Do you personally know anyone who.

swordofislam

RichardAnd wrote: »

My uncle purchased a house in Tuscany where our family originate. I don't know the details of the purchase (whether or not he re-mortgaged the home) or how much the said house cost him but he is now doing far less business than he was during the boom.

Porco dio!! but surely chippers are booming?

Godge wrote: »

This post makes so much sense. If you were a discharged bankrupt after say five years (rather than twelve) and it was automatic (rather than dependent on creditors) they would be ok in the long run.

There is automatic recognition of bankruptcy across EU countries. Anyone who is

• in despair
• desperate
• desparate
• a young couple
• genuine

Or any other of the tedious litany of excuses for wanting me to pay for your fancy house can just emigrate to any EU country and get a job and wait a few months and then they can declare bankruptcy and the rules of that country will apply here.

The country with the most debtor friendly system is England

Zubeneschamali wrote: »

Negative equity hurts them personally in the wallet, so it's more important (to them). So we have to listen to them witter on about it.

I am an ABC1 and I am in negative equity. Do you know what I plan to do? Do you?
I am going to pay my mortgage - the mortgage is much less than I planned for.

Negative equity is not the same as an inability to pay the mortgage.

You boardsies will all be paying high rents to someone who is getting the cost of his investment properties written down.

Come on lads how do you think this will work isn't it Ireland that we are living in?

DublinWriter

AlekSmart wrote: »

Murphaph,this Security-of-Tenure element is,I believe,the single greatest anti rental bogeyman that exists in the Irish phsyche.

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?

coffee_cake

what is the obsession with owning property? you pay rent for flexibility and not being tied down. you pay it and in return get a roof over your head. that's not nothing. although apparently to all the 'but i just wanted a home for my family' people, having a roof over your head really is nothing if you can't have a chance to make a profit on it too.
you might as well say 25 years of grocery shopping = nothing instead of growing your own food or something. 25 years of bus trips = nothing instead of a car. It depends on what you want in the meantime.
It is utterly bizarre to still see this mentality in this day and age. To want a home is one thing but to insist that renting is a total waste is

AlekSmart

DublinWriter wrote: »

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?

Not Thick at all.

I see your point,but I'm still posing the question.

Does this mean that millions,if not billions of Forriners over the past few hundred years have perished in abject poverty and sadness because they did not own their own little place ?

I'm not putting any great arguements for or against,I'm merely curious as to why it seems inconcievable for any Irish person to reach their 20's and not own property ?

Paddyontherun

DublinWriter wrote: »

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

Scenario
Bought 2006 for €700k paid repayments to date but lost job cant make repayts. Value now 350K sold house now in debt of c.€350K.

Rented since 2006 lost job can't pay rental anymore, moving out debt = nil.

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?[/QUOTE]

It is quite possible that a house bought in 2006/2007 for 700K is now worth €350k and unlikely to go back to previous highest values by 2036

DublinWriter

Paddyontherun wrote: »

It is quite possible that a house bought in 2006/2007 for 700K is now worth €350k and unlikely to go back to previous highest values by 2036

Dude.

In all seriousness, are you arguing that Western Europe will experience continual negative economic growth year on year for the next twenty-five years?!?

I mean, come on. Even David McWilliams would call you a pessimist.

You seriously think that a house bought for 700K in 2006/2007 will be worth less in 2036??!

coffee_cake

DublinWriter wrote: »

Dude.

In all seriousness, are you arguing that Western Europe will experience continual negative economic growth year on year for the next twenty-five years?!?

I mean, come on. Even David McWilliams would call you a pessimist.

You seriously think that a house bought for 700K in 2006/2007 will be worth less in 2036??!

It doesn't have to experience negative growth for the entire 25 years to be worth the same or less after 25 years

earlyevening

DublinWriter wrote: »

You seriously think that a house bought for 700K in 2006/2007 will be worth less in 2036??!

But by 2036 you'll have paid the 700,000 plus another 1,400,000 in interest (or more possibly depending on how rates go).

Forget 700,000, will the house be worth 2,100,000 in 2036?

Diarmuid

DublinWriter wrote: »

You seriously think that a house bought for 700K in 2006/2007 will be worth less in 2036??!

Now you're beginning to realise what a real housing crash is like!

Look at Japanese house prices in the past 25 years in real terms

ChRoMe

DublinWriter wrote: »

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?

25 years of rent does not leave you with nothing, you will have had a home for the period without any of the liability associated with owning property a very attractive proposition

ChRoMe

AlekSmart wrote: »

Murphaph,this Security-of-Tenure element is,I believe,the single greatest anti rental bogeyman that exists in the Irish phsyche.

Deep inside our Knowledge Based heads we have an image seared like a photo-negative and it depicts an elderly couple standing outside their bothán with the Stovepipe hatted Landlord and the Peelers in attendance......

