Is there any point?

Wanderer78

Peregrinus wrote:

A bubble followed by a slump is pretty much the epitome of market dysfunction, surely? A well-functioning market brings supply and demand into equilibrium; it doesn't oscillate wildly like this.

I suspect a well-functioning market would involve ditching the 'efficient market hypothesis' and all its equilibriumnesses! Time for us to move on from it

davo10

SteM wrote: »

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Many reasons, in a rental you can be evicted even if you pay your rent, that doesn't happen in a property you own if you pay your mortgage. You can sell your house for profit if market conditions are favourable, and at the end of the mortgage you own your property outright.

Mooooo

Abu94 wrote: »

Well the asking price was 160 so if the owner expected to get more why did he put the price at 160 instead of 200. It's the bidders that inflated the price and probably surprised the owner himself. The houses I looked at were not in Dublin.

They may well have intentionally put in a lower asking price in order to attract more bidders and leave the bidders push it up then

big syke

Could be the council bidding on it. Happening a lot lately.

Peregrinus

davo10 wrote: »

In many cases a mortgage is actually cheaper than rent.

That in itself is an indication that the market is not functioning well. Logically, it should cost more[/i[ to buy an enduring asset outright than to rent it for a temporary period. If it costs less, some market distortion is ramping up one price, or supressing the other (or both).

Browney7

SteM wrote: »

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Realistically, any responsible person who wants to plan and start a family is on a hiding to nothing in the current market if they don't buy before children come. Landlords can sell, take back for own use etc which whilst understandable leaves renters in a precarious position if they lay roots in an area and have to up sticks.

The whole rental shortage is fuelling property price rises because renters look at the 1900 they are being asked for in rent and see the mortgage that would service over a thirty year term which is exactly what current homeowners, government and voters want.

Wanderer78

SteM wrote:

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

davo10

Peregrinus wrote: »

A bubble followed by a slump is pretty much the epitome of market dysfunction, surely? A well-functioning market brings supply and demand into equilibrium; it doesn't oscillate wildly like this.

No it isn't, at times in all markets demand outstrips supply and vice versa. That is why prices of commodities fluctuate.

A bubble can happen for many reasons, in 2008 it was because there was massive oversupply and an abundance of cheap credit. That is unsustainable. Now we have low supply, no where near enough in production and credit is not easy to get. 50% of houses are bought for cash where no credit of any type is required, and mortgages are being offered with stricker rules and stress tests so the market would now seem to be equailibriating after a slump.

Mooooo

Wanderer78 wrote: »

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

Nobody can tell you what you heard your either did or didnt

Wanderer78

Mooooo wrote:

Nobody can tell you what you heard your either did or didnt

I hear dead people to, cheer up, its happy Friday

Peregrinus

Wanderer78 wrote: »

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

Either you were mistaken, or he was. Within the EU, Germany, Austria, Denmark, the UK, France and the Netherlands all have lower home ownership rates than we do.

We are nevertheless in the bottom half. A majority of EU member states have higher home ownership rates than we do. But this is partly an artifact of the expansion of the EU into Eastern Europe, where the former Eastern Bloc states all have very high rates of home ownership resulting from the transfer during the 1990s of a huge stock of state- or publicly-owned housing to its occupiers.

heroics

SteM wrote: »

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Part of the reason is that when myself and my wife retire we will own the house and owe nothing every month (mortgage/rent) as opposed to renting and trying to pay the same rent out of our pensions.

Our pensions should be enough to comfortably live on but if we had to pay the equivalent of what I saw recently 1900€ pm for a 2 bed apartment the pension would be gone fairly quickly.

We will also own an asset that can be hopefully passed on to our kids.

jamesthepeach

What you have now is a lot of people who earn good morning EU and can afford good rent on a nice place.
They are trying to rent nice places, but due to the legislation landlords can't accept their higher offer of the market rate and landlords cannot discriminate based on earnings and ability to pay a steady rent effectively.
Therefore the people with the money are losing out on places to rent for ridiculous reasons when they should be able to rent them easily on their salary.

