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Property Prices-People deluded.
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I dont buy it my tracker essentially means that even at todays reduced purchase prices I would still have a similar monthly mortgage outgoing. It also assumes that I would be vigilant enough to save every penny of that money.
On paper thats fine but its not realistic to assume that is the norm. Human nature would dictate that I would have spent a portion of that money be it on a summer holiday, weekends away, probably sepnt more on my up coming wedding or something else that takes my fancy. Assuming that most people would have banked the lot of that difference are dilusional and cannot see beyond the numbers to real life situations.
Im not even going to go into capital reduction on my mortgage, mortgage interest relief gained versus rent reilief and stamp duty comparrisons etc becasue to get that forensic is pointless and varies so much from situation to situation that it cannt be applies across every person in neg equity. I won't even get into those of us who got the first time buyers grant and those of use getting discounts on our mortgages of 10% for money we agree to pay off early. Simply looking at price falls is way too simplistic.
clearly there are people in neg equity that made bad decisions, but you cannot assume everybody that bought made a bad decision.
Don't forget to add to all this the addition of 1% stamp duty and the loss of Tax Relief at Source. When you add these to the extra cost of mortgages compared to those who got trackers you are talking the equivalent of about 30% difference in price. In other words prices would have to fall 30% just so you are not paying extra. I won't even get into those of us who got the first time buyers grant and who are also getting discounts on their mortgage for paying some off early. To simply compare house prices is not enough.0 -
While renting in a lot of circumstances is obviously a good way of living, there are other circumstances where buying makes more sense.
Renting in this country suits a lot of people at various stages in their life but renting long term for a family isn't as straightforward as it is in other countries. And the thoughts of having to uproot a whole family and everything that goes with it every few years because of an issue with the landlord etc is not something that a lot of people want to buy into.
There's also a factor that sometimes a person can buy a property for less around the same price that they rent it for. I know thats exactly what myself and my wife found in galway about 5 years ago. We looked at our jobs/propects/savings/interest rates/rents/future family plans etc and made the call that buying a house made a lot more sense than renting. And thats a decision we don't regret at all.....
Why? Because we plan on living in the place long term, we are paying less than renting (19 years time we'll own it outright) and the place/area suits our needs now and into the future. We are subject to rate rises, maintenance costs, property tax most likely and all the other costs associated with owning a house but we've worked that in to our decision making process in as much a way as possible.
My point is - there's absolutely nothing wrong with buying a house - so long as you:
1. Buy it for the right reasons (You plan on living in it long term and in as much a way as possible you have determined it will fit your needs into the future)
2. You protect yourself (as much as possible) against job fluctuations/health issues.
3. You dont get a mortgage over 20/25 years.
4. You factor in various rises that could happen.
5. You work out rental versus mortgage costs versus salary costs.
Theres absolutely nothing wrong with renting either if that suits you.
I think the "property ladder" is the worst concept to get into the Irish Psyche (in general)
People bought 1 and 2 bed apartments and dwellings that were totally unsuitable for their future needs (perhaps they were grand for a few years) in the hope that prices would rise, they would sell and move to a bigger more suitable place.
So now you have a lot of people who bought one or two bed apartments which are unsuitable for family life stuck with them.
Fecking A+++0 -
I dont care if people tell me I made a bad financial decision
The second sentence in this thread that sums up the Irish attitude to mortgages.
(This was the first: http://www.boards.ie/vbulletin/showpost.php?p=72684388&postcount=58)0 -
TommyTippee wrote: »The second sentence in this thread that sums up the Irish attitude to mortgages.
(This was the first: http://www.boards.ie/vbulletin/showpost.php?p=72684388&postcount=58)
dont be a muppet and stop taking that one line out of context.
Most financial interactions you make throughout your life are bad ones. Why buy that shirt now. wait 5 months and it will probably be half price in a sale. If somebody tells me buying that shirt is a bad financial decision they are right who gives a s**t.
there you go I have just summed up Irish attitudes to clothes shopping :rolleyes:
Some people just dont realise that being in negative equity doesnt mean you are worse off than if you didnt buy all this back of a beer mat mathes is a joke. There hasnt been one balanced comment on this forum regarding the pros of having bought over the pas tnumber of years versus the cons. Bar one pretty decent article from Ronan Lyons.
