Anyone regret buying property?

Fighting Irish

I regret not buying a house in the 90s and selling it in 06

HardyEustace

D3PO wrote: »

ah the property section of a rag thats been proven wrong lots and lots over the last few years. Yep gotta believe what they print :rolleyes:

as for wages falling 10% over the next year says who ? There is no way that will happen. Disposible income may fall by that amount but wages will not.

a quick tot of my 10 closest friends (6 have had pay rises this year, 3 pay freezes and 1 a pay cut)

What areas do your friends work in? That's definitely bucking the normal trend.

cgc5483

Benedict wrote: »

OMD - I won't labour the point about the income multiple related to average house purchase price. But in a recent article in the Sunday Trib. Property Section, they were adamant that the average price of a house in Dublin was 343K. And I think that you pitch the average wage too high also - and remember that the average wage has fallen and is set to fall up to a further 10% in the coming 12 months.

The ERSI have it at 250,872 which is a more reliable source than the Sunday Times

http://www.esri.ie/irish_economy/permanent_tsbesri_house_p/

Benedict wrote: »

There is an element of shadenfreude about SamG's blog. And being Irish, we tend to be reluctant to admit we made an error. The people who say they are in Neg Eq but don't care, would leap at the chance of turning back the clock so they could walk away from the sale. But they will never admit that. Because nobody wants to be pitied.

While you do have some valid points i think you are making some rash generalisations. You need to actually accept that some people (myself including) couldn't give 2 hoots about being in negative equity. Some people did buy houses to live in long term and not to turn over after a few years.

D3PO

HardyEustace wrote: »

What areas do your friends work in? That's definitely bucking the normal trend.

6 with payrises

2 Fund accountants
1 credit underwriter
1 accountant
1 project manager
1 software develloper

3 with pay freezes

2 teachers
1 secretary

1 with paycut

engineer

im not saying this is the trend around the place but when your talking about 10% averge paycut when the croke park agreement means payfreezes and not paycuts for the biggest employer in the state and that some places are still paying increases (Im sure I read the ESB not listed abouve are another) that 10% paycuts on average thsi year doesnt add up

Zamboni

OMD wrote: »

My current interest rate is 1.75%. No one will ever in the future get a better rate than that. I may soon go into negative equity but my repayments will be less than someone who buys a similar house to mine at a lower price.

So for example someone borrowing €300,000 over 30 years at 1.75% will pay €1069 a month
Someone buying the same property next year at €200,000 over 30 years at 4.75% will pay €1031

Thanks for posting that.
Most people seem to see dropping house prices and think its awesome for potential buyers.
People ask me why I am not buying as there is great 'value' in the market.
The changing cost of finance does not even enter most peoples heads. Crazy stuff!

OMD

Benedict wrote: »

OMD - I won't labour the point about the income multiple related to average house purchase price. But in a recent article in the Sunday Trib. Property Section, they were adamant that the average price of a house in Dublin was 343K. And I think that you pitch the average wage too high also - and remember that the average wage has fallen and is set to fall up to a further 10% in the coming 12 months.

Benedict, I looked up that tribune article. http://www.tribune.ie/article/2010/jun/06/just-how-low-can-the-market-go/?q=Property
They get their figures from a website called myhat.ie.
http://myhat.ie/blog/?p=879

What they did was look at the asking price of all properties sale agreed since the start of the year and got an average of them. That is obviously a ridiculous way to estimate the market. People can question the ESRI figures but at least they have a lot more credibility than that kind of nonsense.

But hey look on the bright side you said this Sunday Tribune figure showed prices were going to drop 50%. Already today they have dropped 33% from your figure.

quozl

In regards to basing anything on myhat, myhat.ie also saw upward movement of house prices in March 2009.
http://www.thepropertypin.com/viewtopic.php?f=4&t=19812

And this June too http://www.thepropertypin.com/viewtopic.php?f=4&t=31072&p=398469&hilit=myhat.ie#p398469

Not only does the methodology appear daft, the results it provides also look pure daft.

Benedict

Nobody is talking about mild NE. But anyone who is comfortable with serious NE must be in a small minority and we are speaking here in general terms. Anyone "comfortable" with serious NE is simply not aware of the implications. For their sakes, I hope they stay that way!

danbohan

Benedict wrote: »

Nobody is talking about mild NE. But anyone who is comfortable with serious NE must be in a small minority and we are speaking here in general terms. Anyone "comfortable" with serious NE is simply not aware of the implications. For their sakes, I hope they stay that way!

what does it matter whether they are comfortable or not , its a fact of life their is no choice only deal with and build your life and future around it if you can . anybody that has job , with current intrest rates should not have major problems , yes he may have stay put longer than he planned but its not insurmountable

OMD

Benedict wrote: »

Nobody is talking about mild NE.

