that has to be a good thing then
No area will be saved from falling prices anyway IMO.
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that has to be a good thing then
No area will be saved from falling prices anyway IMO.
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phoenix_n
Guest
No area will be saved from falling prices anyway IMO.
Except Good Red-Terrace,Victorian etc (not so much the small ones though) houses within walking distance of the city centre. They will take a slight hit but there will be a trend to go for more period property with no commuting so these will be desirable. In fact if certain properties fell within my bracket in say Glasnevin i would re-enter the market.
But any apartment not within easy commute of Dublin will take,IMO, a massive hit.
H
Harrogate
Guest
Bubbles are typically defined as markets departing from historical norms ...
(eg House price to rent and house price to salary ratios greater than ever before)
With buyers over-focussed on short-term capital gains!
In the Uk and Australia both of these ratios are about 40% ABOVE the 1970-2000 average and in Spain about 100%.........
and Germany and Japan both 30% BELOW ...
No figures for ireland but i reckon similar to Spain....
Why the heck aren't the Irish investing in German property?......You can buy a castle in the former GDR
(eg House price to rent and house price to salary ratios greater than ever before)
With buyers over-focussed on short-term capital gains!
In the Uk and Australia both of these ratios are about 40% ABOVE the 1970-2000 average and in Spain about 100%.........
and Germany and Japan both 30% BELOW ...
No figures for ireland but i reckon similar to Spain....
Why the heck aren't the Irish investing in German property?......You can buy a castle in the former GDR
I disagree - many of the Good Red-Terrace,Victorian etc have been bid up in recent years by wannabe new money types taking on massive IO mortgages to "secure" their trophy home. Also - people who trade up to these properties will be selling something which will be worth far less.
The Irish property market feeds on itself so once the lower end goes, everything else will be affected IMO.
I don't think there will investment opportunities for a few years yet. However, anyone thinking of buying now for a home to live in would do well to look at the U.S.
Buyers in the formerly "hot" areas like Miami, Las Vegas and San Francisco are getting to drive some incredible bargains (albeit driving the bargains from an originally inflated price).
When Bovale start throwing in a free swimming pool with their new builds or distressed sellers are offering a free Mercedes with their house, then it might be worth buying ...
Buyers in the formerly "hot" areas like Miami, Las Vegas and San Francisco are getting to drive some incredible bargains (albeit driving the bargains from an originally inflated price).
When Bovale start throwing in a free swimming pool with their new builds or distressed sellers are offering a free Mercedes with their house, then it might be worth buying ...
Not quite, when making such comparisons it's probably better to actually compare like with like, the total mortgage repayment is not comparable with rent, only the interest element, the interest element is circa 1100 per month, in the initial years, dropping substantially in the later years at which time rent will undoubtedly have increased (inflation at worst).Northside: 2 bed apartment? Looks like it's definitely cheaper not to buy....
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Repayments on 365,000 over 35 years = about €1700/month
To rent the same property is only €1150/month
www.daft.ie/217008
So landlord subsidises tenant to the tune of €550/month = €6,600/year!
Far cheaper to rent than to buy
Hence, for the time being buying is cheaper.
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phoenix_n
Guest
I agree that these houses went for silly prices because they're trophy homes, however these are exactly the type of people who would have no need to sell. Remember, when you purchase a property for €15m, you probably haven't got a 100% mortgage
See if you start only comparing the interest component of a mortgage then you must also consider the cash flow benfits of renting. If your boiler breaks when you own a house, you don't call a plumber, you call your landlord. Likewise when renting you avoid management charges, insurance and so forth.
The renter can then put this extra cash-flow to work and invest it over a number of years, paying a large lumpsum upfront when re-entering the property market as the rent-to-mortgage ratio returns to a more historical norm.
I agree that these houses went for silly prices because they're trophy homes, however these are exactly the type of people who would have no need to sell. Remember, when you purchase a property for €15m, you probably haven't got a 100% mortgage
True but these houses also end up on the market from probate etc.
The question will be - who's going to buy them not who's going to sell!
Plenty of people are (were) taking out huge IO mortgages on expensive property, these will be hit by rising interest rates and the realisation that capital appreciation is no longer a reality.
Not quite - amortized over 35 years, the initial interest payments are about €1250 / month....and that's BEFORE interest rates rise - twice again before Christmas
...and as room305 points out, cash-flow is an additional benefit to the renter plus no additional costs on the property!
While Ireland attempts to base its risky economy on residents selling the same little bits of land and bricks to each other at ever increasing prices, Germany surges ahead with da fundamentals.
Germany is the world's top machine manufacturer.
Germany is the world's top machine manufacturer.
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phoenix_n
Guest
565K. Some people are gonna get burned badly.
Not only that - the service that comes with it is *************************! As member of a medical research team some years ago I was responsible for ordering a piece of equipment from Germany. Not only was it superb, delivered on time but with one of the firm's agents to train the technicians who would use it........thrown in gratis as part of the sale! The ordering and lead-up (which I had been scared witless about as I don't know German and specifications were technical and precise) was effortless as communication was excellent; all their personel spoke fluent English. Its not just the stuff - they have perfected the whole package.
Not quite - amortized over 35 years, the initial interest payments are about €1250 / month....and that's BEFORE interest rates rise - twice again before Christmas
...and as room305 points out, cash-flow is an additional benefit to the renter plus no additional costs on the property!
Okay, i checked it is €1250, so in y1 you'd be better off to the tune of €100 p.m.
And I appreciate that there are some cashflow benefits to renting, but it seems to me that you're all neglecting that by yr 20 for example, interest is €770 per month, whilst rent is likely to be approx. (pretending 2.5% p.a increase for 10 of the 20 yrs - very generous I feel) €1500 per month. Indeed for the majority of the years in question rent will far exceed mortgage interest repayments. In addition your capital repayments are open to appreciation at some indeterminant rate, which is likely to be equal to that gained on other investments (see discussion yesterday).
And finally, you mention interest rate rises, we don't know what will happen, one shouldn't try and second guess, however granted signs are that there will be 2 more 0.25% increases pre christmas. After that they're as likely to go down as up, we don't know. IR rises are a double edged sword in any case, in the longer term, higher interest rates tend to keep people renting rather than buying, thus rents may appreciate at a quicker rate.
In summation, i do not accept that it is cheaper to rent than buy, simply because the facts prove that it is not.
Sounds like a contradiction to me!
Ah - but that's just speculation - we're talking about right now.
And....right now it's cheaper to rent: "better off to the tune of €100 p.m" as you put it
And in 2 years time you will be better off buying than renting to the tune of €10 per month, and this margin will increase for every year of your mortgage term.And....right now it's cheaper to rent: "better off to the tune of €100 p.m" as you put it
I made my argument, i addressed all your points, maybe we should just agree to disagree. You've obviously got it into your head that it's cheaper to rent than buy in this country, no matter where. Undoubtedly it is in some area's, but not everywhere.
Finally, can anyone show me area's where rents have fallen in the past year, as from anecdotal evidence i have only seen increases.
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phoenix_n
Guest
When taken into account predicted capital depreciation it is far cheaper at the moment to rent.
And the only way this can happen is if the mortgage holder pumps €500 extra per month into the mortgage on top of interest!
I think it is, unfortunately I have no choice but to trade up - Mrs. Whathome is insisting on it
The facts say it all - right now it's cheaper to rent!
Rents have increased marginally over the past year according to Daft.
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