Negative Equitity

NoseyMike2010

Is there anyone on here who is not in negative equitity?? :mad:

ednwireland

bought in '97 so probably not and me and the OH decided we needed to be able to pay mortgage on 1 salary - and as we have both been out of work in the last 13 years prob a good idea - bought an old house and did it up as money allowed, still not finished, been called mad several times of the the years.

tenchi-fan

NoseyMike2010 wrote: »

Is there anyone on here who is not in negative equitity?? :mad:

Bought a house at €130k thinking it was a bargain as they were asking 170k. At the peak they went for at least €200k, probably €220k. Now it's worth €85k.
Still, at least I can afford the mortgage repayments.

NoseyMike2010

shiiiit ... Where abouts do you live? (Sorry not trying to be Nosey but curious why your house has dropped sooooooooooo much in value!!!)

tenchi-fan wrote: »

Bought a house at €130k thinking it was a bargain as they were asking 170k. At the peak they went for at least €200k, probably €220k. Now it's worth €85k.
Still, at least I can afford the mortgage repayments.

KerranJast

Does it matter if you're going to live in the house and can afford the mortgage?

tenchi-fan

KerranJast wrote: »

Does it matter if you're going to live in the house and can afford the mortgage?

Indeed it does. A mortgage is for 25-40 years. Many people who bought during the boom paid over the odds for starter homes - perhaps a one bedroom flat with the hope of some day building a family home.

However, to be able to move you will need to repay the negative equity amount to the bank, together with being able to pay a 10-15% deposit.

tenchi-fan

NoseyMike2010 wrote: »

shiiiit ... Where abouts do you live? (Sorry not trying to be Nosey but curious why your house has dropped sooooooooooo much in value!!!)

Dundalk

Well you're looking at a €45k drop. I hope to be able to get a decent job and up the repayments to cancel out the negative equity but I'm almost kicking myself for buying (even though I had personal reasons for buying rather than renting.. no need to go into them here!)

KerranJast

tenchi-fan wrote: »

Indeed it does. A mortgage is for 25-40 years. Many people who bought during the boom paid over the odds for starter homes - perhaps a one bedroom flat with the hope of some day building a family home.

However, to be able to move you will need to repay the negative equity amount to the bank, together with being able to pay a 10-15% deposit.

But their next home will be cheaper than it would have been during the boom, probably even be less than or close to their starting home, so providing they can pay the mortgage they should be fine.

The main issue with neg equity is the people who should never have taken / been given a mortgage to begin with.

ei.sdraob

mortgage? whats that :P

Permabear

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Aard

I would counter that that was their fault for buying a property that they didn't expect to live in for a long time. A "starter home" in any other country is rented.

Permabear

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tenchi-fan

KerranJast wrote: »

But their next home will be cheaper than it would have been during the boom, probably even be less than or close to their starting home, so providing they can pay the mortgage they should be fine.

I don't mind that reasoning for a small amount of negative equity.

However, when someone loses say €100,000 on the value of their home, they are now paying a mortgage at say €1200 a month on a house that can be rented for €500 a month.

It's not like they can just buy a lower value house tomorrow and start availing of lower mortgage repayments.

I'm glad speculators got burned - because that is the risk they took and of course because they, together with government policy, caused the property bubble.

However, most homeowners I know who are lumbered with negative equity are middle class teachers, engineers, managers, aged 27-32 who just wanted to own a home. And now in addition to the tax hikes, they are also seeing bank lending rate hikes, property taxes, etc. Bit of a joke really consider the banks and government are the ones who caused the mess.

Permabear

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silverharp

god no , I must have been listening the day they were doing compound interest. I paid off my last mortgage on 2003 and under no circumstances would I have ever considered anything above a 70% morgage , funny with that attitude to debt I wouldnt have lasted long working for an Irish bank :pac:

tenchi-fan

donegalfella wrote: »

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Some economists said it would continue and a lot of people assumed the worst correction would be 10-15%. once again, it was up to the government, through economic policy, abolishing tax incentives and through bank regulation, to protect consumers from these effects. Even consider how the government introduced rent allowance and social housing which skewed the price of rent and property prices!

Permabear

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Seth Brundle

tenchi-fan wrote: »

Indeed it does. A mortgage is for 25-40 years. Many people who bought during the boom paid over the odds for starter homes - perhaps a one bedroom flat with the hope of some day building a family home.