Too many people that frankly dont knwo what they are talking about jsut comparing purchase prices. Not considering interest rates, capital repayments, stamp duty, the human nature of spending more disposible income, etc.
I will say it again Im in negitve equity and I dont care. Ive done the maths. Im in a better position than had I had rented for the past 6 years --> I dont give a crap about negative equity. Now you can twist that whatever way you want but it just shows how much financially inept you are and the fact you cant grasp anything beyond house purchase price
and thats without even getting into the socio economic arguments about house buying, but of course you think everybody is a purchasing manager of a hedge fund and is only interested in ROI becasue thats why most people buy houses isnt it ........0 -
Some people just dont realise that being in negative equity doesnt mean you are worse off
I'm one of those people then, cos if you can't switch your mortgage to another lender offering better rates because you're up to your nuts in negative equity, then inevitably you are going to be worse off.0 -
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TommyTippee wrote: »I'm one of those people then, cos if you can't switch your mortgage to another lender offering better rates because you're up to your nuts in negative equity, then inevitably you are going to be worse off.
Don't be so ridiculous. No one is offering better deals. That is the whole point. Banks are offering money to people to pay off your mortgage early. Such rates have never happened before or will never happen again.0 -
Don't be so ridiculous. No one is offering better deals. That is the whole point. Banks are offering money to people to pay off your mortgage early. Such rates have never happened before or will never happen again.
I'm talking long term here, a concept you seem to be struggling with
:rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:0 -
TommyTippee wrote: »I'm talking long term here, a concept you seem to be struggling with
:rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:
I am talking long term also. Trackers are long term. Their like will never be offered again. PTSB are offering 10% extra to people who reduce their mortgage. So if you have a 35 year mortgage with 30 years left that reduction will only affect your repayments in 30 years time. Were you talking more long term than that.
We are talking about trackers of 0.7%. They will never be beaten over any period into the future. The banks were stupid to give them out and they know it. They will never/can never offer these deals again. That is the long term.0 -
dont be a muppet and stop taking that one line out of context.
Most financial interactions you make throughout your life are bad ones. Why buy that shirt now. wait 5 months and it will probably be half price in a sale. If somebody tells me buying that shirt is a bad financial decision they are right who gives a s**t.
there you go I have just summed up Irish attitudes to clothes shopping :rolleyes:
Some people just dont realise that being in negative equity doesnt mean you are worse off than if you didnt buy all this back of a beer mat mathes is a joke. There hasnt been one balanced comment on this forum regarding the pros of having bought over the pas tnumber of years versus the cons. Bar one pretty decent article from Ronan Lyons.
Too many people that frankly dont knwo what they are talking about jsut comparing purchase prices. Not considering interest rates, capital repayments, stamp duty, the human nature of spending more disposible income, etc.
I will say it again Im in negitve equity and I dont care. Ive done the maths. Im in a better position than had I had rented for the past 6 years --> I dont give a crap about negative equity. Now you can twist that whatever way you want but it just shows how much financially inept you are and the fact you cant grasp anything beyond house purchase price
and thats without even getting into the socio economic arguments about house buying, but of course you think everybody is a purchasing manager of a hedge fund and is only interested in ROI becasue thats why most people buy houses isnt it ........
Take a chill pill, jesus.....also, you seem to contradict yourself a lot with what you are saying but if its works for you then all the best with it....relax tho.0 -
Renting rules, I am in a way better position renting than if i had bought 6 years ago. Theres no way that anyones position couldnt be.
I've spent 40,000 on rent , but i've roughly saved 300,000 on a house (150,000 capital plus 150,000 in interest say 3 bedroom dublin)
Possibly i could have made some of this up renting rooms etc
Ok i've missed the boat on a tracker mortage but you can't have everything
Money paid into negative equity is dead money.
Money paid into interest payments is dead money...0 -
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^^Don't forget stamp duty!^^0
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monkeybutter wrote: »Renting rules, I am in a way better position renting than if i had bought 6 years ago. Theres no way that anyones position couldnt be.
