverse, educated workforce. Low CT rate and have an infrastructure (i.e. roads, IT) that is the envy of most of our competitors (Poland, Malta, Belarus to name a few)

I would consider myself a positive sort amidst the cynics but I have to disagree on the above.
I dont think we are educated enough in the right areas. Think about R&D , Science etc, a lot of young lads went into the building trade to earn the money. I would like to see the stats on the take up of these courses in universties over the boom years

In relation to infrastructure- Well its still pants. The roads are crap, there is a brutal train service - the dart is a glorified monorail, trams arent too bad, Metro is a waste of money and wont be used, buses are still unreliable and you cant get a bus from the northside to the southside etc without going through town....it take forever to drive anywhere.....where do you stop.

Competitiveness is long gone - with upcoming high (income, property, carbon)taxes, roads tolled to the hilt, high price on goods and service -its going to make things tricky. Cost of living is still high compared to the UK for example......wages are high .......

Dob74

SoupyNorman wrote: »

There is light at the end of the tunnel, but it's a long tunnel.

Only problem the light we see is a train coming at us:(

luckat

The price people can pay for their houses depends on how much they're earning. At the moment, that's dropping - especially for the self-employed who are a huge chunk of the house-buying population.

While public servants are facing effective cuts of 10%, many - probably most - self-employed people have lost 30% of their fees.

As for McWilliams "bidding on houses" and writing sensationally; no. He writes plainly, which is unusual for an economist; no jargon. And he researches empirically - what better way to find out the real price houses are selling for than to bid on them?

Now, real house prices. If you go back through the reports of sales, you'll find that a decent three-bed semi in a reasonably upmarket section of the Dublin suburbs would have sold for £30,000 in 1987.

By 1989, this had doubled to £60,000. And by 1995, it was up to an astonishing £100,000.

The same house two years ago would have cost €900,000.

By last year it was down to €700,000, and now it's edging back towards €500,000.

If you look at the average wage of the people buying those houses, in 1987 two people working were probably earning £28,000 or so between them. By 2007 they would have been making some €100,000 between them.

(One of the forgotten reasons for the bubble, by the way is that up to the 1970s a one-salary household was the norm; suddenly the household income was doubled, or at least one-and-a-halfed, and house price rises reflected this from the mid-80s or so.)

I'd listen very carefully to what McWilliams says. He's been right on an awful lot of economic things.

partyguinness

Does it really matter how much valuations fall in real terms?

If there is nobody able to purchase then the valautions are just a moot point.

The_Conductor

luckat wrote: »

While public servants are facing effective cuts of 10%, many - probably most - self-employed people have lost 30% of their fees.

After the latest levy and PRSI increases on the 1st of May its just over a 19% cut in net take home pay in the public sector (depends on a number of factors though- its higher in many cases, and lower in others). You wouldn't know it from whats reported in the media though!

Instead of playing with tax rates, levies, PRSI etc- wouldn't it make a lot more sense to simply give everyone in both the public and private sectors a blanket 30-40% cut in gross pay across the board. It would restore competitiveness overnight, and position us nicely to make the most of a recovery if/when one is to happen in the international arena.

D3PO

smccarrick wrote: »

If you factor a large fluctuation in asset value into the equation- it destroys your figures though....

thats absolutly true. I should have specified that im talking about long term renting (over a 15 - 25 year period)

one of the posters mentioned better to rent for 25 years then buy a hous efor cash. I dont think thats financially the best option is all Im saying.

your right though with asset values dropping it does blow my figures up short term.

ntlbell

D3PO wrote: »

thats absolutly true. I should have specified that im talking about long term renting (over a 15 - 25 year period)

one of the posters mentioned better to rent for 25 years then buy a hous efor cash. I dont think thats financially the best option is all Im saying.

your right though with asset values dropping it does blow my figures up short term.

I never stated it was a better option.

I said it's A option and will depend a lot on personal circumstances.

I also stated it's very hard to put a figure on it.

I never said it was better.

Read the posts more carefully.

mdebets

D3PO wrote: »

Well its not just something to brainwash people into buying, it can and is true (obviously not all the time)

i did a quick calculation of rent versus owning my house to see which would be better

assuming €600 per month rent my rent would have totaled €27,000

Ive paid approx €41,000 to the bank in interest in that period

So straight up id be €14,000 worse off

However take away the TRS ive recieved minus what Id get in rent refief approx €5,000

making me €9,000 "worse off"

Ive partaken in rent a room scheme which has yeilded me €21,000

So straight up Im €12,000 better off owning my own property than if I rented for the same period.

So rent can be dead money or can be financially viable depending on the situation

Your calculation is totally flawed. You are only comparing rent vs. morgage payments. Morgage payments are however not the only costs you have if you own a hous.
You have to buy furniture and replace it now and then (esp. if you have a lodger staying with you who might not be as carefull with your stuff).
You need to pay all th repairs for your house, insurance for the house, maintaining your garden (if you have one).
You might have to pay management fees (which are only going to increase, with people not being able to afford them).
And there are many more payments to be made, which you don't have to do if you are just renting.
And then you have the other benefits of renting.
In your calculation, you don't need to share your house with a third person.
What are you going to do if the owner of the house next to you is going to rent it out to people who have parties every night until 6 in the morning and their landlord won't do anything about it. If you are renting, you can just move, not so if you own the house.
You are not flexible anymore. What are you going to do if you loose your job tomorrow and the only offer for a new job is in Cork. You might have problems selling or even renting your house. When you rent; you can just move.
What are you going to do if you have a family and need a bigger house? In the current climate, you are very unlikely to be able to sell your house, so you can't move.

And after all, with the current climate you are not even guaranteed that you'll own your house at the end. You might end up loosing it, because you can't afford the morgage payments anymore.

D3PO

mdebets wrote: »

Your calculation is totally flawed. You are only comparing rent vs. morgage payments. Morgage payments are however not the only costs you have if you own a hous.
You have to buy furniture and replace it now and then (esp. if you have a lodger staying with you who might not be as carefull with your stuff).
You need to pay all th repairs for your house, insurance for the house, maintaining your garden (if you have one).
You might have to pay management fees (which are only going to increase, with people not being able to afford them).
And there are many more payments to be made, which you don't have to do if you are just renting.
And then you have the other benefits of renting.
In your calculation, you don't need to share your house with a third person.
What are you going to do if the owner of the house next to you is going to rent it out to people who have parties every night until 6 in the morning and their landlord won't do anything about it. If you are renting, you can just move, not so if you own the house.
You are not flexible anymore. What are you going to do if you loose your job tomorrow and the only offer for a new job is in Cork. You might have problems selling or even renting your house. When you rent; you can just move.
What are you going to do if you have a family and need a bigger house? In the current climate, you are very unlikely to be able to sell your house, so you can't move.

And after all, with the current climate you are not even guaranteed that you'll own your house at the end. You might end up loosing it, because you can't afford the morgage payments anymore.

like i said it depends on the circumstances as to weather it is beneficial or not.

re insurance - you should be paying insurance as a renter aswell very little different in renters insurance and full house insureance in monetary terms

personally i dont have garden maintenace costs bar a few watts of electricity for the electric mower

i dont have management fees

so again it depends on the specific circumstances

there are a lot of what ifs both to renting and to buying

of course I could apply what ifs scenarios to renting as well

what if you had to move to cork for a job as its the only one you could get and couldnt continue your fixed term lease in dublin.

your gong to get saddled with the costs of renting 2 places

and so on so forth.

Neither has a any right to claim to be a better solution until you look at the personal circumstances.

My point was to show that you cannot argue that renting is without a doubt 100% the best option thats all