Is Dublin really that expensive?

MarkAnthony

I've made this point in two threads which on reflection could be seen as off-topic. So in an effort to not derail those threads further lets (if anyone is willing) have this discussion here.

I've run (some not particularly scientific) comparisons in prices to the following cities:

Oxford(shire)
Edinburgh
Bordeaux
Toulouse
Liverpool
Manchester

In only one (Liverpool) was I able to find cheaper property prices, and that city has an issue with people leaving it! Recently houses were offered for £1 for anyone showing that they had the funds to renovate.

Anecdotally I'm from Oxford and I'm 35. My parents were able to afford there, many of my friends were able to afford there and many were not. As has been pointed out Oxfordshire is far more expensive than Dublin for good reason. I think that point is arguable but for the purposes of this I'll concede it. So given my contemporaries can afford property in a much more expensive city and I've managed to find a single incidence of a cheaper city in the British Isles I pose the question in the title.

I've an open mind here, all I ask is this thread isn't used as a moan about how hard it is in Dublin, I know it's hard and I don't for one second want to detract from that. However when I've some more time I will pull across the examples I used in the other thread in relation to affordable housing in Dublin (County) and get some opinions there too.

So if anyone would care too, I'd be delighted to see where it's much more affordable in Europe to buy somewhere.

athtrasna

Property prices alone don't give you a comparison, you need to add in average salaries, cost of living etc. Not sure it's a worthwhile exercise myself, it's not going to change anything.

MarkAnthony

athtrasna wrote: »

Property prices alone don't give you a comparison, you need to add in average salaries, cost of living etc. Not sure it's a worthwhile exercise myself, it's not going to change anything.

Fair enough, but does anything discussed on boards change anything? :pac:

(Okay there are some very limited exceptions)

I'd be very much obliged to anyone who wants to include that data as I agree on that point.

retalivity

The current euro/sterling exchange rate will skew in favour of dublin not being that expensive in comparison to a lot of places in the UK.

ongarite

Dublin isn't any more expensive than any capital/major urban city for home & rental home prices.
The late 20th & 21st century trend of urbanisation & increasing centralisation of workforces will only keep prices at a high level for the foreseeable future IMO.

http://www.globalpropertyguide.com/most-expensive-cities
http://www.globalpropertyguide.com/Europe/Ireland/price-rent-ratio

Average wages across Europe:
http://ec.europa.eu/eurostat/statistics-explained/index.php/Wages_and_labour_costs#Gross_wages_.2F_earnings

alastair

One thing to keep in mind is that Dublin is a capital city, and carries a premium as such. Of course Edinburgh might yet become a capital, but you get the point. If Oxford is given a boost for being a hub of learning and high-tech, and convenient to a metropolis, then Dublin also warrants one for being the centre of administration, governance, education, finance, diplomacy etc etc.

My take is that it's certainly not a hugely expensive aberration when in comparison to other capitals, but that doesn't really help if you feel it's left affordability behind a long time ago.

MarkAnthony

ongarite wrote: »

Dublin isn't any more expensive than any capital/major urban city for home & rental home prices.
The late 20th & 21st century trend of urbanisation & increasing centralisation of workforces will only keep prices at a high level for the foreseeable future IMO.

http://www.globalpropertyguide.com/most-expensive-cities
http://www.globalpropertyguide.com/Europe/Ireland/price-rent-ratio

Sorry for being thick - I didn't quite understand the first link. What does the 'years' relate to? The Second link puts us in the top 25, so I suppose we're not exactly cheap either!

Thanks for the links, interesting reading.

Wanderer78

athtrasna wrote: »

Property prices alone don't give you a comparison, you need to add in average salaries, cost of living etc. Not sure it's a worthwhile exercise myself, it's not going to change anything.

id have to agree to a point to this. living costs are a complicated one. i do think ireland in general has extremely high living costs particularly in relation to taxation. we have a dreadfully poor public service system in relation to the rate of taxation so its very difficult to compare it to other places. i feel for those trying to make a go of things in places like dublin or those that are simply stuck there.

