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Buying a house!! Will price go down?!!!

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    #62
    ntlbell
    Registered Users Posts: 16,288 ✭✭✭✭ntlbell


    drunk_monk wrote: »
    Well I lived in what I thought were nice places in Kilmacud, Stilorgan, Clonskeagh. Problems only appeared once we had moved in. These were not cheap places either between €1000 - 1250 a month. What I'm trying to say is if something goes wrong then your more than likely in for a bad time trying to get it fixed.

    hold back paying the rent and see how quick it gets fixed


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    #63
    Sarn
    Registered Users Posts: 3,060 ✭✭✭Sarn


    At the moment, holding off buying a house and renting, in my mind makes sense. I don't think most people here are advocating renting for 20 - 30 years.

    Renting for a year, paying a €1k a month in a great location, while a property I'm interested in (potentially) drops a further €30 - 40k, while at the same time building up that lump sum is IMHO a no brainer.


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    #64
    Chris007
    Closed Accounts Posts: 163 ✭✭Chris007


    If you can hold out for a while prices probably will drop to something more reasonable and realistic due to the credit crunch and subsequent lack of demand in the housing industry. ..Here's hoping!! :p


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    #65
    Gurgle
    Closed Accounts Posts: 5,064 ✭✭✭Gurgle


    Karlrove wrote: »
    Thinking ofbuying a house. Its listed at 410k, Had alook...its woirth bout 375-380, Ive been told the prices will continue to go down,when do you think is a good time to buy...if anyone works in this sector it would be great to hear from you..and anyone else! Thanks

    I depends on what type of house and where.

    If its a great big 5-bed on an acre in Kildare, it should hold its value. If its a 3-bed semi in North Dublin, it will (almost) certainly go down quite a bit.


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    #66
    ravendude
    Registered Users Posts: 584 ✭✭✭ravendude


    SimpleSam06 wrote: »
    Oil prices go up and down based on stock market trends. Potatoes are influenced by oil prices, since that affects the price of the fertiliser the farmer has to truck into his farm and the price of the diesel used in the distribution network. And of course behind it all is the almighty dollar, which dictates inflation more than almost anything else, since most basic commodities are traded internationally in USD (oil, gold, food etc), and when they print more, inflation rises globally as the value of other things is diluted.

    However the point that was being made was that it is quite possible for inflation to increase at 3% per year for 10 years, and rental rates to drop by 10% over the same period. This is because you don't need to supply much of anything to keep a rental property going, its to an extent independent of the greater economic picture.

    SimpleSam is absolutely correct here; High rents in fact tend to lower inflation in the same way that high interest rates do.
    Inflation is determined by a the prices of a defined basket of everyday goods/groceries. If interest rates and/or rent is high (going rent often being indirectly driven by interest rates), people have less money to spend so that basket of goods tends to get cheaper. The converse is also true; if rent/interest is low, people have more disposable income so inflation tends to increase.

    ZYX wrote: »
    Rents go up & down based on supply and demand but then affect inflation .
    Yes, they do, but not in the manner your post suggests, in fact the opposite is true, high rents tend to lower inflation and vice versa. Rent is not included in the basket of goods that determines inflation.


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    #67
    BendiBus
    Closed Accounts Posts: 2,075 ✭✭✭BendiBus


    ravendude wrote: »
    Rent is not included in the basket of goods that determines inflation.

    http://www.cso.ie/releasespublications/documents/prices/current/cpi.pdf

    The services part of the index includes:
    Electricity, gas, telecommunications, alcoholic beverages consumed on licensed premises, meals out, housing, rent, mortgage interest repayments, insurance, public transport, entertainment and recreation, education, household services and miscellaneous services including childcare, social protection, package holidays and other services.


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    #68
    spockety
    Moderators, Education Moderators Posts: 5,452 Mod ✭✭✭✭spockety


    ravendude wrote: »
    SimpleSam is absolutely correct here; High rents in fact tend to lower inflation in the same way that high interest rates do.
    Inflation is determined by a the prices of a defined basket of everyday goods/groceries. If interest rates and/or rent is high (going rent often being indirectly driven by interest rates), people have less money to spend so that basket of goods tends to get cheaper. The converse is also true; if rent/interest is low, people have more disposable income so inflation tends to increase.

