Why buy a house when it won't be worth 2009 prices again until 2020

bobbiw

would you buy a house today.

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

southofnowhere

bobbiw wrote: »

would you buy a house today.

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

Some people want a home not an investment.

And as long as they are comfortable with the mortgage, they won't mind one bit what it's worth as they have no plans to sell.

And yes they could rent, but some people are the point in their lives where they want to buy a house so they will.

It's life really ain't it, you can't put it on hold.

bobbiw

southofnowhere wrote: »

Some people want a home not an investment.

And as long as they are comfortable with the mortgage, they won't mind one bit what it's worth as they have no plans to sell.

And yes they could rent, but some people are the point in their lives where they want to buy a house so they will.

It's life really ain't it, you can't put it on hold.

I suppose, but its hard to watch a property go down in value when you could hold off.

i think though that people are getting that the party is over. So low balling people is a reality now.

johnnyskeleton

bobbiw wrote: »

would you buy a house today.

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

The real question is why aren't people selling? I'd buy a house tomorrow if the price tickled my fancy.

Freddie59

Why would you borrow a mortgage now when you may need only to borrow 50% of that amount in two years time? THAT is life really.:)

irlrobins

bobbiw wrote: »

would you buy a house today.

You're relocating for work.

You're getting married and need bigger place.

You now have children and can't fit in a two bed apt.

You want to downsize.

You want to move to an area with less social problems

You can get a bargain.

You've separated from your partner.

You want a holiday home.

You're fed up with the long commute.

Or because at the end of the day, you've done your research, worked on the financials, found a place you like, don't care about negative equity and feel that now the time is right for YOU.

southofnowhere

Freddie59 wrote: »

Why would you borrow a mortgage now when you may need only to borrow 50% of that amount in two years time? THAT is life really.:)

I agree, but (a certain amount of) people will always need and want to buy houses.

Surely you don't expect no house to sell for two years?

And how many people jumped in during the last say six years so they wouldn't have to borrow double in two years time (as they were told in papers, on Internet forums, by their mate down the pub etc) and they are now in big trouble as a result?

So yes prices are dropping and will continue doing so for some time, but everyone's circumstances are different.

jimmycrackcorm

Why buy a new car etc.

gaeilgegrinds

When you love a house as a home the price is nowhere near as much of an issue as those buying for investments may think.

the_syco

bobbiw wrote: »

would you buy a house today.

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

10 years is not that long if you plan to live there for the next 60 years.

Senna

Prices could continue to drop for years and years to come. Even if prices level out they could still be dropping in value when inflation (not deflation) is taken into account. There might never be the perfect time to buy, and if there is chances are you'll only know in hindsight. Of course at the bottom of the market, buying at not the perfect time might only cost you a few grand more.

So if people work out a price that they can comfortably afford, similar to historical house price levels, and see that price now or in 1 year or in 5 years, then that's as good a time to buy as any.
At the moment only people earning big wages (100k+) will see prices at acceptable wage multiples. So if i earned 100k now and seen a house i like for 250k, then what the hell. Irish people love to own their own piece of land, nothing wrong with that as long as your dont lose all sence when buying.

D3PO

jimmycrackcorm wrote: »

Why buy a new car etc.

we have a winner !! Human nature is funny isnt it.

mathie

bobbiw wrote: »

would you buy a house today.

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

Did Marty McFly tell you that on his trip back from 2020?

I just hope you got his Sports Almanac too.

esmeralda

I bought my house a month before the Euro came in. Everyone, including many "experts", told me I was mad because the prices could not possibly gooo any higher and were bound to plummet the second the euro came in but I had seen the flat I wanted after 2 years of looking desparately and nothing was going to stop me.

It doubled in price over the next 4 years, and that doubled price has held if recent sales in my street are anything to go by (it's capital city center).

In short, I have reached the conclusion that nobody ever knows exactly what is going to happen, and what happens after you buy a house is more down to good luck than good management.

It's when it's a good home and a good time for you that counts.

ardmacha

The new car example is a good one. If you buy a one year old car then the cost is only about two thirds of the cost of a new one, but people still buy new ones.

