Advertisement
Help Keep Boards Alive. Support us by going ad free today. See here: https://subscriptions.boards.ie/.
https://www.boards.ie/group/1878-subscribers-forum

Private Group for paid up members of Boards.ie. Join the club.
Hi all, please see this major site announcement: https://www.boards.ie/discussion/2058427594/boards-ie-2026

Why bother investing in Ireland?

13567

Comments

  • #62
    murphaph
    Registered Users, Registered Users 2 Posts: 19,139 ✭✭✭✭murphaph


    Euroland wrote: »
    For example this property is undervalued:

    http://www.daft.ie/searchsale.daft?id=580928

    and this as well:

    http://www.daft.ie/searchsale.daft?id=576123
    I can find mansions in Detroit for a dollar that are still overvalued at that. You can't just look at a property and say "that's undervalued". Are you buying much property yourself at the moment Euroland? ;)


  • #63
    Count Dooku
    Registered Users, Registered Users 2 Posts: 2,419 ✭✭✭Count Dooku


    Euroland wrote: »
    2) According to CSO, average annual gross household income in Ireland in 2009 was 56,522 Euro

    You missed one important thing - household income is falling by 7% annually
    In 2009, average gross household income was €56,522, a decrease of almost 7% from 2008.
    http://www.cso.ie/releasespublications/documents/silc/current/silc.pdf


  • #64
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Count Dooku wrote: »
    Everybody who can afford a house already bought one

    Isn'it the same in other countries? ;)


  • #65
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Count Dooku wrote: »
    There is no so massive oversupply in another countries as we have in Ireland

    Who told you that?


  • #66
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    murphaph wrote: »
    I can find mansions in Detroit for a dollar that are still overvalued at that. You can't just look at a property and say "that's undervalued". Are you buying much property yourself at the moment Euroland? ;)

    With the lack of arguments don’t try to play a personal card. I’m talking about affordability, and these 2 properties are highly affordable (even for any our average family) and in Dublin and suburbs. Dublin is not Detroit.


  • Advertisement
  • #67
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Count Dooku wrote: »
    You missed one important thing - household income is falling by 7% annually

    http://www.cso.ie/releasespublications/documents/silc/current/silc.pdf


    Before that it was continuously growing, and even if it fell once (or maybe even twice), this doesn’t mean it would continue to fall at 7% a year for the next 100 years. So, what matters is that it was 56,522 Euro a year, which is very high relatively to most of the countries in the world. And we make our analysis based on this number.

    And the most important, there many countries with multiples of 5, 7, 10 or even 20+, so our tiny adjustment won’t make any difference.


  • #68
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Euroland wrote: »
    With the lack of arguments don’t try to play a personal card. I’m talking about affordability, and these 2 properties are highly affordable (even for any our average family) and in Dublin and suburbs. Dublin is not Detroit.
    Even at the peak of the bubble, most properties were affordable, because the banks were supplying 80% to 110% of the purchase price. However note the important difference between affordable and good value.

    A reasonable and generally accepted metric for the price of property in an area: (annual rent-2 months)/property price. If this number is below 7%, it hasn't reached reasonable value, since that's the minimum any professional investor will look for. In Ireland of course this is further complicated by the way that rents are dropping.

    To look at the first one bed apartment, that's €85000 for a one bed shoebox. You may be able to cover the mortgage if you can find a tenant, but its still only a 4% return on your investment (assuming you pay it all upfront and don't get a mortgage, it's more like 2% with a mortgage), and that excludes the normal annual costs and charges of running an apartment which go beyond a house in an estate.

    Not very good.

    It starts to get more realistic around the €50,000 mark, but by the time it reaches that stage, rents will also have fallen.


  • #69
    Count Dooku
    Registered Users, Registered Users 2 Posts: 2,419 ✭✭✭Count Dooku


    Euroland wrote: »
    Before that it was continuously growing, and even if it fell once (or maybe even twice), this doesn’t mean it would continue to fall at 7% a year for the next 100 years.
    How long it will take to pay our debt?


  • #70
    Count Dooku
    Registered Users, Registered Users 2 Posts: 2,419 ✭✭✭Count Dooku


    Euroland wrote: »
    Who told you that?
    http://www.environ.ie/en/Publications/DevelopmentandHousing/Housing/FileDownLoad,24375,en.doc
    And don't forget to add emigration figures on top of it


  • #71
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    To look at the first one bed apartment, that's €85000 for a one bed shoebox.
    It starts to get more realistic around the €50,000 mark, but by the time it reaches that stage, rents will also have fallen.

    :D Try to buy a similar apartment at this price in London, Tokyo, Sidney, Moscow, Paris, etc.


  • Advertisement
  • #72
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Count Dooku wrote: »
    How long it will take to pay our debt?

    Nobody fully repays public debt. We just have to keep it at reasonably low level (i.e. below 50-70%). As regards to the bank debt, we should either restructure it with deep haircuts (up to 95%) or just default on it.


  • #73
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Count Dooku wrote: »
    http://www.environ.ie/en/Publications/DevelopmentandHousing/Housing/FileDownLoad,24375,en.doc
    And don't forget to add emigration figures on top of it

    I was asking you about other countries.


  • #74
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Euroland wrote: »
    :D Try to buy a similar apartment at this price in London, Tokyo, Sidney, Moscow, Paris, etc.
    Most of those cities dwarf the entire population of our country combined. It doesn't actually matter in any case, since rents in districts in those areas will probably reflect the appropriate value better than in Dublin, which is still coming down from a property bubble high.