I've spent 40,000 on rent , but i've roughly saved 300,000 on a house (150,000 capital plus 150,000 in interest say 3 bedroom dublin)
Possibly i could have made some of this up renting rooms etc
Ok i've missed the boat on a tracker mortage but you can't have everything
Money paid into negative equity is dead money.
Money paid into interest payments is dead money...
I think your figures are seriously wrong. Care to provide details? You need to think how much was the house You are in in 2005 and how much would it have cost to rent that same house for the last 6 years (not just today's rent X 6). Based on the figures you have given you are getting an amazing rental deal which is way better than the average.0 -
Hmmm I am the only one that actuolly buys house not because I think on resell value, but because I want to decorate my house the way I want, plus I allways wanted my own king size bed where i can fool with misses all night long...
And yeah, if I wanted to put up a naked picture of myself on a wall, I wont need to go and beg landlord, so he would let me to do a hole in a wall...
Renting is good, buying is good, just sort out your priorities and what you want from your life.0 -
ShadowHearth wrote: »Hmmm I am the only one that actuolly buys house not because I think on resell value, but because I want to decorate my house the way I want, plus I allways wanted my own king size bed where u can fool with misses all night long...
And yeah, if I wanted to put up a naked picture of myself on a wall, I wont need to go and beg landlord, so he would let me to do a hole in a wall...
Renting is good, buying is good, just sort out your priorities and what you want from your life.
Resale value didnt come into it for me either.
If we do resell it'll probably be long after the mortgage is paid and we've gotten our use out of the house. Who has any fcuking clue what we'll get for it then anyway?0 -
Are you adding 150k in future interest over the term of the mortgage to make up a saving made in 6 years? Seriously deranged maths there. No aspect of inflation nor the interest you will have to pay which could easily be double what others pay if not triple.monkeybutter wrote: »Renting rules, I am in a way better position renting than if i had bought 6 years ago. Theres no way that anyones position couldnt be.
I've spent 40,000 on rent , but i've roughly saved 300,000 on a house (150,000 capital plus 150,000 in interest say 3 bedroom dublin)
Possibly i could have made some of this up renting rooms etc
Ok i've missed the boat on a tracker mortage but you can't have everything
Money paid into negative equity is dead money.
Money paid into interest payments is dead money...
People really need to learn what negative equity is. Not everybody is negative equity and it only applies if your mortgage is more than your property. Even with that as you are depreciating your loan it isn't dead money. Effectively you are suggesting an interest payments is a waste of money. Fine the only loan I have ever had is my mortgage which is at the lowest rate you can.0 -
ShadowHearth wrote: »Hmmm I am the only one that actuolly buys house not because I think on resell value, but because I want to decorate my house the way I want, plus I allways wanted my own king size bed where i can fool with misses all night long...Resale value didnt come into it for me either.
People discussing getting value on a property purchase has nothing whatsoever to do with either resale value or property investment. One more time: nothing whatsoever.
Value is a proxy for all the quality of life improvements one can make with the money saved: the very decoration Shadow mentions, a world class education for your kids, a new car every few years, regular holidays etc. NOTHING to do with property investment or any such thing. Merely a recognition that when people dismiss €50,000 here and €40,000 there they seem not to realise how much that amount on the principle adds to the lifetime of a mortgage and how many years that money is adding to your working life. Quality of life, not property investment.0 -
Treehouse72 wrote: »People discussing getting value on a property purchase has nothing whatsoever to do with either resale value or property investment. One more time: nothing whatsoever.
Value is a proxy for all the quality of life improvements one can make with the money saved: the very decoration Shadow mentions, a world class education for your kids, a new car every few years, regular holidays etc. NOTHING to do with property investment or any such thing. Merely a recognition that when people dismiss €50,000 here and €40,000 there they seem not to realise how much that amount on the principle adds to the lifetime of a mortgage and how many years that money is adding to your working life. Quality of life, not property investment.
There were people who purchased dwelling places with resale value being a major factor in that purchase and those are the ones who will, in my opinion, get stung most.
