Huge negative equity on apartments.

MysticalRain

Zulu wrote: »

Why not? Sure couldn't I make up numbers as well? Are you going to believe my numbers or are you going to continue to seek further exceptions?

I bought in 2007.
My mortgage rate is E.C.B +1%.
My mortgage repayments are €1050 per month.
My property has a rental income of €1150 per month. (reduction from €1250 for long standing tenants).
Now I need to pay management fees of €800 per annum, and tax (which is minimal as it's offset against expenses).

Previously I rented. I paid €700 per month for a room sharing a house with 5 others.
I then moved to a one bedroom that I rented for €1300 per month.
I then moved to a two bed that I rented for €1400 per month.
Then I bought and paid mortgage...
€1400-1050=250. Less management fees (800/12=~70) leaves €130.
So I save €130 per month by deciding to buy.

After the term of the mortgage, I'll also have an "asset" which has the potential to yield me roughly (crystal ball conditions apply) the equivalent of €1000 a month gross.

If I stayed renting, I'd be paying €1400 per month but I wouldn't have an asset after a period of time.


...now there's my maths. I'm confident you'll find a reason to ignore/exclude what doesn't suit your argument, but above is the reality I live in.

€700 per month sharing. €1300 per month for a one bedroom??

Where were you renting? Ballsbridge?

Monty Burnz

MysticalRain wrote: »

€700 per month sharing. €1300 per month for a one bedroom??

Where were you renting? Ballsbridge?

Perhaps it was - and this is an advantage of renting, you can rent in places you couldn't possibly afford to buy.

not yet

I apologize to anyone on this thread I may have offended, A post I made last night got a bit personal And to that person I am sorry, I just find it insanely difficult to deal with buying a home for 225k and having it worth 90k today, I do accept that If you can pay your mortgage it should not matter but I re-married last year and wanted to move outside the city but couldn't for obvious reasons.

I still believe ordinary people who where not housing market savvy where let down by our government. Anyways I'm out now good luck to ya'll

Zulu

Monty Burnz wrote: »

Without wanting to trudge over old ground again, the thought-terminating cliché that 'rent is dead money' is the ignorance that has caused the most appalling damage to this country in the last decade.

You understand why people see it as "dead money" though, right? I mean in my situation for example, you can understand what prompted me to buy & stop renting?

As for sneering and snobbery, I'm sure you are well aware that this has historically been visited upon renters like yourself.

Frankly I was aware of it, but I don't hang around with people like that. It didn't apply to me because a) I associate with sound people b) I don't suffer (chronically) from status anxiety & c) I don't respect the views of snobs.

There is no place for it, but discussing optimal economic decisions should not come under the heading of sneering and snobbery.

It doesn't, but the tone of some peoples posts certainly do.

MysticalRain wrote: »

Where were you renting? Ballsbridge?

Yeah, pretty much. I was renting nice places. A beautiful house on haddington road, & an apartment in ranelagh. I could have rented for cheaper, but I choose not to. I didn't want to live in a kip, so I paid a premium for a premium service.

Zulu

not yet wrote: »

I still believe ordinary people who where not housing market savvy where let down by our government. Anyways I'm out now good luck to ya'll

+1

Monty Burnz

Zulu wrote: »

You understand why people see it as "dead money" though, right? I mean in my situation for example, you can understand what prompted me to buy & stop renting?

Yes - because a lot of the time, it makes more sense to buy.

Zulu wrote: »

Frankly I was aware of it, but I don't hang around with people like that. It didn't apply to me because a) I associate with sound people b) I don't suffer (chronically) from status anxiety & c) I don't respect the views of snobs.

I didn't hang around with them either, but I came across them a lot when discussing the future of property in Ireland. Those of us who said it was a bubble were only saying so because we were jealous, begrudgers, doom-sayers etc. etc.

Zulu wrote: »

It doesn't, but the tone of some peoples posts certainly do.

Tone is easily misread on boards, and it can lead to escalating hostility when none was originally intended.

Zulu wrote: »

Yeah, pretty much. I was renting nice places. A beautiful house on haddington road, & an apartment in ranelagh. I could have rented for cheaper, but I choose not to. I didn't want to live in a kip, so I paid a premium for a premium service.

