# A question for 'mature' home owners



## Jeanne (18 Apr 2006)

Ok, by mature I mean home owners who bought 10+ years ago.

If you were a First Time Buyer, would you buy now at current house prices?

Sometimes it's hard to have sympathy for First Time Buyers when they seem to know no bounds when it comes to purchasing property (don't mean to offend anyone, just sort of stating the obvious with this 'buy buy buy' at any cost mentality when it clearly drives property prices ever upwards).

Is the obsession with owning a home a recent obsession, or is it part of our culture. If you, the maturer AAM contributer were starting out today, would you be intent on purchasing too, no matter the cost. 

Anyway, just curious....


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## woods (18 Apr 2006)

As one of the more mature (had my first house in 1975) here I will have to say yes but only if I was married. I dont think that I would worry about it if I was single.


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## runner (19 Apr 2006)

Yes, I would feel I had to. However I would be terrified by the current loan size and 30/40 years repayment mortguages.
As soon as people buy today they start talking/boasting about 'equity' in their property. In my time it was a fear of negative equity. Afraid it may come around again soon. Dont seem to realize that equity is not money!


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## Purple (19 Apr 2006)

I bought 11 years ago and agree with Woods. 
To me buying now, particularly as an investment, is a bit like spread betting with borrowed money; you may loose what you put in (entry costs) plus the negative equity on the property.


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## Glenbhoy (19 Apr 2006)

> Is the obsession with owning a home a recent obsession, or is it part of our culture. If you, the maturer AAM contributer were starting out today, would you be intent on purchasing too, no matter the cost.


An unfair question, because in the most cases it's the 'maturer people' (not necessarily AAM contributors) who give the whole "rent is dead money" speech - and "you'll never go wrong with property, your father and me bought this 15yrs ago for £4,000 and now it's worth €4.8m, here's 200K equity we've  released, now off you go and don't come back until you've bought".........


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## gearoidmm (19 Apr 2006)

My mother is still sending me clippings from the property supplements despite the fact that I've told her over and over that I have no intention of buying.

Little side notes on the clippings telling me how much money I'm throwing away in rent.

Agree with Glenbhoy, the attitude of older friends and relatives is invariably "buy".


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## soma (19 Apr 2006)

gearoidmm said:
			
		

> My mother is still sending me clippings from the property supplements despite the fact that I've told her over and over that I have no intention of buying.


Why not send her clippings of all the bear-ish articles of late..? 

Seriously though, very few people who are 40-60 have any real appreciation of the mammoth debt levels younger people are being asked to undertake - inflation ate their 20 year mortgages.

As hard-working 20 & 30 somethings we're bank-rolling alot of them.


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## woods (19 Apr 2006)

soma said:
			
		

> Seriously though, very few people who are 40-60 have any real appreciation of the mammoth debt levels younger people are being asked to undertake - inflation ate their 20 year mortgages.
> 
> As hard-working 20 & 30 somethings we're bank-rolling alot of them.


You younger ones have no appreciation of the interest levels that we were paying. My bank agreed to fix my loans when interest rates were rising but they missed one and it went to 28% at one stage. The other 2 only went to 17%.
And nobody is bank rolling me or never will. My hard work in the past is doing that.


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## soma (19 Apr 2006)

woods said:
			
		

> You younger ones have no appreciation of the interest levels that we were paying. My bank agreed to fix my loans when interest rates were rising but they missed one and it went to 28% at one stage. The other 2 only went to 17%.



What was the inflation rate..? Interest Rates are meaningless without an inflation context. Plus the size of the loans most definitely matter (we are in the age of the jumbo mortgage as you know), I seriously doubt anyone in the 70s or 80s lost much sleep over a 0.25% increase ,whereas it's a cause of concern for alot of recent buyers these days because of the mammoth amounts being compounded over 35-40 years instead of 15-20 years.


