People who never buy?

Grandpa Hassan

Diarmuid wrote: »

If you're in your 30's now, you won't have to worry about retiring. The pension time-bomb will have well and truly exploded by the time you're 65. I fully expect to be still working well into my 70's. There is no way my pension contributions I'm making is going to allow me live the life I want, ie not in poverty. Couple that with the inevitable dipping into private pensions that successive governments will do in the next 30 years, your retirement is going to be very short. Hopefully I'll still be healthy enough to work.

It is a timebomb, for sure. I agree with you....I expect to be working into my 70s, health permitting. The problem with tha, of course, is that there will be fewer jobs for the young people, who will want you out so they can get your job.

You are looking at massive social costs either way

syklops

PLUG71 wrote: »

Drinking pints in a pub is DEAD money!

Why pay off your pub landlords mortgage when you could be paying off your own by drinking at home?

FYP

jmayo

Johnnyhpipe wrote: »

I know but in that case dont you give up the place you lived your entire life to live in a social housing scheme?

Don't worry in all likelihood no matter what type of house you have (own or rent) you will end up being put in an old folks home smelling of urine parked in a communal sunroom listening to some ould wans wailing or some other ones thinking they are still 20 and going out for the night.

And then some of the friends you will have made will suddenly go to hospital and never come back.
Then you will fear going to hospital.

Now how else can I cheer you up.

Oh wait unless you have stockpiled lots of money don't expect to be retiring before 70 and then when you do, don't expect your pension to be any great shakes.
And by that time anwya you will probably be on a crap load of drugs to keep you going.
And then you will end up in a nursing home.

ted1 wrote: »

I was thinking the same, rent pays mortgages so should always be higher.

Why so ?
Rental rates were not always dictated by buy to lets.

Sarah Bear wrote: »

Not everyone can get a mortgage

nc19 wrote: »

Why not?

I dispair.
Have we learned nothing over the last 7 years ?

L1011

ted1 wrote: »

I was thinking the same, rent pays mortgages so should always be higher.

Buy to lets are a modern invention. Very few other investments where you borrow money at personal mortgage rates (or worse usually) to pay for said investment.

beauf

I assume they sprung from property bubbles in a rapidly rising market.

the_syco

PLUG71 wrote: »

Renting is DEAD money!

Why pay off your landlords mortgage when you could be paying off your own?

Not everyone likes the daily 204KM commute, because not everyones job is secure.

TeaBagMania

The equity in my house here will easily purchase my retirement home in Ireland. It would cost more in the long run by renting here and in Ireland after retirement. It was an easy decision for my circumstance.
After the bubble I was able to refinance the house and have a mortgage payment far less than what I could rent a comparable home for.

Teyla Emmagan

My auntie rented her home for 50 years. Seems a bit mad, but she did. It was rent controlled and all, cause she'd been there so long, but it also wasn't a 'desirable property' (above a shop in the main street in Finglas - no garden or anything, bars on all the windows, and really steep stairs, so it wouldn't have suited most people). Anyway, it meant that when she had to go into a nursing home (of course, she eventually fell down the stairs), she had no collateral to put against the costs. She was a very proud woman, hurt her to have to be dependent on others in her old age because she had no assets.

The_Conductor

TeaBagMania wrote: »

The equity in my house here will easily purchase my retirement home in Ireland. It would cost more in the long run by renting here and in Ireland after retirement. It was an easy decision for my circumstance.
After the bubble I was able to refinance the house and have a mortgage payment far less than what I could rent a comparable home for.

Not really relevant in an Irish context- as we don't have non-recourse loans (even if some of the deals on the tables are increasingly looking like them in all but name). What you're suggesting- is the preferred option of David Hall and others- who believe the banks should have no recourse other than on the asset- and even then, the original owner should have first dibs on it.

fasttalkerchat

The_Conductor wrote: »

Lots of people are renting for far less than the cost of their landlord's mortgage- and living in accommodation they'd not be able to afford to buy- thats why?

