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

Focus needs to be on difference between rent and interest repayment rather than rent in absolute terms (and potentially lost investment returns on deposit if you want to get aggressive). There's a widely held view that all mortgage payments = good, all rent payment = dead money. But assuming a 320k loan in your example at 2.5% for 35 years. There would be €23k in interest repayments over the first three years (dead money) which need to be factored in also. Of course, in your example it doesn't get you all the way there, but it's a material factor for sure especially if you plan to buy a house which is significantly more valuable than the place you are currently renting which is the case for many people.

Sold new in Donabate for 317k in July 2018

Was on the market for 320k until last week and yesterday increased by 90k to 430k 🔥

It doesn't matter when you buy from the pure maths perspective, if you go through and example and compare the equity you've built up in house and increased savings under each scenario, it all works out. The annual comparison between renting and buying must be the difference between rental yields (c.5%-6% of house value) vs mortgage costs (c.2.5%). The vast majority of people simply look at the 5%-6% rental cost which is mathematically incorrect.

If you buy today you will have 2-3 years less of a mortgage to pay in the future.

If you are in a position where you can save significantly during the 2-3 years (whilst paying rent) to reduce the amount of a mortgage you require then yes it won't make that much of a difference. The only problem is that that there is a small minority of people who would be able to do this whilst paying rent and for the vast majority they would probably end up with the same mortgage required in 2-3 years time as required today.

Interest rates can only go one way and that is up, and although nobody can predict house prices in future, I personally cant see them dropping substantially in the next 3 years anyways.

With that in mind I would buy - but only a house I'd be comfortable living in for the next 10+ years.

I don't disagree with your sentiments! Although I would argue that expectations of future interest rates are broadly already factored into fixed term mortgages, particularly the longer term ones. Back in 2016 everyone saying interest rates couldn't go any lower, including myself (I clearly remember an article titled "German Government Bonds are the short bet of a lifetime" and wanting to do it)...yet here were are!

I do disagree with this, it's fundamentally at odds with basic accounting rules. Your expressing a future debt servicing cost as a liability in nominal terms today. If you applied the logic above widely, you'd say when you bought a house for €400k over 35 years that your net worth is -€200k because the total cost of servicing the loan will be €600k. If someone has a loan for €400k for 35 years and one has a loan of €400k for 30 years. Their debt is the same, you don't consider the second person €30k "richer" because they will pay less interest.

The big mistake is thinking that the borrowing needs to be paid for. It definitely does not need to be repaid. This seems to be what's causing issues with the naysayers.

I think it's some fantasy about wizards, Hogwarts, magic wands and a mythical creature called inflation that travels the world gobbling up government debt and sheeting out rainbows of peace it's hind end.

In the real world, there are a lot of people with mortgages who dearly wish that it were true and that this magical creature would visit them and gobble up/evaporate their principal the way it does with government dept - supposedly.

Good point, is everything on the PRR excluding vat?

I thought the search results included this but I don’t know tbh.

Will we be the most in debt country per Capita by 2025 under these new plans? We won't be far off! Maybe we'll have the luck of the Irish n the lads buying our bonds won't require a few quid more in interest off us. There'll be some hangover if them nasty bondholders think paddy is a wee bit exposed!

So you believe funds own more properties than private individuals in Ireland?

My god, this is still be thrown out.

This is absolutely terrible advice, you have no idea where prices will be in 2-5 years, they could be up another 10% and people will be worse off.

People have literally been saying this for years on this forum......the great equalisation in the housing market is only ever a few years away and people should just keep on saving......

Time to get real. Owing property is the best hedge against inflation, it's also the best personal hedge against further lockdowns. It's not decreasing significantly anytime soon.

I would strongly advise anyone not to follow this. And I'm putting my own money where my mouth is when I say this.

Right now we are in one of the worst buyer's markets we've ever had. Supply is at rock bottom and demand is sky high. It could barely be any worse.

We have had sellers holding off because of Brexit, builders sitting on their arses for months on end not building anything, rent freezes, a frozen economy with savings soaring the past year and nothing to spend them on except property. It could not be a worse time to buy now. There is so much planning permission granted or in the pipeline that supply will undoubtedly be far better in 2 years, continuing to climb beyond that.

At the same time, it could not be a better time to sell now and, assuming covid restrictions end in a few weeks, things will get back to normal and supply will gradually pick up again. Already, the savings are not being accumulated as much as during lockdown according to the Central Bank.