Mickiemcfist wrote: » Ehh, the comparison is between buying or renting an investment property?? How does that makes sense?
beaz2018 wrote: » Are you assuming that every house in Dublin has gone down in value by this amount based on a CSO headline % number? Surely certain areas will improve/fall in price over time quicker/slower than others depending on a number of factors.
The Student wrote: » 4) We are talking about an investment property not your PPR so a fall in property will affect your investment decision.
Mickiemcfist wrote: » Ok replying in order 1) 40k deposit is under 100 a month on a 400k home spread over the length if you want to add that 2) 30/35 years of paying mortgage vs paying rent until you die 3) True 4) House prices typically fall & rise together, so the house you'd be moving to would also be comparitavely cheaper, so there's little transactional difference 5) Nobody has suggested that, however looking at the last recession I'd much rather have been a homeowner than a tenant, homeowners seem to be immune from eviction Even assuming the same monthly cost to rent vs buy, its a choice between renting forever, or paying a fixed amount over 35 years which eventually finishes, there's very little pro's in the rent forever column.
voluntary wrote: » Seems like the price drops in Dublin accelerated, -0.1 in February to -0.3% in March all residential and houses were worse, moved from +0,2% gain in February to -0.5% loss in March. -0.5% means 2k montly loss on a 400k house, so negates the 'rent is a dead money' argument.
voluntary wrote: » Mortgage monthly repayments may be made cheaper then rent, but only on some strong assumptions, like: 1) you don't include the deposit in the calculation, so minimum of 40/80k on 400k home (manipulative assumption) 2) you stretch the repayment term to 30 or 35 years, so basically pay pretty much interest only and very little capital. (poor advice assumption) 3) you ignore the other costs associated with ownership in the comparison (property tax, maintenance, management fees) (false assumption) 4) the house prices do not collapse, so you won't lose the deposit (very weak assumption) 5) you can hand the keys back if you move into a negative equity and have the debt forgiven (false assumption)
voluntary wrote: » 2) you stretch the repayment term to 30 or 35 years, so basically pay pretty much interest only and very little capital. (poor advice assumption)
voluntary wrote: » I don't believe such decline would encourage home owners to sell, could however relax the pressure on buy by people currently renting (especially if someone is lucky enough to be locked into an rent restricted zone and paying below the market rates). As long as a decline by more than 0.1% per month continues it should be cheaper to rent than to buy (less money burnt as 'dead money'). Regarding your example, well, the end result is the same, right? You're 50 euros worse off buying that jumper than your friend who paid for it 50 less. The terms 'gain' and 'loss' are very liquid and don't mean much. What matters is what's your balance at the end of the day.
aloooof wrote: » As another poster mentioned, they are incredibly unlikely to continue this trend during the entire duration of the mortgage. What you are calling "dead money" is the cost of having security of your home vs not buying at the exact optimal bottom of the market. A figure of ~3k is comparatively minor in this context, even leaving aside capital appreciation over the long run.
Mickiemcfist wrote: » That's stretching things a little. Youd rarely if ever sell your primary residence and not buy another one so the monthly loss isn't real unless you buy another in a completely different market. The 2k loss in the above example isnt a loss, it's a worse deal than you could have got, a comparison is saying I bought a jumper the other day for 100 & now it's on sale at 50, I've lost 50 quid.
voluntary wrote: » If you buy with mortgage and pay 1500 montly (25 year mortgage), then I can only assume 1000 would be interest and 500 capital repayment. So the 'dead money' this month was: 2000 (capital depreciation) + 1000 (interest) + 40 (property tax) + 150 (management fees) + 50 maintenance = 3240 Just saying. When prices decrease even by small amount each month then ownership/mortgage becomes pretty costly in terms of 'dead money'
Graham wrote: » Over the life of a typical mortgage you are unlikely to end up with a property that's worth less than you paid for it. At current interest rates you're also likely to be paying less per month than someone renting a similar property. Over a lifetime of paying rent you are guaranteed to end up with nothing to show for it.