MarkAnthony

Wanderer78 wrote: »

id have to agree to a point to this. living costs are a complicated one. i do think ireland in general has extremely high living costs particularly in relation to taxation. we have a dreadfully poor public service system in relation to the rate of taxation so its very difficult to compare it to other places. i feel for those trying to make a go of things in places like dublin or those that are simply stuck there.

I very much take the point above in relation to Sterling/Euro but the UK has lower earning and from what I've seen very similar tax rates. I'm open to correction here of course.

Wanderer78

MarkAnthony wrote: »

I very much take the point above in relation to Sterling/Euro but the UK has lower earning and from what I've seen very similar tax rates. I'm open to correction here of course.

i have reason to believe taxation can actually be fairly high in parts of england, when you take into account things like poll tax, council taxes etc but i do think they have a far superior health care system, transport network etc etc. this is a very difficult thing to compare as our countries aint exactly like for like. interesting to see where this thread can go though.

stupid_is_as _stupid_does

I dont know how reliable this site is but using the property price comparison tool only oxford and bordeaux are marginally more expensive overall as a percentage of income. Would prefer to see as percentage of after tax income.

<mod snip>
Sorry i cant post links yet.

aviator7

I think while people are complaining about rental costs, it's actually a quality of life topic more than anything else.

Rents have increased massively in the last two years, and unfortunately even housing of a very low standard are still climbing rapidly.

I think a person on minimum wage for example would struggle greatly to afford to live in Dublin at this point, when somebody working a 40 hour week is finding it tough to rent a room in a shared house, you know there is a problem.

I'm in a job that pays ok, but have noticed my spending money has been steadily dropping.

With us now expected to pay water charges, increasing traffic on the roads causing longer commutes, an increasingly expensive social scene (With alcohol over 60% higher than the EU average), a country which is in the top five most expensive countries worldwide for running a car - yet we have a very mediocre and expensive transport system and a lot of people are left without the option of not having a car, constant cuts to education and (a very poor IMO) health system, and rapidly climbing rents to top it all off.

Case in point, look at Irelands cost of living index. We are 7th most expensive in Europe, Germany is 15th. Yet Germany has the 3rd highest quality of life in Europe, and Ireland comes in 10th.

To me it feels like a country in which you just can't win recently. For me, my financial state seems to be getting worse since the recession apparently ended.

Its the perfect sum for unhappiness IMO, increased rents (or increased cost of anything for that matter) = reduced quality of life. Plain and simple.

Wanderer78

aviator7 wrote: »

I think while people are complaining about rental costs, it's actually a quality of life topic more than anything else.

Rents have increased massively in the last two years, and unfortunately even housing of a very low standard are still climbing rapidly.

I think a person on minimum wage for example would struggle greatly to afford to live in Dublin at this point, when somebody working a 40 hour week is finding it tough to rent a room in a shared house, you know there is a problem.

I'm in a job that pays ok, but have noticed my spending money has been steadily dropping.

With us now expected to pay water charges, increasing traffic on the roads causing longer commutes, an increasingly expensive social scene (With alcohol over 60% higher than the EU average), a country which is in the top five most expensive countries worldwide for running a car - yet we have a very mediocre and expensive transport system and a lot of people are left without the option of not having a car, constant cuts to education and (a very poor IMO) health system, and rapidly climbing rents to top it all off.

Case in point, look at Irelands cost of living index. We are 7th most expensive in Europe, Germany is 15th. Yet Germany has the 3rd highest quality of life in Europe, and Ireland comes in 10th.

To me it feels like a country in which you just can't win recently. For me, my financial state seems to be getting worse since the recession apparently ended.

Its the perfect sum for unhappiness IMO, increased rents (or increased cost of anything for that matter) = reduced quality of life. Plain and simple.

very well summed up. im deeply concerned about our public services. its not sustainable. i class our 'recovery' as survival mode with more and more sinking!

stupid_is_as _stupid_does

Wanderer78 wrote: »

very well summed up. im deeply concerned about our public services. its not sustainable. i class our 'recovery' as survival mode with more and more sinking!

I would also agree with aviators post. I would have quite a decent salary but finding living in Dublin and the overall cost of living means it will be very difficult to save for a deposit on a house. Rent is just one element of this.

