Huge negative equity on apartments.

not yet · 03-10-2012 3:05pm

How the fcuk someone can connect our education system to Buying a home during a boom is beyond my comprehension. Sweet mother of jesus I've seen it all now.

Monty Burnz · 03-10-2012 3:05pm

Zulu wrote: »

A mortgage on €400K worked out for €1K per month.

How the hell did you work that out?? And I said that the house I rented was 'worth' 700k.

not yet · 03-10-2012 3:08pm

Monty Burnz wrote: »

How the hell did you work that out??

I'd like one of those please.

Monty Burnz · 03-10-2012 3:10pm

not yet wrote: »

How the fcuk someone can connect our education system to Buying a home during a boom is beyond my comprehension. Sweet mother of jesus I've seen it all now.

Because people did not understand the economics of what they were doing, they didn't understand the maths, they didn't read the contracts, and - critically - they didn't have any clue how to evaluate the 'information' they were getting about the buy/rent decision.

Look at the people who were telling us that it was a good time to buy:

1. The banks - they make money from lending
2. The estate agents - they make money from people buying houses
3. The media - they make money from property-related advertising
4. The goverment - they win votes from people who think they are getting richer
5. The construction industry - they make money from people buying new property
6. The developers - ditto

They all benefited from booming prices -> booming prices were in their interest -> they are going to say and do things to advance their interests -> they can not be trusted on these subjects

An educated* person with a critical outlook should see that these sources are to be treated with the greatest of suspicion. The sad thing is that so many people still don't seem to have learned their lesson.

*When I say educated, I basically mean 'can read and can count'

bbam · 03-10-2012 3:12pm

bluewolf wrote: »

If that's the case then have the contract legally challenged, sue them etc.

That's the crux of the situation.
Who can afford that, and better, now everyone coming forward will be forced down the bankruptcy route rather than any dealing with the bank.

not yet · 03-10-2012 3:13pm

Monty Burnz wrote: »

Because people did not understand the economics of what they were doing, they didn't understand the maths, they didn't read the contracts, and - critically - they didn't have any clue how to evaluate the 'information' they were getting about the buy/rent decision.

Look at the people who were telling us that it was a good time to buy:

1. The banks - they make money from lending
2. The estate agents - they make money from people buying houses
3. The media - they make money from property-related advertising
4. The goverment - they win votes from people who think they are getting richer
5. The construction industry - they make money from people buying new property
6. The developers - ditto

They all benefited from booming prices -> booming prices were in their interest -> they are going to say and do things to advance their interests -> they can not be trusted on these subjects

An educated person with a critical outlook should see that these sources are to be treated with the greatest of suspicion.

The sad thing is that so many people still don't seem to have learned their lesson.

Once again bolocks,
Some of the best educated people in the state bought property during this period.

Monty Burnz · 03-10-2012 3:15pm

not yet wrote: »

Once again bolocks,
Some of the best educated people in the state bought property during this period.

How is it 'bollocks'? Just saying so does not make it so. Where does the logic break down? By the way, the fact that some of the best educated people were buying during the bubble is support for my point.

telecaster · 03-10-2012 3:19pm

Monty Burnz wrote: »

:

1. The banks
2. The estate agents
3. The media
4. The goverment
5. The construction industry
6. The developers

It would be very difficult to form an opinion on any property market without relying heavily on some combination of those 6 sources of information.

What information do you use to reach your conclusions?

Monty Burnz · 03-10-2012 3:22pm

telecaster wrote: »

It would be very difficult to form an opinion on any property market without relying heavily on some combination of those 6 sources of information.

What information do you use to reach your conclusions?

Economics, objective market data, and most importantly, common sense. Anything from the cited sources is going to be spun (and continues to be spun - the Irish Independent alone calls the bottom every couple of weeks ) so much as to be worthless.

stevedublin · 03-10-2012 3:24pm

Zamboni wrote: »

The rent v buy, the value of your investment may rise and fall, the personal responsibility with entering a contract, the implication to the tax payer for mortgage defaulters in state owned banks, where tax relief comes from and your favourite...compound interest...