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## dodo (19 Apr 2006)

I would not blane the buy buy buy attitude, if banks had stuck to the 2 1/2 times plus  one wage structure people would only been allowed a certain amount of money therfore prices would not have gone throught the roof,  seen a program on C4 before person went to 10 different lending place's in England and all but one gave him much more money that their structure allowed, same has happened here I know first when I went to buy over 10Yrs back that they would only give me 2 1/2 times my salary which amounted to a mortgage of 50 K Punts, Irish permanment would only give me 40K at the time, now people can get at least 10Times their salary if not more


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## Jeanne (19 Apr 2006)

Glenbhoy said:
			
		

> An unfair question, because in the most cases it's the 'maturer people' (not necessarily AAM contributors) who give the whole "rent is dead money" speech - and "you'll never go wrong with property, your father and me bought this 15yrs ago for £4,000 and now it's worth €4.8m, here's 200K equity we've released, now off you go and don't come back until you've bought".........


 
Thanks for the replies.

I hope the question wasn't unfair. I think your response sort of proves the point that even though many of us who bought 10+ years ago shake our heads at the amount of money changing hands for property today (and I'm actually not REALLY that ooold, in my early 40's as it happens and since 40 is the new 30 so they say, I'm feeling quite youthful but I digress ) still, if I was 20 years younger I, like others, would probably be paying out mad money for a few concrete walls and a roof!

I do actually remember when interest rates were about 16%. Hard to believe now 

Oh well, I guess everything is relative........


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## Glenbhoy (19 Apr 2006)

> (and I'm actually not REALLY that ooold, in my early 40's as it happens and since 40 is the new 30 so they say, I'm feeling quite youthful but I digress )


I like your thinking, time to relive my twenties!!
No, seriously, there are a number of factors such as the affordability which is probably similar nowadays to 15 yrs ago, the reasons why this is so are manifest, but interest rates and 30-40yr mortgages are the main reasons.  Of course we all know the main reason is that as we've now entered a new paradigm, you better get in now or you'll never have a chance!!


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## sun_sparks (20 Apr 2006)

To give a different (younger) slant. We bought (went Sale Agreed) in October last year at 350k. Our house would now get 400k. 

We borrowed from parents to top up our mortgage amount and basically maxed out. Tight now, but we're both due pay increases to help us out.

Anyway, what I'm trying to say is that the buy now paradigm is very true. We WOULD have missed out if we had waited. That's six months in the difference.

So while I'm sure my opinions will be different in years to come, for now I've got my first home and can envisage staying there longer-term should the "bubble" burst.

And yes, I envy you older folk, who may go on about your interests rates, but who are basically in a much much better position than I could ever imagine. (My house would need to sell for nearly €7m in order for me to see the same level of rise my parents did in 15 years.)

Sorry...... just choking on that thought!!!!


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## bearishbull (20 Apr 2006)

sun_sparks said:
			
		

> To give a different (younger) slant. We bought (went Sale Agreed) in October last year at 350k. Our house would now get 400k.
> 
> We borrowed from parents to top up our mortgage amount and basically maxed out. Tight now, but we're both due pay increases to help us out.
> 
> ...


sorry for being pedantic bit i dont think your parents home rose twenty times in 15 years. average nominal increase across country has been 5times increase over last 15 years,so its highly unlikely any house increased more than ten times over 15 years.


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## sun_sparks (20 Apr 2006)

Maybe you're right, and I think I underestimated the years now that I think about it (knocked a few off my own age first!!) but I'm not sure on the conversion, they bought in Glasnevin for £40k in 1987 and a house two doors down recently (same in every way) sold for €900k.

Anyone fancy doing the math?


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## Howitzer (20 Apr 2006)

18 fold increase in 19 years.


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## sun_sparks (20 Apr 2006)

Ok, so I was off a little (or a lot  ) but my point still holds true. 

I'll just have to sell my little Lucan semi-d for €6.3m in 2025!!! Sure what's €700k????


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## bearishbull (20 Apr 2006)

sun_sparks said:
			
		

> Maybe you're right, and I think I underestimated the years now that I think about it (knocked a few off my own age first!!) but I'm not sure on the conversion, they bought in Glasnevin for £40k in 1987 and a house two doors down recently (same in every way) sold for €900k.
> 
> Anyone fancy doing the math?


 my parents bought here in glasnevin in 1988 for 46kpunts and its only worth around  650k now,but maybe your parents got a bargain.


