Buying now more mad than during the boom?

Idbatterim

I see threads here frequently asking is now a good time to buy etc, surely the writing is on the wall, and if someone buys now , will find themselves in negative equity the minute they buy. My mum sold her inherited house in 2008, for 435k (at the peak peak, it could have been worth maybe a little over 500k), there are now multiple houses on the same street with ASKING PRICES of 290k!
Atleast during the boom alot of people were very ignorant, now there should not be any excuse... Hopefully rent supplement will drop in this forthcoming budget an that should make renting more attractive.

the ostrich

An ignorant person during the boom is sadly still an ignorant person now. The trouble with thousands of Irish during the boom is that they were very greedy, and greed mixed with ignorance spelt trouble.

Only those who controlled their greed and who did not buy into mutiple properties are now reaping the rewards.

hmmm

Idbatterim wrote: »

Atleast during the boom alot of people were very ignorant, now there should not be any excuse...

There never was an excuse. People have managed to convince themselves that the state (i.e. everyone else) has a duty to bail them out if something goes wrong with their own decisions. The people buying houses now will be the same people in 10 years time blaming banks for "throwing money at them" and asking "where's my NAMA"?

Victor

Idbatterim wrote: »

I see threads here frequently asking is now a good time to buy etc, surely the writing is on the wall, and if someone buys now , will find themselves in negative equity the minute they buy.

That rather depends on how much equity they bring to the transaction.

ricman

IN many areas landlords do not take rent allowance,apart from students, the whole rental market is not controlled by rent allowance, and it was reduced a few months ago anyway.

magentas

It is down to each individual case. Personally myself and bf were in perfect place to buy our home this year. The timing was right FOR US.

We had been renting for years paying someone elses mortgage and the drop in house prices really worked to our advantage. we had deposit and borrowed LESS than we could have 'cos we wanted to live within our means and not be consumed by the loan.

Our home was €365k few years ago, we got it for €240k
Mortgage + life assurance +house insurance combined is working out €50 each extra per month than place we were renting.

Do ye think I'm mad???

magentas

hmmm wrote: »

There never was an excuse. People have managed to convince themselves that the state (i.e. everyone else) has a duty to bail them out if something goes wrong with their own decisions. The people buying houses now will be the same people in 10 years time blaming banks for "throwing money at them" and asking "where's my NAMA"?

This is a rediculous statement. Ill-informed and presumptuous.:mad:
Trust me, the banks are NOT throwing money at people for mortgages now.

who_ru

magentas wrote: »

We had been renting for years paying someone elses mortgage

paying someone elses mortgage & getting nothing in return eh - same ol same in ireland. rent is dead money, sure you're throwing it down the drain there love.

noclue1

who_ru wrote: »

paying someone elses mortgage & getting nothing in return eh - same ol same in ireland. rent is dead money, sure you're throwing it down the drain there love.

Spot on, the oldest bull crap that falls out of the typical Irish persons mouth. It's a waste paying someone else's mortgage

It's unfortunate that the person above who outlined that is now no doubt in negative equity and has reduced his/her mobility to find alternative employment if the need ever arises.

What would make you think buying a house now would be a good investment. Look at the situation the country/world economy is in. Also why does everyone qoute the 2007 bubble price and the price something is now, forget 2007 this is where we are now.

Property prices are still falling!!!!
Double dip recession in the global economy looking more likely each day
Unemployment @ nearly 14% and rising
Not to mention all those kept off the live register doing Mickey mouse FAS courses bringing unemployment to c.500,000
Falling public/private sector wages
Mass emigration in the 20-35 age category (these are the FTBs folks)
C.300,000 empty property nationwide
Previous migrant workers returning home, these previously made up a significant proportion of tenants available to support rental prices
New capital requirements for banks meaning less credit availability
Rising interest rates on new and existing mortgages
Numbers in mortgage arrears growing alarmingly each month
Property taxes in the short to medium term
Water charges on the way also
Rent supplement has effectively put a floor in rents the exchequer cannot continue to pay at this level a reduction in the RS will lead to further rent falls and consequently house prices
Inevitable increases in other taxes to pay for our ballooning deficit(reducing net income)
1 In 4 or 25% chance of Ireland defaulting on it's debt(as priced by the markets) along with a possible exit from the eurozone into a new eurotrash zone made up of us and the other pigs


Why would you buy a house in such an uncertain environment

danbohan

magentas wrote: »

It is down to each individual case. Personally myself and bf were in perfect place to buy our home this year. The timing was right FOR US.