As for houses some people want to trade up, to get a better house in the same area, so would only have to pay the difference, not the full cost of the house. These people's present houses decline in value as the houses they want to buy decline in value.

Also if you people get married and both have houses, whatever value they are, then the new house is just the sum of those, unless they are both in negative equity.

faceman

bobbiw wrote: »

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

Freddie59 wrote: »

Why would you borrow a mortgage now when you may need only to borrow 50% of that amount in two years time? THAT is life really.:)

Where did you get your figures and dates from?

Freddie59

faceman wrote: »

Where did you get your figures and dates from?

At the rate house prices are falling, it is inevitable that they will be worth at least 50% less than what they are worth TODAY.

So, you borrow, say €260k today - when less than half will buy that house for you in two years time. You spend, maybe, €20k on rent in the interim.

A no-brainer really. Hmmm....let's see - borrow €260k or borrow €130k.:rolleyes:

mathie

Freddie59 wrote: »

At the rate house prices are falling, it is inevitable that they will be worth at least 50% less than what they are worth TODAY.

So, you borrow, say €260k today - when less than half will buy that house for you in two years time. You spend, maybe, €20k on rent in the interim.

A no-brainer really. Hmmm....let's see - borrow €260k or borrow €130k.:rolleyes:

So by your calculations just wait twice as long and houses will be free.

BACK OFF THOSE HOUSES ARE MINE!!!111oneone
:rolleyes:

techdiver

bobbiw wrote: »

would you buy a house today.

If you knew that it would not be worth the same amount as you paid for at least 10 year.

Or that within a year it would be worth 20% less than you paid for it.

So why are people still buying.

Because as a nation, we have no sense. People in this country are still obsessed with this notion of owning where they live. They consider rent to be "dead money". Well as far as I'm concerned all the "dead money" I spent was well worth it not to be in the **** that others are in at the moment.

Another point of note that many of these people are probably forgetting. Interest rates are at an historically low point at the moment. As the EU economy improves interest rates will shoot up to combat euro zone inflation regardless of how far behind Ireland is. I hope all these house buyers are aware of this and have factored the future interest rate hikes into their costing over the next few decades.

Fighting Irish

techdiver wrote: »

Another point of note that many of these people are probably forgetting. Interest rates are at an historically low point at the moment. As the EU economy improves interest rates will shoot up to combat euro zone inflation regardless of how far behind Ireland is. I hope all these house buyers are aware of this and have factored the future interest rate hikes into their costing over the next few decades.

but sure that'd be the banks/governments fault

jhegarty

Freddie59 wrote: »

At the rate house prices are falling, it is inevitable that they will be worth at least 50% less than what they are worth TODAY.

So, you borrow, say €260k today - when less than half will buy that house for you in two years time. You spend, maybe, €20k on rent in the interim.

A no-brainer really. Hmmm....let's see - borrow €260k or borrow €130k.:rolleyes:

And at the rate house prices were rising in 2004 there should still be shooting up now.


Past performance is not an ...etc..etc...

SparkyLarks

techdiver wrote: »

Because as a nation, we have no sense. People in this country are still obsessed with this notion of owning where they live. They consider rent to be "dead money". Well as far as I'm concerned all the "dead money" I spent was well worth it not to be in the **** that others are in at the moment.

Another point of note that many of these people are probably forgetting. Interest rates are at an historically low point at the moment. As the EU economy improves interest rates will shoot up to combat euro zone inflation regardless of how far behind Ireland is. I hope all these house buyers are aware of this and have factored the future interest rate hikes into their costing over the next few decades.

so buying now on a fixed intrest rate may end up cheaper in the long run.

As to why buy somewhere now instead of in 2 years time. I want to own where I live , I don;t want to have to worry about changing things, I don;t want to worry what happens if the landlord decides to move into the house i'm in, or move their child in.

also I don;t think house prices are going to fall another 50%. I think economists are getting caught up in predicting the lowest outcome they can. Because I see the Irish economy improving as we return to a real economhy based on exports.

I may be wrong, but so might anybody else, so if you do believe that house prices will fall then hold tough. I'll be enjoying my new house between now and then.

Fighting Irish

SparkyLarks wrote: »

so buying now on a fixed intrest rate may end up cheaper in the long run.