Its a lifestyle choice. I could just as easily ask you- why buy a two bed hovel in the arse-end of no-where, when you can rent, where you want to live, in a superior property- for less than it would cost you to own something you don't like, where you don't want to live..........?

That's fine if its an interest only mortgage. The key element of buying is that you get to keep the house after 25 years. If you rent, the LL gets to keep the house.

Dredd_J

fasttalkerchat wrote: »

That's fine if its an interest only mortgage. The key element of buying is that you get to keep the house after 25 years. If you rent, the LL gets to keep the house.

I bought an apartment 20 years ago in London.
I had it rented for 18 years where it paid for itself aand any taxes I had to pay.
I have a daughter in it the last two years who is going to uni over there so have been paying the mortgage myself since then, but its very little now, much less than if i was renting somewhere for her. At the time i bought it I thought it was a fortune. In another two years she will be finished and it will be let again.
Its made far more than it cost me already, but i'll own it outright in another 5 years.
And thats all possible only becasue i paid down the capital with an ordinary mortgage.
I'll never understand why people take out interest only loans.

Ray Palmer

I read the whole thread and there are some very confusing theories.

1) Rent is cheaper than mortgages. This is highly unusual and not the norm. People saying it is still in place are probably right but that is a sign of bad investors. It would be like rejoicing on bankruptcy sales bringing your cost of living down. It isn't sustainable in the long run. People seem to also think that rent has to relate to the LL costs when what you have to worry about is the market rate

2) I'll move somewhere cheaper: Great for you that you can leave everything you have known for years. You might find you want to stay close to your friends and family. As you get older you tend to need some help too. My parents neighbours have been talking about going back home to Clare for roughly 25 years and are hitting their 80s soon but don't move due to their grandkids.

3) Big pension: Anybody who thinks their pension will be invested so well that is will guarantee enough to pay rent and living costs in the future is kind of dreaming. Your pension will need to be damn good to do that. I would say the people that can have such a good pension are going to invest in property before that. If you are so good with your finances you would quickly realise investing in a property for yourself would make more sense.

Things people aren't even considering
1) Rent goes up while mortgage payments go down over time. Take rent of 1k and a mortgage of 1k in 1990 for two couples both 30. Which is cheaper now? Rent for 1k back then is going to be easily 1.5k now while the mortgage is repaid in a year. So 55 and one couple has an extra expense of a increasing rent than the other couple. the people with their house can now invest this into a pension at better rates given their age.
2) Investments can drop in value dramatically and permanently. No matter what if you house devalues you can live in it. If your pension drops you may not have enough to pay rent. If has happened.
3) No financial advisor would give the advice for Ireland. No financial in Ireland would say it is good to invest in your pension to cover rent.
4) Leaving Ireland to survive retirement is not managing. To leave Ireland to be able to afford retirement is effectively down grading how you are willing to live. It also relies on the other country to remain relative to Ireland a cheaper place, that is some gamble to take on top of the others

Geuze

PLUG71 wrote: »

Renting is DEAD money!

Why pay off your landlords mortgage when you could be paying off your own?

Millions of Swiss / Dutch / Germans rent all their lives.

Their unemployment rates are well below ours.

Ray Palmer

Geuze wrote: »

Millions of Swiss / Dutch / Germans rent all their lives.

Their unemployment rates are well below ours.

With radically different property laws and masses of social housing built with subsidised rents. Not relevant to a discussion on Ireland

Tombo2001

Dredd_J wrote: »

I bought an apartment 20 years ago in London.
I had it rented for 18 years where it paid for itself aand any taxes I had to pay.
I have a daughter in it the last two years who is going to uni over there so have been paying the mortgage myself since then, but its very little now, much less than if i was renting somewhere for her. At the time i bought it I thought it was a fortune. In another two years she will be finished and it will be let again.
Its made far more than it cost me already, but i'll own it outright in another 5 years.
And thats all possible only becasue i paid down the capital with an ordinary mortgage.
I'll never understand why people take out interest only loans.

