Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Browsing old threads about renting vs buying

Options

Comments

  • Options
    #2
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    This one is my favourite. One or two called it correctly, the majority scoffing.
    Rents to Rocket?
    http://www.boards.ie/vbulletin/showthread.php?p=79006148


  • Options
    #3
    Zenify
    Registered Users Posts: 861 ✭✭✭Zenify


    jamesthepeach wrote: »
    predicting the future is pure luck.

    There's a common theme with all above threads. whatever the majority of people on boards are saying, the opposite will happen.


  • Options
    #4
    myshirt
    Registered Users Posts: 5,245 ✭✭✭myshirt


    Famously, if Donald Trump had invested his inheritance in a steady yield mutual fund or etf (when they were invented), he could have avoided all the stress and hassle and no less well off.

    You never beat the market in the long run.


  • Options
    #5
    Arcade_Tryer
    Registered Users Posts: 2,021 ✭✭✭Arcade_Tryer


    4ensic15 wrote: »
    This one is my favourite. One or two called it correctly, the majority scoffing.
    Rents to Rocket?
    http://www.boards.ie/vbulletin/showthread.php?p=79006148
    The certainty with which they were scoffing is quite astonishing too.

    Saw it in work recently, with quite well educated folk, scoffing at FF's plan to incentivise developers to build more, conveniently forgetting that the single, most significant issue of the housing crisis, is supply, and their plan might just go some way toward solving it.


  • Options
    #6
    Tenigate
    Closed Accounts Posts: 849 ✭✭✭Tenigate


    myshirt wrote: »
    Famously, if Donald Trump had invested his inheritance in a steady yield mutual fund or etf (when they were invented), he could have avoided all the stress and hassle and no less well off.

    I think this was just more Trump-bashing.

    At least the article I read, the people who did the study made assumptions like he would have "margined it to the maximum degree allowable". Which is a big assumption, and would he have been able to get funding to do that?

    Edit: and back to the op, are you suggesting Donald should rent his properties instead of owning them?


  • Advertisement
  • Options
    #7
    Ray Palmer
    Registered Users Posts: 8,394 ✭✭✭Ray Palmer


    Arcade_Tryer wrote: »
    The certainty with which they were scoffing is quite astonishing too.

    Saw it in work recently, with quite well educated folk, scoffing at FF's plan to incentivise developers to build more, conveniently forgetting that the single, most significant issue of the housing crisis, is supply, and their plan might just go some way toward solving it.

    I was certainly being scoffed at. In fairness one person did message me years afterwards to apologise.
    Monty Burnz certainly should say something to me.
    By no means did I predict the current situation as I thought there would be action before it got this bad. It is terribly depressing to see we can't take advantage of Brexit now due to ignoring good advice.
    This is going to take another decade to settle down and some bad planning decisions will be rushed through.


  • Options
    #8
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Arcade_Tryer wrote: »
    The certainty with which they were scoffing is quite astonishing too.

    Saw it in work recently, with quite well educated folk, scoffing at FF's plan to incentivise developers to build more, conveniently forgetting that the single, most significant issue of the housing crisis, is supply, and their plan might just go some way toward solving it.

    We *need* to sort out our supply side issues.
    Afterwards- and only after we have ramped up production to sustainable levels- should we sit down and look at ownership and other issues.
    Issuing all manner of dictats regarding ownership- and rules regarding rental accommodation etc- without making meaningful gestures towards ramping up supply of good quality, reasonably sized residential dwellings- where people want to live- is pissing against a wall- and a complete and utter waste of everyone's time, effort and energy.


  • Options
    #9
    [Deleted User]
    Posts: 11,614 ✭✭✭✭ [Deleted User]


    jayteecork wrote:
    "Housing shortage" me hole"

    Where are you now jayteecork?

    Reading that thread is like watching a car crash in slow motion. You can see it happening but can't do anything but keep watching...

    "There may be pockets where rent goes up a bit"..." I cant see rents rising more than 5-6%".

    Ah jaysus. Just saw a comment I made. Cringe!


