Cheaper to buy than rent

handlemaster

According to indo its cheaper to buy than rent. Are buyers finding this to be true ?

http://m.independent.ie/business/personal-finance/property-mortgages/mortgage-payments-are-now-lower-than-renting-30784040.html

ted1

handlemaster wrote: »

According to indo its cheaper to buy than rent. Are buyers finding this to be true ?

http://m.independent.ie/business/personal-finance/property-mortgages/mortgage-payments-are-now-lower-than-renting-30784040.html

Mortgage = 830, rent achievable is 1650.
So yeah the article is correct

handlemaster

ted1 wrote: »

Mortgage = 830, rent achievable is 1650.
So yeah the article is correct

Where is this viable ? What property can be bought with normal deposit of 10-15% and give these figures. I dont think Any.

dubrov

In fairness, interest rates are currently at ridiculously low levels. When they return to more normal levels I would expect renting to be cheaper than a mortgage

handlemaster

dubrov wrote: »

In fairness, interest rates are currently at ridiculously low levels. When they return to more normal levels I would expect renting to be cheaper than a mortgage

Fixed rates for the life time of the mortgage should be standard.

mav79

Looking at monthly mortgage repayments and monthly rents is a very simplistic way of looking at which is cheaper. There is no mention in the article about all the other monthly costs involved after buying a house compared to renting, like maintenance fees, home and life insurance fees and the basic upkeep of a property.

ted1

dubrov wrote: »

In fairness, interest rates are currently at ridiculously low levels. When they return to more normal levels I would expect renting to be cheaper than a mortgage

At 4.4% there twice what other countries are. Only trackers are low

ted1

mav79 wrote: »

Looking at monthly mortgage repayments and monthly rents is a very simplistic way of looking at which is cheaper. There is no mention in the article about all the other monthly costs involved after buying a house compared to renting, like maintenance fees, home and life insurance fees and the basic upkeep of a property.

You forgot the mention that you get cash when you dispose of the property

mav79

ted1 wrote: »

You forgot the mention that you get cash when you dispose of the property

Or else you have debt for years still hanging over your head.

ted1

mav79 wrote: »

Or else you have debt for years still hanging over your head.

There's very few people in Dublin with negative equity. Prices have rising and people are paying their mortgages and reducing debt

jon1981

dubrov wrote: »

In fairness, interest rates are currently at ridiculously low levels. When they return to more normal levels I would expect renting to be cheaper than a mortgage

Not true. They are above normal when compared with EU average. Only incressing the supply of suitable housing will make the difference.

dissed doc

ted1 wrote: »

There's very few people in Dublin with negative equity. Prices have rising and people are paying their mortgages and reducing debt

That is true. If people managed to ride out the crash in prices, the current combination of low mortgage tracker rates and concurrent stabilization means that plenty of people are now not in negative equity, and the rent more than covers costs and taxes of rent.

o1s1n

handlemaster wrote: »

Fixed rates for the life time of the mortgage should be standard.

Why? A competitive mortgage market will offer more options, not less.

lima

ted1 wrote: »

There's very few people in Dublin with negative equity. Prices have rising and people are paying their mortgages and reducing debt

That really depends. at my age, most of my friends bought during the boom and are all around 200k in negative equity. I'm sure many who bought from 2005-2008 are in negative equity, or if they are not then their house is worth a lot less than they paid for it.

lima

handlemaster wrote: »

According to indo its cheaper to buy than rent. Are buyers finding this to be true ?

http://m.independent.ie/business/personal-finance/property-mortgages/mortgage-payments-are-now-lower-than-renting-30784040.html

Good old predictable Charlie Weston trying to insight panic again :rolleyes:

It's been cheaper to buy than rent for years, why mention it on the front of the independent now? is it because it's feared FTB's are putting off buying? Trying to push an agenda to stop the CB's 20% thing? you'd swear this tabloid is involved in some conspiracy to inflate property prices :rolleyes:

Plus, I'd like to hear more opinions other than Karl Deeter and Ronan Lyons, and more articles not written by Charlie Weston.


Such a bad tabloid 'paper' with vested interests.

kandoola

mav79 wrote: »

Looking at monthly mortgage repayments and monthly rents is a very simplistic way of looking at which is cheaper. There is no mention in the article about all the other monthly costs involved after buying a house compared to renting, like maintenance fees, home and life insurance fees and the basic upkeep of a property.

The way I look at it is that after 25 or 30 years the monthly payments stop with a mortgage.
They go on forever when you rent.
That was enough of a frightener for me to buy.

For example, i posted in another thread about my parents mortgage, which is ending in under 2 years time.

Funny you should say that.
My parents are just about 70 and in the last 2 years of their mortgage on their house in Deansgrange.
Its €245 per month.
I pay this for them. I certainly am glad I am not paying the rent that the same house would cost instead. It would probably be about €3000PM nowadays.

On a side note I was at a talk from a major economist (not about property but he went into talking about property when asked by someone) a few weeks ago and he said that apartments are expected now to drop in value. If there are thousands of new apartments built in Dublin, bigger and better serviced, and with rock bottom management fees to attract buyers than existing ones and somehow built at a cheaper price, then he expects current apartments in Dublin to at least half in price.

Now that would scare me out of buying an apartment at this time big time.

Its all getting very confusing.

athtrasna

Can you change the thread title please? It directly contradicts your OP

The_Morrigan

athtrasna wrote: »

Can you change the thread title please? It directly contradicts your OP

Done.