I tended to strike a different balance, avoiding kips, but not breaking the bank either. I usually lived around Rathmines or Ranelagh.

Scruffy Sandra

I think anyone who bought an apartment a few years ago and now sees the value has dropped by 75% must be kicking themselves.

The timing of their purchase will cost them hundreds of thousands of euros more than their neighbour, and that's real money....real pay packets....€1,000 euro this month will go from someone's account into a virtual manhole, never to be seen again and with no return.

It is such a depressing scenario for those involved.

And the worst bit of all is that those apartments, apart from the very few small and perfectly managed complexes, are sure to deteriorate. It is very possible that they will never reach the prices they were bought for in the late 2000s.

babaracus

not yet wrote: »

I still believe ordinary people who where not housing market savvy where let down by our government. Anyways I'm out now good luck to ya'll

The lesson is don't rely on "the government" to protect you from yourself. A grown adult who makes a financial decision should make it based on their own judgement. If that financial decision proves to have been poor then you can't come running back looking for a bail out afterwards. People made a decision to buy voluntarily, nobody put a gun to their heads.

It is always capitalism on the way up and socialism on the way down with some people.

Now I lost 20 quid on the nags last week where do I apply for my bail out?

Zulu

Same place the banks & the developers did, I guess.

Scruffy Sandra

I don't blame the people who bought apartments mouthing off here and kidding themselves that everything is cushty.

But if it was me who was throwing the price of a week in the Canaries down the toilet EVERY month, I don't know how I'd be feeling. Content is unlikely.

Zulu

Obvious troll is obvious.

Scruffy Sandra

Zulu wrote: »

Obvious troll is obvious.

I take it you're one of the ones I am talking about then :rolleyes:

OldNotWIse

stevedublin wrote: »

Okay, if you want to sleep in a ditch or pay someone else's mortgage go ahead, its not the sort of life i would willingly choose for myself.

Aaaah, now we see the truth. You choose not to rent because it's "not the sort of life" you want (whatever that's supposed to mean) but other people who did rent are now supposed to bail you out because your snobbery has failed you? Oh dear...

OldNotWIse

Scruffy Sandra wrote: »

I think anyone who bought an apartment a few years ago and now sees the value has dropped by 75% must be kicking themselves.

The timing of their purchase will cost them hundreds of thousands of euros more than their neighbour, and that's real money....real pay packets....€1,000 euro this month will go from someone's account into a virtual manhole, never to be seen again and with no return.

It is such a depressing scenario for those involved.

And the worst bit of all is that those apartments, apart from the very few small and perfectly managed complexes, are sure to deteriorate. It is very possible that they will never reach the prices they were bought for in the late 2000s.

Yup, my cousin bought one for 350k and its now worth something like 150k. Of course I feel sorry for her, but not enough to want to bail her out. We can't compensate everyone for misguided decisions. When she was approved for her mortgage, we were all "told the news" and there was an hysterical level of excitement etc (never seen anyone get so excited about getting into so much debt tbh)

stevedublin

OldNotWIse wrote: »

Aaaah, now we see the truth. You choose not to rent because it's "not the sort of life" you want (whatever that's supposed to mean) but other people who did rent are now supposed to bail you out because your snobbery has failed you? Oh dear...

I am not asking anyone to bail me out, I am quite happy living in my own home (or it will be when the mortgage is paid off).
My snobbery hasn't failed me at all!

Mr Benevolent

Trigger Happy wrote: »

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

Nope, it means that:

...the pledge ends (dies) when either the obligation is fulfilled or the property is taken through foreclosure.

It's funny though. Ten years ago I was told that I was mad to not buy a house. Same thing five years ago. Now it's 'you did the right thing'. Sometimes doing nothing is the right option.

Scruffy Sandra

OldNotWIse wrote: »

When she was approved for her mortgage, we were all "told the news" and there was an hysterical level of excitement etc (never seen anyone get so excited about getting into so much debt tbh)

Yes, I remember people bragging about how much they had been offered by the bank.

Like I said it was "getting on" Irish style.

One fella I know bought a gaff that had sockets in the wall for plugging the hose of your hoover into, instead of dragging the hoover around the house. That set him back....oh...about €3,000 over the course of 30 years.

