Irish Property Market chat II - *read mod note post #1 before posting*

Bass Reeves

https://www.boards.ie/discussion/comment/119590454#Comment_119590454

The last of the trackers were given out in 2007/8. That is 15years ago. The last of them had trackers of 0.75%, the earlier ones are below1.5% with either the ECB rate or cost of funds.

These loans even if 30yl year loans are not at 1.5-2.25%. that is still exceptionally cheap money. However most are 2025 year morgages. I have a commercial loan at 1.5% over ECB rate. It's there since 2005 and the final payment is May 2025.

I could have paid it off 3-5 years ago but why would I . 100k was costing a thousand euro. Now 50k with present rises is costing a bit with 1k.

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/119591726#Comment_119591726

You keep saying renting an apartment is more expensive than mortgage repayments but this is not true in many cases - and that's before the increase in mortgage repayment cost.

Another factor missed is that a couple with a child, for example, will likely be looking for a house that, at a minimum, provides them with 2 dedicated bedrooms plus 2 additional dedicated office spaces - or, at the very least, the potential for a seomra/attic conversion down the line to provide that additional space. They're not going to pay over the odds (in their mind) for a small 3-bed which leaves them working/living in a similarly cramped home environment. These people will 100% be discerning if they think things are falling. And, as all in the thread have acknowledged, this is not a small percentage of buyers.

It's clear you're speaking hypothetically rather than as someone who is actually in this situation.

awec

https://www.boards.ie/discussion/comment/119594127#Comment_119594127

It is true in most cases. Unless you are one of the lucky few paying well below the market rate in rent, you are almost certainly paying more every month than someone paying a mortgage on an equivalent property.

Renting is more expensive than paying a mortgage. Renting with kids is almost certainly more expensive than paying a mortgage, as in this situation there is usually no possibility of house sharing to reduce outgoings. Renting anything of reasonable size, suitable for family living, is incredibly expensive.

The couple in your example, who are shopping for either a 4 bed or a 3 bed with convertible attic, hypothetically living in a 2 bed apartment, are very likely to reduce their monthly outgoings by buying rather than renting.

Rents are almost certainly going to go up more. This waiting game is not as straightforward as people like to make out, rental outgoings can very easily eat up any potential gains you see from waiting, and if prices don't fall by as much as you think they will, or fall slower than you thought, it will be an expensive mistake.

Bass Reeves

https://www.boards.ie/discussion/comment/119594127#Comment_119594127

A couple renting a 2 bed apartment with 1-2 children are usually looking for a three bed Semi D or townhouse. It's unlikely that they will have savings to buy a 4 bed. If the have WFH in a two bed apartment they will WFH In a three bed semi

AySeeDoubleYeh

I mean... I am one of several dozen people I know who are ACTUALLY in the situation I described. 3-bed home with some room in the back garden to add in the seomra for 10-15k or whatever. Attic a secondary and obv more expensive option. that's what this cohort want. Need, even, as working from home is not going away. Don't tell me what people in this situation are doing because, as i said, you don't have a clue.

My rent is less than my mortgage repayments will likely be. Again, i know plenty of people in this situation.

None of this is to say myself or my peer group have the right of it, but for the love of jaysus stop speaking for other people when it's clear you don't understand them.

I could buy a house today (and i know that makes me lucky) - I choose not to. If prices rise and rise and rise then so be it, but for now i am prepared to wait.

Bass Reeves

https://www.boards.ie/discussion/comment/119594247#Comment_119594247

Could you have bought 2-4 years ago

AySeeDoubleYeh

No - got married, had a baby. Then Covid happened and the WFH requirement shifted our needs somewhat.

But even for people who could've bought 2018-2020 and chose not to, so what? You win your internet points, but the sentiment of this group in 2022 still exists.

JohnnyChimpo

https://www.boards.ie/discussion/comment/119594247#Comment_119594247

besides the point, but you'd get some tiny seomra for 15k these days, unfortunately

AySeeDoubleYeh

Ha, not surprising!

AdamD

https://www.boards.ie/discussion/comment/119594127#Comment_119594127

Rent is actually double the mortgage repayments in the case of many apartments, I'd love to see an example of one where the rent is below mortgage as I simply don't believe they exist in Ireland right now.

AySeeDoubleYeh

what reason on earth do i have to lie?

awec

https://www.boards.ie/discussion/comment/119594764#Comment_119594764

If their rent is way below market rate and capped by the RPZ.

It is possible, but they are the exception, not the norm.

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/119594821#Comment_119594821

And there are a lot of properties that are rented by word of mouth rather than through daft etc. It way well be the minority, but it is not a small number of people.

Cyrus

https://www.boards.ie/discussion/comment/119594247#Comment_119594247

be interesting to see the numbers on this, its not very common.

drogon.

https://www.boards.ie/discussion/comment/119594764#Comment_119594764

Let’s not forget that over 54% of renters are getting support from the local council or government. That is huge as rents are being subsidies by the public coffers and renters aren’t paying the full rents. For a lot of these people, yes renting is still cheaper than a mortgage.

Bass Reeves

https://www.boards.ie/discussion/comment/119594821#Comment_119594821

You also have the risk that these LL are the cohort most likely to sell. Yield is often at 3-4% and they would have the same costs as a lad that is getting double the rent.

Of the LL decides to sell you are looking at rent doubling.....if you can find a place to rent.

awec

https://www.boards.ie/discussion/comment/119595115#Comment_119595115

These aren't the people trying to buy houses.

milu2021

People sometime don’t fully compare the total cost of house ownership with the rent. The simple calculation of looking at the monthly mortgage amount and the monthly rent amount doesn’t tell the full story.