This works brilliantly when you can buy an apartment for £40k and rents go up by 5% each year on average for the next 20 years (which is what happened in Dublin); not when you are buying one for €200k and then rents fall. And by the way, it doesn't make you clever. It just means that when you are 30 years old, property prices happened to be attractive at the time. And property prices in Dublin in the early 1990s was probably the most optimal in the past 50 years. You had choices that other generations don't have.

handlemaster

It seems to me a lot of people complain when prices were high,complain when prices were low and now complain prices are going back up. They seem to think their owed a free house or a house at very little cost.

lima

handlemaster wrote: »

It seems to me a lot of people complain when prices were high,complain when prices were low and now complain prices are going back up. They seem to think their owed a free house or a house at very little cost.

In fairness, young people have it really tough right now.

They went to college, got a degree, done all that was asked, got a good job and now have good pay. But then it comes to buying property - the sheer extreme price is in no way in line with all the hard work that was done. Everything possible was done to get educated and get a foot on the career ladder. But now in Ireland that is not enough. You need rich parents, or 'old money' inheritance to live the life that was offered to you when you were growing up.

I do like where I live, but when I walk down the street and see all that old money with the huge houses and jaguars it makes me feel really disappointed that you can only go so far in life by playing by the rules. You need to be either born with money or steal it.

whippet

lima wrote: »

In fairness, young people have it really tough right now.

They went to college, got a degree, done all that was asked, got a good job and now have good pay. But then it comes to buying property - the sheer extreme price is in no way in line with all the hard work that was done. Everything possible was done to get educated and get a foot on the career ladder. But now in Ireland that is not enough. You need rich parents, or 'old money' inheritance to live the life that was offered to you when you were growing up.

I do like where I live, but when I walk down the street and see all that old money with the huge houses and jaguars it makes me feel really disappointed that you can only go so far in life by playing by the rules. You need to be either born with money or steal it.

wow .. so much in this I don't know where to start.

First off ... the sense of entitlement is palpable from your post.

Secondly .. yes 'old' money exists and always will - but 'old' money can go bankrupt very quickly also and there is plenty of new money too!! .. such is society.

There are an abundance of affordable houses the length and breath of the country .. just in a small subsection of dublin the prices are out of reach of most ... not everyone can live in a couple of square miles ... so money will always talk in places like this.

It seems that you have a chip on your shoulder about people who own nice things?

Grandpa Hassan

lima wrote: »

In fairness, young people have it really tough right now.

They went to college, got a degree, done all that was asked, got a good job and now have good pay. But then it comes to buying property - the sheer extreme price is in no way in line with all the hard work that was done. Everything possible was done to get educated and get a foot on the career ladder. But now in Ireland that is not enough. You need rich parents, or 'old money' inheritance to live the life that was offered to you when you were growing up.

I do like where I live, but when I walk down the street and see all that old money with the huge houses and jaguars it makes me feel really disappointed that you can only go so far in life by playing by the rules. You need to be either born with money or steal it.

You also make it sound like it is an absolute disaster to not own property. That you can't live any kind of a good life. Which is nonsense

jmayo

lima wrote: »

In fairness, young people have it really tough right now.

They went to college, got a degree, done all that was asked, got a good job and now have good pay. But then it comes to buying property - the sheer extreme price is in no way in line with all the hard work that was done. Everything possible was done to get educated and get a foot on the career ladder. But now in Ireland that is not enough. You need rich parents, or 'old money' inheritance to live the life that was offered to you when you were growing up.

I do like where I live, but when I walk down the street and see all that old money with the huge houses and jaguars it makes me feel really disappointed that you can only go so far in life by playing by the rules. You need to be either born with money or steal it.

Ehh ever hear the saying "life isn't fair" ?

Look at this another way.

In the mid 2000s some people who didn't even finish school were making more money than those who had studied for years and had college degrees/professional qualifications.
Was that fair ?