It was madness and anyone who says they don't regret it or that they didn't make a mistake are delusional.

The thoughts of working every day to pay back €200,000 plus €150,000 interest for the next 30 years to live in the same two rooms, portable hoover or not, would bring a shotgun to my temple.

justsomebloke

Monty Burnz wrote: »

Without wanting to trudge over old ground again, the thought-terminating cliché that 'rent is dead money' is the ignorance that has caused the most appalling damage to this country in the last decade.

but unfortunately the statement is still true as renting is still dead money unless you are actively investing money for your future which most Irish people aren't doing.

steve9859

Scruffy Sandra wrote: »

The thoughts of working every day to pay back €200,000 plus €150,000 interest for the next 30 years to live in the same two rooms, portable hoover or not, would bring a shotgun to my temple.

You realise that you do have something at the end of it, right? An asset and something that will provide an income stream for the 20 or 30 years that you might live after you have paid it off. And which you can then give to your kids.

Not saying that it is right for everyone. And if you bought in the last 10 or 15 years you would have no doubt been better off renting, and putting your spare money into cash or other investments (which would have also lost value, don't forget)

The way you articulate your argument makes it seem like you have set fire to £350,000

steve9859

justsomebloke wrote: »

but unfortunately the statement is still true as renting is still dead money unless you are actively investing money for your future which most Irish people aren't doing.

Absolutely true. If you rent, and don't save / invest at the same time, then rent truly is dead money.

If you rent whilst at the same time building up assets for your old age, then fair play. You have made a choice to rent rather than buy, and there are plenty of good reasons.

If you rent rather than buy, but then don't save anything and moan at the age of 65 (when buyers have an unencumbered asset giving off an income stream) that you have no assets, no pension and no investments, then you only have yourself to blame.

books4sale

Confab wrote: »

Sometimes doing nothing is the right option.

So true, sometimes its best to take a few steps back, bide your time, cooly and calmly assess the situation, cut out all the noise.

If more people had done this during the boom, they wouldn't be up sh*t creek right now. Instead clueless and thoughtless they followed the herd because everyone else was doing it, ridiculous!

In my situation, I have done this and have assessed that buying a property is the wrong move right now, there is a long way to the bottom yet and then there's the stagnent period of 8-10 years to follow.

Theboinkmaster

justsomebloke wrote: »

but unfortunately the statement is still true as renting is still dead money unless you are actively investing money for your future which most Irish people aren't doing.

No you're wrong. Rent is not dead money - it is the cost of utilising an asset.

If like many people are today you're renting whilst waiting to buy you are more likely to be better off.

Buy now and pay €1,500pm in mortgage OR

Wait for 2 years and pay €1,500 pm in rent but save €1,000 pm in capital depreciation.

You're effectively saving €1,000 per month plus the cost of capital.

books4sale

Scruffy Sandra wrote: »

One fella I know bought a gaff that had sockets in the wall for plugging the hose of your hoover into, instead of dragging the hoover around the house. That set him back....oh...about €3,000 over the course of 30 years.

.

Where did the dust go? A great big vaccum bag in the skhhhy!

Scruffy Sandra

steve9859 wrote: »

You realise that you do have something at the end of it, right? An asset and something that will provide an income stream for the 20 or 30 years that you might live after you have paid it off. And which you can then give to your kids.

Not saying that it is right for everyone. And if you bought in the last 10 or 15 years you would have no doubt been better off renting, and putting your spare money into cash or other investments (which would have also lost value, don't forget)

The way you articulate your argument makes it seem like you have set fire to £350,000

I don't know why you keep saying this. What asset? A worthless apartment in a wrecked apartment block? How much are you going to rent it out for? Where will you live? Who would buy it?

They have set fire to €350,000....that is my point.

steve9859

Scruffy Sandra wrote: »

I don't know why you keep saying this. What asset? A worthless apartment in a wrecked apartment block? How much are you going to rent it out for? Where will you live? Who would buy it?

They have set fire to €350,000....that is my point.

Not everyone who has a mortgage has bought a place like that. And not every apartment complex is as you describe. There were some pretty solid ones built prior to the boom

And if you have brought a crock of sh1t, you are better off walking away....bankruptcy is better than throwing away that cash over a 30 year period.