The problem is that many people bought their home as a place to live, not as an investment. If the price of food were to increase in value, would you be smug about people who spent their money on overpriced food while clever you starved yourself so you can save money

Boombastic · 03-10-2012 3:30pm

Monty Burnz wrote: »

How the hell did you work that out?? And I said that the house I rented was 'worth' 700k.

I don't know how they worked that out but I worked this out €1,000 / month for 33.3333 years = €400,000

It said on the radio earlier that property will reach bubble levels again in 18 years

Monty Burnz · 03-10-2012 3:31pm

Boombastic wrote: »

I don't know how they worked that out but I worked this out €1,000 / month for 33.3333 years = €400,000

It said on the radio earlier that property will reach bubble levels again in 18 years

An interest free loan! I wonder where that guy banks?

Boombastic · 03-10-2012 3:31pm

not yet wrote: »

Once again bolocks,
Some of the best educated people in the state bought property during this period.

Best educated does not equal intelligent;)

stevedublin · 03-10-2012 3:33pm

Monty Burnz wrote: »

By the way, the fact that some of the best educated people were buying during the bubble is support for my point.

Your point seems to be that anybody who is educated would not have bought property during the boom, no?

Monty Burnz · 03-10-2012 3:36pm

stevedublin wrote: »

Your point seems to be that anybody who is educated would not have bought property during the boom, no?

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.

stevedublin · 03-10-2012 3:43pm

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.

Most Irish people are taught to eat and clothe ourselves too.
Perhaps we should all starve ourselves and go around naked, it would make excellent economic sense.
Darn my upbringing and the false view of the world it gave me!

Monty Burnz · 03-10-2012 3:47pm

stevedublin wrote: »

Most Irish people are taught to eat and clothe ourselves too.
Perhaps we should all starve ourselves and go around naked, it would make excellent economic sense.
Darn my upbringing and the false view of the world it gave me!

I've no idea what point you are trying to make here. Is it that you think the Irish education system has done a great job?

stevedublin · 03-10-2012 3:47pm

People who tell you that you need to eat:
1. Farmers - they make money selling food
2. Supermarkets - they've a vested interest in having people buy food regularly
3. Food processing companies - evil corporations profiting from greedy people who invest in buying food - dont listen to them!

Educate yourself! Don't eat just because everyone tells you you have to! You'll save loads of money for yourself and the State!

Realistic_joe · 03-10-2012 3:51pm

Boombastic wrote: »

Best educated does not equal intelligent;)

Education is a very broad description. Someone can be very well educated, it doesn't mean they are educated in property.

Even within the people who were property educated, they were mainly individuals who knew the local market and how to make money in the good times. Most of these people knew very little about economics and how to differentiate a stable economy from an unstable one. And that's why regulatory bodies/government shouldered a lot of the blame - they were they people who knew but did nothing about it.

03-10-2012 3:51pm

Monty Burnz wrote: »

I've no idea what point you are trying to make here. Is it that you think the Irish education system has done a great job?

stevedublin wrote: »

People who tell you that you need to eat:
1. Farmers - they make money selling food
2. Supermarkets - they've a vested interest in having people buy food regularly
3. Food processing companies - evil corporations profiting from greedy people who invest in buying food - dont listen to them!

Educate yourself! Don't eat just because everyone tells you you have to! You'll save loads of money for yourself and the State!

I think he's giving us a practical demonstration of the lack of education

maninasia · 03-10-2012 3:51pm

The education system in Ireland is poor. Too much time spent on religion. Not much science. Almost no classes devoted to civic and political and economic education. Little project work. When the bank guarantee went into effect (and was renewed annually) there was little understanding in the public at large what that actually meant because they simply didn't understand economics or the size of the debt being taken on.

Monty Burnz · 03-10-2012 3:52pm

stevedublin wrote: »

People who tell you that you need to eat:
1. Farmers - they make money selling food
2. Supermarkets - they've a vested interest in having people buy food regularly
3. Food processing companies - evil corporations profiting from greedy people who invest in buying food - dont listen to them!

Educate yourself! Don't eat just because everyone tells you you have to! You'll save loads of money for yourself and the State!