    Find me a house in Dublin that is available to rent now at 1200pm. If that house is still 1200pm or less in actual terms in 25 years from now, I will eat my hat and any other hat you put in front of me. Get real.


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    #69
    Kipperhell
    Closed Accounts Posts: 1,477 ✭✭✭Kipperhell


    Rent is an inflationary aspect one way or the other. I don't even vaguely believe that the basket of goods has a direct link in the manner suggested above. To suggest when oranges are cheap rent is high just doesn't sound logical to me.

    As congestion increases I would say rent will certainly go up in property closer to major work centres out performing inflation. There is also the fact that chances are your mortgage versus rental income will have a changing ratio.

    Long term views of property invest are always advisable short term views are always risky. Property is not a flawed investment idea it just require thought beyond the assumption any property has long term rental potential. You should buy with an eye on the future.


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    #70
    phantom_lord
    Registered Users Posts: 10,894 ✭✭✭✭phantom_lord


    i thought this was an interesting thread + article on renting vs buying

    http://forumserver.twoplustwo.com/30/business-finance-investing/renting-vs-owning-45827/

    http://www.smartmoney.com/personal-finance/real-estate/renting-makes-more-financial-sense-than-homeownership-21111/


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    #71
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    spockety wrote: »
    Find me a house in Dublin that is available to rent now at 1200pm. If that house is still 1200pm or less in actual terms in 25 years from now, I will eat my hat and any other hat you put in front of me. Get real.
    While I admit it is extremely unlikely that rents will remain static for the next two and a half decades, that still doesn't guarantee that they will rise in line with inflation, although they will rise over that timeframe, of course.

    We find ourselves in a unique situation in Ireland (it really is different this time, heh) in that we have a massive oversupply of places to buy and places to rent, and the supply is rising. Anecdotally, emigration is rising, although I haven't hard figures on that. Thus by the simple laws of supply and demand, rents will drop, although as kipperhell points out, it won't be a uniform drop, places with easy access to services or public transportation will drop by far less.

    This has an interesting corollary in that good value for buying property (not actual prices) could be to an extent worked out from rental rates for an area, making the real bottom of the market very difficult to work out. All that can be said for sure is that its a good deal lower than today, in my opinion.


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    #72
    Firetrap
    Closed Accounts Posts: 4,442 ✭✭✭Firetrap


    I don't think anyone is suggesting rent forever and ever. When it comes down to it, most people here who are renting would like to buy. The question is when to make that jump.

    The fact that the market isn't moving is an indicator that many people think that houses are overpriced. Yes, the banks aren't dishing out money the way they were but maybe there's more to it than their current financial woes. Could it be, perchance, that they believe that they would be lending someone money to buy a depreciating asset?

    There's also a Mexican stand-off going on. Sellers are trying to keep the prices high. Buyers who aren't in a rush to buy are happily holding off because there's a perception out there that prices will fall further. Sentiment has changed; where once there was a mad panic to buy anything, anywhere just to get on the ladder, there's now a sit and wait mentality.

    There's a perception that potential buyers can afford to wait it out better than sellers. There are people out there really feeling the pinch and are selling in order to cut their losses and to get expensive houses off their hands. Interesting times.


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    #73
    ZYX
    Registered Users Posts: 882 ✭✭✭ZYX


    SimpleSam06 wrote: »
    While I admit it is extremely unlikely that rents will remain static for the next two and a half decades, that still doesn't guarantee that they will rise in line with inflation, although they will rise over that timeframe, of course.

    .
    Which is why I used the example of the price of potatoes. There is no guarantee that the price of potatoes or anything else will rise in line with inflation.


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    #74
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    ZYX wrote: »
    Which is why I used the example of the price of potatoes. There is no guarantee that the price of potatoes or anything else will rise in line with inflation.
    Great, well let me know when you start paying people to grow BTL properties on a farm and delivering them in a diesel fueled truck. ;) Seriously, I'd like to see that.


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