Rent is money down the drain. Take a Risk.

On the overall point of “risk taking”, in all the excitement of the bubble, people seem to have forgotten that the primary function of residential housing is to provide shelter.

It is not normally associated with speculative enterprise. The housing market is illiquid, opaque and features very high entry and exit costs. The finished products cannot be exported or even relocated if demand shifts.

The percecption of the quality of the “risk taking” that went on during the bubble years has been reflected in the banks share prices over the last year or so. -70% and counting.

What is starting to happen is the industrial estate shoeboxes and their ilk all over the country are losing their speculative premium and returning to their basic shelter providing value. Which is what they should have cost all along (in a rational market).

Watch this:

Renting vs. Buying a home
youtube.com/watch?v=YL10H_EcB-E

Renting vs. buying a home (part 2)
youtube.com/watch?v=QA2TBiIsdT0

FYI: there’s a lot of good videos by this guy in maths, CDOs etc if you are interested.

And from Australia

Buying a Home Vs Buying an Investment Property & Renting
youtube.com/watch?v=ljBZZZZMxbM

goodliving, thanks for those observations.

crashandburn likewise. Off you go now and buy all the property you want. The more you buy and the more you pay the happier I’ll be for you.

I’m out of the evangelising business, there’s enough info out there on this site alone to help people (who want to) to make up their mind between buying and renting.

I’ll be happy for you when you buy buy buy, and I’ll leave you be, if you’ll just return the favour. Some of us want to to stay renting while prices are dropping, rents are dropping, and house prices are still too high. That’s not too much to ask is it?

I promise, in 30 years if I’m broke and sleeping on the streets, I’ll come over to your house tell you you were right, and wish you luck as you embark on your last decade of mortgage payments.

-Rd

I know this sounds callous but I couldn’t care less about people’s personal financial problems. I couldn’t care less about the Glee Policy because I feel none either way. I know that if I have financial difficulties I won’t get hand outs or help so I chose the old philosophy of living simply so that other’s may simply live.

I like this site’s pragmatic , non emotional approach to the issue of property.

Those that espouse the virtues of buying property and denegrating those that rent should possibly turn their efforts into providing solice to those in financial difficulty for buying into the now well proven bubble :unamused:

I’ve just realised, that goodliving and crashandburn were just concerned about me. Let me set your minds at ease folks.

I do have a mortgage. I took it out with myself. I pay a fixed amount each month. Some of it (the interest) goes to a landlord, the rest (the principle) goes into a savings account and earns interest.

It’s a really great mortgage product. It’s flexible, I can increase or decrease or even stop the principle portion if I want to.

I can “release equity” from the savings account any time I want without so much as signing my name, certainly no fees or stamp duty or any of that.

I can move my mortgage to a new house, a bigger one, a smaller one, one in a different country, and I take 100% of my equity with me.

I don’t lose equity when house prices fall.

My repayments don’t increase when interest rates increase.

I live in a much much bigger and more centrally located apartment than my repayments would suggest.

My equity increases each month relentlessly.

At some I’m sure I’ll convert my equity from cash to property. But only when property comes back to some sort of realistic value.

Seriously, thanks again for the concern. I’m sure all the other renters are moved by it as much as I am, but you really don’t need to worry, we’re fine.

-Rd

daltonr, what a brilliant mortgage product you got!!
But you haven’t told the full story have you - why didn’t you tell us what kind of commission or arrangement fees you had to pay yourself to sign up for it??

Congratulations to these risk-taking-titans of industry. We should have a ticker tape parade and a dig out.

The only reason that people did that is that property was a “sure thing” and a source of easy money. They thought there was no risk and are now realising they were had.

So far from applause at their “smart and ballsy” property gambles, perhaps you should be wondering how much money they are putting in someone else’s pockets.

Mortgage interest… check.
Developer who sold them an overpriced apartment which is only going down in value… check.
First time buyer status gone on a hopelessly inadequate property… check.
Extra 27k on mortgage for the privilege of a parking space… check.

My mortgage broker (me) took me out to dinner at FXB’s had a chat about my financial prospects and decided I was a good risk. The whole deal was sealed before the Ice Cream had arrived.

The broker even picked up the bill.

-Rd

I have to say, I enjoy reading the pin and have done for quite a while now but there is an undoubted patronising tone of “I told you so” amongst some of the pinsters…lots of :unamused: posted when going through buyers posts or people having trouble with Negative equity on AAM…does anyone realise that these are REAL people in REAL trouble?

Im my un-educated opinion, these price drops are all relative anyway, I may well find myself in negative equity in the next year or two…so I have to stay put for a few years…no big deal as far as I can see. There are people that were given mortgages that they cannot afford though, we shouldn’t be sneering at these people, we should be helping them out somehow - At the risk of being shot down, I do think that the state should provide some sort of temporary assistance to prevent people losing their homes…

The pin is a great source of information for people looking around the market and has developed into a bigger beast altogether but it is quite unashamedly biased…I read about job cuts every day here but rarely read about job creations by some of the bigger corporations - its a fact there are companies out there that cannot fill jobs quick enough.