As to why buy somewhere now instead of in 2 years time. I want to own where I live , I don;t want to have to worry about changing things, I don;t want to worry what happens if the landlord decides to move into the house i'm in, or move their child in.

also I don;t think house prices are going to fall another 50%. I think economists are getting caught up in predicting the lowest outcome they can. Because I see the Irish economy improving as we return to a real economhy based on exports.

I may be wrong, but so might anybody else, so if you do believe that house prices will fall then hold tough. I'll be enjoying my new house between now and then.

lol the country is going to sh1t, and it still has a long way to go, house prices will keep falling, i don't think people realise how bad this is

in a way i'm glad all this happened

mathie

Fighting Irish wrote: »

lol the country is going to sh1t, and it still has a long way to go, house prices will keep falling, i don't think people realise how bad this is

in a way i'm glad all this happened

You're enjoying that the country is going to ****?

Unemployment turns you on does it?

Fair play to you.

canalman

20 years ago max loan 2.5 x main earner +100% second earner.
This works out at approx. loan of 150k
House prices could fall to this sensible lending level again.

Fighting Irish

mathie wrote: »

You're enjoying that the country is going to ****?

Unemployment turns you on does it?

Fair play to you.

I was sick of paying way over what i should be paying for stuff and i wasn't looking forward to the taught of buying renting crappy houses that even with a good job would take most of my life to pay off, this sh1t had to stop sooner of later i'm just glad it has finally hit

Fighting Irish

also its all well and good saying you're buying a house to live in not to make money off, and you can afford the mortgage etc etc but if you can you might as well wait a while, prices are dropping as we speak. imagine only having to pay half the amount per month for your mortgage if you wait a while

faceman

Fighting Irish wrote: »

lol the country is going to sh1t, and it still has a long way to go, house prices will keep falling, i don't think people realise how bad this is

in a way i'm glad all this happened

Why are you glad? Thats an uneducated, idiotic statement to make.

techdiver

faceman wrote: »

Why are you glad? Thats an uneducated, idiotic statement to make.

I think he answered it with the following.

Fighting Irish wrote: »

I was sick of paying way over what i should be paying for stuff and i wasn't looking forward to the taught of buying renting crappy houses that even with a good job would take most of my life to pay off, this sh1t had to stop sooner of later i'm just glad it has finally hit

bobbiw

The idea that you should borrow 2.5 times your salary is crap.

If I make 200k a year that means I take home around 12k a month.

A 500k mortgage will cost me around 3k a month. Leaving me with 9k a month to spend.

Now if I make 20k a year that might make sense but the more you make the less it does.

As for prices falling, they will continue to. The houses that are the most secure are the older ones believe it or not. Good 70s and 80s built 3-4 bed semi or detached homes are more desireable and better built than the crap that builders put out in the last decade.

So not everything will drop by 50%.

But a lot will, you are going to see a lot more 5 figure sales in the next 2-3 years than in the last 20 and that wont just be apartments.

ntlbell

bobbiw wrote: »

The idea that you should borrow 2.5 times your salary is crap.

If I make 200k a year that means I take home around 12k a month.

A 500k mortgage will cost me around 3k a month. Leaving me with 9k a month to spend.

Now if I make 20k a year that might make sense but the more you make the less it does.

As for prices falling, they will continue to. The houses that are the most secure are the older ones believe it or not. Good 70s and 80s built 3-4 bed semi or detached homes are more desireable and better built than the crap that builders put out in the last decade.

So not everything will drop by 50%.

But a lot will, you are going to see a lot more 5 figure sales in the next 2-3 years than in the last 20 and that wont just be apartments.

the X times your wages is usually used for low to middle income

obviously if you making hundreds of thousands or millions it's a pointless.

it's not to be used as definitive guide as has been said more times two people on 35k could have completely different lifestyle wants/choices disposable income etc

but it's impossible for a bank to work all this out

so untill people start PROVING what they can afford banks have to gague on multiples of incomes

this is not a complicated concept and talking about people earning hundreds of thousands and then comparing it is utter nonsense.