We had been renting for years paying someone elses mortgage and the drop in house prices really worked to our advantage. we had deposit and borrowed LESS than we could have 'cos we wanted to live within our means and not be consumed by the loan.

Our home was €365k few years ago, we got it for €240k
Mortgage + life assurance +house insurance combined is working out €50 each extra per month than place we were renting.

Do ye think I'm mad???

no , but when intrests rates hit 8 or 9% the desision might not seem as good +the fact that your house may have fallen 30% in value from what you paid . irelands house prices are seriously overvalued still , they will fall much further in next few years ,
but you only live once and if your happy and can afford it enjoy ,

sambuka41

the ostrich wrote: »

Only those who controlled their greed and who did not buy into mutiple properties are now reaping the rewards.

A lot of people who are in trouble didnt buy more than 1 very expensive property!!

This mad need to buy always puzzled me. I was speaking with a geneologist recently,she was advising me how to go about looking at Griffiths valuation for owners of houses in early 1900's. She was saying that it was uncommon to see a property in Dublin with the same owner as occupier. She said it became more frequent around the 1930's. Crazy to think this 'must own' mentality isn't around long!!:eek:

The way things worked back then was mad,the land was owned by 1 guy,it was rented by a builder who then in turn rented the house to tenants!!! But now we have to own everything.

astrofool

People would rent on 50 or 100 year leases, or get mortgages that spanned generations of family, the land owner was, literally, king. I think it's the attitude of trying to go to the polar opposite of that, that fuel the need to own, along with crappy rental laws for landlord and tenant.

Treehouse72

magentas wrote: »

It is down to each individual case. Personally myself and bf were in perfect place to buy our home this year. The timing was right FOR US.

We had been renting for years paying someone elses mortgage and the drop in house prices really worked to our advantage. we had deposit and borrowed LESS than we could have 'cos we wanted to live within our means and not be consumed by the loan.

Our home was €365k few years ago, we got it for €240k
Mortgage + life assurance +house insurance combined is working out €50 each extra per month than place we were renting.

Do ye think I'm mad???

If you have stress tested your mortgage for interest rates that are several percentage points above where they are today, then no.

McTigs

magentas wrote: »

It is down to each individual case. Personally myself and bf were in perfect place to buy our home this year. The timing was right FOR US.

We had been renting for years paying someone elses mortgage and the drop in house prices really worked to our advantage. we had deposit and borrowed LESS than we could have 'cos we wanted to live within our means and not be consumed by the loan.

Our home was €365k few years ago, we got it for €240k
Mortgage + life assurance +house insurance combined is working out €50 each extra per month than place we were renting.

Do ye think I'm mad???

To be honest, yes i do think you're mad.

I am personally fed up to the back teeth with renting. I've been renting for 15 years now and i've had to the back teeth, i want my own gaff. Myself and my girlfriend had our first child six weeks ago, i have a substantial deposit and mortgage approval but there is no way i'm buying yet.

No one knows where any of this is gonna end up for all the reasons given by noclue1 above. There are way too many variables pointing south. As for the whole "rent is dead money" and "why be paying someone elses mortgage etc etc", well thats just bull**** in a deflating market.

put simply, i reckon 30% further drop on 240k over the next 2 years. Thats 72k. That's 144k less to payback over the life of a mortgage.
Rent the same gaff for 2 years would be about 18k.
That makes me 126k better off for continuing to rent. I don't like it but the sums are the sums.

magentas

oh my god haven't been on in a few days and I can't believe all the replies!
Just glanced through messages TBH 'cos more or less spounting the same 'oul crap from know-it-alls.

I know in my heart we made the right decision. Yeah the property could have gone down in price but we'd been looking for a while and this place was perfect for us.

And please stop all this crap about "it's a bad investment"
It's not an investment to us...we don't ever intend on selling...it's our HOME!!!

fontanalis

magentas wrote: »

oh my god haven't been on in a few days and I can't believe all the replies!
Just glanced through messages TBH 'cos more or less spounting the same 'oul crap from know-it-alls.

I know in my heart we made the right decision. Yeah the property could have gone down in price but we'd been looking for a while and this place was perfect for us.

And please stop all this crap about "it's a bad investment"
It's not an investment to us...we don't ever intend on selling...it's our HOME!!!

That's a good attitude, I suppose it comes down to personal circumstances and you said you're not that worse off. Although stress testing for rates rises ,like someone said, is vital.