However, to be able to move you will need to repay the negative equity amount to the bank, together with being able to pay a 10-15% deposit.

People who paid for property when knowing (as we all did) that it was way overpriced should not have the right to start bitching about how unfair it is that they are in negative equity and I do hope that no rescue plan is made for them.
I deliberately have not moved since I bought my small house 10 years ago. I could have moved to something twice as large and costing half a million but I didn't because I was able to stand back and think sensibly. What I did was not something smart or based on insider knowledge. There had been warnings for years about the property bubble and despite Ahern et al's dismissal of reality, it burst. Big time.

People were happy signing the contracts and commiting to paying back the mortgages amounts - should I feel sympathy for them simply because they didn't think ahead? If they can't afford the house then sell it and take the hit but they shouldn't start blaming others!

The_Honeybadger

tenchi-fan wrote: »

Some economists said it would continue and a lot of people assumed the worst correction would be 10-15%. once again, it was up to the government, through economic policy, abolishing tax incentives and through bank regulation, to protect consumers from these effects. Even consider how the government introduced rent allowance and social housing which skewed the price of rent and property prices!

There is blame on all sides, I know a guy who paid nearly 500k :eek: for a four bed semi in Galway, houses in the same estate are now asking 220=250k (asking, I doubt they are selling). He was warned that it was too much and his parents pleaded with him not to take on a mortgage that size, luckily he has a well paid job which is secure but my god that is some hit to take. People like this played a part too, young couple lost the run of themselves entirely and got hysterical bidding for houses that were way overvalued, and if they are honest with themselves I bet they probably knew that too, you can't blame FF for that, although I agree their policies were disasterous. I'm not in negative equity as I don't own a house, I wasn't in a position to buy until about 2007 financially due to my age and did consider it, but my employer could have moved me so I didn't bother (thank god). There are certain posters on here who seem delighted to see these people 'take their medicine', but personally I do have great sympathy for anybody whose house value has collapsed leaving them with a monster of a mortgage, we can't expect ordinary folk to be economists, everybody from the media to our Taoiseach was talking up the boom and they believed the hype, extremely glad it's not me though.

Permabear

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tudlytops

ednwireland wrote: »

bought in '97 so probably not and me and the OH decided we needed to be able to pay mortgage on 1 salary - and as we have both been out of work in the last 13 years prob a good idea - bought an old house and did it up as money allowed, still not finished, been called mad several times of the the years.

Some here, we doing up an old cottage, far from being done, but we bought what we could afford and no more, so no banker here.

Lu Tze

mickeyk wrote: »

There are certain posters on here who seem delighted to see these people 'take their medicine', but personally I do have great sympathy for anybody whose house value has collapsed leaving them with a monster of a mortgage, we can't expect ordinary folk to be economists, everybody from the media to our Taoiseach was talking up the boom and they believed the hype, extremely glad it's not me though.

The mortgages were monster mortgages before there was any drop in equity. They didnt suddenly get bigger over night.

I also dont much buy the "we can't expect ordinary folk to be economists". It is the single largest transaction and probably most important decision most people make in their life. But they put in less research than they would buying a car, ot a television etc.

Monty Burnz

tenchi-fan wrote: »

However, most homeowners I know who are lumbered with negative equity are middle class teachers, engineers, managers, aged 27-32 who just wanted to own a home. And now in addition to the tax hikes, they are also seeing bank lending rate hikes, property taxes, etc. Bit of a joke really consider the banks and government are the ones who caused the mess.

Remember that everyone who bought a house during the boom, regardless of their motive, played a part in blowing up the bubble. I'd obviously place less blame on non-speculative buyers.

tudlytops

Lu Tze wrote: »

The mortgages were monster mortgages before there was any drop in equity. They didnt suddenly get bigger over night.

I also dont much buy the "we can't expect ordinary folk to be economists". It is the single largest transaction and probably most important decision most people make in their life. But they put in less research than they would buying a car, ot a television etc.

And it wasn't just the mortgages was the car loans, the furniture loads, the do up your house loans, it was all just so easy, we want and we want now.

I feel for people losing finding it hard to pay for their homes, but at the some time, they got themselves here, why not buy smaller and not so nice, why buy at all.