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## angie (20 Apr 2006)

What I can't figure about FTB now is how not only do they have huge mortgages but they have the house done in the best of everything top to bottom six months before they move in !!  I was a FTB 10+ years ago but I spent at least two years in the house with hand me downs and garden furniture in the dining room and that wonderful concrete flooring !!!  
Well done to those who can do it I just can't figure how.
angie


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## soma (20 Apr 2006)

angie said:
			
		

> Well done to those who can do it I just can't figure how.


_Credit.. Credit.. Credit.._


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## aonfocaleile (20 Apr 2006)

Just to say in relation to Angies point above FTBs having the house done up perfectly with the best of everything that it isn't necessarily true of all FTBs. I know couples who, having bought their first property, slept on camp beds for months, had their friends around for 'painting parties' and ate from cardboard boxes disguised as 'retro furniture' (i.e. covered with sheets) etc until they could gradually afford to finish their homes. These people are probably the minority though but I wanted to make the point that its not all roses in the garden for FTBs.


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## Eurofan (20 Apr 2006)

aonfocaleile said:
			
		

> These people are probably the minority though but I wanted to make the point that its not all roses in the garden for FTBs.


Yup i slept on a bloody sun lounger for a couple of months while saving for a bed though i bought about 7 years ago.

Of the two most recent ftbs i know one is working 3 nights a week in the local pub collecting glasses and bringing drinks to tables to break even each month (This in addition to a normal permanent job that pays about €35k). The other has a bed but is using donated stools as the only living room furniture until finances improve.

Two others who bought last year have just remortgaged to repay their credit card debts (used to furnish the houses) and credit union loans (used for deposits) but will still happily tell anyone who's interested how they've _made_ €40k profit since they bought.


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## Flower Girl (26 Apr 2006)

If I was starting now I wouldn't be buying a three-bed in the sticks - I'd buy an apartment near my work with any owner occupier tax breaks I could get.

I don't get the obsession of young people or newly weds having to have a family home from day one...what's that all about?

Property and your primary home is a great CG tax free investment. No-one will ever lend you that sort of money for any other investment.

So yes, do it. But do it as smart as possible to start with.


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## CN624 (27 Apr 2006)

aonfocaleile said:
			
		

> Just to say in relation to Angies point above FTBs having the house done up perfectly with the best of everything that it isn't necessarily true of all FTBs. I know couples who, having bought their first property, slept on camp beds for months, had their friends around for 'painting parties' and ate from cardboard boxes disguised as 'retro furniture' (i.e. covered with sheets) etc until they could gradually afford to finish their homes. These people are probably the minority though but I wanted to make the point that its not all roses in the garden for FTBs.



I'm sure there are those couples but I haven't seen any in a while. To do something like that would be to 'kill one's social standing in the community.'
If one doesn't have a 52" tv isn't one slumming it these days?? 

I know of one girl who has bought a 4,500 euro fridge (And shes only a poorly paid teacher. So why don't we all have one? Rant over, back to the thread) 

Whereas back in the 'good old days' most people did a little saving before they bought everything for their house cheap credit & a me me me, now now now, attitude means that people consume today, pay tomorrow.

How many 2006 Opels Astras have you seen on the roads recently? But the thing about them is they are 'free'. Well until next year after the SSIA payout anyway. Not that everyone thats got one has the luxury of an SSIA to fall back on. A couple of the people I know are just going to get a top up on the mortgage to pay for the car, "sure you won't notice it" on the mortgage over 30 years. 

This is from people who are saving for weddings and building houses with walk in wardrobes and en-suites in every room. 

If one of them loses their job or gets ill for one month and can't work they are instantly in debt. They don't have a safety net. 

Are the Jones's worth keeping up with?