Those poor Famine-Times people were RENTING :eek:...and just lookit what happened to THEM :eek: :eek:.....No way is that goin to happen to ME

What exercises my feeble mind is what happens to oul Gerrman,French,Italian people ?

Are they thrown out onto the street after they retire ?

How have several hundred years worth of Forriners managed to eke out a life for themselves without actually owning their own home,as we Irish have a RIGHT to do..?

I'm just curious,perhaps you could knock-in to your elderly neighbours there Murphaph and enquire if they're worried about the Baliff callin round ??

Security of tenancy is a real issue for all tenant s the culture does not exist for that to be solved.pouting the crash aside, many renters don't want to be home owners, however they want to be unsecured tenants less

earlyevening

Mind blowing to see any sense in those mortgages that some people have, where the they might be on interest only, but the interest only portion is higher than the rent on a similar property.

Talk about dead money.

Monty Burnz

DublinWriter wrote: »

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?

Oh god, we're not going to have to debunk the 'rent is dead money' meme again, are we?

thebman

ChRoMe wrote: »

25 years of rent does not leave you with nothing, you will have had a home for the period without any of the liability associated with owning property a very attractive proposition

None of the maintenance or furnishing costs in many cases too. People who get loans for houses rarely factor in the upkeep and changing it about all the time which renters are less likely to do.

Godge

DublinWriter wrote: »

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?

I think you are missing something (or maybe you are thick)

Diarmuid wrote: »

Now you're beginning to realise what a real housing crash is like!

Look at Japanese house prices in the past 25 years in real terms

Absolutely right about Japanese house prices.

http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/26/Japan-Urban-Land-Index.html


Look at that index for Japanese urban land. 20 years after the bubble burst, the land is worth half what it was worth at the peak.

2014 may be the best time to buy.

books4sale

bluewolf wrote: »

what is the obsession with owning property? you pay rent for flexibility and not being tied down. you pay it and in return get a roof over your head. that's not nothing. although apparently to all the 'but i just wanted a home for my family' people, having a roof over your head really is nothing if you can't have a chance to make a profit on it too.
you might as well say 25 years of grocery shopping = nothing instead of growing your own food or something. 25 years of bus trips = nothing instead of a car. It depends on what you want in the meantime.
It is utterly bizarre to still see this mentality in this day and age. To want a home is one thing but to insist that renting is a total waste is

Well said.... to add to a popular phrase.

Rent is dead money......but at least I have my freedom!

Another angle, you bought into the mentality, the dream, the whatever.

How many with mortagages could truly say they're free.

You gave it to 'da man' and now you're takin' from 'da man'.

Shackle down the masses so to speak, you're not in control anymore, a huge weight around your neck 'a hangman's noose'....a mortgage.

You've just been had. Let's see you start a revolution from your couch.

Ya, didn't think so.

Freedom.....indeed!

jank

DublinWriter wrote: »

I couldn't really help the year that my mother died.

...and no, I didn't buy another property. As I mentioned, I used the funds to put on deposit in my existing offset mortgage so that it would be effectively interest free and paid off seven years early.

So you lost out on interest on 280k?

That over 4 years is a loss of almost 35k at a modest 3% interest. Interest rates of 5% + was not uncommon in the good times. If it was 5% over 4 years then you are talking about $60k.

Tell me, has your property value increased by 35k-60k since 2007?
So you are basically holding cash in an account to offset interest payments on a depreciating asset. Losing money twice here.

Sorry, but these are the facts. There is no such thing as a free mortgage from a bank. You should stop telling pseudo Celtic tiger economic myths. My favorite being that property prices always go up.

noxqs

DublinWriter should get a nobel price in Economics. Paul Krugman is an amateur in comparison. Stating arguments like:

X = A
Y = B

Therefore, X > Y. QED.

DublinWriter is not a philosopher or he would have spotted his almost classic textbook example of a reductio ad absurdum.

The list of flaws in your logic, besides the core logical fallacy (lol), is so long and repeated over and over on this forum and elsewhere, that there is no point replying to this anymore. Suffice it to say, if you were the finance minister of Ireland, we would be in deeper trouble.

jank

DublinWriter wrote: »

Dude.

In all seriousness, are you arguing that Western Europe will experience continual negative economic growth year on year for the next twenty-five years?!?

I mean, come on. Even David McWilliams would call you a pessimist.

You seriously think that a house bought for 700K in 2006/2007 will be worth less in 2036??!

350k growing @ 2% compound for 25 years is about 575k, so yes it is entirely possible!
You having to be hitting 3% + on average every year for 25 years to be back to where you were.

Of course this is not even accounting for interest payments.