I at no point considered using both wages to get a mortgaged, we though what could we get based on one wage and that is what we went with.

Its small, its old, it needs loads of work, but it ours 100%.

Monty Burnz

tenchi-fan wrote: »

Some economists said it would continue

Who was paying these economists?

tudlytops

"Some economists said it would continue"

A lot of people said the world would end in the year 2000, did we pack up and went somewhere high and safe or something...

people bought because they wanted to be home owners and they wanted it there and then.

they used all their incomes and push it to the limited, never though what if something goes wrong...didn't have to be the end of the boom, people can lose their job, have an accident, etc, at any time.

And why did so many borrow for so much more on top of it...

tenchi-fan

donegalfella wrote: »

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Do you think the government are propping up housing prices for mortgage holders?
The government are propping up house prices so the banks don't suffer. The reason for this is because they want to ensure banks can keep lending, etc etc, same reason why they continue to pump billions into the bank.

The mortgage holders /taxpayers are being hit three times: reduced house value, higher interest rates and higher taxes.

Permabear

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Mr McBoatface

Fortunately I'm no where near negative equity even though the value of my house bought in 2006 has fallen by 50% if not more since prices peaked.

There are lots of people in negative equity but there are lots of people who capitalised on boom and sold there massively overpriced homes in built up Urban Area's and exited to the so called commuter belt areas. Yeah the houses they bought where overpriced too and they have fallen in price but they cleared their mortgages and have no debts and in many cases have money in the bank. Many of these people where not economists they where ordinary folk who smelt a rat and cashed in before it all went tits-up.

I'm not a economist but when the average house prices went above 3 times the average Irish wage I thought we where on a dodgy road. Despite this I never ever thought my 3 bed terrace ex-council house in West Dublin would reach a third of a million, and when it did I knew that the dodgy road had turned into a ponzi scheme of sorts. The last ones on the road where burnt, I feel really sorry for those non-speculators who are now in negative equity.

tails_naf

I remember when I finished university in 2002/2003, my parents were encouraging me to buy something, but at the time I thought the prices of 130k for a 3 bedroom semi-d was scandalous! I just couldn't see the 'value' in the property at the time, as in fairness the quality was low for a lot of these estate houses.

As the years went by, I had mixed feelings - prices were rising, but I still felt that the houses were just not worth the price tag. Lots of people around me were jumping on the bandwagon, but I guess this attitude that the property was poor 'value' was partly due to having done a bit of travelling to europe/us, and seeing what people were paying there for nicer houses.

Finally, after saving for 6 years, I decided to build in 2009 - and have moved in now. Playing the waiting game has paid off somewhat - I'm definitely in positive equity, probably 50% LTV, and somewhat glad I didn't get caught up in the buying frenzy.

That said, you can only blame the people who bought so much. We were being told constantly by 'experts' that is was a no brainer to invest in property - that only a fool stayed on the sidelines during the celtic tiger. We were conned pure and simple.

We now know an 'expert' may just be a bullsh***er in a nice suit. Hopefully we will remember that lots of people in Dail Eireann wear nice suits.


I'm getting really off topic now - but I remember there was an episode of Eddie Hobbs' show me the money a few years back, which essentially was helping people who were woefully in debt get back on track. One of the guys was a young financial advisor, and he was stone broke. I nearly spat out my tea when I heard what he did for a living. Experts my 'poll'.

tenchi-fan

tails_naf wrote: »

I'm getting really off topic now - but I remember there was an episode of Eddie Hobbs' show me the money a few years back, which essentially was helping people who were woefully in debt get back on track. One of the guys was a young financial advisor, and he was stone broke. I nearly spat out my tea when I heard what he did for a living. Experts my 'poll'.

Financial adviser = insurance salesman. Whether it's life assurance, pensions or other investment products, their job is to sell stuff.

I'm generally good with money and although I've been stung with some negative equity at the end of the day I like owning a home and I can comfortably afford mortgage repayments. However, I was very lucky I bought in 2009 rather than 2007 and I'm sure in years to come people will say they're glad they bought in 2011 rather than 2009 but that's life.

