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ERSI/TSB is it half empty or half full

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  • 03-08-2005 9:10am
    #1
    MorningStar
    Closed Accounts Posts: 3,031 ✭✭✭


    http://www.rte.ie/news/2005/0803/esri.html
    44% of first-time buyers burdened by mortgage

    03 August 2005 08:40

    New research has found that nearly half of all first-time house buyers view their mortgage as somewhat of a burden.

    The Economic and Social Research Institute and Permanent TSB will publish the findings of two reports on the Irish housing market later today.

    44% of the 700 first-time buyers surveyed said their mortgage repayments were 'no burden at all', while 6.5% said they were 'a heavy burden'.
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    The report found that 20% of people needed money from their parents to purchase their homes, with the average amount being €15,000.

    The report also says the average age of a first-time buyer is 30, with the majority taking out a mortgage over 20 years.

    It will be intersting to see the full report but what is funny is Newstalk 106 radio suggested more than half FTB were happy with mortgages while RTE takes the opposite view. I personally would say it is a bad sign that roughly half them think it is a burden. A small downturn could make people panic but they aren't really the people that run the market.


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    #2
    soma
    Registered Users Posts: 602 ✭✭✭soma


    Yeah I heard that on newstalk myself this morning - while technically true saying that 'over half of FTBs find their mortgage payments no burden at all' it's an overly optimistic view of the data.

    Here's what I really don't get about these polls:

    (a) do they differentiate b/t FTBs who are buying as couples, and those buying on a single income - I mean this is a world of difference in terms of affordability.

    (b) I simply do not understand how the stats are not higher for those who are burdered. For example, I'm very happy with what I earn at the moment. However, pretty much any place I look at in dublin (basically the 300-317k mark)
    would leave me repaying a minimum of about 1400 euro a month (when life assurance + house insurance are added) over 30 years, and this is before
    any kind of interest rate hike! :eek:

    And the worst part of that debt, is that it's for the 'priviledge' of living in a bad area! :mad:

    How can anyone not be 'burdened' with debt like that..? (without earning 70-80k, i know alot of ppl and I know one person in that pay bracket) I keep seeing polls & postings on this board where 'most' ppl seem to say 'I pay ~700/mth' - I mean did everyone on this board buy 3-4 years ago..?


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    #3
    MorningStar
    Closed Accounts Posts: 3,031 ✭✭✭MorningStar


    soma wrote:
    (a) do they differentiate b/t FTBs who are buying as couples, and those buying on a single income - I mean this is a world of difference in terms of affordability.
    I very much doubt it but you have got to consider that most homes are bought by couples and always have been. It is probably no more than 10% buying homes on their own.
    soma wrote:
    (b) I simply do not understand how the stats are not higher for those who are burdered. For example, I'm very happy with what I earn at the moment. However, pretty much any place I look at in dublin (basically the 300-317k mark)
    would leave me repaying a minimum of about 1400 euro a month (when life assurance + house insurance are added) over 30 years, and this is before
    any kind of interest rate hike! :eek:
    €1400 a month between a working couple isn't that bad. Earning €25k each means the mortgagfe is affordable. Maybe not the best quality of life but not a bad one at all. The starting wage in some call centres is €25k basic.
    soma wrote:
    And the worst part of that debt, is that it's for the 'priviledge' of living in a bad area! :mad:
    The priviledge is the services in the area and the travel time home. I work with people who spend over 4 hours traveling a day. That is worth a lot of money IMHO.
    soma wrote:
    How can anyone not be 'burdened' with debt like that..? (without earning 70-80k, i know alot of ppl and I know one person in that pay bracket) I keep seeing polls & postings on this board where 'most' ppl seem to say 'I pay ~700/mth' - I mean did everyone on this board buy 3-4 years ago..?
    It's not much more than rent for two people. The extra expenses of furniture, appliances etc... is a concern and it is where people can get into trouble. Zero finance for 24 months is a trap people fall into, after the given time the interest rate is high.


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