/Mod

ted1

lima wrote: »

That really depends. at my age, most of my friends bought during the boom and are all around 200k in negative equity. I'm sure many who bought from 2005-2008 are in negative equity, or if they are not then their house is worth a lot less than they paid for it.

So did my friends, buying in 2005 on a 25 year mortgage would see you 40% through it and at current prices you'll find that if you sale you could pay off the remainder.

Several of my friends ( who bought this year)have sold houses and apartments they bought during the tiger years and were surprised to have made a profit.

hidinginthebush

mav79 wrote: »

Or else you have debt for years still hanging over your head.

True, but you miss a few months rent and you're out on your arse, can't pay your mortgage, you declare bankruptcy, and even if there is a risk you'll be thrown out the various support groups will rally being you the ensure the bank back pedals any decision of repossession.

murphaph

lima wrote: »

That really depends. at my age, most of my friends bought during the boom and are all around 200k in negative equity. I'm sure many who bought from 2005-2008 are in negative equity, or if they are not then their house is worth a lot less than they paid for it.

And if they managed to get one of those trackers at ECB + 0.5% the total cost might still be lower than what someone buying today will pay with eye wateringly expensive mortgage interest rates, when compared to core Eurozone states.

handlemaster

o1s1n wrote: »

Why? A competitive mortgage market will offer more options, not less.

if payments are fixed for the entirety of the mortgage you know what to pay every month no surprises. this can be still competitive for all involved. certainty breaths confidence. its common in other european countries

Moonbeam

had it not always been cheaper to pay a mortgage then rent? but cheaper no I don;t think so maintenance costs a small fortune in some houses .

*edit* I realise always is the wrong word so for the last 15 years.

lima

murphaph wrote: »

And if they managed to get one of those trackers at ECB + 0.5% the total cost might still be lower than what someone buying today will pay with eye wateringly expensive mortgage interest rates, when compared to core Eurozone states.

Possibly but someone buying today may have a large deposit saved up, I have over 100k myself to put towards a place, so (in my case) this coupled with the low prices relative to 2007 means I'm well better off plus im not stuck in the outskirts of Dublin

lima

kandoola wrote: »

On a side note I was at a talk from a major economist (not about property but he went into talking about property when asked by someone) a few weeks ago and he said that apartments are expected now to drop in value. If there are thousands of new apartments built in Dublin, bigger and better serviced, and with rock bottom management fees to attract buyers than existing ones and somehow built at a cheaper price, then he expects current apartments in Dublin to at least half in price.

Now that would scare me out of buying an apartment at this time big time.

Its all getting very confusing.

Yeah but its not going to happen with apts. Not in the short-medium terms

1. It'll take years for any to be built
2. They'll have to be build outside the city as there is no room for apts close to the city centre.
3. Any large blocks of apts that are empty are being sold to large US funds who are renting them out, thus keeping the price high due to a lack of apts in the city.
4. I've been looking for 2 years and every apt I bid on is eventually sold to a cash investor, so I'm assuming they know a bit!

murphaph

lima wrote: »

Possibly but someone buying today may have a large deposit saved up, I have over 100k myself to put towards a place, so (in my case) this coupled with the low prices relative to 2007 means I'm well better off plus im not stuck in the outskirts of Dublin

If you'd had a low margin tracker you would have seen nothing but mortgage payment reductions since the crash, same as the reducing rents, so no advantage to renting during that period IMO and you'd have been equally well able to save.

murphaph

lima wrote: »

2. They'll have to be build outside the city as there is no room for apts close to the city centre

Proper minimum 30 storey development of the docklands and problem solved. There's no solid argument not to move large parts of Dublin Port's operations out of the city to north county Dublin. The container handling aspects could be moved in short order, whatever about the bulk liquids.

kandoola

lima wrote: »

Yeah but its not going to happen

Oh if I had a euro for everyone i heard say that in 2001,2,3,4,5,6 i'd be a rich man

ted1

murphaph wrote: »

Proper minimum 30 storey development of the docklands and problem solved. There's no solid argument not to move large parts of Dublin Port's operations out of the city to north county Dublin. The container handling aspects could be moved in short order, whatever about the bulk liquids.

It won't work, unlike other cities dublin has a low sun, so the footprint needed for a 30 storey building prividing x is actual the same as a several 6 stories prividing x. Buildings shoukdnt cast shadows, if you are actually interested there's done good studies that you should look up.

ted1

lima wrote: »

Yeah but its not going to happen with apts. Not in the short-medium terms

1. It'll take years for any to be built
2. They'll have to be build outside the city as there is no room for apts close to the city centre.
3. Any large blocks of apts that are empty are being sold to large US funds who are renting them out, thus keeping the price high due to a lack of apts in the city.
4. I've been looking for 2 years and every apt I bid on is eventually sold to a cash investor, so I'm assuming they know a bit!

You should have but the bullet a few years back, your large deposit effectively is worthless now as the apartments that you didn't go ahead with have increased by much more than 100k

dubrov

kandoola wrote: »

On a side note I was at a talk from a major economist (not about property but he went into talking about property when asked by someone) a few weeks ago and he said that apartments are expected now to drop in value. If there are thousands of new apartments built in Dublin, bigger and better serviced, and with rock bottom management fees to attract buyers than existing ones and somehow built at a cheaper price, then he expects current apartments in Dublin to at least half in price.

Now that would scare me out of buying an apartment at this time big time.

Its all getting very confusing.

A lot of ifs and buts there. I don't see how apartments can be built bigger and better serviced but built at a cheaper price with lower management fees.
It is pretty much a contradiction.

Obviously more supply will put downward pressure on prices. At least this major economist remembered something from school