Cavehill Red

When Ford Maddox Ford wrote 'The Good Soldier', he originally wanted to call it 'The Saddest Story'.
For me, the saddest story is this one - the negative equity one. I nearly lost many friends over the years when I tried to tell them not to buy at what I considered inflated prices. Some people still don't talk to me after I told them to hold off, and they did for a bit then plunged in anyway when prices went even higher.
They weren't greedy or grasping. They just wanted homes of their own, no unusual thing in this country. I think they feel if they looked at me they'd hear 'I told you so' in their heads, even though I'd never say such a thing, ever. I feel so sorry for those people - young couples, some with kids, who'd scrimped and saved all their youth while house prices ran continually out of their reach.
It was all they'd ever known as adults - house prices rising every month. The financial experts told them to buy now. So did the media. So did their parents who helped out with deposits. When they weighed that up against ranting old me, who were they to listen to?
We know the ramifications now -thousands of people trapped in indebentured debt slavery for 20, 30 even 40 years. Some who've lost their jobs and cannot keep up with the mortgage will be forced to leave, never to return because of our Victorian debt laws which would put them in jail for posting back the keys to the bank. Soon the foreclosures will begin in earnest, and people will end up on the street even as hundreds of thousands of surplus houses rot away.
It's absolutely tragic - an epochal tragedy, akin to Cromwell or the Famine. Not in the level of death, but in the way it will leave a lasting legacy of misery in this country for generations.
It really is the saddest story.

For myself, I'm not smug. I have a house. I bought before the boom, sat it out without selling and am still paying the mortgage and still in the black. Nothing to be smug about there. That's the way things are supposed to work. How did it all go so horribly wrong here?

tenchi-fan

Cavehill Red wrote: »

How did it all go so horribly wrong here?

Thanks for your post. A lot of people don't "get it"

People wanted security. They saw rent prices escalating during the boom years and thought at least if they had a mortgage they would know how much their repayments would be each month and they would own something at the end of it.
They also saw one in every four newly-built homes being designated as social housing.

They went down to the mortgage broker and said "I earn €40,000 and my wife does some casual hours with a nurse temping agency. How much of a mortgage can I get."
To which the mortgage broker replied, "well you're in a good profession so we'll use a good multiplier, I'll assume your wages will increase by 5% per year, you're going for a 100% mortgage, we'll add your wife's income and then some, assume the possibility of renting out a room, over 40 years... how does €380,000 sound? Repayments are €1000 a month"

Wow, that's amazing. We saw a beautiful 3 bedroom home in Bettystown which is just a one hour commute from Dublin. And €1000 a month, that's fantastic, it's a quarter of our income but we can definitely afford it...

So it was a combination of mis-selling of financial products, the government allowing banks to lend money that could never be paid back, the government encouraging more and more developments and allowing developers limited liability so they didn't need to worry about their actions, obviously some naivety on behalf of the people buying the house, allowing banks to increase variable rates despite record low ECB rates, and general mis-management of the economy.

I feel it would be cheaper if the government allowed banks to collapse and then bail out mortgage holders, ensuring yes they were penalised for evidence of greed or speculation, but as Cavehill Red said, mortgage holders and taxpayers should not be treated as indentured slaves while the bankers and developers got off scot-free.

FlashD

but I guess this attitude that the property was poor 'value' was partly due to having done a bit of travelling to europe/us, and seeing what people were paying there for nicer houses.

Travel, the greatest educator of them all and what eventually saved me from being stuck in negative equity.

It wasn't until I left Ireland in 2007, just before things went bad, that I realised what a huge property problem there was back home.

I couldn't believe the prices people were paying for houses in the middle of huge concrete estates compared with the affordable beachfront properties for sale in Australia. Poor value indeed.

It also seemed to me that the word 'home' had completely disappeared and was replaced with the word 'investment'.

How did it all go so horribly wrong here?

Besides analysing all the technical mumbo jumbo, what the government, banks etc should have done, I believe that it all came down to simple greed, arrogance, a desire to keep up with or get ahead of everyone else. Everyone wanted to be 'somebody', being a 'nobody' was for losers.

Plenty of 'nobodies' in Ireland now it seems and will be for many years.

kaiser sauze

I'm not in NE because I let the madness pass me by, and will continue to do so for another 12-18 months. Then some lucky seller is going to be only too delighted to take my cash.

tenchi-fan

FlashD wrote: »

Travel, the greatest educator of them all and what eventually saved me from being stuck in negative equity.