There's also plenty of objective scientific evidence, historical evidence and indeed common sense telling you that you need to eat.

I think your attempted comparison falls down rather badly on those grounds.

stevedublin · 03-10-2012 3:57pm

Monty Burnz wrote: »

There's also plenty of objective scientific evidence, historical evidence and indeed common sense telling you that you need to eat.

I think your attempted comparison falls down rather badly on those grounds.

Okay, go live in a ditch then since I couldn't find any academic papers proving that you need to have a roof over your head.

stevedublin · 03-10-2012 3:58pm

bluewolf wrote: »

I think he's giving us a practical demonstration of the lack of education

You didn't learn analogies in school then?

Monty Burnz · 03-10-2012 4:02pm

stevedublin wrote: »

Okay, go live in a ditch then since I couldn't find any academic papers proving that you need to have a roof over your head.

You are embarrassing yourself now. Is this the best discussion you can manage? There's no shame in admitting you were wrong.

Scientific papers demonstrating a need for a roof over your head:

http://www.ecmaj.ca/content/164/2/229.short
http://www.tandfonline.com/doi/abs/10.1207/s15327655jchn0702_2
http://psycnet.apa.org/psycinfo/1992-08566-001
http://onlinelibrary.wiley.com/doi/10.1111/j.1540-4560.1990.tb01801.x/abstract
http://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.89.4.529
http://onlinelibrary.wiley.com/doi/10.1111/j.1540-4560.1990.tb01798.x/abstract

And hundreds more.

McTigs · 03-10-2012 4:11pm

stevedublin wrote: »

You didn't learn analogies in school then?

was that the day you came in stoned after lunch?

OldNotWIse · 03-10-2012 4:12pm

Monty Burnz wrote: »

Some were greedy, most were a bit stupid. It really wasn't a good time to buy for most people.

Other people were fooled into putting their life savings into bank shares. Do they get their money back too? They weren't greedy, they were just trying to provide for themselves in their old age. Where do they sign up to get their money back? Do you mind paying more tax to bail them out?

Agree. Weren't the multiples a maximum of 4.75? How did people manage to get such huge mortgages if they could only borrow 4.75 times their annual wages? Were they all on 90k per year? If not, they must have lied about their income in order to obtain a mortgage. Did it not cross their minds that the multiples were there for a reason? ie; this is what you can afford to pay back taking your wages into account.

If someone thought a certain house was worth paying X amount for then, why is it still not worth X amount? And why would the "worth" make a difference unless one is planning to sell?

Monty Burnz · 03-10-2012 4:13pm

stevedublin wrote: »

You didn't learn analogies in school then?

I like how you Googled to figure out whether you were trying to make an analogy or a metaphor.

Ash.J.Williams · 03-10-2012 4:15pm

I feel a bit of a failure for not having a house in a far off county in negative equity

stevedublin · 03-10-2012 4:16pm

Monty Burnz wrote: »

people were fooled into putting their life savings into bank shares. Do they get their money back too? They weren't greedy, they were just trying to provide for themselves in their old age. Where do they sign up to get their money back? Do you mind paying more tax to bail them out?

You are embarrassing yourself now. Is this the best discussion you can manage? There's no shame in admitting you were wrong.

MadsL · 03-10-2012 4:18pm

Just hard to find scientific papers that will uphold the need to own that roof.

As I said earlier. I'm astonished that people are still falling for the rent is dead money bollox.

A house is not an asset until you own it outright, until then it is liability.

The myth of renting until you die is for those who fail to invest the difference enabling them to buy on retirement for cash, avoiding the dead money of interest payments and insurance.

As for paying someone else's mortgage, my rent in the boom was a small fraction of the mortgage that the landlord paid and got section 23 relief on all his other income. I paid a pittance compared to the market price of the property. Bargain.

jackal · 03-10-2012 4:20pm

The fúcking worm has well and truly turned. From the people who brought you:

Enjoy living with your mammy!
At least I'm not paying somebody else's mortgage
Sure I was just trying to put a roof over my head
Sure I have to live somewhere
Sure the rent on the apartment in Bulgaria in guaranteed for 5 years.
Rent is dead money.
My properties are my pension.
Sure I will sell it so some féckin eejit for twice the money in 5 years.
At least I own my own place.
Enjoy sitting on the sidelines, you won't be able to afford a shoebox next year!
Better get a foot on the ladder!