They probably bought a 1/2 bed apt with the intention of living in it for a year or three, then sell it for more than they bought it and move into a better place - another step on "the ladder". This place was probably fine for their needs for that period of their life but they never seen past the issue of them not being able to sell it, or having to sell it for less than they paid for it.
These people are going to be in trouble when they need to get something more appropriate for their changing needs as they get older and these are the people that are gonna feel it most.
There were those who bought second and third properties - if they over stretched themselves they are also in difficulty as these places will almost have to be sold at a lose if the person needs to sell them in this market.
Yes, value is a lot more than just monetary, however it is difficult to put a price on other value.0 -
iT is right to dismiss 40-50k over the life span of a mortgage as with inflation these sums become much smaller in real terms. A year or two on to your mortgage doesn't make that much difference. I was at a 60th and people were discussing the fact that while they had just paid off their mortgages the difference was negligible to them now. That is what happens with the repayments. My mortgage is already less to me in real terms as I earn more than when i got it that actually still applies to lots of people. Yes people lost their jobs but that is sometimes what happens.Treehouse72 wrote: »People discussing getting value on a property purchase has nothing whatsoever to do with either resale value or property investment. One more time: nothing whatsoever.
Value is a proxy for all the quality of life improvements one can make with the money saved: the very decoration Shadow mentions, a world class education for your kids, a new car every few years, regular holidays etc. NOTHING to do with property investment or any such thing. Merely a recognition that when people dismiss €50,000 here and €40,000 there they seem not to realise how much that amount on the principle adds to the lifetime of a mortgage and how many years that money is adding to your working life. Quality of life, not property investment.0 -
Very interesting discussion on some aspects of what is being discussed in this very thread (the financial implications of buying now versus buying earlier, lower prices now versus more beneficial mortgages / relief in years gone by):
http://www.thepropertypin.com/viewtopic.php?f=4&t=38737&start=0
Obviously the Pin is the home of the uber-bears so the consensus was always going to be those who wait are making a better decision that those who bought - I'd agree with this but definitely think that - pure financial implications aside - those who bought over the past 8 years or so may well have been right to do so for any number of reasons and their lives may be better for making that decision, money isn't everything after all! We are getting towards a moment when many of those who have been saving / investing for the past decade or so will be thinking about finally purchasing (for cash or getting a small mortgage); when / if the market declines another 20% I'll be making a move myself.0 -
TommyTippee wrote: »I'm one of those people then, cos if you can't switch your mortgage to another lender offering better rates because you're up to your nuts in negative equity, then inevitably you are going to be worse off.
yeah because Im going to get a better rate than 0.75% above ECB base rate on my current tracker :rolleyes::rolleyes:0 -
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monkeybutter wrote: »Renting rules, I am in a way better position renting than if i had bought 6 years ago. Theres no way that anyones position couldnt be.
I've spent 40,000 on rent , but i've roughly saved 300,000 on a house (150,000 capital plus 150,000 in interest say 3 bedroom dublin)
Possibly i could have made some of this up renting rooms etc
Ok i've missed the boat on a tracker mortage but you can't have everything
Money paid into negative equity is dead money.
Money paid into interest payments is dead money...
sorry man but those numbers dont add up. There is no was a property that has dropped 300k which would peak it at about 600k cost you € 555 per month to rent on average over the past 6 years.
now if you were in a hosue share maybe but then again a prime example of oversight as the income from rent a room schemens would need to be part of oyur calculation which they clearly are not.
perfect example of people looking at purchase price rather than cost of ownership.0 -
ShadowHearth wrote: »Hmmm I am the only one that actuolly buys house not because I think on resell value, but because I want to decorate my house the way I want, plus I allways wanted my own king size bed where i can fool with misses all night long...
And yeah, if I wanted to put up a naked picture of myself on a wall, I wont need to go and beg landlord, so he would let me to do a hole in a wall...
Jesus christ.....have we learned nothing?0 -
TommyTippee wrote: »Jesus christ.....have we learned nothing?
What learning are you talking about?
Are you saying that resale value should be a consideration in every major house purchase?0 -
What learning are you talking about?
Are you saying that resale value should be a consideration in every major house purchase?
