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THE GOVERNMENT’S TOP housing policy adviser has said that he would never buy a home again and is committed to renting.
Conor Skehan of the Housing Agency made the shock admission to Matt Cooper as part of a TV3 documentary set to be broadcast tonight.
In the programme, ‘Ireland, What’s Next: The Housing Crisis’, Skehan says that many Irish people continue to regard renting as ‘dead money’, a perception he say we need to get away from.
“Well, I’m the chairman of the Housing Agency and I will never buy a piece of property again. I rent,” he said.
Skehan goes on to say that, “we’ve completely lost the connection between rental values in Ireland and that still has to sink into people’s minds.”
He adds that Irish people need to move away from the feeling that they should profit from housing, saying that, “Irish expectations of the value of land for housing are disconnected from reality.”
The documentary also sees Cooper travelling to Germany, where nearly half the population rents rather than buys property, to examine whether this approach should be adopted in Ireland.
The broadcast comes at a time when both property prices and rental prices are rising rapidly and consistently, with complaints that first-time buyers are being priced out of the market.
The recent decision by the Central Bank to tighten mortgage lending rules has also received a mixed reaction.
Cooper speaks to Cork property developer Michael O’Flynn as part of the programme. It follows O’Flynn’s successful High Court action which saw him maintain control of his group of companies under pursuit from a US investment group.
“The scale of criticism towards developers was extraordinary,” Cooper said ahead of the broadcast of the programme.
“I can’t see this market recovering without developers. But there are people who don’t believe there is any role for developers. When that crazy misunderstanding exists by a lot of people in this country, you’re not going to solve the development situation.”
‘Ireland, What’s Next: The Housing Crisis’ airs tonight at 9pm on TV3.
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I wouldn’t fancy trying to find the equivalent of €1,000 a month for the rent in my retirement, I think I’d be much happier knowing I’ll have somewhere to live.
I thought the exact same thing Mark, you don’t have the same income when retired so what do you do then?
There’s also the added headache of your landlord having the ability to evict you at any time with a months notice, even if you’re up to date with rent. The bank can’t evict you if your up to date with mortgage. And landlords going bankrupt so the banks evict the tenants to sell the houses. And not having the ability to do up your own house. And after paying all that money for all them years leaving nothing behind for your kids when you go. There’s so many issues with long term renting.
It’s a terrifying thought, not having the certainty of somewhere to live in retirement, presuming of course that you live that long, fingers crossed.
These people have agendas they’ll say one thing and do another. he’ll own half od dublin while we rent of him. Renting is dead money get out of it as soon as you can.
Paying rent is another means of transferring wealth from the poor to the rich. Everybody should have the right to own their own home. And should not have to rent or mortgage the best years of life away to do so. Wishful thinking though.
I think you’ve all summed up the pitfalls of renting succinctly. As a married father of 3, the main issue is the lack of a secure home. A friend of mine who has a child with special needs has been forced to move 3 times in 5 years due to landlords selling up or moving in. That is not an acceptable situation. I find a lot of the people who criticise people who got stung with a boom time mortgage are not or have not been in the position where a secure home is a necessity. I certainly would not have minded renting if there was a secure element to it. The last thing I ever wanted was to get a loan of hundreds of thousands, but until there is a real alternative, people will keep striving to buy.
You wouldn’t have to find 1,000 Euro a month though – because in a properly regulated market where people’s rights to be provided with affordable private rental accommodation is put before the developers, the investors, the banks and the landlords – you wouldn’t need to.
This is how it is in Germany – instead of pumping their hard earned money into a mortgage, they invest in their pensions, go on holidays, eat out regularly – you know, they live their lives.
They insure that they can provide into their old age because they are not robbed paying mortgages and over inflated rents.
Conor Skehan is right – we have to change the mindset and judging from these comments, good luck with that.
Paying OVERINFLATED rents is certainly a transfer of wealth – but borrowing at extortionate interest rates to repay banks over 30 years is the exact same thing.
Sure at the end of buying you have a house – wow, that’s fab – after all you’re efforts you can now die and give it to your kids.
You just spent your entire life working to pay the bank for a house you probably won’t live to enjoy – or won’t be able to afford to enjoy because instead of investing in a pension or saving, you gave it to the bank.
Pat yourself on the back there. Well done.