Scruffy Sandra

steve9859 wrote: »

Not everyone who has a mortgage has bought a place like that!

Very, very few apartment blocks will be properly maintained over the next ten years for various reasons. First of all, most were not built to last.

Also renters will not take care of them, so that will be left to the management company and the fees they receive. As more and more owner occupiers grow older and start families, more will be let out to tenants. More will be let to social-welfare recipients too, as rent allowance is reduced.

As taxes are increased in the next ten years of austerity budgets, there will be a refusal to pay these extortionate management fees in many cases or shortcuts will be taken instead....shortcuts on proper maintenance. Certainly things like landscaping will go out the window.

Gradually they will deteriorate until they are worthless. Those outside of the M50 and along the imaginary metro north will be first to go.

steve9859

Theboinkmaster wrote: »

No you're wrong. Rent is not dead money - it is the cost of utilising an asset.

If like many people are today you're renting whilst waiting to buy you are more likely to be better off.

Buy now and pay €1,500pm in mortgage OR

Wait for 2 years and pay €1,500 pm in rent but save €1,000 pm in capital depreciation.

You're effectively saving €1,000 per month plus the cost of capital.

Over a 30 year period, as long as you havent bought somewhere that is going to fall down, it is a big assumption that there will be capital depreciation. And if you don't plan selling, it is irrelevant.

What you are correct about is that buying a house is a matter of timing, if immediate capital appreciation / depreciation is important to you.

Capital appreciation doesn't pay the bills. And capital depreciation doesn't put you on the street.

(with the caveat that if you have brought a place that is so bad that it will be worthless forever, in SruffySandra's example, then you're better off getting out rather than being the hero and paying that cash over 30 years for nothing....the state wont thank you for it and give you a medal)

steve9859

Scruffy Sandra wrote: »

Very, very few apartment blocks will be properly maintained over the next ten years for various reasons. First of all, most were not built to last.

Also renters will not take care of them, so that will be left to the management company and the fees they receive. As more and more owner occupiers grow older and start families, more will be let out to tenants. More will be let to social-welfare recipients too, as rent allowance is reduced.

As taxes are increased in the next ten years of austerity budgets, there will be a refusal to pay these extortionate management fees in many cases or shortcuts will be taken instead....shortcuts on proper maintenance. Certainly things like landscaping will go out the window.

Gradually they will deteriorate until they are worthless. Those outside of the M50 and along the imaginary metro north will be first to go.

Well, I disagree....there are material differences between, for example, your M50 complex and your higher spec ballsbridge complex (I dont disagree with you that there is some cr *p out there that is, or will be, worthless). Where do you propose people live in the future with the shortage of proper houses? Apartments are here to stay for a certain demographic

But there's no point going back and forward here saying the same things over and over

(I'm not being aggressively defensive here, by the way, because I have bought some heap outside the M50. I so have an apartment, fair enough, and I would rather have a house, but its in a high end block, that I bought over 12 years ago, with a mortgage that is not too far from being gone.)

Theboinkmaster

steve9859 wrote: »

Over a 30 year period, as long as you havent bought somewhere that is going to fall down, it is a big assumption that there will be capital depreciation. And if you don't plan selling, it is irrelevant.

What you are correct about is that buying a house is a matter of timing, if immediate capital appreciation / depreciation is important to you.

Capital appreciation doesn't pay the bills. And capital depreciation doesn't put you on the street.

(with the caveat that if you have brought a place that is so bad that it will be worthless forever, in SruffySandra's example, then you're better off getting out rather than being the hero and paying that cash over 30 years for nothing....the state wont thank you for it and give you a medal)

It is very relevant in a falling market. I could buy a house now for €500k or perhaps in 3 years time for €400k.

€100k is a real cash saving and it's alot more if you intend to borrow it.

cyrusdvirus

Theboinkmaster wrote: »

It is very relevant in a falling market. I could buy a house now for €500k or perhaps in 3 years time for €400k.

€100k is a real cash saving and it's alot more if you intend to borrow it.

That's speaking as a potential buyer though.

If you have already bought, and have no intention of selling, then falling or rising market means diddly squat to you.

As i mentioned before, negative equity is only a factor if you intend on selling. If you are not selling, then it doesn't affect you.