I would say that deciding whether or not to borrow a huge amount of money over 20+ years should be based on more than the ridiculous 'advantages' as listed above
all of which can be done while renting, incidentally0 -
TommyTippee wrote: »Jesus christ.....have we learned nothing?
its called having a material posession. Value is in the eye of the beholder and isnt classified by its return on investment.
People buy things to make them happy and content. Its called human nature you need to take your investment hat off for a moment and properly consider the psyhcology behind material posession purchases and the also the psychology behind saving.
if a house mortgage over the last 5 years was say 50k and the same house for rent was 35k Im telling you for a fact that you could count on one hand the number of people who would save all the 15k difference. To try and pretend its the norm is farsical to the extreme which is used as the basis for the argument on being "better off" not buying.
FFS Lets all live at home with our parents its the most financially prudent way to live. :rolleyes::rolleyes:0 -
We bought our first home 10 years ago, just as prices were beginning to climb. I was sure there would be a crash soon so made sure that we got what we could in an area that I would be happy to raise a family in. Prices just climbed and climbed. We paid €250k, at the peak it would have hit €600k and now we have it on the market for €315k. We're giving up a + 0.8 tracker to sell. We've been thinking abuot it for a year or two and between stamp duty and mortgage rates thought we were stuck where we are - financial madness to move. But, we got to a point where the financial aspect just had to be put aside to look at the bigger picture. We have 2 kids, now have a third on the way. We have a house that is too small for our family as it is, kids have a postage stamp garden to play in and all in all none of us are happy there. We've just got mortgage approval for a 5 year fixed rate of 3.7%. But we were overpaying our mortgage for the last 8 years so our repayments were based on the outstanding capital but we've a overpayment balance of €20k (PTSB) so redemption figure is €20k less. We're also slightly downgrading the area so getting a garden 3 times the size, an extra bedroom, 2 extra rooms downstairs and we'll now be walking distance to school. For this the asking price is €5k more than what we're asking for. We're actually getting a mortgage that's marginally smaller than what we have now, over the same term as was remaining on our original, and our repayments will be €200 less than we're paying at the moment, because of the lower principle and we won't be overpaying. Who knows if we'll revert to a 10% variable or a 2% variable in 5 years time. Chances are that we'll be in a better financial position at that point (I'm currently at home after a redundancy, will probably be working again by then) so we'll cope. And while prices are still dropping our new mortgage is only 50% ltv so we've a bit of scope before neg equity, although since we'll be staying that's not really an issue.
I'm in no doubt that what we should do, from a purely financial view, is sell then rent and buy next year. But for quality of life, we're doing what we need to do for our family, without negatively affecting our monthly financial position. This is also the house for life and I think it'll be the best decision we'll ever make. In our situation, finance alone cannot dictate whether a decision is good or bad.0 -
TommyTippee wrote: »I would say that deciding whether or not to borrow a huge amount of money over 20+ years should be based on more than the ridiculous 'advantages' as listed above
all of which can be done while renting, incidentally
Yep,
Am sure thats all the poster based his decision on......
He was making the point that resale value is a minor consideration for those that don't intend on selling any time soon.
There are not that many landlords in this country that will let you redecorate any way you please.....0 -
There were people who purchased dwelling places with resale value being a major factor in that purchase and those are the ones who will, in my opinion, get stung most.
They probably bought a 1/2 bed apt with the intention of living in it for a year or three, then sell it for more than they bought it and move into a better place - another step on "the ladder". This place was probably fine for their needs for that period of their life but they never seen past the issue of them not being able to sell it, or having to sell it for less than they paid for it.
These people are going to be in trouble when they need to get something more appropriate for their changing needs as they get older and these are the people that are gonna feel it most.
There were those who bought second and third properties - if they over stretched themselves they are also in difficulty as these places will almost have to be sold at a lose if the person needs to sell them in this market.
Yes, value is a lot more than just monetary, however it is difficult to put a price on other value.
Well wrote piece kippy but I do feel you are missing or maybe even avoiding Treehouse72's overriding point (seen as you quoted him/her). It would seem to me Treehouse72 is not just talking about those who bought that 1/2 bedroom apartment with the intention of getting on the property ladder if you will (although no doubt he/she is most definately including them as well). He/she would seem to also be including those who bought property that fully meets (and perhaps even surpasses) their then immediate and future needs, but such a property extends them that much that it impinges on other aspects of their quality of life.