In the late 90s you had eejits with a few months IT conversion courses walking into jobs that paid ridiculous amounts only for some longer term employees who had proper qualifications and struggled up through the ranks having to carry them because a) they really knew fook all and b) they didn't really care about IT as it was just the thing to be in for job prospects.
Was that fair ?

You played in a under 12 match and ref gave his favourite pet favourable treatment meaning you lost.
Was that fair ?

What is going on at the moment regarding property is going to bust or reverse in some fashion.
You know well you cannot continue to have a property market such as in Ireland where normal commerical rules and sanity are ignored or even turned on it's head.

Will that be fair ?
To some people probably not.

Tombo2001

jmayo wrote: »

Ehh ever hear the saying "life isn't fair" ?

Look at this another way.

In the mid 2000s some people who didn't even finish school were making more money than those who had studied for years and had college degrees/professional qualifications.
Was that fair ?

In the late 90s you had eejits with a few months IT conversion courses walking into jobs that paid ridiculous amounts only for some longer term employees who had proper qualifications and struggled up through the ranks having to carry them because a) they really knew fook all and b) they didn't really care about IT as it was just the thing to be in for job prospects.
Was that fair ?

You played in a under 12 match and ref gave his favourite favourable treatment meaning you lost.
Was that fair ?

What is going on at the moment regarding property is going to bust or reverse in some fashion.
You know well you cannot continue to have a property market such as in Ireland where normal commerical rules and sanity are ignored or even turned on it's head.

Will that be fair ?
To some people probably not.

So whats your point? I didnt read anyone saying that life should be fair.....

Tombo2001

whippet wrote: »

wow .. so much in this I don't know where to start.

First off ... the sense of entitlement is palpable from your post.

Secondly .. yes 'old' money exists and always will - but 'old' money can go bankrupt very quickly also and there is plenty of new money too!! .. such is society.

There are an abundance of affordable houses the length and breath of the country outside Dublin .. just in the entire city of dublin the prices are out of reach of most ... not everyone can live in a couple of square miles ... so money will always talk in places like this.

It seems that you have a chip on your shoulder about people who own nice things?

FYP

There are very few affordable family homes in Dublin; and most of the jobs for graduates are in Dublin.

There is a clear mismatch, and it is really no consolation for a 30 year old with a 9 month old child who wants to buy a family home in Dublin to learn that you can buy a 3-bed semi in Belturbet for €89k.

whippet

Tombo2001 wrote: »

FYP

There are very few affordable family homes in Dublin; and most of the jobs for graduates are in Dublin.

There is a clear mismatch, and it is really no consolation for a 30 year old with a 9 month old child who wants to buy a family home in Dublin to learn that you can buy a 3-bed semi in Belturbet for €89k.

why would someone wanting to live in dublin want to be looking at homes in belturbet .... I just did a quick search on my home.ie for 3-4 bed houses in dublin for less than €225k and got 47 pages of results.

less than €175k returned 27 pages of results.

mariaalice

lima wrote: »

In fairness, young people have it really tough right now.

They went to college, got a degree, done all that was asked, got a good job and now have good pay. But then it comes to buying property - the sheer extreme price is in no way in line with all the hard work that was done. Everything possible was done to get educated and get a foot on the career ladder. But now in Ireland that is not enough. You need rich parents, or 'old money' inheritance to live the life that was offered to you when you were growing up.

I do like where I live, but when I walk down the street and see all that old money with the huge houses and jaguars it makes me feel really disappointed that you can only go so far in life by playing by the rules. You need to be either born with money or steal it.

I some what agree with you, one of my children would like to eventually buy near where she grew up, but while it was doable for her father and myself with very modes jobs and not much money and interest rates of 16%... it would be beyond impossible for any one today with similar jobs to buy in the same area, Where I disagree with you and its the same argument I have with my child it its not that you cant afford a home it is that you cant afford a home in the area you would like.