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## Eurofan (27 Apr 2006)

CN624 said:
			
		

> I A couple of the people I know are just going to get a top up on the mortgage to pay for the car, "sure you won't notice it" on the mortgage over 30 years.


The number of times i've heard this in the last year or so in particular is amazing, even more so the number of people who've told me *"We've just gotton rid of all our debts"* by remortgaging....


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## Glenbhoy (27 Apr 2006)

> The number of times i've heard this in the last year or so in particular is amazing, even more so the number of people who've told me *"We've just gotton rid of all our debts"* by remortgaging....


Yeah, there are a helluva lot of people in this boat, but by definition these are not FTB's - as the banks are'nt that keen on releasing equity on the 2 bed duplex in the the sticks!!
The people I know releasing equity are the people who bought 10 yrs ago, they release equity for the car, for the creche, for the holidays, for the conservatory, for the whirlpool bath........
And sure feck it, it's a life style choice for them - if people want the extra debt then why not, it's not for fuddy duddy conservatives like us to criticise (and I do mean that) (of course some people have no choice, as given the near impossibility of surviving on one income these days they may have to fund their relatively frugal life somehow).


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## bearishbull (27 Apr 2006)

Thing is vast majority dont realise the extra cost of buying consumables that will be gone/obsolete over the longer period of 20-30 years.
on the question in hand,its far harder for young buyers nowadays,my fathers generation could afford a decent house in a good suburb on a single average wage over 20 years and not a box in outskirts of dublin with two full wages over 30 or 35 years like nowadays.


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## Eurofan (30 Apr 2006)

Glenbhoy said:
			
		

> The people I know releasing equity are the people who bought 10 yrs ago, they release equity for the car, for the creche, for the holidays, for the conservatory, for the whirlpool bath........


Most of the people i know who are releasing equity have only bought in the last few years, the most recent of whom did so to clear the credit union & credit card debts used to fund the deposit and furnishings, install decking plus another few grand on completely superfluous rubbish within the house.

As far as they're concerned they've now 'cleared their debts', despite taking only weeks to run up another grand or so on the freshly cleared credit card.

They'll still quite happily brag over dinner out how they've already 'made €30k on the house' in the year since they bought it.

They're far from alone. Many of my own peers (i'm 30) seem to be of the same mentality. I know personally another girl who has remortgaged every year for the last three years in order to fund a lavish lifestyle of 'bling' purchases including buying a racehorse with her brother.

Most of them believe sincerely they've _earned_ the amounts somehow and none give a second thought to the long term repayments. I've long given up on voicing any opinion to the contrary as it just creates tension.

I honestly find it bloody scary to be frank. I've had experience of debt in the past when i had difficulty maintaining repayments and i have a sick stomach just thinking of it.

I honestly couldn't sleep at night taking on the debts many young people have today.


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## Glenbhoy (1 May 2006)

> Most of the people i know who are releasing equity have only bought in the last few years, the most recent of whom did so to clear the credit union & credit card debts used to fund the deposit and furnishings, install decking plus another few grand on completely superfluous rubbish within the house.


Maybe, but do banks not tend to release equity only up to LTV's of about 80%? (I don't know, but thought I read it somewhere recently, and that certainly used to be the case).


> I know personally another girl who has remortgaged every year for the last three years in order to fund a lavish lifestyle of 'bling' purchases including buying a racehorse with her brother.


In fairness, I like her style!!  May have higher maintenance costs than the outdoor jacuzzi, but at least it's cool!!


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## Eurofan (1 May 2006)

Glenbhoy said:
			
		

> Maybe, but do banks not tend to release equity only up to LTV's of about 80%? (I don't know, but thought I read it somewhere recently, and that certainly used to be the case).



Never heard of that, but everyone i know bought at 90% or 92% and remortgaged as soon as they could arrange a suitablely higher valuation, in the 'decking etc' case that was less than a year (via EBS if it matters).


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## autumnleaf (4 May 2006)

woods said:
			
		

> As one of the more mature (had my first house in 1975) here I will have to say yes but only if I was married. I dont think that I would worry about it if I was single.