So they then go and workout what a similar rent in mortgage payment would get them and will bid up the properties to the value they are happy with. Some will even go higher than what they would have paid in rent, increasing the value even more, along with the benefits pointed out by the poster above. Lots of these people are in competition with each other so the highest bidder gets the house. none mucking about bidding below the highest bidder earning power is on a hiding.

Also estate agents know this and always price a house at way less than the price they will get just to get many people to come and look at the house. A lot of them will walk away. A lot will fall.in love with the house and the changed they are thinking of making to it to I crease that value. They will then decide what it's worth to them and bid up to that.

There is no conspiracy.

Many people are waiting g for the next property crash, which probably isn't too far away, and hoping to catch a break then. That may be your only choice if you are not prepared to match and beat bids.

davo10

Wanderer78 wrote: »

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

You sure did. He said that home ownership has declined dramatically over the last 10 years and is now one of the lowest in Europe. The 2016 CSO census showed ownership in Ireland at the lowest since 1971.

PokeHerKing

SteM wrote:

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Like asking why would you buy a car when you could just rent one? The reasons are many and pretty obvious in my mind.

I also hate this whole "oh the Irish psyche of wanting to own their own home"

There's nothing inherently Irish about it. It's not because of the plantations or the famine or any other psycho babble people pontificate about.

It's because it makes a lot of sense for a lot of reasons and people the world over do it not just the Irish.

Hector Savage

I pray for another crash.
It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

jamesthepeach

PokeHerKing wrote: »

Like asking why would you buy a car when you could just rent one? The reasons are many and pretty obvious in my mind.

I also hate this whole "oh the Irish psyche of wanting to own their own home"

There's nothing inherently Irish about it. It's not because of the plantations or the famine or any other psycho babble people pontificate about.

It's because it makes a lot of sense for a lot of reasons and people the world over do it not just the Irish.

That was just a mantra trotted out by people so they could say that some how they were geniuses who saw the crash and to look down their noses at people who bought. And also by people whom wouldn't actuay get a mortgage so it made them feel better.

Most of them who I know personally who trotted out that list as the reasons they didn't buy bought as soon as they could afford too
Those who didn't buy were expecting lower prices and then got caught out by the speed of the price catch-up and are now crying that they can't buy now, but for all sorts of other reasons. It's always someone else's fault when you make a bad decision and pure genius when you make a good one.

jamesthepeach

Hector Savage wrote: »

I pray for another crash.
It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

We need another huge crash alright. Might give people some perspective.

Wanderer78

Hector Savage wrote:

I pray for another crash. It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

I don't to be honest, it hurts a lot badly, particularly those that are perceived to have done the right things in life, including those that purchased their own home, but sadly I do believe it's inevitable. We're stuck on a merry go round unfortunately

Peregrinus

All other things being equal, people will obviously prefer to own a home rather than rent one.

But all other things are rarely equal. If buying a home costs more than renting one - which, logically, it should - your preference for owning a home may not be great enough to lead to you pay the additional cost involved. You can phrase that as "I can't afford to buy" and see yourself as someone excluded from home ownership, or you can phrase that as "the extra cost is not worth it to me" and see yourself as someone who is making a choice about the allocation of limited resources.

Your preference, and your choice, is not just driven by cost, but by a host of other factors. For instance, the Irish rental market consists almost entirely of furnished properties which, internationally, is unusual. So a choice to rent is a choice not to buy furniture but to live with furniture that someone else has chosen, and so to give up a fair degree of control over your living environment. This contribute to renting being seen as a low-status alternative, and this will add to the stress of someone who finds they are excluded from the buying market by lack of funds/lack of credit.

And there are also social and cultural factors. Italy, for example, has a higher rate of owner-occupation than Ireland, but this is partly because young adults tend to live at home until they marry or buy a house, and because they live with their (homeowning) parents they are counted as living in owner-occupied premises, even though they don't own them. So Italy's high rate of owner-occupation is in fact associated with a lower degree of domestic and financial independence for young single adults, which is not what you might initially think.