It wasn't until I left Ireland in 2007, just before things went bad, that I realised what a huge property problem there was back home.

I couldn't believe the prices people were paying for houses in the middle of huge concrete estates compared with the affordable beachfront properties for sale in Australia. Poor value indeed.

It also seemed to me that the word 'home' had completely disappeared and was replaced with the word 'investment'.


Plenty of 'nobodies' in Ireland now it seems and will be for many years.

Says the guy comparing property prices in Australia to the cost of acquiring a home in Ireland :rolleyes:

Have fun being a "somebody" in Australia. I think it works out well when someone (often just starting out) is able to make a new life for themselves away from family, friends, etc. However you need to remember that not everyone has this luxury and I think it's very sad when people are forced to leave their lives behind just to secure employment in another country.

Bill2673

I'm not at all surprised that this thread has been taken over by people only too anxious to tell the world that they are not in negative equity; of course its not enough simply to say that. This has to be followed by a bit of proselytizing, moralizing.....or another way of saying it would be "in your face, suckers"....

Yes; people called me mad.....when I said No....i won't buy a house......or if i do buy a house....i'll buy it very cheaply .....in 1987 on an attractive mortgage that only one salary can pay.....they said i was mad.....but look at me now....and look at them.....who was right in the end! Meeeee!!!! I was right!!!!!! And youse were all wrong!!!!!! And by the way.....any idiot would have known a housing crash was coming!!!!! So youse are all idiots!!!!!.....

Well done lads.

The country needs more gloaters.

During the housing boom, there were no shortage of gloaters. people who owned three houses and had to let everyone know about their easy money gains.

When the proprerty crash started, these people went quiet, and for a while there was no gloating at all.

But now that its gone full circle, you guys are here to tell us all how clever you are. Its great to have some gloaters back in the country again.

ei.sdraob

i think it needs to be repeated over and over

negative equity is not an issue if you are servicing the debt and you intend to live in the home for a long time

but if you got a mortgage as an investment and ignore the old advice of

the value of your investment can go down as well as up

then well as an "investor" you got burned, unfortunately when "average Joe" gets into "investing" is when we have a clear bubble that's about to go pop

if you feel bad now that you are overpaying for an overpriced house, then you should have been thinking twice before signing on the dotted line (with various warnings on page)

yes I know renting in Ireland sucks but even during the worst of the bubble the rent to house value multiple was insane

---

now before I get accused of being "insensitive" negative equity is affecting me indirectly via family members getting a mortgage despite approaching retirement, by time I found out it was too late to scream NOOOOOOOOOOOOOOO
anyways since they work hard maintaining a business and dont watch RTE i dont think they even heard the phrase yet :P or seem too worried

sarumite

tenchi-fan wrote: »

I feel it would be cheaper if the government allowed banks to collapse and then bail out mortgage holders, ensuring yes they were penalised for evidence of greed or speculation, but as Cavehill Red said, mortgage holders and taxpayers should not be treated as indentured slaves while the bankers and developers got off scot-free.

I agreed with all your post up until this point.....most people I know (many, including my sister are sadly in negative equity) chose to buy because they didn't want to pay rent. I almost chose to buy for the same reason, though I chose not to as I didn't want to be tied down to the area I was living in at the time. The argument that rents were going up may be true, but it was always cheaper to rent than to buy. Some People saw houses as much as an investment as they did a home. We shouldn't bail out mortgage holders any more than we should bail out someone who lost money on the stock market.

Noffles

well and truly in NE bought for 220, presume it it worth about 120 now... the neighbour bought almost the same house I have for 320... worth about 120 now also... there are no winners really, just different degrees of losing.

Stuck with this kip forever I would imagine... it'll eventually become a holiday home though as I intend to return to the UK... and RENT an apartment there!!

Bill2673

tenchi-fan wrote: »

but as Cavehill Red said, mortgage holders and taxpayers should not be treated as indentured slaves while the bankers and developers got off scot-free.

I just don't get your last comment....

the bankers have gotten off scot free?

By that I presume you mean the owners of the bank....that the owner of a house is indentured, while owners of the bank get off scot free? The owners of AIB have seen their equity value decline by 98%......that is to say, their current worth is 2% of the peak.......is that getting off scot free.