The main argument against renting is that it’s ‘throwing money away’. However what people sometimes fail to consider is that when you own a home there are lots of costs that don’t go into building equity in the house.

These costs include home repair and maintenance (typically 1% of home value), interest in the mortgage (2-3% and rising). Stamp duty of 1% when buying. Property taxes. Opportunity cost of the down payment, this is identical overlooked but has a really cost. €100,000 down payment is money that is locked into the house and can’t be used to generate a return elsewhere.

Obviously each case is unique but just saying ‘the mortgage is €2000 a month and rent is €2050, so its cheaper to own’ is not fully accurate.

AdamD

There are a lot more arguments against renting than just 'throwing money away', especially in the current market where is incredibly difficult to even find a property to rent, nevermind a good one.

Thinkingaboutit

https://www.boards.ie/discussion/comment/119591154#Comment_119591154

Just pasted this from a very basic search: 'Even with Thursday's modest decline, the average price of houses nationwide remained 810,000 New Zealand dollars ($517,000), putting them beyond the reach of many young people looking to buy their first home. In Auckland, the median price remained NZ$1.1 million.10 Aug 2022' (source). The Euro and USD are are parity, give or take a tiny amount. Dublin was Eur 403,000 Euro as of June, and Eur 320,000 nationwide (source). NZ has more expensive property than Ireland. Like in parts of Canada, a buyer is competing against some very wealthy Asians and not necessarily impoverished locals, a bit like here except the wealthy foreign investor has tax advantages. NZ is beautiful (Ireland is too but I don't to be jannied per OP post), but that beauty attracts a premium.

Another big annoyance with buying now is that planning locks (unless someone wants to spend money they don't have on offsets) most new homes whether developer or self built into methods of heating which are not remotely future (or present) proof. That said the number of rentals with very poor insulation and even storage heating or sometimes inefficient boilers (both very expensive and fairly ineffective) makes that grumble a bit beside the point - new builds at least are generally well insulated and the heating .

A billion people here have probably said it, but for renters, auctioneers / estate agents, who might deliberate curb the reach of their ads to their own web sites, are increasingly preferred to the scammer riddled (reports are taken but it draws so many of them) daft.ie (I might get in trouble for that daft doubting as that and boards share the same owner), altho they themselves don't always properly check references. Any claims from lazy journos about the number of ads there, even if accurate, are therefore misleading.

timmyntc

https://www.boards.ie/discussion/comment/119595338#Comment_119595338

interest in the mortgage is absolutely compared to rent - the main comparison used in monthly mortgage repayments vs monthly rent!

Various insurances etc arent counted, but arent massive either. The only valid point is the home maintenance costs, but even then it doesnt make owning an asset worse than renting an asset

drogon.

https://www.boards.ie/discussion/comment/119595186#Comment_119595186

I am just pointing out that these are large cohorts of people that the state is subsiding rents for. I can easily see this number hitting 60%~70% by the end of the year if prices continue to climb (both for renting and buying)

combat14

state needs to hold the line and stop increasing HAP payments and other subsidies .. if 60% of renters are getting state support in most cases landlords will have to accept that's all they are going to get

drogon.

https://www.boards.ie/discussion/comment/119595743#Comment_119595743

Yeah good luck trying that. The state already has over 10k homeless figure. If they stop HAP, imagine what the figure will be.

Current hap subsidy for Dublin is capped at €1300. Good luck find anything for that, I would expect this to be over €1800 by some time next year.

People are now also expecting the government to cap fuel/energy prices, same as what they are doing in the UK. Without realising that the state will have to pay energy companies for those that go above the threshold. In the UK they expect it to cost them £130-150 billion for 2 years.

combat14

https://www.boards.ie/discussion/comment/119595829#Comment_119595829

no one is talking about doing away with HAP .. just a little restraint from government in rising it all the time .. then again so many government members are either declared or secret landlords they have a vested interest in keeping the always upwards gravy train going...

Bass Reeves

https://www.boards.ie/discussion/comment/119595338#Comment_119595338

If you rent there are s a good chance the rent will increase. In 20...25..or 30 years time the mortgage ends.. your rent will probably have dou led in that time.

Back when we bought our house the mortgage was 240/ month and it was about 150 month to rent a small 2 bed property in a village.

It mortgage is paid off a long time ago, to rent the same house is 8-900/month.

Go figure which is the best option long term

Villa05

https://www.boards.ie/discussion/comment/119595571#Comment_119595571

I believe the poster was not moving to New Zealand to escape High House prices rather poor governance

Villa05

https://www.boards.ie/discussion/comment/119596488#Comment_119596488

You don't see any potential issues with rent going from half the cost of a mortgage to double

Bubbles do pop, you know

dontmindme

https://www.boards.ie/discussion/comment/119595743#Comment_119595743

Ah will ya stop...isn't it the landlords in receipt of these payments that we fking have in government.

D_s

https://www.boards.ie/discussion/comment/119596594#Comment_119596594

Based on the fact that the poster said "mortgage is paid off long time ago", I think they have been through multiple boom-bust cycles. It popped. Then it inflated again, maybe to loftier heights than last time. Then popped. And in the end, the poster is mortgage free after their last €240 payment, while renting neighbours continue paying €900. In the long run, through bubbles and recessions, owning a property is rarely a poor decision.