Mugatu

It baffles me how people can say with confidence they know eaxctly what % will be taken off houses in 12 months. At the minute houses are falling in value by 1% a month meaning a maximum of -12% this time next year. On top of that daft have reported the rate of decline has slowed a lot since the end of last year. Housing stock in Dublin is decresing according to daft watch. Yet some people claim for a "fact" houses will be 20 - 50% cheaper next year.

As for the 50% from today. What house, what location, what price difference between now and the peak of 06/07, is it an apartment can the poeple actually sell in that much NE..... etc etc.

statss

Mugatu wrote: »

It baffles me how people can say with confidence they know eaxctly what % will be taken off houses in 12 months. At the minute houses are falling in value by 1% a month meaning a maximum of -12% this time next year. On top of that daft have reported the rate of decline has slowed a lot since the end of last year. Housing stock in Dublin is decresing according to daft watch. Yet some people claim for a "fact" houses will be 20 - 50% cheaper next year.

As for the 50% from today. What house, what location, what price difference between now and the peak of 06/07, is it an apartment can the poeple actually sell in that much NE..... etc etc.

how could trust daft? they rely house sales.

Senna

Mugatu wrote: »

It baffles me how people can say with confidence they know eaxctly what % will be taken off houses in 12 months. At the minute houses are falling in value by 1% a month meaning a maximum of -12% this time next year. On top of that daft have reported the rate of decline has slowed a lot since the end of last year. Housing stock in Dublin is decresing according to daft watch. Yet some people claim for a "fact" houses will be 20 - 50% cheaper next year.

As for the 50% from today. What house, what location, what price difference between now and the peak of 06/07, is it an apartment can the poeple actually sell in that much NE..... etc etc.

Asking prices may be dropping by 1% but selling prices are dropping by much more, making daft reports interesting but pretty much worthless. Alot of houses are being pulled by canny sellers to rent instead. They stay on the rented market for a few months until canny realizes that it wont rent either then it pops up on daft again, i'd expect more of these over the next 3 months.

The average house price is still 270k (open to correction, cant be bothered looking), that includes a hell of a lot of 1&2 bed flats and houses in unsuitable locations. Average wages are dropping also. 32k would be a fairly average wage to take as an example, if we say 4 times average wage that an average price of 128k or nearly half the current rates. 4x average wage is generous, but it justifies many peoples belief that we have another 50% to go. In my own personal view the average house prices (statistics of country, not any one particular house) will be around 100k in todays money when the market bottoms out.

giftgrub

I've been renting for the last ten years and am about to buy my first home

I liked renting, the good thing is you can live almost anywhere you want

However personal circumstances chance, married now, with a baby

Our house cost 450k late last year, we're getting it for 315k

If it drops so be it, we can afford the mortgage, and we have a home of our, barring the arrival of triplets anytime soon we wont be moving!!

am i bovvered

Senna wrote: »

32k would be a fairly average wage to take as an example, if we say 4 times average wage that an average price of 128k or nearly half the current rates. 4x average wage is generous, but it justifies many peoples belief that we have another 50% to go.

I am no expert but this is a Q I have always wondered...
Traditionally banks took between 3~5 times a persons salary into account for a mortgage, but that was set at a time when the norm was that every home had only one income. Nowadays almost every home has two incomes, so at 32k that would mean 64k. Even if we call that figure 50k x 4 = 200k.

I am not talking the market up or down... I do not know... my feelling is there is still away to go before the bottom but not as far as some here predict.

Freddie59

mathie wrote: »

So by your calculations just wait twice as long and houses will be free.:

Remember where you heard it first.;):D

bobbiw

I dont think prices will be free. A lot depends on the credit market though.

Less people are qualifying for loans now. You need to think about the mentality that people are going to go through.

Just like people previously would buy a shed to get on the property ladder, now they will be scared because of the talk of negative equity.

No one wants to buy a house today for 300k and have it 270 before the end of the year.

People will start to think that they are better off with 20k profit than to hold on and not be able to sell. The mega estates of poor quality housing will be hit hard.

Apartments will be hit badly as well.

Location may be a part of it but overall prices have to come down. Ireland is not the economic powerhouse that it was.

Amazing that it went from being the best economy in europe (or the world) to being the biggest cautionary tale.

Goverment were foolish not to prepare for this. But then again they had never had prosperity and I doubt they are that bright.