More or less every developer in the country is bankrupted. Unless they've done something illegal (economic treason anyone?) what more do you want? Read the Irish Times today, about some developer in Bray that you and i have never heard of, up before the high court because he owes €11mn and can't pay it. How is he getting off scot free.

Can you explain exactly what you mean by saying developers and bankers have gotten off scot free.

(and please don't confuse this with having or not having any sympathy for bankers or developers, thats a completely different matter).

jester77

Bill2673 wrote: »

I'm not at all surprised that this thread has been taken over by people only too anxious to tell the world that they are not in negative equity; of course its not enough simply to say that. This has to be followed by a bit of proselytizing, moralizing.....or another way of saying it would be "in your face, suckers"....

Yes; people called me mad.....when I said No....i won't buy a house......or if i do buy a house....i'll buy it very cheaply .....in 1987 on an attractive mortgage that only one salary can pay.....they said i was mad.....but look at me now....and look at them.....who was right in the end! Meeeee!!!! I was right!!!!!! And youse were all wrong!!!!!! And by the way.....any idiot would have known a housing crash was coming!!!!! So youse are all idiots!!!!!.....

Well done lads.

The country needs more gloaters.

During the housing boom, there were no shortage of gloaters. people who owned three houses and had to let everyone know about their easy money gains.

When the proprerty crash started, these people went quiet, and for a while there was no gloating at all.

But now that its gone full circle, you guys are here to tell us all how clever you are. Its great to have some gloaters back in the country again.

I wouldn't call them all gloaters, yes some are. But from an outside perspective people just lost the run of themselves over the last 10 years and all they ever thought of was property. Any time I would come home for a visit and head to the pub, the first question I was always asked was about the price of property where I lived at the time... every time! One of the major reasons I think that Ireland is in this mess is due to the poor rights a renter has. You move into an apt or house and you can't add your own personal touch (furniture, painting, carpets, etc) and you can get tossed out at any moment. It leaves a person feeling that buying is a better option and it probably was 10 years ago. But then credit became too easy to get and everyone was jumping on the bandwagon. Unfortunately most people only looked at their current circumstances and never really sat down and calculated for interest rate rises, partner (or both) losing a job, schools close by, having to move for a job, etc. in the future. It's a sad a situation for many and not something to gloat at.

Also, I think this negative equity thing is thrown around too much. Most people who are in negative equity are still paying the same mortgage they signed up to and agreed to pay. Some have lost their jobs and are struggling but for the rest nothing has really changed, just a virtual number that has no real effect on their day to day circumstances.

Jaysoose

FlashD wrote: »

Travel, the greatest educator of them all and what eventually saved me from being stuck in negative equity.

It wasn't until I left Ireland in 2007, just before things went bad, that I realised what a huge property problem there was back home.

I couldn't believe the prices people were paying for houses in the middle of huge concrete estates compared with the affordable beachfront properties for sale in Australia. Poor value indeed.

It also seemed to me that the word 'home' had completely disappeared and was replaced with the word 'investment'.



Besides analysing all the technical mumbo jumbo, what the government, banks etc should have done, I believe that it all came down to simple greed, arrogance, a desire to keep up with or get ahead of everyone else. Everyone wanted to be 'somebody', being a 'nobody' was for losers.

Plenty of 'nobodies' in Ireland now it seems and will be for many years.[/QUOTE]


What a load of old sh1te, people wanted homes to live in and were told by the goverment/media/financial experts that they had to hurry up get on the ladder.

The amount of "experts" that "seen it coming a mile away" that pop up in these threads make me wonder why they didnt make a pile of money on this "bubble that the dogs in the street knew about". But then its easy to sit back and say "i told you so".

Cavehill Red

FlashD wrote: »

Besides analysing all the technical mumbo jumbo, what the government, banks etc should have done, I believe that it all came down to simple greed, arrogance, a desire to keep up with or get ahead of everyone else. Everyone wanted to be 'somebody', being a 'nobody' was for losers.
Plenty of 'nobodies' in Ireland now it seems and will be for many years.