I think just about everyone but you is. The thread is titled "anyone regret buying?" Some do some don't. It is not called "anyone here in massive negative equity and happy about it"

DJDC

A very interesting thread from a pyschological point of view as it shows how people try to justify failed financial decisions using a number of flawed concepts. I disagree with this just being an Irish problem, its a basic human personality trait where people attempt to justify mistakes to make the internal healing process easier.

The basic arguements of the current arguement seem to be as follows:

1) I am glad I got my mortgage in 04-08 as I would not be able to get one now

Well then should be a worry then. You are refused a mortgage for a reason. Examples include lower wages, increased probability of redundancy, poorer economic envirnoment etc. These default probabilities are independent of whether you have the mortgage or not. Therefore, surely it would be better to be refused a mortgage now rather than having the mortgage from 04-08 as the default probability today is the same in both cases.

2) I took advantage of low interest rates/tracker mortages etc which I would be unable to get now.

The vast majority of mortgages taken out in 04-08 had 25+ year terms. You may have fixed the initial years of the mortgage at low rates, however for most this will not have impacted the actual principle P to be paid as interest payments are frontloaded. You still owe P + remaining interest while the asset itself is now only worth e.g. 0.5 P. The small gain in lower interest payments is vastly exceeded by the loss in the value of the house.

Think about it.

Dandelion6

RoverJames wrote: »

I thought you couldn't sell an affordable house shortly after buying ? I may well be wrong.

Yes you can, but if you sell within 20 years you'll be subject to a clawback to the council on any proceeds you make above the price that you paid for it.

D3PO

DJDC wrote: »

2) I took advantage of low interest rates/tracker mortages etc which I would be unable to get now.

The vast majority of mortgages taken out in 04-08 had 25+ year terms. You may have fixed the initial years of the mortgage at low rates, however for most this will not have impacted the actual principle P to be paid as interest payments are frontloaded. You still owe P + remaining interest while the asset itself is now only worth e.g. 0.5 P. The small gain in lower interest payments is vastly exceeded by the loss in the value of the house.

Think about it.

You dont understand this point at all

25 year term on a tracker at ECB plus .75% and inflated price from 04 versus 25
year term at todays price with todays interest rates with the likelyhood of margin increases

guess who ends up paying more over the full term of the mortgage ?

think about it

AARRRRGH

I had my 30 year mortgage paid for in 10 years with over payments as well as maxing out my pension contributions.
The celtic tiger was good to me and i make no excuses. I rode it like id ride Cheryl Cole. Hard and fast for as long as she'd let me.
The only thing i do regret is that i paid off the mortgage that quickly when i had a tracker mortgage. I could have banked that like a previous poster said and made a few quid on the difference in rates.

Benedict

The fact that honest Irish men and women were fooled into paying up to 4 or even 5 times what a property was worth? Doesn't matter! Yerrah what the hell! Tis only money! Yerrah will ye stop complaining and move on!

Irish people have been traumatised by the scandal of the property bubble! Decent people's lives have been destroyed.

And it is happening now! Today! Asking prices are, in general, double what they should be.

Many people buying now, will be in tears this time next year if they believe the lie that the market has "bottomed out".

We should be shouting from the rooftops! Not mumbling about negative equity being "comfortable"!

The_Morrigan

Benedict wrote: »

The fact that honest Irish men and women were fooled into paying up to 4 or even 5 times what a property was worth? Doesn't matter! Yerrah what the hell! Tis only money! Yerrah will ye stop complaining and move on!

Irish people have been traumatised by the scandal of the property bubble! Decent people's lives have been destroyed.

And it is happening now! Today! Asking prices are, in general, double what they should be.

Many people buying now, will be in tears this time next year if they believe the lie that the market has "bottomed out".

We should be shouting from the rooftops! Not mumbling about negative equity being "comfortable"!

Benedict - just a question here, but would you be of the same mindset if you bought a top of the range tv for a couple of grand and two months later the same tv's price was slashed....I'm just wondering and not trying to start an argument.

This is how I treat the whole property bubble, negative equity, overpriced assets etc... I didn't buy my home to make a profit, I bought it to live in. I'm not in negative equity yet, but even if I was, it won't affect me until I go to sell or need to remortgage - so right now I'm very happy with my home.

To be honest, if I whinged everytime I bought something and then realised a few weeks/months later the same thing is half the price or less I'd be demented by now and would probably have thrown myself off my loverly balcony.
You have to live in the present and plan for the future, the past needs to be learnt from then left alone. Everything rises to fall, and everything falls to rise again - tis life, sometimes it sucks, other times it doesn't, wouldn't be life otherwise.

ztoical

No regrets as I work as an artist and if I didn't buy I'd be paying two rents as I would have to rent somewhere to live and a studio space to work. Buying a house let me rip two rooms apart for a studio which I couldn't do in a rented space.