Fighting Irish

faceman wrote: »

Why are you glad? Thats an uneducated, idiotic statement to make.

Because everything was over priced

Fighting Irish

Mugatu wrote: »

It baffles me how people can say with confidence they know eaxctly what % will be taken off houses in 12 months. At the minute houses are falling in value by 1% a month meaning a maximum of -12% this time next year. On top of that daft have reported the rate of decline has slowed a lot since the end of last year. Housing stock in Dublin is decresing according to daft watch. Yet some people claim for a "fact" houses will be 20 - 50% cheaper next year.

As for the 50% from today. What house, what location, what price difference between now and the peak of 06/07, is it an apartment can the poeple actually sell in that much NE..... etc etc.

I think Dublin house prices are always going to be different than the rest of the country, same with other major cities/countries

Senna

am i bovvered wrote: »

but that was set at a time when the norm was that every home had only one income. Nowadays almost every home has two incomes,

But so many couples both had to work just to afford a mortgage. If houses were at a traditional levels (which they will be) many husbands or wife's can afford to stay at home and look after the kids, rather than working to pay a mortgage and childcare.
With our high unemployment levels i think a one earner family will be the norm of those that purchase houses after the bust.

ntlbell

am i bovvered wrote: »

I am no expert but this is a Q I have always wondered...
Traditionally banks took between 3~5 times a persons salary into account for a mortgage, but that was set at a time when the norm was that every home had only one income. Nowadays almost every home has two incomes, so at 32k that would mean 64k. Even if we call that figure 50k x 4 = 200k.

I am not talking the market up or down... I do not know... my feelling is there is still away to go before the bottom but not as far as some here predict.

not true.

usually one of the incomes will be dropped at some point be it having kids etc.

when they have kids they have huge costs like creche fee's child minder fee's which can eat a huge amount of one of the incomes

again it's not as simple as X amount wages you need to work out what YOU can afford based on your circumstances and lifestyle choices a bank cant do this for you

mrgaa1

http://news.bbc.co.uk/1/hi/business/8062926.stm
http://news.bbc.co.uk/1/hi/business/8063520.stm

Some interesting news from Asia.

We all became property speculators - and property investors. So now that most of those are gone the real investors are starting to move in and buy the bargains that are available. These are the people who see the long term viability of property - not just housing but commercial. And who says house prices will take ten years to come back - who knows whats going to happen? One thing is for absolute sure house prices will rise as it costs a lot more now to build them and materials such as plasterboard, plastics, tiles etc... are all rising - 10% this year alone and another increase coming. So those who are doing renovations will see these prices - labour may come down but not a whole pile.

CiaranC

mrgaa1 wrote: »

And who says house prices will take ten years to come back - who knows whats going to happen?

Its nearly 20 years in Japan and they havent "come back"

Freddie59

mrgaa1 wrote: »

And who says house prices will take ten years to come back - who knows whats going to happen? One thing is for absolute sure house prices will rise as it costs a lot more now to build them and materials such as plasterboard, plastics, tiles etc... are all rising - 10% this year alone and another increase coming. So those who are doing renovations will see these prices - labour may come down but not a whole pile.

I asked you before - are you a developer/employed in the construction industry?

House prices will rise, you say. When? After they've tumbled to historic lows is te bit you've conveniently left out.

And the price of materials? This will not dictate the price of houses. The market will. End of story.

Fighting Irish

mrgaa1 wrote: »

http://news.bbc.co.uk/1/hi/business/8062926.stm
http://news.bbc.co.uk/1/hi/business/8063520.stm

Some interesting news from Asia.

We all became property speculators - and property investors. So now that most of those are gone the real investors are starting to move in and buy the bargains that are available. These are the people who see the long term viability of property - not just housing but commercial. And who says house prices will take ten years to come back - who knows whats going to happen? One thing is for absolute sure house prices will rise as it costs a lot more now to build them and materials such as plasterboard, plastics, tiles etc... are all rising - 10% this year alone and another increase coming. So those who are doing renovations will see these prices - labour may come down but not a whole pile.

:rolleyes:

gurramok

Good logic.

They will rise again very soon according to mrgaa1. Now, hardly any Irish based citizens are buying at todays prices primarily because of affordability\job problems\budget eating wages etc, so who will buy all these expensive houses?