I think the penny is finally droping for you

jank

Godge wrote: »

I think you are missing something (or maybe you are thick)








Absolutely right about Japanese house prices.

http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/26/Japan-Urban-Land-Index.html


Look at that index for Japanese urban land. 20 years after the bubble burst, the land is worth half what it was worth at the peak.

2014 may be the best time to buy.

Have a look at Germany too, Negative house prices for the last 10 years.

fricatus

DublinWriter wrote: »

Sorry to sound thick, but am I missing something here?

25 Years of Mortage Repayments = house.
25 Years of rent payments = nothing.

I don't think you're thick, or missing anything! I'd put it more like this though:

25 Years of Mortage Repayments = roof over your head for 25 years + house.
25 Years of rent payments = roof over your head for 25 years

DublinWriter wrote: »

Even in the most modest and benign of economic inflationary environments, does anybody here seriously believe that a house bought today will be worth less or equal to what it will be worth in 2036?

People are pointing to all sorts of property crash data from all around the world, but maybe the better point is this: do you really think your rental payment in 20-25 years' time is still going to be lower than my mortgage payment at that point?

Monty Burnz wrote: »

Oh god, we're not going to have to debunk the 'rent is dead money' meme again, are we?

Calling it a "meme" is meant to imply that it's not true then, I take it?

Sure it's not dead money in the sense that you pay for - and get - a certain service. However if you can pay a mortgage for a similar amount, and then own the house after 25-30 years, and not have to pay anything thereafter, surely that's better? You're getting the same service after all as the guy who's renting, right?

Take inflation into account too. The property crash and price deflation of the past few years has coloured people's perceptions, but you've got to understand that this is a very, very unusual situation historically, and that over time, inflation is the trend. It's not a big deal in the short term, but 2% annual inflation over 25 years adds up to 64% (because it compounds).

Nobody can predict the future, but remember that 2% is the ECB's target inflation rate, so that will be the actual rate over the next 25 years if Trichet, Draghi, etc. are all successful in managing the currency!

If you accept this assumption, then you also accept that rents will gradually rise to 64% above current rents by 25 years' time. The mortgage, being for a fixed amount, will stay about the same (albeit fluctuating in a narrow band due to rate changes).

So not only will your rent be 64% higher than my mortgage in 2036, but I will also make my final payment at some point around then. You, on the other hand, will have to keep paying, month on month, no doubt working beyond retirement age! At least your landlord will be happy!

coffee_cake

So not only will your rent be 64% higher than my mortgage in 2036, but I will also make my final payment at some point around then. You, on the other hand, will have to keep paying, month on month, no doubt working beyond retirement age! At least your landlord will be happy!

I'm too tired to bother getting into figures right now, but I am going to say it again: the difference is flexibility. It's also house repairs and everything else a landlord is responsible for that you're not. Maybe if I continue to rent I'll be paying a high payment for the next number of years. And maybe one day I'll decide I've had enough and I'm going to move to france or spain and rent there for a while, no problems. Anything breaks down, landlord - no cost of repairs. etc. You, meanwhile, are still stuck living in the same place, bills, and lack flexibility. Now, maybe that's what you're happy with. Maybe you really do want to trade that for (perceived or otherwise) security. It still doesn't mean one is inherently better than the other, imo.

Monty Burnz

jank wrote: »

Have a look at Germany too, Negative house prices for the last 10 years.

Or Japan - prices falling for over 20 years.

Monty Burnz

fricatus wrote: »

Calling it a "meme" is meant to imply that it's not true then, I take it?

Yes, of course it's not true.

fricatus wrote: »

Sure it's not dead money in the sense that you pay for - and get - a certain service. However if you can pay a mortgage for a similar amount, and then own the house after 25-30 years, and not have to pay anything thereafter, surely that's better? You're getting the same service after all as the guy who's renting, right?

For the umpteenth time, I'll explain the nonsense of 'rent is dead money'; you either rent a property, or you rent money to 'buy' property. The rent you pay for the property is commonly called 'rent'. The rent you pay for the money to buy property is called 'interest'. Mortgage interest is dead money, no?

And of course if rent is lower than the mortgage on the same property, things get very interesting. I rented a place during the bubble for 5 years that cost me 1500 to rent, but would have cost another sucker 4100 per month to buy. That's quite a difference. In fact, extrapolated, it's the difference between being a millionaire with the cash to buy two such houses and a few Ferraris and ending up with one such house at the end of the mortgage term.

The funniest thing though is that we are still hearing the same idiotic rationalisations for buying at all costs that has trapped so many into bubble-priced shoe boxes. Some people will never learn.

DublinWriter

jank wrote: »

350k growing @ 2% compound for 25 years is about 575k, so yes it is entirely possible!