McTigs

magentas wrote: »

And please stop all this crap about "it's a bad investment"
It's not an investment to us...we don't ever intend on selling...it's our HOME!!!

Jaysus don't go getting so excited. You asked if people thought you were mad, and a few people said that they thought you were and gave perfectly valid reasons for their opinion.

I never mentioned "investment". When i buy a house it will be to be a home for my family, but i want that home to cost me the least amount in mortgage so as much as i would like to buy now, i feel the sensible thing to do is wait and see what happens.

That's just what i'm doing and i'm pretty confident that it is the right thing to do for me. Maybe you think i'm mad but i'm not gonna get my knickers in a twist if you do, it's just opinion is all.

Theboinkmaster

magentas wrote: »

It is down to each individual case. Personally myself and bf were in perfect place to buy our home this year. The timing was right FOR US.

We had been renting for years paying someone elses mortgage and the drop in house prices really worked to our advantage. we had deposit and borrowed LESS than we could have 'cos we wanted to live within our means and not be consumed by the loan.

Our home was €365k few years ago, we got it for €240k
Mortgage + life assurance +house insurance combined is working out €50 each extra per month than place we were renting.

Do ye think I'm mad???

Yes. And completely ignorant.

The 3 obvious clues in your post - "paying someone else's mortgage", "Our home was €365k few years ago" and "extra per month than place we were renting"

magentas

Theboinkmaster wrote: »

Yes. And completely ignorant.

The 3 obvious clues in your post - "paying someone else's mortgage", "Our home was €365k few years ago" and "extra per month than place we were renting"

Can you elaborate on your "points" please?

Theboinkmaster

magentas wrote: »

oh my god haven't been on in a few days and I can't believe all the replies!
Just glanced through messages TBH 'cos more or less spounting the same 'oul crap from know-it-alls.

I know in my heart we made the right decision. Yeah the property could have gone down in price but we'd been looking for a while and this place was perfect for us.

And please stop all this crap about "it's a bad investment"
It's not an investment to us...we don't ever intend on selling...it's our HOME!!!

You're wrong - you've effectively burned €100k

Theboinkmaster

magentas wrote: »

Can you elaborate on your "points" please?

Yes of course:

1 - paying someone else's mortgage

That's the tried and tested crap people came out with during the boom, when property prices were increasing.

By paying rent you are contributing to someone else's mortgage yes, but you're also avoiding capital depreication.

Why is having a mortgage something to aspire to?!

2 - our home was €365k years ago

Completely irrelevant - bubble prices, is no basis for informing your decisions now

3 - extra aper month than place we're renting

Are you stress-testing mortgage up to 8% interest rates? are you including capital depreciation in the cost of ownership? Depreciation could be €1k per month alone

magentas

Can I just enquire as to what the numerous posters here who say anyone is mad to buy a house now and anyone was mad to buy a house a few years ago...do ye all rent?
Making greedy landlords and property developers richer?

Or do ye have houses from the council?

Or other?

Genuine query

average_runner

Bought in 2007, house value was 435 now 385. But sold the two bed at the peak of the market when 4 beds were falling and 2 beds werent!

So happy days and also got a .5 tracker!!


The tracker makes up for any loss in the house value as interest rates with the banks raising themselves will hit between 6-9%.

I know ours go up with the ECB but a tracker is better than the other options.


BUt if the time is right for you to buy, then go for it once its not an investment, if for life who cares about the price or falling price!

Theboinkmaster

magentas wrote: »

Can I just enquire as to what the numerous posters here who say anyone is mad to buy a house now and anyone was mad to buy a house a few years ago...do ye all rent?
Making greedy landlords and property developers richer?

Or do ye have houses from the council?

Or other?

Genuine query

I rent and will continue to do so over the next few years until i think prices have levelled out.

All the while I'm saving a significant deposit, to reduce the morgage ill utlimately get and watching property prices crash.

For example IMO if i bought today (prices purely illustrative):

deposit €80k
mortgage €400k 30 years
monthly repayments €1,500pm

but if i wait 5 years and prices reduce to normal levels, which i think they will

deposit €150k
mortgage €100k 25 years
monthly repayments €800 (allowing for interest rates to increase)

and as regards rent - i pay €1k per month over 5 years = €60,000
but the price of the house has fallen €230k, that's €170k plus interest saved

Get it?

magentas

Theboinkmaster wrote: »

Yes of course:

1 - paying someone else's mortgage

That's the tried and tested crap people came out with during the boom, when property prices were increasing.