We now have to hear accusations of smugness from those that used to laugh about how fúcking clever and brave they were for mindlessly following the crowd, borrowing as much as humanly possible and expecting to make a fortune and be in a mansion in dalkey 5 years hence...

stevedublin · 03-10-2012 4:21pm

Ash.J.Williams wrote: »

I feel a bit of a failure for not having a house in a far off county in negative equity

I'm fairly sure this discussion is about people buying apartments in Ireland to live in, not holiday homes or investment properties.

MadsL · 03-10-2012 4:23pm

stevedublin wrote: »

I'm fairly sure this discussion is about people buying apartments in Ireland to live in, not holiday homes or investment properties.

We know plenty of people who 'leveraged' the semi to buy the 'investment' property. Don't we?

Monty Burnz · 03-10-2012 4:23pm

stevedublin wrote: »

You are embarrassing yourself now. Is this the best discussion you can manage? There's no shame in admitting you were wrong.

When you find yourself having to copy other people's posts verbatim, the white flag is well and truly waving...

stevedublin · 03-10-2012 4:25pm

Monty Burnz wrote: »

There's also plenty of objective scientific evidence, historical evidence and indeed common sense telling you that you need to eat.

I think your attempted comparison falls down rather badly on those grounds.

My comparison is fine, see:
http://www.ecmaj.ca/content/164/2/229.short
http://www.tandfonline.com/doi/abs/1...7655jchn0702_2
http://psycnet.apa.org/psycinfo/1992-08566-001
http://onlinelibrary.wiley.com/doi/1...801.x/abstract
http://ajph.aphapublications.org/doi.../AJPH.89.4.529
http://onlinelibrary.wiley.com/doi/1...798.x/abstract

Thanks for doing the work for me, I'm feeling lazy today!

MadsL · 03-10-2012 4:27pm

^

Are you incapable of seeing that not owning a home doesn't make you homeless. Seriously?????

stevedublin · 03-10-2012 4:28pm

Monty Burnz wrote: »

When you find yourself having to copy other people's posts verbatim, the white flag is well and truly waving...

No white flag on my part whatsoever. I'm merely highlighting the absurdity of your position.

Monty Burnz · 03-10-2012 4:30pm

stevedublin wrote: »

No white flag on my part whatsoever. I'm merely highlighting the absurdity of your position.

What is my position?

stevedublin · 03-10-2012 4:31pm

MadsL wrote: »

^

Are you incapable of seeing that not owning a home doesn't make you homeless. Seriously?????

Unless you want to live with Mammy forever, putting a roof over your head costs money whether you rent or own.

MadsL · 03-10-2012 4:31pm

stevedublin wrote: »

No white flag on my part whatsoever. I'm merely highlighting the absurdity of your position.

OK, I'll bite. Enlighten me as to the absurdity. The alternative to a mortgage is a ditch in your view is it not? Is that your position?

edit: "Unless you want to live with Mammy forever, putting a roof over your head costs money whether you rent or own."- where did I say it didn't? I took issue with the bollocks about dead money

stevedublin · 03-10-2012 4:32pm

Monty Burnz wrote: »

What is my position?

absurd.
You are comparing the negative equity of someone who bought an apartment to live in to the losses of someone who lost money on shares.

apache · 03-10-2012 4:34pm

Gosh theres a huge divide here among renters and buyers - a bit bitter!
ok i bought in 2007. If i could do it all again i would. (Lol i must be thick!). I paid k225 (loaned, whatever) for a 2 bed apartment. Still love it! Started a great job at end of 2006 where i was on silly money. Massive wage cuts since but well able still to afford it. Mortgage is e900. To rent same place is e1000. TRS extended and in last budget brought mortgage down again. Would be paying less but i'm in fixed rate.

Got sick. ( didn't factor that) Job still pays me but going on half pay soon. Bank has reduced my mortgage drastically so still ok.