Heisenberg1

Wanderer78 wrote: »

I don't to be honest, it hurts a lot badly, particularly those that are perceived to have done the right things in life, including those that purchased their own home, but sadly I do believe it's inevitable. We're stuck on a merry go round unfortunately

I don't we are in for a crash any time soon as we all know the last one was down to cheap credit, this one is purely down to supply.

jamesthepeach

jamesthepeach wrote: »

We need another huge crash alright. Might give people some perspective.

But you still won't be able to buy a house, because none will be for sale if the price is less than cost or mortgage value

CountingCrows

Heisenberg1 wrote: »

I don't we are in for a crash any time soon as we all know the last one was down to cheap credit, this one is purely down to supply.

Following your logic the only way a crash will occur is with a massive oversupply of housing...

zl1whqvjs75cdy

CountingCrows wrote: »

Following your logic the only way a crash will occur is with a massive oversupply of housing...

Which is never going to happen. Even the very mention of developer incentives gives us national ptsd.

Wanderer78

Heisenberg1 wrote:

I don't we are in for a crash any time soon as we all know the last one was down to cheap credit, this one is purely down to supply.

This is a complicated one, and you are correct about the last crash being related to cheap credit, but if you keep an eye on international affairs, particularly in economic terms, it's possible, more complexity could interfere with our housing market, resulting in, well who knows. Prices could simply continue to rise or..... There's no question our current housing issues are largely supply related, and as far as I can see, that's simply not going to change any time soon, if at all. What a mess!

Heisenberg1

CountingCrows wrote: »

Following your logic the only way a crash will occur is with a massive oversupply of housing...

Far from it if we had a decent supply of houses in the market we would have more stable prices, my logic is that there is a difference between the current rise in prices today vs the last time.

jamesthepeach

[Deleted User] wrote: »

But you still won't be able to buy a house, because none will be for sale if the price is less than cost or mortgage value

And you probably wouldn't have a job to enable you to get a mortgage.

sbsquarepants

Abu94 wrote: »

2 bigger houses that are renovated cost 180 in the area. This specific house is smaller and as I have said it needs a full renovation. There is absolutely no way that you could make a profit after renovation.

Profit is not always the motivator.

Any item, from a paperclip to a cruise ship is "worth" what someone is willing AND able to pay for it.

The problem last time was because although there were any number of people willing to pay extremely high prices for houses, they weren't actually able to. They borrowed money they couldn't afford to repay and then, surprise, surprise - they couldn't repay it!

This is different - people are either paying with cash they have on hand, or more realistic borrowings. Prices are high because supply is low and demand is high, but crucially people are paying with money they actually have. This is the market doing what it is supposed to do. The only way prices are dropping significantly imo is when we start building on a large scale again.

Hopefully politicians will have learned something from the previous crash. People just want houses for their families and they'll do whatever it takes to get one. It's far too much to ask of joe and jane soap, that they stop and consider the national good when their trying to put a roof over their kids heads. That's their priority and so it should be!

UsBus

Hector Savage wrote: »

I pray for another crash.
It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

jamesthepeach wrote: »

We need another huge crash alright. Might give people some perspective.

It's inevitable at this stage. While there is a lot going well in the Irish Economy, I think sentiment around property will turn extremely negative again.

The current level of sterling has to be burning our exporters. I think any job losses or business closures resulting from the UK turmoil will quickly spread to other areas of our economy. Just think of the motor industry, car imports from the UK will be booming again while a significant number of the population have tied themselves into PCP deals. A double whammy for the motor industry.

It could be that economic factors outside of Ireland will be the beginning of the next downturn here.

Wanderer78

UsBus wrote: »

It could be that economic factors outside of Ireland will be the beginning of the next downturn here.

i think you could be spot on here. theres a few major economies looking dodgy at the moment, including countries such as china, australia, canada, a couple of european nations etc. if these countries head into recession soon, im expecting knock on effects here. waiting game i guess.