voluntary wrote: » Yeah, in a long run that's right. The timing is the key though. If you rent and spend let's say 1500 per month, then this is your monthly 'dead money' If you buy with mortgage and pay 1500 montly (25 year mortgage), then I can only assume 1000 would be interest and 500 capital repayment. So the 'dead money' this month was: 2000 (capital depreciation) + 1000 (interest) + 40 (property tax) + 150 (management fees) + 50 maintenance = 3240 Just saying. When prices decrease even by small amount each month then ownership/mortgage becomes pretty costly in terms of 'dead money'
voluntary wrote: » Yeah, in a long run that's right. The timing is the key though.
voluntary wrote: » The price decreases in Dublin have been negating the 'rent is dead money' for hte last 6 or 7 months. Nobody knows the future.
Jaster Rogue wrote: » No it doesn't. Not unless the €400k house dropped by €2k every month from now on until the price reached €0.
Amirani wrote: » Residential Property Price figures released by the CSO for March: https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexmarch2019/ Slight Month-on-Month increase nationally of 0.2%. The Year-on-Year rate though now drops to 3.9%. Dublin down again slightly by 0.3% MoM. Up 1.2% versus last year.
JJJackal wrote: » Just an observation - looking at 2 properties. Bids seem to be flying in. Both are currently over asking. Bidders have bid in 10k increments in both (which I thought was unusual - the properties I am looking at are mid range prices in Dublin) Is there a guide for bids based on value of house eg 1k increase for 100k house (a 1k increase on a 1million house would not make sense?)
cruizer101 wrote: » This is what I find bizarre though, I think the majority of people would be happy with a change like that. The issue is those who wouldn't be happy include a lot of people who like to make a lot of noise (kinda like the water protests). Census 2016 shows that Owner Occupied make up 1,147,552, rented local authority 143,178, rented other 326,493. So the vast majority are owner occupied so probably aren't overly anti eviction, (obviously a certain amount will be). I honestly think the majority would be in favor of better legislation around evicting problem tenants, no one wants problem tenants in a rented house down the road from the house you own, but they are the quiet majority who just get on with life and work and pay their taxes and don't shout the loudest.
The Student wrote: » Do you honestly see any politician ever voting for a changes in the law which would end up in someone being evicted from a property. This would be political suicide.
beauf wrote: » The issues with the building is that they are only building for the most profitable sector. Top down. The crisis is mainly at the bottom and middle end. There is no plan to solve this.
The_Conductor wrote: » +1 We need high density, high volume residential accommodation output- esp. in city centers. Dublin is a special issue- and needs highrise, high density developments- as central as possible- where people do not need to commute. Ideally- as large as possible a portion of this should be affordable housing- and certain professions (I'd argue doctors, nurses, teachers- and anyone in fulltime gainful employment of under 40k gross per annum) should get priority. Dublin city council- was under the control of political entities who were diametrically opposed to development (the Greens) for too long- and despite having access to considerable redevelopment funds- didn't draw on them. Perhaps the time to ask the question- whether or not local authority housing should be formally nationalised- is now- as the piecemeal approach on a council by council, local authority basis- has not worked. Against this backdrop- we have the government investing 9-10 billion in infrastructure projects- when we don't have the available workforce for building our accommodation needs. Surely- parking infrastructure projects for a rainy day- might make more sense?
The_Conductor wrote: » Dublin city council- was under the control of political entities who were diametrically opposed to development (the Greens) for too long- and despite having access to considerable redevelopment funds- didn't draw on them.
IAmTheReign wrote: » I saw an article the other day in the indo saying that planning applications for over 6000 properties had been lodged in the previous 5 days. The article spun it to sound like a bad thing by saying how nearly half of them are being built buy to let and will never go on sale to families. I mean you can't win. People can't find a place to live in Dublin but they still complain when the only people with the resources to build try and build.