Even more than that Treehouse72 is perhaps including those who could comfortably afford such properties but clearly made bad financial decisions as well.....I know now there are some who will see the words financial decisions being mentioned by me and see red (as it would almost seem that buying a family home is not a financial decision by many or at least the financial aspect seems to play very little part in it).
I'd consider myself a reasonably balanced person. Could have borrowed €300 -€400k or maybe even more against a house at some stage no doubt. Leaving out the financial aspect out of it I would most likely be as happy as a pig in muck with my dwelling. But you simply need to include the financial aspect. Don't know about some of ye contributors to the thread but the fact that I'm a slave to the bricks and mortar for the next 40 years or more, perhaps even passing on the debt to my offspring would annoy the fcuk out of me to say the least and would even go for my mental health in time I'd imagine. Foreign holidays, treating myself to a newer car, childrens education etc would no doubt suffer as a consequence. Even getting sick might be a luxury I could not afford for Christ sake. May end up taking in a couple of lodgers to help pay the mortgage or at least allow me live that bit more comfortably. I don't know about the rest of ye but that kind of life is not for me.0 -
Of course.johndaman66 wrote: »Well wrote piece kippy but I do feel you are missing or maybe even avoiding Treehouse72's overriding point (seen as you quoted him/her). It would seem to me Treehouse72 is not just talking about those who bought that 1/2 bedroom apartment with the intention of getting on the property ladder if you will (although no doubt he/she is most definately including them as well). He/she would seem to also be including those who bought property that fully meets (and perhaps even surpasses) their then immediate and future needs, but such a property extends them that much that it impinges on other aspects of their quality of life.
Even more than that Treehouse72 is perhaps including those who could comfortably afford such properties but clearly made bad financial decisions as well.....I know now there are some who will see the words financial decisions being mentioned by me and see red (as it would almost seem that buying a family home is not a financial decision by many or at least the financial aspect seems to play very little part in it).
I'd consider myself a reasonably balanced person. Could have borrowed €300 -€400k or maybe even more against a house at some stage no doubt. Leaving out the financial aspect out of it I would most likely be as happy as a pig in muck with my dwelling. But you simply need to include the financial aspect. Don't know about some of ye contributors to the thread but the fact that I'm a slave to the bricks and mortar for the next 40 years or more, perhaps even passing on the debt to my offspring would annoy the fcuk out of me to say the least and would even go for my mental health in time I'd imagine. Foreign holidays, treating myself to a newer car, childrens education etc would no doubt suffer as a consequence. Even getting sick might be a luxury I could not afford for Christ sake.
Perhaps I missed the point of Treehouses post.
There is very obviously a financial aspect, which I point out in earlier posts, and the finances are obviously a critical part of it. However taking into account resale value - is not one of the main parts of this if one is buying a family home that they owner does not intend selling for some time if at all......
Myself any my wive could probably have borrowed close to 600K in the "boom" but that doesn't make 600K the amount we are comfortable paying back.......no matter what the house was bought for........
The main point is, can you afford to pay back that mortgage week on week for the duration of the loan, while taking into account (as much as possible) rate rises, rates, maintenance, salaries etc and at the same time ensure you have an adequate quality of life.
That life you speak about in your last paragraph isn't for many - but again, if you find yourself in that situation for whatever reason, you will need to make some critical decisions and work out the pros and cons of acting on them.0 -
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TommyTippee wrote: »I would say that deciding whether or not to borrow a huge amount of money over 20+ years should be based on more than the ridiculous 'advantages' as listed above
all of which can be done while renting, incidentally
I presumet most of people understood what I ment by my comment, but I can explain for a bit ... Slower... People.
I want a place to call home. Not an investment. I want my children to grow up and call that place home, not a fecking hole my parents were renting all theyr life. I want freedom to decide what I want in my place, not what landlord decided.
It might be a shocker lad, but some people buy homes to live in not to invest in to them and make a few fast quid. Idiots, I know!0
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