Residential Property Market

euroboom13

Just a thought.

The ave family home, can be rented ,in Dublin, for around 1000e a month,but the ave home owner, is paying (on recent purchase price) approx 1300e a month.

Going on this simple maths ,if a family wants to buy ,at this "bargain" bottom,they will have to find another 300e a month.Also pay prop tax and water rates and worry about the end of, our record breaking low interest rates!(which will end and could cause repayments to double).

My point is, the "average family "aren't going to suffer a " buy "until 1)rents rise dramatically or 2)house prices fall(more)

so if ave families aint buying/ave house price must fall

I am only using basic expenditure, but my point is rent v morgages.....rent is the cheaper and less vunerable to bank rates/new taxes.

I know this is a sore subject.(i am pro property ownership ,but only when it makes sence and not when it effects a families, standard of living)

roro2

All well and good in theory, but the average home purchaser isn't making decisions based only on this calculation. There is a premium attached to home ownership versus renting that is not captured in the equation. And this psychological/social/non-financial element is even more pronounced in this country. So even if the average purchaser is using this calculation, if they were prepared to pay the additional €300 per month in your example, then the equation is balanced.

There is also another point that is often missed - at the end of the life of the mortgage, the purchaser is left with an unencumbered asset equal to the value of the house. Or another way of looking at it - they can live in the house rent-free for the rest of their days whereas the renter will continue to have to pay rent even when their income diminishes. This isn't captured by the "monthly rent < monthly mortgage repayment so it's clearly better to rent" argument.

euroboom13

I am struggling to see how young families settled into rented accommodation would ..1)pay 20% deposit 2)sign up for an extra €300a month 3)prop tax/water rates for the privilege of signing up to, a upward only mortgage agreement.

As an investment fair enough ,I see all the benefits ,but since every penny counts these days ,I can not see any mass participation in property ownership ,without some fundamental change.

My question is will the gap narrow .morgage v rent

Interest rates can only rise
House prices may fall/rise
Rents may rise /fall
Gov taxes may rise/fall
Or are we at optimum buy territory.(if we are at optimum, buying in recession ,is extremely sacrificial ,and I assumed it wouldn't be as painful)