    Certainly those apartments are affordable, but this means nothing. They are poor value at best.


  • #75
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    A reasonable and generally accepted metric for the price of property in an area: (annual rent-2 months)/property price. If this number is below 7%, it hasn't reached reasonable value, since that's the minimum any professional investor will look for. In Ireland of course this is further complicated by the way that rents are dropping.

    First, the rents stopped falling

    Second, our problem is not the “overvalued” property; our main problem is unrealistically low rents. They were subsidized for many years during the boom, and people got used to that. Look at other countries. In the world there are only very few countries where the average rent would represent a smaller percentage of an average gross household income.


  • #76
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    Most of those cities dwarf the entire population of our country combined.

    It doesn’t matter, what matters is that all of them are either capitals or the largest cities in their respective countries.


  • #77
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    It doesn't actually matter in any case, since rents in districts in those areas will probably reflect the appropriate value better than in Dublin, which is still coming down from a property bubble high.

    Certainly those apartments are affordable, but this means nothing. They are poor value at best.

    Yes, we need higher rents, on a proportional level with those countries. Currently our tenants significantly underpay relatively to the tenants in other parts of the world.


  • #78
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Euroland wrote: »
    First, the rents stopped falling
    No they didn't, the rate of fall just decreased. Note also that this is asking rent, not the rent that was eventually agreed upon.
    Euroland wrote: »
    Second, our problem is not the “overvalued” property; our main problem is unrealistically low rents. They were subsidized for many years during the boom, and people got used to that. Look at other countries. In the world there are only very few countries where the average rent would represent a smaller percentage of an average gross household income.
    Rent or property price to household income ratios have no value, but even with that, can you provide figures to substantiate these international comprisons? Also I'm confused here - if rents were "subsidised", wouldn't they have been too high? Who was subsidising them?


  • #79
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Euroland wrote: »
    It doesn’t matter, what matters is that all of them are either capitals or the largest cities in their respective countries.
    Then that should be reflected in the rents, so the equation changes not a whit.
    Euroland wrote: »
    Yes, we need higher rents, on a proportional level with those countries. Currently our tenants significantly underpay relatively to the tenants in other parts of the world.
    Evidence? Besides which you've got a lot of pressurised landlords out there, specuvestors who bit off more than they can chew, competing with established landlords who were around long before the bubble, and who can arbitrarily drop prices to hoover up tenants and still make a good living out of it. That and a lot of other factors combine to leave us with rental rates falling further. Maybe not hugely further, but certainly there are more drops to come.


  • #80
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    No they didn't, the rate of fall just decreased. Note also that this is asking rent, not the rent that was eventually agreed upon.

    They are nearly flat now. Moreover, I know a few cases where the landlords, after several previous rent price decreases, finally began asking for more.


  • #81
    ei.sdraob
    Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    Euroland wrote: »
    :D Try to buy a similar apartment at this price in London, Tokyo, Sidney, Moscow, Paris, etc.

    Now we are comparing Leitrim to worlds most important cities :rolleyes:


  • Advertisement
  • #82
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    Also I'm confused here - if rents were "subsidised", wouldn't they have been too high? Who was subsidising them?

    The property owners, as they were betting mainly on capital appreciation.


  • #83
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    ei.sdraob wrote: »
    Now we are comparing Leitrim to worlds most important cities :rolleyes:

    No, we are comparing Dublin to those cities.


  • #84
    ei.sdraob
    Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    Euroland wrote: »
    No, we are comparing Dublin to those cities.

    Dublin has nothing to compare to them


  • #85
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    Amhran Nua wrote: »
    Rent or property price to household income ratios have no value, but even with that, can you provide figures to substantiate these international comprisons?

    Here are just a few multiples:

    Australia 7.1
    Canada 4.6
    China 11.4
    New Zealand 6.4
    United Kingdom 5.1
    United States 3.3

    And, usually, the further you go towards less developed countries, the higher is the multiple.
    As regards to rent - similar story: in less developed countries people spend up to 50-100% of average gross household income on average rent.


  • #86
    ei.sdraob
    Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    China is in a humongous bubble, some of places in Beijing are 20x income

    This bubble is feeding into Australia from where they extract raw resources


  • #87
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    ei.sdraob wrote: »
    Dublin has nothing to compare to them

    Who told you that? :confused:


  • #88
    ei.sdraob
    Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    Why do I feel im arguing with someones final year AI project :P


  • #89
    K-9
    Registered Users, Registered Users 2 Posts: 43,316 ✭✭✭✭K-9


    ei.sdraob wrote: »
    China is in a humongous bubble, some of places in Beijing are 20x income

    This bubble is feeding into Australia from where they extract raw resources

    New Zealand and arguably the UK are in bubbles as well.

    Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.



  • #90
    Euroland
    Closed Accounts Posts: 634 ✭✭✭Euroland


    ei.sdraob wrote: »
    Why do I feel im arguing with someones final year AI project :P

    Coz apparently you’re still in school ;)


  • Advertisement
  • #91
    danbohan
    Closed Accounts Posts: 1,914 ✭✭✭danbohan


    Euroland wrote: »
    Ha-ha, now you are trying to find some exceptions to your rule. Then please don’t forget that Ireland is one of the 5 strongest exporters in the world.

    it certainly is one of the strongest exporters that has the IMF in situ,


Advertisement