Benedict

Oh it's true! There's no point in letting it get you down - but at the same time - brushing it under the carpet will make it more likely that others will make the same mistake. (And paying 50% too much for a TV is completely different to paying 50% too much for a house!)

Surely it is wrong to say nothing when you see hard-working people still innocently walking themselves into paying 300k for a property that will be worth 180k in 12 months time - and will not be 300k again for at least a generation.

People who spoke out some years ago were told by Bertie to "go and commit suicide". Complaining can be a good thing!

The_Morrigan

Benedict wrote: »

Oh it's true! There's no point in letting it get you down - but at the same time - brushing it under the carpet will make it more likely that others will make the same mistake. (And paying 50% too much for a TV is completely different to paying 50% too much for a house!)

Surely it is wrong to say nothing when you see hard-working people still innocently walking themselves into paying 300k for a property that will be worth 180k in 12 months time - and will not be 300k again for at least a generation.

People who spoke out some years ago were told by Bertie to "go and commit suicide". Complaining can be a good thing!

I was just curious - I know people at work who are constantly whinging about Ireland, its property market, its taxes, cost of living etc etc. but would they move?? - Not a chance, cos then they'd have nothing to complain about. They also don't complain constructively - if I have an issue with a company or product, I will write an email or letter and voice my opinion - I'm not nasty about it, but I will highlight a problem or concern I have and ask that it be rectified so someone else won't have to endure the same.

Benedict

What's done is done - but warning buyers to beware in the future is not whinging! It's advising! Telling a child to look before crossing the road is not whinging, it's advising! It's not whinging to warn buyers that current asking prices are still stupid and if you pay anywhere near them, you could be in trouble in the near future. There are a lot of financially damaged people out there who wish more people were "whinging" when they were fooled into mortgaging their lives away for massively overpriced houses.

The_Morrigan

Benedict wrote: »

What's done is done - but warning buyers to beware in the future is not whinging! It's advising! Telling a child to look before crossing the road is not whinging, it's advising! It's not whinging to warn buyers that current asking prices are still stupid and if you pay anywhere near them, you could be in trouble in the near future. There are a lot of financially damaged people out there who wish more people were "whinging" when they were fooled into mortgaging their lives away for massively overpriced houses.

The advice given in the past has been incredibly wrong, so most have to figure this out on their own, and not pay any attention to others who may or may not know what they are talking about.
I had a conversation with my father years ago when I first went out to try buy a place. Now you'd always assume you could trust your own father but his advice was to find a nice lad to buy a house with - I didn't heed his advice - I was not going to make a half million mistake with a bloke I may not stay with.

I've gone through the mortgage process and on more than one occassion I did up the figures, went to the bank, reviewed everything and walked away - because I knew I was not going to be able to afford that particular house/apt on that mortgage if anything went wrong. I eventually bought an apt in summer 2008, I didn't pay the asking price, in fact I paid well below it cos I was cheeky with the builders.

People have to take responsibility for their own actions, and figure out if they can afford a house at any stage of their life - whether it is over inflated or rock bottom prices. Noone forced them to sign on the dotted line. I don't like how the trend is to blame everyone else, yes I know that the Exec bankers/developers/govt made a mess of it, but you could also regard every person who bought at the inflated price as also being partly responsible.

Zamboni

This thread is pointless at this stage. Its like a brick wall.
Do the math people, seriously. I didn't buy but I have done the math and buying a property in 2006 on a tracker could easily cost less over the term of a mortgage than a buying cheaper house in 2010 at 5%.

The important price is not the price of the house but the total price you end up paying at the end.

Benedict

The original question was "anyone regret buying property?"

The answer is, most (not all apparently) who have bought at grossly inflated prices have been financially damaged and they do regret it - whether they admit it to themselves or not.

On a final and positive note, this blog may have sent out a warning to prospective buyers that the boom has not ended. Offer 40% to 50% less than asking price. If you pay the current still stupid asking prices, you'll be regretting it too.

Make sure there are no more decent Irish workers tragically left in negative equity because they believe the lie that we have "reached the bottom".

We haven't!

Dr. Dodger

Zamboni wrote: »

This thread is pointless at this stage. Its like a brick wall.
Do the math people, seriously. I didn't buy but I have done the math and buying a property in 2006 on a tracker could easily cost less over the term of a mortgage than a buying cheaper house in 2010 at 5%.

The important price is not the price of the house but the total price you end up paying at the end.