I should probably have made clear I was asking a rhetorical question. I'm well aware of how it went wrong here.
And I'm going to continue to insist that blaming it on the 'greedy public' is not only inaccurate but offensively wrong.
Let's look at what you dismiss at 'technical mumbo jumbo' for a minute, because that's where the truth can be uncovered.
Having the euro interest rate set too low for Ireland created a credit bubble towards the rear end of the genuine Celtic Tiger years ( up to 2001 or so.)
With effectively free money looking for a home in Ireland, it is natural that speculators will avail of it and transfer it into performing solid assets.
So big buy-to-let speculators came into the rental market, pushing rents and sales prices of houses upwards.
Seeing prices rise, two further groups of people became attracted into the housing market. Firstly was developers, who saw a way to churn the cheap credit into significant profits, utilising ridiculously generous tax breaks introduced by Fianna Fail.
Secondly was smaller buy-to-let speculators, who saw what the big boys were doing and wanted a slice.
At this point, the market became a Ponzi scheme. The average housebuyer saw prices rising almost stratospherically as they were pushed upwards by the availability of credit, lax lending procedures from the banks and the intrusion of buy-to-let speculators.
With the media calling the song of their own advertisers, the public were informed at every twist and turn to buy NOW before prices rose further out of reach. And so many did, as much out of panic that they might never afford a home as anything else.
It was a tiny minority, largely from the second, smaller class of buy-to-let landlords, who demonstrated greed, by flipping houses, boasting of 'portfolios', investing in Budapest and Sunny Beach and so on. The developers and larger speculators were always greedy, as were the banks. That's what they do. It's who they are.
The vast majority of those who bought homes in the bubble years did so to live in them. And the later they did, the greater they were skinned for it, as always happens in Ponzi schemes.
So I would suggest, before you start tarring hundreds of thousands of homebuyers who were effectively defrauded of their future wealth as greed-motivated nobodies, that you inform yourself of what actually happened.
It's not mumbo-jumbo, you know.

RichardAnd

My parents bought a house for well over it's asking price in 2005. It's now worth less than what they paid for it BUT, they can easily afford the mortgage and neither of them are likely to loose their jobs. They are in negative equity but they bought the house to live in so they don't seem too phased.

My own take on property is that buying isn't for me. With rental, I can walk away from where I live without a worry if I wish/need to. If I needed to down grade to save, this would also be doable. With a mortgage, I'd have a ball and chain around my leg.

My parents do, however, own a plot of land in dublin. I may, someday, build a house on this land but until then, I'm happy to rent and stay debt free. Thankfully, I'm free of that burning Irish desire to own "property".

rossc007

It beggars belief that people come on here and pretend that the knew the whole bubble was going to burst, 20 20 hindsight. If you really did now what was happening you'd have bet against it in the markets and made some serious money.

In my opinion you where lucky at the time you bought, no more, no less.

Cavehill Red

Plenty of people did, Ross.
Anyone who downsized before 2007, all the people who sold and rented. Those who sold and emigrated. Those who flipped a bit and got out in time.
There were a lot of people made sizeable fortunes, often older people who sold up and moved into smaller gaffs mortgage free.
One way of looking at the housing bubble is that it was a significant transfer of wealth from a younger generation to an older one.

rossc007

If you say so mate, I dont remember many people talking about downsizing at that stage.... I tell a lie, I know one bloke who sold and didn't buy, he split with his missus.

fliball123

Bill2673 wrote: »

I'm not at all surprised that this thread has been taken over by people only too anxious to tell the world that they are not in negative equity; of course its not enough simply to say that. This has to be followed by a bit of proselytizing, moralizing.....or another way of saying it would be "in your face, suckers"....

Yes; people called me mad.....when I said No....i won't buy a house......or if i do buy a house....i'll buy it very cheaply .....in 1987 on an attractive mortgage that only one salary can pay.....they said i was mad.....but look at me now....and look at them.....who was right in the end! Meeeee!!!! I was right!!!!!! And youse were all wrong!!!!!! And by the way.....any idiot would have known a housing crash was coming!!!!! So youse are all idiots!!!!!.....

Well done lads.

The country needs more gloaters.

During the housing boom, there were no shortage of gloaters. people who owned three houses and had to let everyone know about their easy money gains.

When the proprerty crash started, these people went quiet, and for a while there was no gloating at all.

But now that its gone full circle, you guys are here to tell us all how clever you are. Its great to have some gloaters back in the country again.