  • Options
    #10
    Lumen
    Registered Users Posts: 31,080 ✭✭✭✭Lumen


    Arcade_Tryer wrote: »
    Saw it in work recently, with quite well educated folk, scoffing at FF's plan to incentivise developers to build more, conveniently forgetting that the single, most significant issue of the housing crisis, is supply, and their plan might just go some way toward solving it.
    Or it might be a complete waste of money. FG have been expecting rising prices to stimulate supply for years now, and it is happening very slowly if at all.

    The best explanation I've read is that construction in Ireland is largely done by SMEs who are equity financed and therefore growth is organic. It takes a few project cycles to scale up, and everyone is risk averse after the last crash. You can't just push a button and pop up some houses, particularly when planning permission can take years.

    This sort of lag is what causes the boom-bust cycles. By the time the capacity is built up another crash comes along and wipes them out again.


  • Options
    #11
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    4ensic15 wrote: »
    This one is my favourite. One or two called it correctly, the majority scoffing.
    Rents to Rocket?
    http://www.boards.ie/vbulletin/showthread.php?p=79006148

    I'm actually quite disappointed to see that I didn't post in that thread.
    I know some people who see how prolifically I post in this forum- probably think I dodged a bullet on it- I'm not so sure.........
    From memory- the reason I didn't post- was I didn't see evidence leaning one way or another at the time- and I had a lot of personal stuff going on (4 of my 6 siblings emigrated- because of lack of employment prospects/opportunities here).

    If you look at where we were in 2010- we entered an IMF bailout of 85 billion in November- and the press were heralding us as possibly the next 'Greece' to test the Eurozone.......... We borrowed from the IMF @ 5.8%- because our sovereign borrowing rate- hit 14% in October 2010.

    Our property market- continued in freefall for another year- finally bouncing around the bottom in November 2011- at a little over 50% falls in market values for Dublin housing, and 60% for apartments.

    In May of this year- you had Karl Deeter postulating that 2016 was the midpoint in a new property cycle- which was headed for another crash in roughly 7 years time article here

    Honestly- its damn hard to figure quite where we'll be in 7 years time.
    We have in or around 60 billion in sovereign debt we will have to have restructured by then- as our peak interest payments will be taking between 7 and 8 billion a year straight out of the exchequer. We look likely to hit a balanced budget before interest payments this year- however, if you factor interest of 8 billion into the equation- this just isn't good enough. Against this backdrop- we have people pleading for a billion here, a billion there- to construct social and other housing projects, for those incapable of housing themselves- meanwhile you have all manner of people demanding the right to live precisely where they want to live...........

    The most remarkable thing to me- from 2010-todate- is the manner in which the Irish public, has, by and large, not taken to the streets to protest against the injustices visited upon it by our political classes (Irish Water aside- and thats simply a can that we've booted down the road).

    We have a few assumptions we have to ask and clarify.
    Is the construction of 25k units per annum- a reasonable and sustainable level. When will we reach this target? Will we overshoot it? How do we pay for it? Is our political system going to survive the next 7 years?

    Part of the legacy of the bust- is there is an acceptance that we have approximately 180,000 vacant dwellings- of which 13,000 are social housing units- that the local authorities are having trouble filling- for the simple reason- they are in the arse end of no-where, where few people want to live.

    The last boom- was based on the premise that people were happy to commute to Dublin from west of the Shannon- and as far south as Wexford (and according to Irish Rail- there are over 200 people making a daily roundtrip to Dublin from Limerick, even now). This was seen as somehow acceptable- why, I have no idea- however, the vast majority of the public subscribed to it.

    What happened- during 2009-2012 period- is a lot of people moved away from this acceptance- towards wanting to live in urban settings. This was seen as a problem though- rather than a solution- and something to be countered- rather than something to be worked with- and so we've all these vacant estates- hell, we have vacant apartment blocks in Ballybofey for crying out loud- not to mention the erstewhile stag and hen capital of Ireland and the UK- Carrick-on-Shannon.........

    I'm glad I didn't try to call what was going to happen in the period immediately after 2010- honestly, I have no idea what I'd have said- and hindsight is a wonderful thing..............


  • Advertisement
  • Options
    #12
    wordofwarning
    Closed Accounts Posts: 697 ✭✭✭wordofwarning


    Tenigate wrote: »
    I think this was just more Trump-bashing.

