Rent is money down the drain. Take a Risk.

Who said anything about wanting a loan for free? What I’m saying is that mortgage interest doesn’t buy equity. It doesn’t even buy shelter unless it is your PPR.

What it does buy you is the option to purchase at today’s price rather than having to wait x years to save enough to purchase with cash. If you expect today’s purchase price to be lower than the future purchase price (minus the loan interest), then it makes sense to purchase now using borrowed money. Otherwise, a mortgage is not the best way to buy a property.

I am a regular contributor.

I have not rented through the boom. I bought and I sold.

I currenttky have property investments valued at 7m. They where worth 10m, one year ago. They will be worth far less in 12 months.

Thats life. I am not bitter.

The only one

I sill have my FTB status. I am not bitter either.

Perfect, That’s it!, throw out the Catholic church and become Muslims and the boom can continue for another 10 years!

cwutididthar? boom :stuck_out_tongue:

Don the flak jackets folks, there’ll be a lot more of this carry-on from bewilderbulls over the next year or two.

Irish people seem to have a tendancy to always accept the word of whoever the Authority is this week, and when the Authority changes they’ll quickly insist they were on the right side all along. Some sort of survival instinct from the centuries of Occupation, IMO. In 1911 most of Dublin were out lining the streets enthusiastically waving Union Jacks for a Royal Visit. By 1920 every single one of the same people were running round claiming to have been in the GPO in 1916. From the 30s to the 80s the place was dominated by the Church, and by the mid-90s you couldn’t find anyone who admitted to having upheld the Church regime and turned a blind eye to the abuses everyone must have known were going on. And ever since then, the Privateer Quick-Buck Property Pyramid Merchants have been the New Gods, the new Authority, that practically the entire country bought into and fervently supported.

By 2012 there will be a New God in place, and every single person you meet will be loudly insisting they were a Property Bear all along and never supported the Prices Always Go Up mantra. During the transition, until the New God arises, there will be packs of confused and frightened people wandering around looking for a target to snap at. And that target, on the Interwoogie at least, is and will be the Pin. There really is nothing to be done about it. Just ignore them really. A certain type of person needs Authority to tell them what to do and how to think, and when that Authority collapses they become dangerous…but only until the next semi-plausible Authority appears to which they will immediately transfer all their unthinking blind devotion.

Me, cynical? :wink:

Great post…that’s IMO a very useful way to think about a mortgage as an investment proposition.

That just about sums it up perfectly

Spot on Mr. Winder.

Care to speculate on what form the replacement deity will take?

brilliant point. there is a caution in there for everyone. My mother was a staunch church supporter until Eamon Casey and Anne Murphy. she was so hurt it took around two years before she was able to say, “you shouldn’t completely trust a priest, they are only human”.
on the other hand my mother in law still believes Anne Murphy made the whole thing up; she also asks us constantly “ah would you not buy a house, i don’t feel right visiting you in someone else’s house”. AAAAAAAAAAGH |O

i also think that there will be a lot of hurting bulls looking for targets of blame, some i know would think nothing of physically expressing their torment so i’ll be keeping my views strictly for those able to absorb them.

Yes a good point from Sidewinder.
The Authority bit reminds me of a woman who phoned in to Joe Duffy on RTE one afternoon, very disillusioned.
Let down by her husband, she turned to her priest, and then the abuse scandals broke.
So she phoned up Joe, a complete stranger, and told him how her trust was gone.
“I’ll never trust another man again,” she confided down the phone line to Joe, who should have replied: SO WHY ARE YOU PHONING ME, YOU SILLY WOMAN!!!
Joe is without doubt THE MOST POWERFUL MAN in Ireland.
God help us all if he’s ever involved in some scandal.

It’s probably pointless to speculate, it could be anything. Some of the Old Gods never really went away, just kept the head down. So Neo-Unionism, Religious Fundies and De Valera Republicanism will all make a play to regain power, though with a bit of luck none of them will get very far. And there’ll be a bunch of new economic ideologies that emerge from the wreckage of the Privateer/Spoofery age across the world, including almost certainly Neo-Communism and Neo-Fascism but it’s doubtful they’ll get much of a foothold in Ireland. Personally I’d love to see the rise of the Rationalist Engineers but I’m not sure if the Irish psyche is quite ready for us yet :smiley:

For simplicity if Rental Yield% = Mortgage APR%, then neither renting nor buying is economically any different.

Remember on a typical mortagge you are repaying “interest + capital”. You could alternatively make the choice of paying alot less in rent and save the remainder which grows into a very large chunk of capital over 30 years

In any case, if the rental yield is < the mortgage yield, which it is in alot of cases, then buying is ONLY better if the value of the property is rising by more than that difference every year.

The argument that renting is “dead” money only works when prices are rising. At the moment, prices are falling, so the person buying is worse off every year than the person who rents and saves the difference.

Also, its unfair to assume the ‘realists’ on this site are bitter because they missed the boom. I would suspect alot of them have actually done very well from property over the years and probably still own their own home. However, they can also see that as an investment, the property game is over. You only need a basic undertsnading of how the global economic landscape is changing and yields available in alternative investments to appreciate that there are safer, better uses of ones capital elsewhere

There are very few smug people on this site. Most arguments are well balanced and generally backed up with hard facts and an an objective outlook

People are more emotional beings then rational beings.

Emotions almost always outweigh rational thought.

Just just look at the whole “dream house” phenomenon. People will still buy a dream house today even though they know if will lose value immediately.

I’m really happy house prices are crashing - why wouldn’t I be?
sure isn’t there many parents out there that are happy their kids will have a chance to buy.

We simply can’t brush facts under the carpet, (now lisbon vote is over it’s ok to talk) houses are overpriced here. Worse than this, there is a global flight from property.
Maybe if you built your house from barrels of oil it might be apppreciating ATM.

Crash, all the evidence is pretty conclusive on that score…

We don’t need a rationalitypin, there is no debate!!! :open_mouth:

Not everyone buys a home as an investment. Some people buy a home because they want to live there. They’re more concerned with finding their dream home where they’ll be happy than worrying if they’d save a few quid renting.

You are missing the point MrSteve.
People are not arguing about the qualities of owing a home it simply at what cost?!

What is being pointed out here is that the buyers search for the mythical “dream home” soon realised they could not afford what they wanted and settled for something less, usually stranded about 25 miles outside the commuter belt of where they would like to live continually in the belief/hope/delusion that capital appreciation would enable them to “trade up” to where that dream home really was. Now that many are seeing the equity built up in their not so dream-like-disappear into thin air this plan is all but a lame duck.

Like David McWilliams said, they’ve been “sold a pup”.

Should it of happened?No.
Could we stop it? No.
Did some try to stop? Yes.
Is it Tragic? Unbelievably so.

One could have ‘not bought’ but its too late now.

It makes more sense to pay 1,800 a month in mortgage interest for something you could rent for 1,200?

That was the financial premise of the Irish Property Bubble.

Especially when rents are decreasing, capital values are decreasing and interest rates are increasing.

What like having to pay 10 times annual wage for a shoebox in a windy industrial estate?

The bad old days when workers could afford to buy a house for themselves where they could have a family, not a poky shoebox?

The success of having the most overvalued residential property market in the world?

Well done Ireland. You done good. Maith an fear.