MarkAnthony

stupid_is_as _stupid_does wrote: »

I would also agree with aviators post. I would have quite a decent salary but finding living in Dublin and the overall cost of living means it will be very difficult to save for a deposit on a house. Rent is just one element of this.

I want to be very careful in saying this as it seems to attract certain posters like flies to... but this is where I think the CB went wrong. I completely agree with the 3.5x limit but the 10-20% requirement, I personally think is onerous.

I've said it before and I don't want to derail the thread with this but 100% mortgages are not evil when used appropriately with the appropriate income limitations or guarantees. I bought my first place at 19/20 with a 100% mortgage and a guarantee from my parents against their house. Even if for the sake of argument we concede 100% mortgages are belzebub in Financial instrument form what is wrong with a 92% or 95% mortgage where the income limits are adhered to? Perhap even make 3.5 the ceiling with say only 3x available on a 95% mortgage.

It seems to me that all the higher deposit requirements do is keep people in the rental trap.

aviator7

MarkAnthony wrote: »

.... is keep people in the rental trap.

I think your post can be summed up by this last few words.

Renting in this country is a pain, end of story.

No rent control, no stability, no long term leases, a current lack of available places, and while there are minimum standards of accommodation set out, they are not followed. Every 12 months you have to worry about whether or not you will still be able to afford your current place. Landlords get away with murder in this city.

We have even reached the point where a landlord can call Irish Water and provide a tenants name to them, yet somehow this isn't a breach of the Data Protection Act.

I'm the type of person that happily pays a little more for things out of convenience. E.G paying more for an unlimited phone plan so I don't have to worry about going over data allowances or minutes. However we are now in a situation where landlords are increasing rent every year, and we are being asked to pay a lot more money for absolutely nothing in return.

It's like the minimum price of a bedroom in a shared house in Dublin has magically become 550 Euros, regardless of condition of the house, facilities, location, size of room, proximity to services, how many people you are sharing with etc. It's mind boggling.

To top it off, people are genuinely afraid to complain about things in their house to their landlord right now, because they know that they are very much replaceable as tenants when the lease ends. "Put up or shut up."

I don't blame the landlords at all, it's currently a supply and demand situation, but what gets me really riled up is the fact that NOTHING is being done about it.

I don't like being stuck in the same place, hence no interest in buying property, but I should be able to move into an apartment in reasonable condition and expect to be able to stay there for longer than 12 months if I wish, if I am a good tenant, without having to worry about all the aforementioned things.

stupid_is_as _stupid_does

MarkAnthony wrote: »

I want to be very careful in saying this as it seems to attract certain posters like flies to... but this is where I think the CB went wrong. I completely agree with the 3.5x limit but the 10-20% requirement, I personally think is onerous.

I've said it before and I don't want to derail the thread with this but 100% mortgages are not evil when used appropriately with the appropriate income limitations or guarantees. I bought my first place at 19/20 with a 100% mortgage and a guarantee from my parents against their house. Even if for the sake of argument we concede 100% mortgages are belzebub in Financial instrument form what is wrong with a 92% or 95% mortgage where the income limits are adhered to? Perhap even make 3.5 the ceiling with say only 3x available on a 95% mortgage.

It seems to me that all the higher deposit requirements do is keep people in the rental trap.

You are correct i dont want to derail original thread. Did you have a chance to look at website i referred to a few posts up? It seems Dublin is up in the top half of the cities you have posted in terms of price to income ratios. I make no judgement on whether that is rightly or wrongly just information.

robp

MarkAnthony wrote: »

I want to be very careful in saying this as it seems to attract certain posters like flies to... but this is where I think the CB went wrong. I completely agree with the 3.5x limit but the 10-20% requirement, I personally think is onerous.

I've said it before and I don't want to derail the thread with this but 100% mortgages are not evil when used appropriately with the appropriate income limitations or guarantees. I bought my first place at 19/20 with a 100% mortgage and a guarantee from my parents against their house. Even if for the sake of argument we concede 100% mortgages are belzebub in Financial instrument form what is wrong with a 92% or 95% mortgage where the income limits are adhered to? Perhap even make 3.5 the ceiling with say only 3x available on a 95% mortgage.

It seems to me that all the higher deposit requirements do is keep people in the rental trap.