International investors who see bargains in the Irish market? :P

mrgaa1

Freddie59 wrote: »

And the price of materials? This will not dictate the price of houses. The market will. End of story.

This statement has to be the funniest thing I've ever read. If you buy materials that cost - lets say €100 - and you pay someone €30 to use them - BTW thats €100+€30 = €130 - now you would add some profit - lets say 5% so thats €6.50 and we add those figures together we get €139.50. And you go to sell it - why would any sane person sell for less than this? You have to pay the supplier of the materials and you have to pay the person who used them. Profit has to be made - normally you'd cost in your other items such as insurance, utility bills etc.. which I haven't done in this instance.
Don't give me the usual rubbish about market conditions - everything has a cost that it just can't go below. Its not financially viable. So materials, labour, insurance, health & safety (this includes scaffolding, PPE, machines in reasonable order, toolbox talks, risk assessments etc..), tea hut, storage hut, toilet & wash facilities, van(s) &/or lorry(s), diesel, tools, bank facilities, tax man, VAT man all have costs that have to be met.
Market conditions are only viable to the point where its not viable to sell at a cost less than what it costs to cover all expenditure. This is what business is about - covering your costs.

Fighting Irish

mrgaa1 wrote: »

This statement has to be the funniest thing I've ever read. If you buy materials that cost - lets say €100 - and you pay someone €30 to use them - BTW thats €100+€30 = €130 - now you would add some profit - lets say 5% so thats €6.50 and we add those figures together we get €139.50. And you go to sell it - why would any sane person sell for less than this? You have to pay the supplier of the materials and you have to pay the person who used them. Profit has to be made - normally you'd cost in your other items such as insurance, utility bills etc.. which I haven't done in this instance.
Don't give me the usual rubbish about market conditions - everything has a cost that it just can't go below. Its not financially viable. So materials, labour, insurance, health & safety (this includes scaffolding, PPE, machines in reasonable order, toolbox talks, risk assessments etc..), tea hut, storage hut, toilet & wash facilities, van(s) &/or lorry(s), diesel, tools, bank facilities, tax man, VAT man all have costs that have to be met.
Market conditions are only viable to the point where its not viable to sell at a cost less than what it costs to cover all expenditure. This is what business is about - covering your costs.

Materials won't go down in price


EVERYTHING in Ireland was/is overpriced, everyone was kidding themselves

jape

mrgaa1 wrote: »

This statement has to be the funniest thing I've ever read. If you buy materials that cost - lets say €100 - and you pay someone €30 to use them - BTW thats €100+€30 = €130 - now you would add some profit - lets say 5% so thats €6.50 and we add those figures together we get €139.50. And you go to sell it - why would any sane person sell for less than this? You have to pay the supplier of the materials and you have to pay the person who used them. Profit has to be made - normally you'd cost in your other items such as insurance, utility bills etc.. which I haven't done in this instance.
Don't give me the usual rubbish about market conditions - everything has a cost that it just can't go below. Its not financially viable. So materials, labour, insurance, health & safety (this includes scaffolding, PPE, machines in reasonable order, toolbox talks, risk assessments etc..), tea hut, storage hut, toilet & wash facilities, van(s) &/or lorry(s), diesel, tools, bank facilities, tax man, VAT man all have costs that have to be met.
Market conditions are only viable to the point where its not viable to sell at a cost less than what it costs to cover all expenditure. This is what business is about - covering your costs.

SkepticOne

mrgaa1 wrote: »

Don't give me the usual rubbish about market conditions - everything has a cost that it just can't go below. Its not financially viable. So materials, labour, insurance, health & safety (this includes scaffolding, PPE, machines in reasonable order, toolbox talks, risk assessments etc..), tea hut, storage hut, toilet & wash facilities, van(s) &/or lorry(s), diesel, tools, bank facilities, tax man, VAT man all have costs that have to be met.
Market conditions are only viable to the point where its not viable to sell at a cost less than what it costs to cover all expenditure. This is what business is about - covering your costs.

But none of that means you're going to sell at that price. What happens then? How much are you making from a house that won't sell at a price that covers your costs?