Reading through the various predictions of doom on the pin, I come accross a lot of statistics, percentage points, graphs etc…all used to come to various conclusions. What I don’t see taken into account is the fact that we are a totally different country\breed of people to A) Ireland of the eighties and B) any other country in the world.

New poster - Check.
Argues for bailout - Check.
Dismisses significance of negative equity - Check.
Argues that “Ireland is different” and “This time it’s different” - Check.

You are Tom Parlon and I claim my five euro.

The state doesn’t provide support, other taxpayers provide support. Why should we?

We are the same idiots who vote for gombeen politicians and we still on a rock on the edge of Europe. I don’t believe we are any different.

Reply to dotcom:

I’m an avid reader of the pin. While I believe house prices coming down is a good thing, I don’t consider myself biased. I do agree some of the regular posters can be aggressive but I really think this is down to the absolute bullshit anyone who expressed even moderate concerns about property was subjected to over the last few years.

Anyone can come on here and express a view, if stands up to critical analysis then they have nothing to worry about.

You try and talk to your peers about house prices falling and why it’s a good thing and see the reaction.

As for a bailout of people in NE, will you think that through properly please, if people had put sufficent thought into buying a house they would not be in NE. I was under pressure from all angles to buy a house the last year or two, actually I still am not (not to the same extent mind you) but I done a bit of rersearch and decided against it. That was before found this website too.

The state\other taxpayers - same thing reallly…typical of the response I expected really. Why should we? Because they are fellow human beings who need help!

I’m not saying that they should be bailed out altogether but there should be some mecanism that could stop the reposession process if at all possible…even delay it for a couple of years until people get back on their feet - realistically how much would it cost the state\tax payer? As much as one of the Po*y tribunals that has been running for the past x years? I don’t think so.

Look, the attitude amongst the younger people in this country is completely different to those of our European neighbours or even the US. There is defintely a confidence amongst the population that simply wasn’t there 10\20 years ago - a belief that we are not simply drifting on an economic tide here.

Dotcom, as a non property owner I have been hearing plenty of “I told you so” advice for a long time from property owners. They were very quick to pat themselves on the back when prices were going up, and deride me for “paying a landlords mortgage” etc… so its simply a case of what goes around comes around. Most people try and not be gleeful, but why do you think that people who basically post “my get rich quick scheme fell flat and I owe money” should get sympathy just because their get rich quick scheme was property-based?

It all depends on your point of view I suppose.

As for the state providing temporary assistance for families in their PPR… In theory it has its merits. I assume this assistance will extend to renters too? No of course it wont. Thankfully, from my point of view as a renter, the government does not have enough spare cash to help out people. It would stick in my craw to see my the money I pay in tax be handed out to clueless property owners in trouble.

Can you see how it would feel from that point of view?

As pointed out, any government intervention in the past has had unforeseen or unintended effects, and the money ended up in the pockets of people who were not meant to benefit from it. The government can intervene, but it would only be putting a false floor on the thing. The simple, inescapable fact is that property prices have to come down. A lot.

Some people are going to get stung and lose their homes. Rather than wasting tax money paying peoples mortgages for them for a while (when the simple fact is they are too big to service long term), I would rather see the government change the bankruptcy laws to reduce the amount of pain that bankruptcy inflicts here in Ireland. Make bankruptcy painful, but not crippling like it is at present and let the banks take the hit, not the taxpayers.

I know plenty of people who haven’t been able to buy because they have been priced out of the market. They work and pay tax and now you expect these people to bail out others.

As you said NE is “no big deal as far as I can see”.

"'m not saying that they should be bailed out altogether but there should be some mecanism that could stop the reposession process if at all possible…even delay it for a couple of years until people get back on their feet - realistically how much would it cost the state\tax payer? As much as one of the Po*y tribunals that has been running for the past x years? I don’t think so. "

Sounds great… while you’re at it, buy me a house cause I don’t have one either!

In fact, buy me a new car too, I really want one.

And maybe a solid gold plane…

Really… why should I pay for someone elses mistakes?

I didn’t buy into the scam, and nobodys going to force me to through taxes, I’ll emigrate before that happens…

Where should we take this bailout money from, the health service, education, social welfare?

I truly feel sorry for anybody in a predicament at this stage but an ill thought out bailout will probably only end up giving the market onc last breath of wind.

I find it hard to fathom how so many people rushed in and bought houses without even doing some simple calculations.

Does it seem right that the average house is nearly ten times the average wage?
I need to borrow 6x my salary to buy a house in commuterville?
I can rent for much cheaper than I can buy, why is that?
Is a market that is growing in double digits sustainable in the long term?
What is it about Ireland that supports such expensive house prices?

I never considered the amount of bullshit that pinsters had to put up with so I guess that would excuse some of the "I told you so " merchants.

I have thought it through properly, people make decisions based on the information available to them at the time…i.e. it was a no brainer to buy a house up until 18 months\2 years ago before forums like this began making a decent bit of noise in the public domain.

I have no problem at all with leaving people in negative equity, that’s something that people just have to deal with ( at least they have a roof over their heads) - I’m talking about people, families that are losing their homes here, not about NE…

Ok, that just troll talk. Good luck with yourself.

Classy response