    At least the article I read, the people who did the study made assumptions like he would have "margined it to the maximum degree allowable". Which is a big assumption, and would he have been able to get funding to do that?

    Edit: and back to the op, are you suggesting Donald should rent his properties instead of owning them?

    It is not Trump bashing. Since the 1988 his net worth only increased by 300%. If he invested in the S&P500 index, his net worth would have been up 1,336%. His investment returns have been not great
    Other billionaires' net worths have beaten the stock market's growth in that time. Bill Gates, for example, saw his grow increase 7,173% since 1988 to $80 billion. Warren Buffet's wealth grew 2,612% in the same time period, to $67.8 billion.

    http://fortune.com/2015/08/20/donald-trump-index-funds/

    The fact is people can't call when the top and bottom of the stock market cycle is happening. Hindsight is great, but you can't make the decision on the spot ie many hedge funds predicted the stock market should tank in the first 6 months of the year. It has returned 8% in the first 6 months of the year (S&P500).

    Warren Buffett, Burton Malkiel and all the other best minds in business will tell you can't beat the market. You buy decent assets for the long haul. You buy an asset, as it makes fundamental sense. People make mistakes buying property, bonds, stocks etc as they speculate. Buying a house today, as you think it will be worth 20% tomorrow is speculation. You should buy it, as the calculations support it

    Schiller (the most highly regarded housing economist in the US) has a few rules for buying a property. IMO he knows what he is doing, as he has heavily analysed the US housing market for decades and works in Yale

    1) you plan on living there for at least 7 years
    2) you need to understand there is an opportunity cost to buying it ie you will not take jobs as they are too far away from your house. But if you rented, you probably would have moved
    3) owning a home is not an investment. It is a consumption choice

    Here is a good video on owning versus renting

    http://www.wsj.com/video/robert-shiller-on-owning-vs-renting/D5620B8B-3F9F-4F6F-95C2-931DD62F6376.html


  • Options
    #13
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    The current position is that rents are going to keep rocketing. In Rathgar alone there are at least 3 substantial pre-63s being marketed as private houses. The effect of this is that even as new builds come on stream older stock is being removed from the market. So far the government initiatives have only succeeded in scaring the smaller investors off. The choice for a renter is to watch rents rising or buy. The decision to buy is all about the future level of interest rates. If and when they go up, repayments will go up, prices will fall and rents will fall. Buying seems to be a no brainer if the repayments are affordable.


  • Options
    #14
    quadrifoglio verde
    Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    4ensic15 wrote: »
    The decision to buy is all about the future level of interest rates. If and when they go up, repayments will go up, prices will fall and rents will fall. Buying seems to be a no brainer if the repayments are affordable.

    How will interest rate increases lead to a reduction in rent prices? I can understand it slowing down demand from buyers, but without supply of rental property outstripping demand, then rents aren't going to fall.
    Less house buyers mean more people renting, so surely an increase in interest rates would increase rent if supply of property remains low


  • Options
    #15
    Ray Palmer
    Registered Users Posts: 8,394 ✭✭✭Ray Palmer


    It seems people still don't see the impact of less purchases. Less people buy means more property for rentals and after a point that requirement becomes permanent.


  • Options
    #16
    Hollister11
    Closed Accounts Posts: 5,482 ✭✭✭Hollister11


    myshirt wrote: »
    Famously, if Donald Trump had invested his inheritance in a steady yield mutual fund or etf (when they were invented), he could have avoided all the stress and hassle and no less well off.

    You never beat the market in the long run.

    Yea but whats more fun. Building business, or just letting money grow.

    If I knew my 1 million would be worth 10M no matter what option I chose (Building business, or investing in a fund) I would pick building businesses. You need something to do everyday, so if the end result is the same, you might as well work for it.


  • Options
    #17
    quadrifoglio verde
    Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    Ray Palmer wrote: »
    It seems people still don't see the impact of less purchases. Less people buy means more property for rentals and after a point that requirement becomes permanent.

    The people who don't buy still need somewhere to live though, so surely less people buying means higher demand for rentals.
    However if interest rates increase, then there's less property investor's as borrowing is more expensive, which would lead to less rentals.


Advertisement