 
This assumes that you would get married one day and that you would stay married once you were! What if you were, say, 35 and still unmarried? Or just divorced and your other half got the house? Would you still hold out for Mr/Miss Right before buying or would you take the plunge?


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## woods (4 May 2006)

autumnleaf said:
			
		

> This assumes that you would get married one day and that you would stay married once you were! What if you were, say, 35 and still unmarried? Or just divorced and your other half got the house? Would you still hold out for Mr/Miss Right before buying or would you take the plunge?


Point taken. I was just reflecting on my own circumstances at the time that I got my first house and it was unheard of for single people to go out and deliberatly get a house at my age. The question was "would we do the same again"
Even though we were married one of us was under 21 and had to get parents to sign to say that they did not object to us getting a mortgage as the age of consent had not been lowered.


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## autumnleaf (10 May 2006)

It’s interesting because I also used to assume that houses and marriage went together like a horse and carriage. In the mid-90s an unmarried work colleague in her late 20s bought an apt in Dublin. I remember thinking it a bit unusual at the time. As it turned out it was a smart move. I’ve lost touch with her since but I assume she didn’t regret it. Whereas the only time I considered buying a place was when I was in a serious relationship (actually got to the "looking at estate agent windows together" stage) and sometimes I worry this has led me to miss the boat (on the property, not the marriage thing!)

I’ve noticed in recent years that a lot more single people (men and women) of all ages are buying places. I wonder if this is one of the factors pushing up demand. OK, some are buying with a friend or sibling but others are buying alone, and obviously this means a larger number of single-person dwellings.


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## Jeanne (25 May 2006)

autumnleaf said:
			
		

> It’s interesting because I also used to assume that houses and marriage went together like a horse and carriage. In the mid-90s an unmarried work colleague in her late 20s bought an apt in Dublin. I remember thinking it a bit unusual at the time. As it turned out it was a smart move. I’ve lost touch with her since but I assume she didn’t regret it.


 
Hey, might be worth your while to look her up now. That was a smart move on her part. She probably bought it for a song. If she's still there  you could be on to a good thing.


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## Summer (31 May 2006)

I am a mature home owner. (40 +) My current home is "valued" at a sum which I could never afford to buy on my salary.
Equity is not cash.
My concern for anyone purchasing a home at the current levels is if they are mid thirties and take out a forty year mortgage. Will they still be working when they are 70 - 75? Most companies like young profiles. Have a look around your office! I know in mine (private company) sixty would be stretching it.
Or if they wait until they are forty to start a family. (Having bought their home at thirty five). Will they be elderly parents with all the associated risks?
Just my thoughts on the question.
I would not encourage my children to buy while there is an asset (property) bubble.


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## Grizzly (6 Jun 2006)

When I purchased my first house back in 1975 it had been on the market for a year, there were no buyers about. In fact I remember as a buyer there was a shortage of houses available. People couldn't sell so they didn't bother to try and sell them. It cost me £7k.
Six years later I put this house on the market I couldn't sell it for 6 months. I eventually sold it for £26.5k after great difficulty. It had gone up in value in six years by about 3.75 times. 
I purchased my next house for £42.5k, kept it for 13 years and again had difficulty selling it. Eventually sold it for £95k, but the thing is it had only increased by 2.25 times in 13 years.
Look at my present house, since purchasing it, it has increased in value by 11 times its purchase price in 11 years.
Absolutely crazy stuff. I am absolutely certain that those difficult to sell times are coming around again. I would not recommend anybody to purchase a house. Having to sit on a 40 year mortgage, with no capital appreciation and a glut of people waiting to sell. Why?


