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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:05 am 
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Location: Over Macho Grande? I don't think I'll ever be over Macho Grande...
275k, when anyone knows you can get at least 10-20% off the top any day of the week? They'd bite your hand off at 250k!

I wanted Bray and then I had to get back to delivering huge amounts of value on behalf of the taxpayer, apologies... I'll know which side my bread is buttered on next time!!! :wink:

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:18 am 
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I've already explained why your 275K example doesn't work, even if you get it for 250K.

Even if it was valid it would be the exception rather
than the average case as the News implied. And the News
deliberately ignored the other very real costs of owning vs renting.

So the real question here is why does the RTE News feel the need to mislead the viewing public (who pay for the News).

Flashy new sets and shoddy old practices.
What other news do they lie about?

-Rd

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:20 am 
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Location: Over Macho Grande? I don't think I'll ever be over Macho Grande...
daltonr wrote:
I've already explained why your 275K example doesn't work, even if you get it for 250K.


Artane is in Dublin. How does it not fit the bill?

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:38 am 
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ffs will you two give it a rest?You're like a couple of owld wimmin! :)

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:45 am 
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Here is said article - http://dynamic.rte.ie/av/230-2492725-320-180.smil [realplayer required]

featuring the return of Ken McDonald

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 10:41 am 
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This segment was quoted to me by a friend last night as a reason to buy. She has put in an offer for €270k for a 2 bed in D8 near LUAS- if accepted (she lowered a previous offer) with a deposit from parents, her mortgage will be less than €250k. So I'm guessing monthly payments of less than €700. Don't know if the place would rent for €1200, but fairly sure it would for €1000pm. So in this case, it is cheaper to buy than to rent.

I know I reacted with surprise and was fairly pessimistic when she first told me she was buying but at this stage I just listen. She's a big girl and can make up her own mind, and has told me she is sick of people telling her not to buy (her family mostly). It's not the worst value place out there. It wouldn't be a choice I would make, but her decision is up to her.


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 10:56 am 
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here we go again, i had hoped ireland was past the stage of this bloody discussion between rent vs buy but it seems plenty of people can still be fooled by a few made up numbers on the news.

if the shoebox of 275k drops by as little as 5% in value this year than that's more than the cost of renting it.

anyway these shoeboxes will drop a lot more than 5%.

case closed


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:07 pm 
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And its only cheaper to buy than rent for ONLY the FIRST YEAR as its a teaser rate. After year 1, it probably be still cheaper to rent than buy when the rates reset to double/triple what they are now in normal global growth times hence the news item is misleading as a bloody mortgage lasts for 20-40yrs.


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:31 pm 
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gurramok wrote:
And its only cheaper to buy than rent for ONLY the FIRST YEAR as its a teaser rate. After year 1, it probably be still cheaper to rent than buy when the rates reset to double/triple what they are now in normal global growth times hence the news item is misleading as a bloody mortgage lasts for 20-40yrs.


Exactly. People need to wake up and realise that Teasers rates are designed to suck (tease) you into something with the illusion that it makes sense over 30years, even though you are only getting the rate over 1-2 years.

Anyone who assumes a 2.75% mortgage rate for 30 years in their analysis of Buy v Rent on this basis is dillusional.

For a start; 30yr EURIBOR is 3.5%, thats the markets perception of what the "average" EURIBOR rate will be over 30years. Further, Irish banks can't borrow themselves anywhere close to this...in fact the Irish Govt cant either, its borrowing costs are a good 2% higher

So, assuming a 30yr Mortgage of 2.75% when the Irish govt 30yr borrowing costs are 5.5% only makes sense to people living in Bizarro World. The banks and the govt may be able to take a loss for a few years offering mortgages at way below their own borrowing costs...but this is obviously unsustainable. Anyone pencilling in 2.75% for 30years is in for a shock...


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:33 pm 
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The Unwelcome Guest wrote:
daltonr wrote:
I've already explained why your 275K example doesn't work, even if you get it for 250K.


Artane is in Dublin. How does it not fit the bill?


The example given in the report was Dublin City Centre


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 12:57 pm 
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Location: Over Macho Grande? I don't think I'll ever be over Macho Grande...
groom1 wrote:
The example given in the report was Dublin City Centre


Where is this example? I'm sure there are many 2 bed properties in city centre achieving 250k, whatever the ask and again looking for 1200 pm but maybe not getting that.

Areas like Christchurch, around the Northside of the Quays, down Bolton St, Mountjoy Square...

My point, despite being a pair of old wimmin, is that rich is banging on about places where people, like himself, attach a premium to... So really, we understand and all that but the truth is, in certain instances it is cheaper to buy then rent for the time being in certain areas of Dublin and Ireland generally but that's for a limited period only and on the basis of all things remaining equal as we all know!

But it's not blanket one way and it's not blanket the other way either!

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 1:03 pm 
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The Unwelcome Guest wrote:
So really, we understand and all that but the truth is, in certain instances it is cheaper to buy then rent for the time being in certain areas of Dublin and Ireland generally but that's for a limited period only and on the basis of all things remaining equal as we all know!

The problem when you concede this you also concede that extremely short term calculations based on teaser rates and current interest rates are a valid way of calculating the costs of renting versus buying.

When you say "Yes you are correct but" people's brains switch off right away. All they hear is that you agree with them and they are correct.

The only response is and should be "This is wrong, the 'buy' calculation doesn't account for normal interest rates nor does it account for capital depreciation over the next few years. In almost any circumstance a potential buyer would be better to rent now and wait prices to at least stabilise".


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 1:14 pm 
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Location: Over Macho Grande? I don't think I'll ever be over Macho Grande...
Fine... But this topic isn't really addressing those people is it? We'll have a couple of threads in the next few days, how much to offer here, how much to offer there...

That's the place for such reasoned and balanced pointing out of the flaming obvious! :lol:

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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 2:13 pm 
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The Unwelcome Guest wrote:
groom1 wrote:
The example given in the report was Dublin City Centre

Where is this example?

http://dynamic.rte.ie/av/230-2492725-320-180.smil


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 Post subject: Re: Rent vs Buy on the 9 O'Clock News (lies or shocking truth?)
PostPosted: Wed Feb 18, 2009 6:38 pm 
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TUG wrote:
Where is this example?


It is a fictional 2 bed apartment in Dublin City Center that exists only in the mind of Ken McDonald
and the gullible and/or lazy people in RTE eager to fill airtime. It does not exist.

Quote:
My point, despite being a pair of old wimmin, is that rich is banging on about places where people, like himself, attach a premium to...


I'm only talking about the places that Ken McDonald used in his example. I don't know who these "people like me" are, or how we differ from "people like you". I don't attach any premium to anywhere.

You can keep casting around trying to find some exceptions where it's cheaper to buy than rent, but you're chosing to ignore completely the whole point of this thread.

The piece on the News used the AVERAGE rental cost for a 2 bed of 1200 a month.
But used a number substantially less than the average purchase price when it used 250K.

Explain to me why this is ok with you?

If someone used the same kind of dodgy maths to back up a half baked story about public sector workers, you'd be down on them like a ton of bricks.

-Rd

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