Now factor in DIRT.

jank wrote: »

You having to be hitting 3% + on average every year for 25 years to be back to where you were.

Huh? Paid €230 for the house in 2003. House is currently valued at €210.

jank wrote: »

Of course this is not even accounting for interest payments.

Told you - I don't pay *any* interest on my mortgage because I was lucky enough to get an offset mortgage before they pulled the plug on them in this country.

jank wrote: »

I think the penny is finally droping for you

Yeah...I'm beginning to understand just how much of an emotive subject this is for those who rent or still live with their parents.

Monty Burnz

DublinWriter wrote: »

Yeah...I'm beginning to understand just how much of an emotive subject this is for those who rent or still live with their parents.

The people who can now pick up a house or (especially) an apartment for peanuts? Yes, it must be galling...

Diarmuid

DublinWriter wrote: »

Yeah...I'm beginning to understand just how much of an emotive subject this is for those who rent or still live with their parents.

catch me if you can

Stupidest thing I did during the book years was down to being young and inexperienced . I got one of those ridiculous MBMA credit cards. applied online think it was 2005. Didnt have to sign or fill out much at all to get it. And got sent a 5k card in the post. Pissed it way on partying and stupid clothes etc. I really and i mean really learned my lesson and paid the card off myself and cancleled it. and i will never ever get another credit card in my life.

I had sense enough not to get a huge mortgage and our house was built for 135,000 back in 2006. Back then it was valued at 600k! nowadays id imagine its worth half that or less. But we are happy we arnt in negative equity and have no loans or fancy cars. we just save save save. Despite being told to get out and go spending by the government we will not be doing this.

swampgas

bluewolf wrote: »

I'm too tired to bother getting into figures right now, but I am going to say it again: the difference is flexibility. It's also house repairs and everything else a landlord is responsible for that you're not. Maybe if I continue to rent I'll be paying a high payment for the next number of years. And maybe one day I'll decide I've had enough and I'm going to move to france or spain and rent there for a while, no problems. Anything breaks down, landlord - no cost of repairs. etc. You, meanwhile, are still stuck living in the same place, bills, and lack flexibility. Now, maybe that's what you're happy with. Maybe you really do want to trade that for (perceived or otherwise) security. It still doesn't mean one is inherently better than the other, imo.

+1


The flexibility angle is very important from another point of view - risk of a serious downturn.

When you sign up for a mortgage, you are doing two things: locking yourself to a property, and committing to paying the bank back every month. Stop paying, lose the house. If you want to re-locate, you have to be able to sell the house.

Now when everything is going well, it's not a problem - employment is easy to find, and the house should be easy to sell if necessary. In fact you may have positive equity and be in a position to cash in if you do sell.

However if your job disappears and another doesn't show up, you need to be mobile. Let's say there has been a downturn and you are also in negative equity.

You might be able to find another job 50 miles away, or 100 miles away, or in London, or Toronto.

If you are renting, you have that flexibility.

If you have a 35 year mortgage, you have to consider what happens in the first 15-20 years (when much of the capital is still outstanding) if there is a down turn and you lose your job. The combination of serious negative equity and lack of income can mean you end up losing the house and are in debt - that's worse than dead money, right?

Or it can mean you end up having to rent somewhere else where you can find work while still paying the mortgage - a tough proposition - worse than having paid rent for a while maybe?

What a lot of people forgot in the bubble when they were taking out 35 and 40 year mortgages was how long 35-40 years is compared to economic cycles. They simply didn't factor in the real possibility that over a period of decades a serious blip in the economy was likely to happen, and that they could end up badly exposed when it did.

So you might be paying more per month renting instead of paying a mortgage, but you are also taking on a lot less exposure to risk.

swampgas

catch me if you can wrote: »

Stupidest thing I did during the book years was down to being young and inexperienced . I got one of those ridiculous MBMA credit cards. applied online think it was 2005. Didnt have to sign or fill out much at all to get it. And got sent a 5k card in the post. Pissed it way on partying and stupid clothes etc. I really and i mean really learned my lesson and paid the card off myself and cancleled it. and i will never ever get another credit card in my life.

I had sense enough not to get a huge mortgage and our house was built for 135,000 back in 2006. Back then it was valued at 600k! nowadays id imagine its worth half that or less. But we are happy we arnt in negative equity and have no loans or fancy cars. we just save save save. Despite being told to get out and go spending by the government we will not be doing this.

I know a lot of people who learned this lesson with credit cards early on in life - it made them a lot more cautious about debt. My wife when very young got into a real mess and had to move back home with her parents so she could pay off her debts. This experience and then working in finance (on the credit lending side) gave her a real understanding of the costs and risks of borrowed cash.

It's too bad so many people are now learning the hard way with massive mortgages instead of smaller loans.