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## SidTheDweeb (6 Jun 2006)

Grizzly said:
			
		

> When I purchased my first house back in 1975 it had been on the market for a year, there were no buyers about. In fact I remember as a buyer there was a shortage of houses available. People couldn't sell so they didn't bother to try and sell them. It cost me £7k.
> Six years later I put this house on the market I couldn't sell it for 6 months. I eventually sold it for £26.5k after great difficulty. It had gone up in value in six years by about 3.75 times.
> I purchased my next house for £42.5k, kept it for 13 years and again had difficulty selling it. Eventually sold it for £95k, but the thing is it had only increased by 2.25 times in 13 years.
> Look at my present house, since purchasing it, it has increased in value by 11 times its purchase price in 11 years.
> Absolutely crazy stuff. I am absolutely certain that those difficult to sell times are coming around again. I would not recommend anybody to purchase a house. Having to sit on a 40 year mortgage, with no capital appreciation and a glut of people waiting to sell. Why?



What was inflation during those same periods?


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## darex (6 Jun 2006)

Summer said:
			
		

> My concern for anyone purchasing a home at the current levels is if they are mid thirties and take out a forty year mortgage. Will they still be working when they are 70 - 75? Most companies like young profiles. Have a look around your office! I know in mine (private company) sixty would be stretching it.
> Or if they wait until they are forty to start a family. (Having bought their home at thirty five). Will they be elderly parents with all the associated risks?
> Just my thoughts on the question.



The term of the mortgage can't be longer than (65 - your age), so if you are 35 then you can only get a 30 year mortgage


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## beattie (6 Jun 2006)

darex said:
			
		

> The term of the mortgage can't be longer than (65 - your age), so if you are 35 then you can only get a 30 year mortgage


 

Are you sure about that? I would have thought that banks would have circumvented that rule by now


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## yygaurav (6 Jun 2006)

It was possible to get 90 years mortage in Japan in good days.

[broken link removed]


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## liteweight (20 Jun 2006)

soma said:
			
		

> What was the inflation rate..? Interest Rates are meaningless without an inflation context. Plus the size of the loans most definitely matter (we are in the age of the jumbo mortgage as you know), I seriously doubt anyone in the 70s or 80s lost much sleep over a 0.25% increase ,whereas it's a cause of concern for alot of recent buyers these days because of the mammoth amounts being compounded over 35-40 years instead of 15-20 years.



I bought first house in 1978 for 19,600 and was only allowed to borrow 15k. One month later a friend bought three doors down from me at 23k! We rushed to buy because of escalating house prices. Interest rates went through the roof with the result that repayments were approx 600 while main earner made 650 a month. Both had to work..believe me we lost a lot of sleep!


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## lukegriffen (20 Jun 2006)

Flower Girl said:
			
		

> I don't get the obsession of young people or newly weds having to have a family home from day one...what's that all about?.



Growing up in late 80s & 90s no-one bothered about buying a house when in their 20s (unless they were getting married).  That was because the price was the same from one year to the next (until circa 95) so people could take their time, do their thing, rent & house-share & have a laugh, safe in the knowledge that when they decide that they want to buy a house, it'll be at a similar price.
Now people are totally focused on property because of the huge pressure to buy now because prices have kept increasing for past 11 years. 
But if prices had been rising by 10% a year back then, I'm sure everyone would have been just as obsessed as young people now.


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## Butter (26 Jun 2006)

I really think that a huge number of young people (20s and early 30s) are funding their lifestyle purely on credit (credit cards, credit union loans to pay off the credit cards, remortgaging the house etc etc).
That's not so bad when you are a young couple enjoying life, but I'm afraid all the debt will come back to haunt people.  What happens when kids come along?  Then the choice is do both parents continue to work and pay out €1000 a month in childcare?  In a lot of cases that's on top of a mortgage that could be somewhere between €1500 and €2000 a month.  When child number two comes along childcare can be anywhere from €1500 to €2000 a month.  Your outgoings then are between €3000-€4000 a month before you even buy a loaf of bread. I know from experience about that situation as we are in our early thirties, two kids and a large mortgage and not a whole lot left at the end of the month.  I look at the spending that is going on in Ireland at the moment and am truely astonished.   Where is it all coming from???


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## SemperFi (6 Jul 2006)

I blame the parents ...


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## liteweight (6 Jul 2006)

SemperFi said:
			
		

> I blame the parents ...



that's alright......we're used to it!


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