Patlyndo, that’s the point, you DO get to enjoy it throughout your life, change it to whatever you want, build on, demolish walls etc. The transfer of wealth is much greater when renting because at the end of it, you have no asset whatsoever to leave to your kids (and god forbid anyone would want to do that!) No, the mindset does not have to change. Just because you and Conor have chosen a lifestyle which you prefer and suits you best, does not mean we should all do the same as you because you’re right and we’re wrong, it’s a personal choice, and I’ve chosen ownership, happily so.
Patlyndo: You seem frustrated with the mindset of people, when its not the mindset thats the issue. The mindset would be changed easily, if security was given to those who rent. It requires leadership, and thats what is deficient in this country. I’d certainly prefer a slice of what you described than a mortgage, but alas, its not available, so I don’t know why you are annoyed at the mindset people have developed in THIS country where your option is very insecure tenancy with little in the way of rights, or mortgage where you pay not only to eventually own your home, but as long as you pay, you know that there is no letter coming telling you to get out. When the system comes that you suggest, I’d be first in line to rent, but you should be on to our government about that, not getting annoyed at average Irish person.
Amy, did I touch a nerve?
Em, no, I was answering your points. But sure if that’s your rebuttal, what’s the point at all, you seem quite childish.
He is childish, Amy – he points hold no water and are mostly hyperbole.
e.g.
“for a house you probably won’t live to enjoy”
I guess he thinks most people die the day of their last mortgage payment. For me, that’d be 55. I’d like to think I’d have another 30+ years left – thanks though.
“You just spent your entire life working to pay the bank for a house”
30 years is your entire working life now. This is how Pat makes his points – hyperbole and lack of logic. What’s ironic though, is that he WILL actually spend his entire life paying rent. Yet, he applies his “whole life” scenario to people on a mortgage that lasts a very specific & finite amount of time.
James, have you read the comments here?
It is the mindset of many Irish people that homeownership is king – this is what they aspire to. TO won a home is seen as some great achievement.
What I describe can only be achieved if people demand it James and you can see here that people with a vested interest in property – would rather poke needles in their eyes than support any changes which will reduce the value of their “asset”.
Because a rented house is not a home, because only an asset makes a home.
You don’t seem to grasp the concept that it can be both a home and an asset. I want to leave my child a home when I die so he won’t have to pay rent or a mortgage, so we both get the benefit of the one mortgage. What about that agitates you so much? You have yet to pose a rational argument for why I should rent, instead you just degenerate further into insults. Stench of begrudgery to be honest.
Gee is that you Andy – who’ll be 55 when he repays his mortgage?
Firstly, I am Patricia, hence the Pat. I am a wife and a mother and if I spend my entire life renting – what about it? Surely that is my business?
However, when people, who pay thousands of their hard earned cash to the poor banks call me stupid for choosing not to do that, and instead choosing to save my money, invest in a pension, invest in in my children – when I am alive as opposed to leaving them bricks and mortar – then I absolutely will defend it.
You can’t fix stupid though and when it all goes belly up again then instead of wondering “how did that happen” let me tell you how – it happened because Ireland is full of Andy and Amy’s who have to buy – because renting is dead money and anyone who rents are going to end up homeless and poor at the side of the street.
Sad.
“Surely that is my business?”
And therein lies the hypocrisy of your argument. I couldn’t give a toss whether you rent or buy but you REALLY seem to care about what I choose.
The bust was not caused by people purchasing homes. They’d be built and purchased whether its owner occupiers or landlords doing the purchasing. It was the speed and the greed of banks and developers at throwing up houses and out loans and massive immigration causing a large demand that was the problem. But sure don’t let logic get in the way of your little ownership vendetta. And you keep on thinking that I neglect my kids just because I have a stable home for them.
Sad.
Amy – I couldn’t care less what you do – the argument is why I rent, if there is a stench of anything it’s from you and your rubbish started in the first response.
I grasp what is good for my finances Amy.
You have borrowed money to buy an asset and it’s pretty much like those machines that you see with the claw and it costs 2 euro a pop to try and get the cuddly toy that probably cost 50 cent to make.
As for insults – well take a read back and have a look – all I said was “did I touch a nerve” because you came out swinging on your first response – I mean the cheek of me supporting renting over buying – how dare I and Mr. Skehan have an opinion…
You really do seem to care though Amy, why be so annoyed?