MadsL

Zulu wrote: »

Why not? Sure couldn't I make up numbers as well? Are you going to believe my numbers or are you going to continue to seek further exceptions?

I bought in 2007.
My mortgage rate is E.C.B +1%.
My mortgage repayments are €1050 per month.
My property has a rental income of €1150 per month. (reduction from €1250 for long standing tenants).
Now I need to pay management fees of €800 per annum, and tax (which is minimal as it's offset against expenses).

Previously I rented. I paid €700 per month for a room sharing a house with 5 others.
I then moved to a one bedroom that I rented for €1300 per month.
I then moved to a two bed that I rented for €1400 per month.
Then I bought and paid mortgage...
€1400-1050=250. Less management fees (800/12=~70) leaves €130.
So I save €130 per month by deciding to buy.

After the term of the mortgage, I'll also have an "asset" which has the potential to yield me roughly (crystal ball conditions apply) the equivalent of €1000 a month gross.

If I stayed renting, I'd be paying €1400 per month but I wouldn't have an asset after a period of time.


...now there's my maths. I'm confident you'll find a reason to ignore/exclude what doesn't suit your argument, but above is the reality I live in.

Thanks for posting the figures, but whilst not a "a reason to ignore/exclude what doesn't suit your argument" without your 2007 purchase price and current valuation it is not possible to see if it was "cheaper" for you to buy. I'm sure that you now understand the reasons for that.

However given the data you have provided; lets take a guess.

(firstly ignoring rental income on the property and 100% mortgage)

35 year mortgage on approx €220,000 2007 purchase price.
Now worth approx 100k

Over five years you have only paid off 14k on the principal. You still owe €206k, and have paid approx 51k in interest.

If you sell today you have a net liability of €106k
If keep the 'asset' you need to pay at total of €451,703 to own it outright.

If you bought it today at 100k you would pay it off assuming the same repayments (but 6% rate) in 11 years paying just €136,844 for the asset.

You say you save €130 a month having bought the apartment (I'm trying to figure out if you have one or two apartments, it is not clear if you rent out your apartment and live in one of them or rent out and rent yourself) That equates to 54k off your purchase price over the term of your mortgage, so the net if you like on the apartment is €397,703 but had you rented for a further 5 years you would have paid; 136,844 plus rent at 84k = €220,844. Oddly enough close to your assumed 2007 purchase price.

Now I fully accept that this is all crystal ball stuff, and ignores mortgage interest relief, property tax and a bunch of other stuff and that your tenants are covering your mortgage costs at the moment.

However, it does highlight the fact that the word "cheaper" is entirely relative and that you cannot simply look at rent per month versus mortgage payment per month and say that one is "cheaper' without examining the prevailing market condtions.

Scruffy Sandra

gatecrash wrote: »

As i mentioned before, negative equity is only a factor if you intend on selling. If you are not selling, then it doesn't affect you.

Completely false

- can't switch mortgage provider
- powerless against interest hikes by mortgage provider
- can't borrow more

Bullseye1

Negative equity is a serious problem for those people who default as banks are selling properties for much less than the real market, ie they have fire sales and then chase the defaulter for the balance. Your much better to sell the property yourself to minimise the loss. Banks are not concerned with your financial loss they just want to recoup as much as they can quickly hence ridiculously low prices.

Theboinkmaster

gatecrash wrote: »

That's speaking as a potential buyer though.

If you have already bought, and have no intention of selling, then falling or rising market means diddly squat to you.

As i mentioned before, negative equity is only a factor if you intend on selling. If you are not selling, then it doesn't affect you.

What are you taking about - i was refuting the statement "rent is dead money"

You're point is irrelevant to that :cool:

Scruffy Sandra

Summary of thread:

Disadvantages of buying an apartment post 2006
1. Cannot sell property
2. Cannot switch mortgage provider
3. Paying €100,000s more than apartment will ever be sold for
4. Likely deterioration of apartment block
5. No structural changes allowed
6. No possibility of buying bigger home for family
7. Falling rents as rental allowance decreases
8. Higher management fees as others default
9. Metro North and others indefinitely postponed
10. Poor build quality in many, leading to future structural problems
11. Higher interest rates on mortgage

Advantages of buying an apartment since 2007
1. Your very own shiny wooden floors

alb

Fascinating thread, here's some observations:

- People will buy and only care about the immediate monthly cost. They probably have no idea how much they interest they pay over the life of the mortgage, therefore underestimate how much the house actually costs.