Some experts in the field report that the 3.5x limit is more restricting than the lump sum requirement. Anyone can save harder but increasing your salary is often not possible.

The lump sum requirement restricts the young more than other groups. However 20 YOs don't need to own houses and its not even financially smart for many to do so as many 20 YOs have low rent due to house sharing. Anyway banks can still make exceptions in special cases. There is no such thing as a rent trap.

MarkAnthony

robp wrote: »

Some experts in the field report that the 3.5x limit is more restricting than the lump sum requirement. Anyone can save harder but increasing your salary is often not possible.

The lump sum requirement restricts the young more than other groups. However 20 YOs don't need to own houses and its not even financially smart for many to do so as many 20 YOs have low rent due to house sharing. Anyway banks can still make exceptions in special cases. There is no such thing as a rent trap.

I really don't understand this logic.

If a couple on minimum wage chose to buy they can do, even with the 3.5x limit. 36K a year allows for a purchase of 126K which will buy a 3 bed terrace in some parts of Dublin.

If the same couple though are even renting a room - let's say €600 per month for a decent double - they've less than 29K before tax to live and save on. I really don't see how they can save harder.

Given that any (couple) can afford to buy despite the 3.5 limitation, it would seem to me the income limitation is no limitation at all to actual purchasing it simply means that one has to adjust their expectations as to area/size. However the deposit requirement would seem to be an issue no matter which way you look at it.

Riverireland

MarkAnthony wrote: »

I want to be very careful in saying this as it seems to attract certain posters like flies to... but this is where I think the CB went wrong. I completely agree with the 3.5x limit but the 10-20% requirement, I personally think is onerous.

I've said it before and I don't want to derail the thread with this but 100% mortgages are not evil when used appropriately with the appropriate income limitations or guarantees. I bought my first place at 19/20 with a 100% mortgage and a guarantee from my parents against their house. Even if for the sake of argument we concede 100% mortgages are belzebub in Financial instrument form what is wrong with a 92% or 95% mortgage where the income limits are adhered to? Perhap even make 3.5 the ceiling with say only 3x available on a 95% mortgage.

It seems to me that all the higher deposit requirements do is keep people in the rental trap.

I agree. Since we are Always being told that we are obsessed with homeownership and encouraged to view renting as normal, it would seem Europe wants to discourage home ownership.

MarkAnthony

Riverireland wrote: »

I agree. Since we are Always being told that we are obsessed with homeownership and encouraged to view renting as normal, it would seem Europe wants to discourage home ownership.

I've always wondered why home ownership is seen as a bad thing by some. Surely everyone needs a home, property needs to be owned by someone ergo let's own the building we live in. Perhaps I'm missing something.

Riverireland

MarkAnthony wrote: »

I've always wondered why home ownership is seen as a bad thing by some. Surely everyone needs a home, property needs to be owned by someone ergo let's own the building we live in. Perhaps I'm missing something.

That's how I see it myself. I do think mountains are being put in peoples way when it comes to buying these days. 2 people become unemployed. The one renting can get rent allowance straight away, continue paying rent to land lord who may have mortgage which he continues paying, all stays the same. The one with the mortgage is not eligible for mortgage interest payments since jan 2014. Bank gets paid nothing and person with own house ends up loosing house/homeless. Shed some light on that policy for me someone?

Jaketherake

MarkAnthony wrote: »

I've always wondered why home ownership is seen as a bad thing by some. Surely everyone needs a home, property needs to be owned by someone ergo let's own the building we live in. Perhaps I'm missing something.

Depends on your age. You'll notice that people in their early 20s have almost always said "I'm happy renting, whats this obsession with home ownership"

Then when in their 30's those who were marrying and having kids all wanted to buy.

Then in their 40s if they havent bought yet they get all worried and its everyone elses fault that they werent able to buy.

And noone ever listens to those older than them when they tell them what it will be like in a few years

alastair

MarkAnthony wrote: »

I've always wondered why home ownership is seen as a bad thing by some. Surely everyone needs a home, property needs to be owned by someone ergo let's own the building we live in. Perhaps I'm missing something.