By paying rent you are contributing to someone else's mortgage yes, but you're also avoiding capital depreication.

Why is having a mortgage something to aspire to?!

2 - our home was €365k years ago

Completely irrelevant - bubble prices, is no basis for informing your decisions now

3 - extra aper month than place we're renting

Are you stress-testing mortgage up to 8% interest rates? are you including capital depreciation in the cost of ownership? Depreciation could be €1k per month alone

Having our own home, not mortgage, was something to aspire to

we couldn't have afforded house if it was €365k so it was relevant to our decision

we have stress-tested and have fixed mortgage. The decision wasn't taken lightly and we looked at worst case scenarios

Theboinkmaster

average_runner wrote: »

Bought in 2007, house value was 435 now 385. But sold the two bed at the peak of the market when 4 beds were falling and 2 beds werent!

So happy days and also got a .5 tracker!!


The tracker makes up for any loss in the house value as interest rates with the banks raising themselves will hit between 6-9%.

I know ours go up with the ECB but a tracker is better than the other options.


BUt if the time is right for you to buy, then go for it once its not an investment, if for life who cares about the price or falling price!

erm...i care.

if you bought a house today for €300k and in 2 years time you could have bought it for €200k you wouldn't care?!

Ortiz

If they don't care do you care?

average_runner

Theboinkmaster wrote: »

I rent and will continue to do so over the next few years until i think prices have levelled out.

All the while I'm saving a significant deposit, to reduce the morgage ill utlimately get and watching property prices crash.

For example IMO if i bought today (prices purely illustrative):

deposit €80k
mortgage €400k 30 years
monthly repayments €1,500pm

but if i wait 5 years and prices reduce to normal levels, which i think they will

deposit €150k
mortgage €100k 25 years
monthly repayments €800 (allowing for interest rates to increase)

and as regards rent - i pay €1k per month over 5 years = €60,000
but the price of the house has fallen €230k, that's €170k plus interest saved

Get it?

So let me get this right!

Your going to save 1,166.66p every month for next 5 years!
Pay your rent on top of that.
And you expect house value to drop by 230,000.

Sorry not sure how your on that much of salary with your calculations there.

Get your head out of fairy land cause house prices at 400k wont drop that much my friend! Havent even drop that much in last 3 years when most the crash stats show the biggest percentage fall. The fall is getting slower now !!!

Mine was 435 and only gone to 385 now, know that because 2 were sold at that price in last few weeks

gleep

Have to ask, how secure is your job? Are you confident that your company/own business is bullet-proof?

If not this causes two problems. You may not be able to affford your mortgage if one/both of you loose your jobs (hope not, sincerely).

You'll also be tied to the one area in terms of looking for a new job, because you'll have to sell the house, whereas if you were renting you're free to move whenever. This severely limits your options further in a depressed jobs market.

McTigs

magentas wrote: »

Can I just enquire as to what the numerous posters here who say anyone is mad to buy a house now and anyone was mad to buy a house a few years ago...do ye all rent?
Making greedy landlords and property developers richer?

Or do ye have houses from the council?

Or other?

Genuine query

I think you'll find that it was people buying houses at daft prices that made the property developers rich

I pay 750 a month rent on a flat "worth" about 250,000 at todays prices. Thats a measley 3.6% yeild for the landlord so i don't think he's getting rich off me.

Like i said "Rent is dead money" has no relevence in a deflating market. The time for me to buy will be when prices are dropping by less than the rent i am spending. I believe this will minimise my future mortgage repayments thus providing a better quality of life than buying now. No brainer from where i'm standing.

average_runner

McTigs wrote: »

I think you'll find that it was people buying houses at daft prices that made the property developers rich

I pay 750 a month rent on a flat "worth" about 250,000 at todays prices. Thats a measley 3.6% yeild for the landlord so i don't think he's getting rich off me.

Like i said "Rent is dead money" has no relevence in a deflating market. The time for me to buy will be when prices are dropping by less than the rent i am spending. I believe this will minimise my future mortgage repayments thus providing a better quality of life than buying now. No brainer from where i'm standing.

750 for a flat, what a rip off big time. In the boom times when i rented i paid 370 a month for a double room, just outside Ranelaegh. In total the rent for the house was 1000 between 3 of us!!

Your nearly paying the same amount as my mortage is now!! Happy days for that landlord! All landlords want is for mortage to be covered and a small profit.