Northern Ireland Residential Property Price Index

marathonic

qwert_yuiop wrote: »

I'd define that as guessing.

And what other option is there?

glentoran99

marathonic wrote: »

That's rather unfortunate timing.

it was but in relation to the comment "you'd be no worse off" that's not true


I would have been in a better position to the tune of 40k+ had I rented for the last ten years

qwert_yuiop

marathonic wrote: »

And what other option is there?

None. Why do it at all? It's only ever mystic meg playing with bones. Pointless.

marathonic

qwert_yuiop wrote: »

None. Why do it at all? It's only ever mystic meg playing with bones. Pointless.

But, over the long term, if you predict rises when buying is cheaper than renting and falls when buying is significantly more expensive than renting, you will be right the majority of the time.

Sure, there will be extremes at either end that nobody can predict but, when making the biggest purchase of my life, I like to do enough analysis to give me a view as to whether I should buy now, or in a few years, before I take the plunge. Others may differ.

In today's market, and in my area, a house costing £650 per month to rent can be bought for £125,000. A 25 year mortgage at 90% LTV will initially cost £503.56 for this purchase. It's easy to see why I don't think housing is overvalued at today's prices.

qwert_yuiop

marathonic wrote: »

There's no need to resort to being the grammar police when you run out of arguments.

The removal of the fear of being evicted is just an added bonus. The finances are the main factor - my savings of £330 per month today over my accommodation costs had I rented will cover 2-3 holidays per year (if that's how I choose to spend it).

In my opinion, the mathematical analysis is needed to justify a house purchase. If I wanted to buy a place because I wanted it, and without any mathematical analysis, I'd have bought my house in 2007 at £250,000 as opposed to in 2013 at £115,000.

If people in 2007 had done similar analysis, they'd have realised that renting was SIGNIFICANTLY cheaper than buying and may not have found themselves in the the predicament they've been in ever since.

I don't think there is an argument to run out of. Renting has its merits, so has buying. Buying requires so much more commitment of capital and involves more limitation of freedom, and so needs to be incontrovertibly better.
I've often found it more useful to apply the capital elsewhere. For instance, my euro earnings in my AIB account very fortunately did not have to be committed to a mortgage.
As for buying in 2007, that was all based on the famous "greater fool" theory, and the collapse was well flagged by the Dublin market grinding to a halt in late 2006. The flashing signal was the "I earn more from my house than my job" line.

Yes, indeed. Past participle accuracy. Vital.

qwert_yuiop

marathonic wrote: »

But, over the long term, if you predict rises when buying is cheaper than renting and falls when buying is significantly more expensive than renting, you will be right the majority of the time.

Sure, there will be extremes at either end that nobody can predict but, when making the biggest purchase of my life, I like to do enough analysis to give me a view as to whether I should buy now, or in a few years, before I take the plunge. Others may differ.

In today's market, and in my area, a house costing £650 per month to rent can be bought for £125,000. A 25 year mortgage at 90% LTV will initially cost £503.56 for this purchase. It's easy to see why I don't think housing is overvalued at today's prices.

Well, all entirely reasonable, but if there's no capital appreciation the figures start looking dodgy, when you consider rates, insurance and also repairs and maintenance. You need to want it, otherwise it starts looking a lot like a millstone very quickly. A depreciation blows all calculations asunder.

guiriman

I bought for £104k 13 years ago (completed January 2004), today we went sale agreed for a touch under £150k, so 44% growth over that period, or a compounded average of 2.8% pa. So pretty fair compared to interest rates I think, FTSE's up around 53% in the same time period but I can't live in a share certificate!

motorguy

glentoran99 wrote: »

bought in 2006 for 139000


sold in 2016 for 74000


balance at the time 120000


but yeah no worse off

If you'd read what i said rather than trying to be smart, you would see i was referring to 2005 prices. Prices jumped massively 2006-2008.

If prices are back to 2005 prices, in theory if you bought in 2005 and resold now, chances are you'd be getting your purchase price back.

Likewise, if you were buying as a home to pay off and keep then the current market value at any point is irrespective.

motorguy

glentoran99 wrote: »

it was but in relation to the comment "you'd be no worse off" that's not true


I would have been in a better position to the tune of 40k+ had I rented for the last ten years

Its not true in your case no, because its not the scenario i was referring to. I was talking about 2005 ish, not 2006.

Its quite possible that the bulk of that £40K was lost in the jump in prices from 2005-2006 alone.

qwert_yuiop

guiriman wrote: »

I bought for £104k 13 years ago (completed January 2004), today we went sale agreed for a touch under £150k, so 44% growth over that period, or a compounded average of 2.8% pa. So pretty fair compared to interest rates I think, FTSE's up around 53% in the same time period but I can't live in a share certificate!

As marathonic indicates, you need to add up all your mortgage payments over the period, add initial deposit, rates, insurance, repairs and maintenance costs. Subtract this from your received net sum(less estate agents' and solicitors' fees.) If this figure is negative, you lose.

If positive, you will then compare this to putative aggregate rental payments throughout this period. Don't forget assumed interest on capital opportunity loss, based on the interest payments in place over the period.

Remember dividend payments on your theoretical stock market investment.

Alternatively, decide life is too short and have another cup of tea.