Its the same old south Dublin argument...south Dublin is both a actual place and a metaphysical place, it a place where generations of professional and state employees live, an area where education is valued , where discreet wealth is valued but not flashy wealth, where you take you children to France on holiday as opposed to a package holiday to Spain, good transport links, a nice environment and so on and so on. People want it because it is a pleasant way to live. It could be any part of Dublin or Ireland and housing has become very expensive in such areas. I do think wealth had become much more concentrated in certain areas , due mainly to money being inherited.

Tombo2001

whippet wrote: »

why would someone wanting to live in dublin want to be looking at homes in belturbet .... I just did a quick search on my home.ie for 3-4 bed houses in dublin for less than €225k and got 47 pages of results.

less than €175k returned 27 pages of results.

Point taken.

However (i) thats 470 houses in a city of 1.2mn people (ii) a number of these would need to be substantially refurbished, which should be factored in and (iii) to get a 200k mortgage, an individual would need a salary of circa 70k, way above the average.

Mr.McLovin

Tombo2001 wrote: »

Point taken.

However (i) thats 470 houses in a city of 1.2mn people (ii) a number of these would need to be substantially refurbished, which should be factored in and (iii) to get a 200k mortgage, an individual would need a salary of circa 70k, way above the average.

(iv) I'm betting most of these houses are in estates where the majority of people get their houses 'for free'*, its pretty sickening I'd imagine to be living next door to joey 'never had a job, never wants a job' blogs when your working 40+ hours a week just to pay the mortgage


*hugely reduced rate before anyone starts!

Mrs OBumble

Ray Palmer wrote: »

No matter what if you house devalues you can live in it.

Have you heard of global warming and rising sea levels? There are some houses that you will not be able to live in in 20 years time.

Friends have been telling me that the earthquakes in New Zealand caused some people to re-think their retirement investment strategies. Relying heavily on property in one limited geographical area can leave you very exposed to the effects of a range of disaster situations that you cannot control or sometimes even insure against.

whippet

Tombo2001 wrote: »

Point taken.

However (i) thats 470 houses in a city of 1.2mn people (ii) a number of these would need to be substantially refurbished, which should be factored in and (iii) to get a 200k mortgage, an individual would need a salary of circa 70k, way above the average.

for a house of €200k, you would be looking at borrowing €180k ... using a totally notional 3.5x Main salary lending by the bank .. you'd be looking at a salary requirement of approx €52k (25% lower than your estimate) with a prudent financial history to get a mortgage - or two incomes on average wage would do it.

jmayo

Tombo2001 wrote: »

So whats your point? I didnt read anyone saying that life should be fair.....

See post 78 where lima laments the lot of current 20 something generation who are faced with rising house prices, while at the same time everyone knows they will be able to save less due to higher taxes, less salary growth, etc.

They basically said only people with rich parents or inheirtance will succeed in buying houses.

My two examples were how during our tech and construction bubbles a lot of people who had busted their nuts getting good education were only as well off or even less well off as those who might have a lot less education.

Ulimately my point was that life isn't necessarily fair and just because you bust your nuts getting a degree, education, etc doesn't mean everything will be a bed of roses.

IMHO buying into the mantra that going to third level, etc is a guaranteed path to success is as false as Americans buying into the myth that everyone can live the American Dream.
It just aint so anymore and I am not sure if ever was.

Ray Palmer

Mrs OBumble wrote: »

Have you heard of global warming and rising sea levels? There are some houses that you will not be able to live in in 20 years time.

Friends have been telling me that the earthquakes in New Zealand caused some people to re-think their retirement investment strategies. Relying heavily on property in one limited geographical area can leave you very exposed to the effects of a range of disaster situations that you cannot control or sometimes even insure against.

Yes Ireland is notorious for earthquakes. Even with 20 years on Ireland will have very few houses that will be effected by rising sea levels.

It is simple ridiculous nit picking in relation to Ireland and the property market. If you think these risks are so high up that it warrants not buying here and plan to have a pension to pay your rent good luck to you.

If you are talking about risk of earth quake and risk of sea levels rising I would look at the much more realistic risk of having the ability to pay rent on a limited income for 20+ odd years after retirement. Ultimately renting property for up to 60 years will be more expensive than buying.