Northern Ireland Residential Property Price Index

marathonic

I wonder are we going to see the same on the Northern Ireland board as we see from the bears on the main UK board on HPC:

• Nov/Dec 2012: Two consecutive rising months on Halifax survey and the bears say it's a blip in the figures and a dead cat bounce
• Jan 2013: A small drop for the month but the annual rate shows first increase since 2010 and the bears say "I told you so, prices are falling again"
• Feb-Mar 2013: Consecutive monthly rises with continuous arguments from the bears that it's still a dead cat bounce
• Apr 2013: Another monthly rise with arguments from the bears that prices are still falling in real terms with inflation at 2.8% and the annual price rise at 2%
• May 2013: Another monthly rise with annual price rises in excess of inflation. The bears continue to argue about a deteriorating economy and refuse to give in.
• Jun-Jul 2013: Further monthly rises with the annual rate of increase standing at 4.6%. Some bears have now bought and, on revealing this to the forum, are banned. Others complain about government policy and, without that, markets would still be in decline (not realising that government policy is one of the many factors they should consider when deciding whether or not to buy a house). The stubborn bears now turn to an argument that the prices are reported wrong in the Halifax/Nationwide surveys - an argument they would have shot down in a heartbeat if brought up by the bulls in the downmarket

Don't get me wrong, in the UK, the market did reveal a dead cat bounce during 2009. However, the economy, whilst not out of the woods, is in a lot better place today than it was then.



So will it be a case of:

• This is a dead cat bounce, leading to
• Prices are falling in real terms, leading to
• The economy is still bad, leading to
• What are the government doing, leading to
• The reports are wrong

At no point does anyone seem to blame themselves asking themselves why didn't I buy when I could. It's all the governments fault.

motorguy

marathonic wrote: »

So will it be a case of:

• This is a dead cat bounce, leading to
• Prices are falling in real terms, leading to
• The economy is still bad, leading to
• What are the government doing, leading to
• The reports are wrong

At no point does anyone seem to blame themselves asking themselves why didn't I buy when I could. It's all the governments fault.

I think that pretty much summarises what we have seen / are seeing / will see on here.

marathonic

I've been playing with some figures for my own circumstances having bought in December 2012.

Cost of Ownership
Mortgage Interest: 3,335
Maintenance Estimate: 1,250
Rates: 1,200
Insurance: 120
Total Ownership Cost: 5,905

Saved Rent: 7,200

Savings in buying as opposed to renting: 1,295

The interest figure above assumes I got a 100% mortgage, which I didn't, but is the figure that should be used for a true comparison considering the opportunity cost of losing my deposit.

Now onto price movements:

Property Type: Detached House in North of Northern Ireland @ £115,000.

Annual Change as per Q3 2013 Report:
North of Northern Ireland: +5%
Detached: +3%

Using a 4% estimate, my property has rose by £4,600. Add the savings when compared to renting to that and I come up with £5,895.

This is without looking at the fact that I negotiated a good discount, due to it being a falling market, and the banks valuation coming in higher than the price I paid.

It also ignores the fact that I bought at the end of Q4 2012, a quarter that declined by 2%. Therefore, the quoted 4% rise incorporates a 2% decline for which I wasn't actually in the market.

Mistral001

marathonic wrote: »

I've been playing with some figures for my own circumstances having bought in December 2012.

Cost of Ownership
Mortgage Interest: 3,335
Maintenance Estimate: 1,250
Rates: 1,200
Insurance: 120
Total Ownership Cost: 5,905

Saved Rent: 7,200

Savings in buying as opposed to renting: 1,295

The interest figure above assumes I got a 100% mortgage, which I didn't, but is the figure that should be used for a true comparison considering the opportunity cost of losing my deposit.

Now onto price movements:

Property Type: Detached House in North of Northern Ireland @ £115,000.

Annual Change as per Q3 2013 Report:
North of Northern Ireland: +5%
Detached: +3%

Using a 4% estimate, my property has rose by £4,600. Add the savings when compared to renting to that and I come up with £5,895.

This is without looking at the fact that I negotiated a good discount, due to it being a falling market, and the banks valuation coming in higher than the price I paid.

It also ignores the fact that I bought at the end of Q4 2012, a quarter that declined by 2%. Therefore, the quoted 4% rise incorporates a 2% decline for which I wasn't actually in the market.

You have done well. Even if the house had fallen slightly in price you would still have done well as you would have been saving on rent. you will also have an advantage of paying off your mortgage earlier than if you had waited.

BigAl94

marathonic wrote: »

I've been playing with some figures for my own circumstances having bought in December 2012.

Cost of Ownership
Mortgage Interest: 3,335
Maintenance Estimate: 1,250
Rates: 1,200
Insurance: 120
Total Ownership Cost: 5,905

Saved Rent: 7,200

Savings in buying as opposed to renting: 1,295

The interest figure above assumes I got a 100% mortgage, which I didn't, but is the figure that should be used for a true comparison considering the opportunity cost of losing my deposit.

Now onto price movements:

Property Type: Detached House in North of Northern Ireland @ £115,000.

Annual Change as per Q3 2013 Report:
North of Northern Ireland: +5%
Detached: +3%

Using a 4% estimate, my property has rose by £4,600. Add the savings when compared to renting to that and I come up with £5,895.

This is without looking at the fact that I negotiated a good discount, due to it being a falling market, and the banks valuation coming in higher than the price I paid.

It also ignores the fact that I bought at the end of Q4 2012, a quarter that declined by 2%. Therefore, the quoted 4% rise incorporates a 2% decline for which I wasn't actually in the market.

What about capital repayments?


Might be an idea to check the effect of inevitable interest rate rises and factor that in as well. http://www.theguardian.com/money/mortgage-calculator?view=desktop

marathonic

BigAl94 wrote: »

What about capital repayments?

Capital repayments are like an enforced savings plan building equity in my property. They should not be used for comparing buying to renting because you're building no equity in renting.

BigAl94 wrote: »

Might be an idea to check the effect of inevitable interest rate rises and factor that in as well. http://www.theguardian.com/money/mortgage-calculator?view=desktop

Interest rates can rise by over a percent before the savings in buying over renting are wiped out. In the meantime, I can use those savings to pay down capital, reducing the impact of rate rises when they come.

The figures above use an interest rate of 2.9%, which is my current rate. I have intentions to move to the HSBC Base Rate + 1.49% tracker mortgage which increases the savings in buying over renting further and allows rises in rates of over 2% before the savings in buying over renting are wiped out.

Also, this all assumes that the cost of renting itself doesn't increase over the next few years. I wouldn't want to place too much hope on that.

Of course, personally, I intend to have my mortgage obliterated over the next couple of years before these expected rises become much of an issue.

marathonic

saverbuyer wrote: »

I'm suggesting there are no buyers. Easy credit is not coming back.

The latest report:

http://www.dfpni.gov.uk/lps/ni_rppi_statistical_report_q4_2013.docx

One year on, my predictions seem to have been overly pessimistic and the 19% increase in transactions for 2013 over 2012 appears to suggest your assertation that there are 'no buyers' was not a correct one.

marathonic

saverbuyer wrote: »

Detached down 5% over the quarter.

Eats into that £270 "saved" by buying.

Detached up 5% over the year.

Adds into that £270 "saved" by buying.

saverbuyer

marathonic wrote: »

Detached up 5% over the year.

Adds into that £270 "saved" by buying.

Sorry, hasn't Derry detached gone from 140K to 145K.

Isn't that 3.5%

saverbuyer

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