It's not really seen as bad by most though. Take Germany - the poster boy for renting. It's got an engrained culture of renting stemming from the end of WW2 - they needed housing and few could afford to build for themselves or buy, so rentals became the default option. They've great legislation to protect renters, and ensure quality provision for renters. And yet 40% of the population own their own homes. Renting suits some better than owning, and renting in a context of quality stock and security of tenure would suit even more. Different strokes.

robp

MarkAnthony wrote: »

I really don't understand this logic.

If a couple on minimum wage chose to buy they can do, even with the 3.5x limit. 36K a year allows for a purchase of 126K which will buy a 3 bed terrace in some parts of Dublin.

If the same couple though are even renting a room - let's say €600 per month for a decent double - they've less than 29K before tax to live and save on. I really don't see how they can save harder.

Given that any (couple) can afford to buy despite the 3.5 limitation, it would seem to me the income limitation is no limitation at all to actual purchasing it simply means that one has to adjust their expectations as to area/size. However the deposit requirement would seem to be an issue no matter which way you look at it.

Buying isn't a problem. The problem is the size of the loan relative to their earning power. In the case you mention the risk is not so high. Such a couple will have no problem after a few years saving. They probably will have some savings from living at home and housing sharing. If they can't save at all they may be in difficulty in the next crisis. But in a way that is a moot point because the firstly the measures serve to protect banks from taking on too much risk. Maximising home ownership is not the goal.

Given that any (couple) can afford to buy despite the 3.5 limitation, it would seem to me the income limitation is no limitation at all to actual purchasing it simply means that one has to adjust their expectations as to area/size.

Not all couples have two incomes and not everyone lives near a cheap houses.

Jaketherake

robp wrote: »

Not all couples have two incomes and everyone lives near a cheap houses.

The biggest change in home ownership in the last 20 years is that now single income buyers ere more than likely coming up against double income buyers and will not be able to compete, unless it is at a level of property that double income buyers just arent interested (ie the cheapest end of the market).

Double income buyers are the vast majority of the market now.

Riverireland

Jaketherake wrote: »

The biggest change in home ownership in the last 20 years is that now single income buyers ere more than likely coming up against double income buyers and will not be able to compete, unless it is at a level of property that double income buyers just arent interested (ie the cheapest end of the market).

Double income buyers are the vast majority of the market now.

I'd say you're right there. Unless they're cash buyers they'd have to be.

riclad

The problem i see happening in the past 3 years is rents are going up
, which means it s very hard to save up for the deposit to buy a house .
Unless you are willing to buy outside dublin.
Some landlords are leaving the rental market,
because the rental income is less than the mortgage and they are under pressure from the banks to sell up .
Reducing the amount of houses for rent .

KlausFlouride

The only downside of home ownership I've ever seen stated is lack of mobility when it comes to moving for work, which is valid I suppose, but pretty reductive.

Tar.Aldarion

I don't think the problem is the expense, I think the problem is the quality of the apartments themselves, they are terrible for the most part. Yeah other cities are as expensive but when i rent in them the places are actually nie to live in, arent crumbing at the walls and having carpet from the 80s

awec

Tar.Aldarion wrote: »

I don't think the problem is the expense, I think the problem is the quality of the apartments themselves, they are terrible for the most part. Yeah other cities are as expensive but when i rent in them the places are actually nie to live in, arent crumbing at the walls and having carpet from the 80s

Actually I think the biggest problem with Irish apartment is not the decor but rather the design. Decor is easily fixed.

We just don't build them for long term living. They are too small, there is a severe lack of storage space and rooms are poorly thought out. Developers are all about squeezing in as many units to a block as they can possibly fit. Why give each apartment an extra storage room when you can squeeze in an extra apartment at the end and get an extra rental income?

Many apartments have no storage room at all! Imagine you had a child's buggy and the space that would have to take up in your living room or bedroom. Imagine you had suitcases that need storing etc.

Geuze

MarkAnthony wrote: »

I've always wondered why home ownership is seen as a bad thing by some. Surely everyone needs a home, property needs to be owned by someone ergo let's own the building we live in. Perhaps I'm missing something.

It's not a bad thing.

Having public policy extremely biased towards one form of tenure other another is a bad thing.

Giving way too much tax reliefs towards investment in all forms of property over other forms of capital is a bad idea.