Over the term are the important words there though. If you pay €100k less for a home, stick off a chunk of a deposit and could manage to pay off more than just your monthly mortgage you could clear it earlier thus saving on interest payments. I think I'd rather be in that situation where there was a chance of clearing the mortgage earlier in life. If not and it does go to term well at least I had the opportunity and it just didn't work out.

Fighting Irish

Benedict wrote: »

The fact that honest Irish men and women were fooled into paying up to 4 or even 5 times what a property was worth? Doesn't matter! Yerrah what the hell! Tis only money! Yerrah will ye stop complaining and move on!

lol

Benedict wrote: »

Oh it's true! There's no point in letting it get you down - but at the same time - brushing it under the carpet will make it more likely that others will make the same mistake.

history always repeats its self, some people never learn

facksake

NiMhaoldearg wrote: »

Benedict - just a question here, but would you be of the same mindset if you bought a top of the range tv for a couple of grand and two months later the same tv's price was slashed....I'm just wondering and not trying to start an argument.

This is how I treat the whole property bubble, negative equity, overpriced assets etc... I didn't buy my home to make a profit, I bought it to live in. I'm not in negative equity yet, but even if I was, it won't affect me until I go to sell or need to remortgage - so right now I'm very happy with my home.

To be honest, if I whinged everytime I bought something and then realised a few weeks/months later the same thing is half the price or less I'd be demented by now and would probably have thrown myself off my loverly balcony.
You have to live in the present and plan for the future, the past needs to be learnt from then left alone. Everything rises to fall, and everything falls to rise again - tis life, sometimes it sucks, other times it doesn't, wouldn't be life otherwise.

Absolutely spot on - well said

Blizzard

Benedict wrote: »

Offer 40% to 50% less than asking price. If you pay the current still stupid asking prices, you'll be regretting it too.

Benedict - I think you should really be telling people that if they feel a property is totally overpriced, then to offer less for it OR whatever a buyer deems the selling price should be given the economic climate and the house prices in the area and what they can afford to pay. Yes, a buyer can offer 40-50% less but I think unless someone has hit rock bottom they're not going to accept it. I've read thru this thread and noticed with interest that you repeated this advice several times and I have to disagree. I do agree that some houses are not priced realistically, however, many houses have dropped prices significantly and they are now dipping back to early 2000 levels. How far back are people expecting house prices to go to? 1980's? Don't think so. Estate agents are now telling sellers to be realistic in their approach to selling - if it ain't priced right it won't get viewings. Any reputable EA knows this and advises accordingly.

Benedict

People write about "the long term" and "over the term of the mortgage" and come to the conclusion that paying maybe 100k too much wasn't so bad after all when you look at the overall long-term picture. But the "long term" calculation is even better if you pay what the house should have cost an inflated price!

According to David McWilliams, Morgan Kelly and others, you should ask yourself could this house pay for itseld in about 14 years through rental income and/or capital appreciation?

With most of the current asking prices, it would still take at least double that.

In the boom years, there was such daft capital appreciation that the rental income didn't matter.

Reading this blog, it's not hard to see how the boom happened. Some people (and good luck to them I suppose) are quite happy to pay too much on the basis that - for example - they bought the house to live in and not to make a profit!

Well great! But would it not be better to get it at a good price and have a few bob put aside for the kids' education? No? Okay fine!

The experts (like Prof Morgan Kelly) tell us that the prices are still up to 50% too high - but if buyers are happy to pay, then good luck to them.

The_Conductor

The inverse of this is you have some estates around the country in receivership where you have both private sales and receiver sales happening at present (these was an example earlier in the week in this forum- in Kildangan, Co. Kildare). Receiver prices can be up to 60-70% below what private sellers suggest their property is 'worth' to potential purchasers (lets not get bogged down in the details of the specific example).

We have significant quantities of properties that NAMA are now stating will be put on the market sooner rather than later- which should assist on balancing supply and demand. (NAMA are suggesting that each vacant property on its book depreciates by 10-15% per annum, and also is liable to damage or vandalism or wear and tear, even while vacant, of 10-15k per annum)- it simply doesn't make the financial sense to hold onto them (aside from the comments about demolishing rural estates etc).

Us Irish have gotten into trouble over property before (think back to the bubble in agricultural land prices in the late 70s). It really is the case that we haven't learnt- and probably never will. Our history of disposessment (sp.?) is still fresh in many people's minds.

Benedict

I must say I find it astonishing - but enlightening - that there appear to be so many contributors who feel that grossly overpaying for a property really doesn't matter that much - once you aren't attempting to sell.

So if you pay a few hundred grand too much! No sweat! Sure aren't you living in it! And sure isn't it a lovely June afternoon?

No wonder the country is in the state it's in!