Irish Property Market chat II - *read mod note post #1 before posting*

You also have the risk that these LL are the cohort most likely to sell. Yield is often at 3-4% and they would have the same costs as a lad that is getting double the rent.

Of the LL decides to sell you are looking at rent doubling.....if you can find a place to rent.

People sometime don’t fully compare the total cost of house ownership with the rent. The simple calculation of looking at the monthly mortgage amount and the monthly rent amount doesn’t tell the full story.

The main argument against renting is that it’s ‘throwing money away’. However what people sometimes fail to consider is that when you own a home there are lots of costs that don’t go into building equity in the house.

These costs include home repair and maintenance (typically 1% of home value), interest in the mortgage (2-3% and rising). Stamp duty of 1% when buying. Property taxes. Opportunity cost of the down payment, this is identical overlooked but has a really cost. €100,000 down payment is money that is locked into the house and can’t be used to generate a return elsewhere.

Obviously each case is unique but just saying ‘the mortgage is €2000 a month and rent is €2050, so its cheaper to own’ is not fully accurate.

Just pasted this from a very basic search: 'Even with Thursday's modest decline, the average price of houses nationwide remained 810,000 New Zealand dollars ($517,000), putting them beyond the reach of many young people looking to buy their first home. In Auckland, the median price remained NZ$1.1 million.10 Aug 2022' (source). The Euro and USD are are parity, give or take a tiny amount. Dublin was Eur 403,000 Euro as of June, and Eur 320,000 nationwide (source). NZ has more expensive property than Ireland. Like in parts of Canada, a buyer is competing against some very wealthy Asians and not necessarily impoverished locals, a bit like here except the wealthy foreign investor has tax advantages. NZ is beautiful (Ireland is too but I don't to be jannied per OP post), but that beauty attracts a premium.

Another big annoyance with buying now is that planning locks (unless someone wants to spend money they don't have on offsets) most new homes whether developer or self built into methods of heating which are not remotely future (or present) proof. That said the number of rentals with very poor insulation and even storage heating or sometimes inefficient boilers (both very expensive and fairly ineffective) makes that grumble a bit beside the point - new builds at least are generally well insulated and the heating .

A billion people here have probably said it, but for renters, auctioneers / estate agents, who might deliberate curb the reach of their ads to their own web sites, are increasingly preferred to the scammer riddled (reports are taken but it draws so many of them) daft.ie (I might get in trouble for that daft doubting as that and boards share the same owner), altho they themselves don't always properly check references. Any claims from lazy journos about the number of ads there, even if accurate, are therefore misleading.

I am just pointing out that these are large cohorts of people that the state is subsiding rents for. I can easily see this number hitting 60%~70% by the end of the year if prices continue to climb (both for renting and buying)

Yeah good luck trying that. The state already has over 10k homeless figure. If they stop HAP, imagine what the figure will be.

Current hap subsidy for Dublin is capped at €1300. Good luck find anything for that, I would expect this to be over €1800 by some time next year.

People are now also expecting the government to cap fuel/energy prices, same as what they are doing in the UK. Without realising that the state will have to pay energy companies for those that go above the threshold. In the UK they expect it to cost them £130-150 billion for 2 years.

If you rent there are s a good chance the rent will increase. In 20...25..or 30 years time the mortgage ends.. your rent will probably have dou led in that time.

Back when we bought our house the mortgage was 240/ month and it was about 150 month to rent a small 2 bed property in a village.

It mortgage is paid off a long time ago, to rent the same house is 8-900/month.

Go figure which is the best option long term

You don't see any potential issues with rent going from half the cost of a mortgage to double

Bubbles do pop, you know

Based on the fact that the poster said "mortgage is paid off long time ago", I think they have been through multiple boom-bust cycles. It popped. Then it inflated again, maybe to loftier heights than last time. Then popped. And in the end, the poster is mortgage free after their last €240 payment, while renting neighbours continue paying €900. In the long run, through bubbles and recessions, owning a property is rarely a poor decision.

Yes, that I understand, tho I probably don't even think he need to as far as NZ. There's France, some Spanish regions, and across the Atlantic, but if he knows NZ a bit, it might be comfy if not exactly cheap. A lot of the Anglosphere has the curse of over priced property anyhow. If this country wasn't a tax scam for US and other corpos, it would be as poor as many of its people already are now.

The original post was in reply to a poster commenting on the true cost of renting V owning and he was claiming that the true cost of ownership was no allowed for in buying a house. It showed that even in a case where renting seemed more economical in the longterm it had a much poorer outcome. There is little other inference to be drawn from it.

The rental would have been smaller than the house we build and now live in but was adequate for a young couple. We lived in it while the house was being build.

Now yes there is a rental/house ownership anomaly. However part of this is the reality of REITS and there higher cost. Part is quality of house. The house we rented at that stage was no palace. Over regulation without considering the implications (which is probably preventing houses that would be available for short term let's 1-3 years coming onto the market). Regulation has also increased the risk in the case of damage, repossessing your property or in the case of non payment the length of time this can go on for

So which is out of kilter the cost of a house or the cost of renting one

ECB signals further rate hikes as inflation battle intensifies

The ECB is obliged to bring inflation down to around 2% over the medium term, which is normally understood to mean over a two-year horizon.

how are ordinary households and businesses going to cope with multiple interest rate rises on top of ferocious increases to transport fuel, electric, heating and food bills ..

most of the inflation appears to be caused by energy price rises caused by war in ukraine? how are multiple interest rate rises going to help with that problem....

will banks start to cut back on lending next year if they sense many households are struggling to pay essential living bills

jesus looks like ecb are finally not messing around.. very hard to plan budget for buying a house with this going on..

Banks predict another 0.75% rate hike by ECB in October

BofA and Credit Suisse said they had also revised up their calls for a 75 bps ECB rate hike in October versus previous expectations for a 50 bps move.

https://www.rte.ie/news/business/2022/0909/1321617-banks-predict-another-0-75-rate-hike-by-ecb-in-october/

Not messing around, the only reason their upping rates big time now is because they have their new money printing tool to keep the PIGS bonds in check. So all in all they are printing more money in order to control inflation.

Remains to be seen if it will work or not, if Milton Friedmann was in the ECB now he would **** himself.

Theres enough homebuyers around who are still cashed up, or public sector workers who just got a payrise.

All sorts of reasons people are chasing property higher, lifestyle changes, growing family,downsizing, splitting up etc.

Ive a property to sell shortly in South Dublin, not going to take less than 600K.

I would be like negotiating with a brick wall, not going to lower my price.

Im either insane, or I dont need the money... probably both.

Inchicore, it will always be working / welfare class.

I dont see it being a place to buy or invest.