Would a landlord let me rent at next to nothing? Think not!

Next yous will be telling me to get rid of my private health insurance and be waiting months for operations!

Banks are working well with those in difficulty. I will pay every cent i owe when i am fit to return to work. (Spread over remainder of loan or at end) I just didn't factor in illness.

Would not like to be renting when i reach my 60s. Didn't get a silly mortgage out. Very doable.

So with what i pay per month still cheaper than renting. When i have it all paid off i will have no living expenses. Why would i want to rent for rest of life? Can think of nothing more soul destroying!

Anyway haters gonna hate

jackal · 03-10-2012 4:34pm

stevedublin wrote: »

Unless you want to live with Mammy forever, putting a roof over your head costs money whether you rent or own.

and BOOM... the mammy shot.

Monty Burnz · 03-10-2012 4:36pm

stevedublin wrote: »

absurd.
You are comparing the negative equity of someone who bought an apartment to live in to the losses of someone who lost money on shares.

Why is that absurd?

MadsL · 03-10-2012 4:37pm

stevedublin wrote: »

absurd.
You are comparing the negative equity of someone who bought an apartment to live in to the losses of someone who lost money on shares.

Both are looking to live comfortable on retirement.

One buys shares and rents with the hope that the profit on the shares brings a cash lump sum to buy a house and enough to live on through retirement (or a large enough annuity)

The other rents the money to 'buy' a house and puts money into a retirement plan.
Hopes the mortgage is paid off and the plan gives enough to live on.

Look pretty similar to me.

MadsL · 03-10-2012 4:40pm

apache wrote: »

Gosh theres a huge divide here among renters and buyers - a bit bitter!
ok i bought in 2007. If i could do it all again i would. (Lol i must be thick!). I paid k225 (loaned, whatever) for a 2 bed apartment. Still love it! Started a great job at end of 2006 where i was on silly money. Massive wage cuts since but well able still to afford it. Mortgage is e900. To rent same place is e1000. TRS extended and in last budget brought mortgage down again. Would be paying less but i'm in fixed rate.

Got sick. ( didn't factor that) Job still pays me but going on half pay soon. Bank has reduced my mortgage drastically so still ok.

Would a landlord let me rent at next to nothing? Think not!

Next yous will be telling me to get rid of my private health insurance and be waiting months for operations!

Banks are working well with those in difficulty. I will pay every cent i owe when i am fit to return to work. (Spread over remainder of loan or at end) I just didn't factor in illness.

Would not like to be renting when i reach my 60s. Didn't get a silly mortgage out. Very doable.

So with what i pay per month still cheaper than renting. When i have it all paid off i will have no living expenses. Why would i want to rent for rest of life? Can think of nothing more soul destroying!

Anyway haters gonna hate

You are really struggling with what would have happened financially if you had rented rather than bought. Try doing the maths, I'll be back shortly with how much better of you would be had you rented. Not trying to be smug, just that you seem not to want to work it out mathematically.

Ash.J.Williams · 03-10-2012 4:42pm

stevedublin wrote: »

I'm fairly sure this discussion is about people buying apartments in Ireland to live in, not holiday homes or investment properties.

I was talking about people who bought HOMES, many of them are now miles away from anyway relevant to their lives!!

Monty Burnz · 03-10-2012 4:44pm

I love Stevedublin's tactic of declaring something 'absurd' or 'wrong' or whatever, but never actually being able to explain how he arrived at his conclusion.

stevedublin · 03-10-2012 4:45pm

MadsL wrote: »

Both are looking to live comfortable on retirement.

One buys shares and rents with the hope that the profit on the shares brings a cash lump sum to buy a house and enough to live on through retirement (or a large enough annuity)

The other rents the money to 'buy' a house and puts money into a retirement plan.
Hopes the mortgage is paid off and the plan gives enough to live on.

Look pretty similar to me.

If someone aged about 30 years old bought bank shares in the boom and planned to rent accomodation until they were 60 in the hope that the profit from those shares would be enough to buy a home outright and leave enough to live on - well their plan would be not looking good right now!

Huge negative equity on apartments.

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