- Buying a house with cash is a LOT cheaper than buying with a relatively small or no deposit and a mortgage. People underestimate the difference.

- People may compare the monthly mortgage payment to their monthly rent when comparing but will probably exclude indirect ownership expenses such as prop tax, maintenance and mgmt fees.

- Many people are not disciplined enough to save enough of what's left over after paying rent to ensure they are financially gaining in the long term. This gives the illusion that a mortgage is always better as there's something to show at the end of it right? It's important to save and invest the difference between rent and ownership costs if renting is to work out to your advantage in the long term.

- Sometimes it's better financially to rent, sometimes it's better to buy.

- Mortgage interest is as much 'dead money' as rent is. Which is better to pay and when varies for everyones situation. You need to factor in a lot of aspects when calculating it. If you don't calculate it you're probably making a bad financial decision.

- People seem to forget about opportunity cost. "I have bought a house for 100k more than the guy down the road did 2 years later, but I'm happy in it and not planning to sell and can afford the monthly payments so it makes no difference right?" - well, actually it means you've 100k less in your pocket than you would have had. This is real and significant. It might mean you work 5 years less in life, or take a round the world trip or have an inheritance for your children.

Scanlas The 2nd

alb wrote: »

Fascinating thread, here's some observations:

- People will buy and only care about the immediate monthly cost. They probably have no idea how much they interest they pay over the life of the mortgage, therefore underestimate how much the house actually costs.

- Buying a house with cash is a LOT cheaper than buying with a relatively small or no deposit and a mortgage. People underestimate the difference.

- People may compare the monthly mortgage payment to their monthly rent when comparing but will probably exclude indirect ownership expenses such as prop tax, maintenance and mgmt fees.

- Many people are not disciplined enough to save enough of what's left over after paying rent to ensure they are financially gaining in the long term. This gives the illusion that a mortgage is always better as there's something to show at the end of it right? It's important to save and invest the difference between rent and ownership costs if renting is to work out to your advantage in the long term.

- Sometimes it's better financially to rent, sometimes it's better to buy.

- Mortgage interest is as much 'dead money' as rent is. Which is better to pay and when varies for everyones situation. You need to factor in a lot of aspects when calculating it. If you don't calculate it you're probably making a bad financial decision.

- People seem to forget about opportunity cost. "I have bought a house for 100k more than the guy down the road did 2 years later, but I'm happy in it and not planning to sell and can afford the monthly payments so it makes no difference right?" - well, actually it means you've 100k less in your pocket than you would have had. This is real and significant. It might mean you work 5 years less in life, or take a round the world trip or have an inheritance for your children.

+1000

Can't understand people who think it's "no big deal" they spent 200k or so more on their house than if they bought it now. All I can assume is these people must love their jobs so much they'd be happy to work for free. That could work out at 10 years of having to drag yourself out of bed to go to work when you could have been enjoying your early retirement when you take account of the extra interest as well.

Zamboni

alb wrote: »

- People seem to forget about opportunity cost. "I have bought a house for 100k more than the guy down the road did 2 years later, but I'm happy in it and not planning to sell and can afford the monthly payments so it makes no difference right?" - well, actually it means you've 100k less in your pocket than you would have had. This is real and significant. It might mean you work 5 years less in life, or take a round the world trip or have an inheritance for your children.

Thank you.
The first mention of opportunity cost.
It only took 33 pages...

Monty Burnz

Zamboni wrote: »

Thank you.
The first mention of opportunity cost.
It only took 33 pages...

To be fair, I think opportunity cost may be a concept too far for those struggling to understand the parallels between mortgage interest and rent.

Zamboni

Monty Burnz wrote: »

To be fair, I think opportunity cost may be a concept too far for those struggling to understand the parallels between mortgage interest and rent.

Aye but what really bothers me is that opportunity cost is covered in Junior Cert Business Exam and the vast majority of the demographic that would frequent boards.ie should understand it

stevedublin

alb wrote: »

- Buying a house with cash is a LOT cheaper than buying with a relatively small or no deposit and a mortgage. People underestimate the difference.