So is this the reverse gloating by people who decided not to buy..The fact is there was a stream of mis information from the banks and the gov...People were trying to get a home not an investment...Now these same people have to fork out more in tax, house essentials (esb ,etc), property tax and inevitable interest rate hikes...

Well I am sorry to tell the guys who held off you will be paying for this too as there will be a massive default in this country I'd hedge a bet of at least 20/30% of mortgage holders defaulting by the end of 2013 and they will leave the country and just pop the keys in the banks letter box and no thanks...Lets whisper this part as I dont want to knock any of the current renters off their smug petistools...Guess who owns the banks ---shhhhhhhhhh

This fact is completely overlooked and the quicker people realise that this scenario will completely cripple Ireland for good....I myself have a gaff it is currently about 10k in neg equity but as someone pointed out its only a problem if you sell and I have no plans to sell...

But if people who are defaulting get bailed out I do not feel it would be fair to continue paying my mortgage and a strategic default will come to play..and here is the kicker...I could organise things so that I am set up in a different country and then just give the keys back....As people who are not yet at the pin of thier collar have the choice to get themselves ready for this and I for one am I have a job lined up with a relative ...so for all you renters...you will be paying my neg equity...Thanks guys

Cavehill Red

rossc007 wrote: »

If you say so mate, I dont remember many people talking about downsizing at that stage.... I tell a lie, I know one bloke who sold and didn't buy, he split with his missus.

In the second hand market, obviously people made money. Those who bought were giving the money to somebody. Many of those didn't churn it back into a bigger house because their reasons for selling were to emigrate or downsize or to dispose of an inheritance.
In the new build market, it's a different story. The cash went to the developers, many of whom thought like their customers and the government that trees would grow to the sky and the whole shebang would go on forever.
The developers took their profits, and in many cases, ploughed it into the sort of ghost estates and NAMA fodder that will never recoup their outlay now.
I know one guy who lived through a smaller bubble in Britain in the late 80s. Back then he was working in the City of London, saw it coming and sold his house in Croydon and rented for two years. He bought the house three doors up from his previous one for around 60% of what he'd received for his own.
Fifteen years on, he was back in Dublin and reckoned the scenario seemed familiar. Sold up in Blackrock for a tidy sum, and rented. Still hasn't bought back in. God only knows what sort of lump sum he has sitting around these days.
Just one example. But like every market, there are winners as well as losers. In this one, not many winners. Most of those are older people who sold up before 2007 and downsized.

Bill2673

jester77 wrote: »

I wouldn't call them all gloaters, yes some are. But from an outside perspective people just lost the run of themselves over the last 10 years and all they ever thought of was property. Any time I would come home for a visit and head to the pub, the first question I was always asked was about the price of property where I lived at the time... every time! One of the major reasons I think that Ireland is in this mess is due to the poor rights a renter has. You move into an apt or house and you can't add your own personal touch (furniture, painting, carpets, etc) and you can get tossed out at any moment. It leaves a person feeling that buying is a better option and it probably was 10 years ago. But then credit became too easy to get and everyone was jumping on the bandwagon. Unfortunately most people only looked at their current circumstances and never really sat down and calculated for interest rate rises, partner (or both) losing a job, schools close by, having to move for a job, etc. in the future. It's a sad a situation for many and not something to gloat at.

Also, I think this negative equity thing is thrown around too much. Most people who are in negative equity are still paying the same mortgage they signed up to and agreed to pay. Some have lost their jobs and are struggling but for the rest nothing has really changed, just a virtual number that has no real effect on their day to day circumstances.

I agree with a lot of what you are saying.

To be honest, I much prefer the country as it is now as we were a complete nation of assholes five years ago, we really were, when the property bubble was its peak. All these d1cks who thought they could walk on water.

I don't mean to be flippant; the recession is causing a lot of pain. But in the long term, i think the country will be better off for it.

On your comment on renting; I remember talking to an Austrian girl who said she was living/ renting in the same apartment that her Granny rented 90 years ago. The apartment had stayed in the family all that time, even though it was rented. If we had that sort of framework, then yes there would be less of a need to buy. As you mentioned, here one of the problems with renting is that you can be out on your ear in 12 months time, and if you have kids in school etc, that is a big problem.