Seriously, most people who have to actually work for a living do not have the cash to buy their own home outright.

Monty Burnz

Zamboni wrote: »

Aye but what really bothers me is that opportunity cost is covered in Junior Cert Business Exam and the vast majority of the demographic that would frequent boards.ie should understand it

Which brings us back to this point:

Monty Burnz wrote: »

No, the point is that it was a failure of our education system - people just followed the crowd and believed the rubbish the vested interests were feeding them. The fact that 'well educated' people fell for it shows that there is a big gap in how Irish people are taught to understand the world.

alb

stevedublin wrote: »

Seriously, most people who have to actually work for a living do not have the cash to buy their own home outright.

Yes, because Irish ppl are terrible with money unless it's directly taken out of their account for them every month. If you saved 250euro per month for 25 years and assume an interest rate of 3.5% over that time you'd have 120k cash which will buy many properties in Ireland.

Many people not saddled with a mortgage can save 250p/m either easily or by being a bit frugal. Many don't bother to even try and that's on them. People drop this amount alone on going out in a month. It's a choice for many. If instead of 'going mad' in the good times you kept the excess you had a great headstart.

Scruffy Sandra

Irish people with money is like a mule with a spinning wheel.

No one knows how he got it and dang if he knows how to use it.

https://www.youtube.com/watch?v=AEZjzsnPhnw

MadsL

https://i.chzbgr.com/completestore/12/9/20/gSmT8EiUIUGnL3qOP0IcGg2.jpg

Thinkingaboutit

Some people in this thread could buy with cash as they knew next week's Euromillions.

Even houses bought relatively early in the property bubble will be in negative equity, with huge payments for properties not worth it. Moralising won't remove that drag on economic progress. Mortgages need to be made non recourse, or single recourse, so banks can learn some cop on, and how to give honest financial advice. The taxpayer should have to take all the risk. Open up Spike Island again for some of these bankers, especially the Anglo ones, if they are found guilty.

Monty Burnz

Thinkingaboutit wrote: »

Some people in this thread could buy with cash as they knew next week's Euromillions.

There's a big difference between spotting the biggest property bubble in the history of the world, and choosing 8 (or whatever) random numbers correctly. Well, if you have a brain, there is.

Thinkingaboutit wrote: »

Even houses bought relatively early in the property bubble will be in negative equity, with huge payments for properties not worth it. Moralising won't remove that drag on economic progress. Mortgages need to be made non recourse, or single recourse, so banks can learn some cop on, and how to give honest financial advice.

Future mortgages, sure. That would certainly drive property prices down lower, which suits Ireland Inc in the long run.

Thinkingaboutit wrote: »

The taxpayer should have to take all the risk. Open up Spike Island again for some of these bankers, especially the Anglo ones, if they are found guilty.

What?? So funding for schools and hospitals and facilities for the underprivileged and pensioners - all these things should take a hit so that people can default on the mortgages they chose to take out? Pull the other one, it's got bells on.

By the way, you can't actually jail bank employees unless they are proven to have broken the law. Fortunately for many of those who bought during the bubble, stupidity is not illegal.

TwoShedsJackson

Monty Burnz wrote: »

What?? So funding for schools and hospitals and facilities for the underprivileged and pensioners - all these things should take a hit so that people can default on the mortgages they chose to take out? Pull the other one, it's got bells on.

I'm thinking a vital n't was left out of the taxpayer line...

Balmed Out

Thinkingaboutit wrote: »

The taxpayer should have to take all the risk.

You need to think about that some more. Should the taxpayer also bail me out for my dot com bubble losses? Should the taxpayer bail out every poor investment? if not then why one and not another?

MadsL

Thinkingaboutit wrote: »

Even houses bought relatively early in the property bubble will be in negative equity, with huge payments for properties not worth it.

You are starting to sound like that bloke in Dundalk who doesn't want to pay his mortgage because his basement apartment is no longer worth 225k.

Worth. As opposed to function. It still functions as a house, you just paid too much for it. I once bought a video camera sold to me by a very clever salesman in a Times Square electronics store. I paid way more than it was worth. It still worked.