“And you keep on thinking that I neglect my kids just because I have a stable home for them.”
Good for you Amy and of course anyone who doesn’t own clearly cannot provide the same stability.
But of course this isn’t a mindset at all …………No sireeeee………….
Pat has a serious chip on her shoulder. Typical defensive & jealous renter.
I agree 100% Patrick. They want everyone to rent of the few.
Why struggle to pay a mortgage when you can struggle to pay someone else’s one?
and what do you do when you get to old age? its not a bad plan to have the assurance that you don’t have to pay for accommodation in when you retire inspite of the gimps trying to tax people out of their homes
Do what other countries do – have long term, open-ended leases with strong controls on rent increases.
sure but people in future wont be rolling into retirement with big pensions in 20 or 30 years so having to pay say 500 per month (even) for 30 years with no real income would be a worry. Personally I see myself trading down when the kids are grown up so will be happy enough to sell the family home and move to a small apartment.
It will be seen as dead money while the price of renting and a mortgage payment are almost equal.
And that’s why Ireland is screwed. People have no long term view. Just because at this moment a mortgage is cheaper than rent it doesn’t mean you should go and lock yourself into a 30 year contract!
Of course Irish people want to own their own homes. Who wants (or could afford) to be paying someone else’s mortgage as a pensioner? And that’s the reality here. I would be happy enough to rent for the rest of my life if my rent was capped and if I wouldn’t have to move 50 times during that time.
“Who wants (or could afford) to be paying someone else’s mortgage as a pensioner?”
In other countries, individual landlords or housing associations own entire blocks of apartments and prefer a steady, monthly and long term flow of rental income verses the get rich quick attitude to property we in Ireland have. Apartments in many European countries are geared towards rearing a family with three or even four bedrooms. In Ireland, you’d struggle to find any bigger than a two bedroom apartment.
Both Irish laws and, more importantly, the Irish cultural attitude to property need to change before a similar model can be adopted here.
Put thw difference into stocks. Far more productive.
When you pay rent for a property you are paying for a service.
You pay rent on your loan for a mortgage – it’s called interest – yet this isn’t dead money?
If Irish people changed their mindset and if Conor Skehan could bring his boss to make the required changes, obviously over time, to the appalling rental situation that exist in this country, then it owuld be a start.
Do you own a car, Pat?
Why Andy?
Because you should totally rent one. Owning is for suckers.
Oh Andy, do you buy a car when you go abroad for your holidays – I mean – renting is such a waste of money and of course everybody in Ireland buys their cars without a loan, much like they “think” they buy their homes lol….
Very silly analogy, Pat. Renting a car for a holiday is a far cry from renting a house to live in for the rest of your life. With no security of tenure and obscene rent rises renting is dead money.
No it’s not Mary and again you are displaying “that” mindset.
You cannot cherry pick when renting is dead money.
If I rent a car when I am abroad then I do it because it is cheaper than buying a car.
If I rent a holiday home for a month instead of buying it, then I do it because it makes more financial sense.
Renting a home, or availing of that service, is something I choose to do because I do not want a 30 year contract to a bank to repay them the capital and the interest (RENT) on the money that I borrowed to enable me to “own” a home.
The reason our rental market is the way it is, is because of the Andy’s and the Amy’s who are willing to “own” at whatever cost – this demand drives up prices, which drives up rents.
It’s the obsession with property that destroyed us.
Do you think that it’s coincidental that Greece, Spain and Ireland were the worst affected by the crisis – we have the highest ownership rates in the world.
It is not a coincidence – it’s because we’re fools.
Willing to own at whatever cost? Where in the name of jaysus are you getting your sound bites from? How do you know how much I spent? I bought within my means, not at “whatever cost”. Would you ever give up. When you’re 55 and still paying rent for the rest of your days, which could be another 30 or 40 years, I’ll be paying all that excess money into my pension pot, or maybe blowing it in Vegas, whatever. You’ve chosen one route, I’ve chosen another, and yet you’re still insisting that your choice is the only right one and we should all change our mindsets. Amazing.
Renting is dead money, with the new banking rules and no rent controls its about to become even worse!
Renting **in Ireland at the moment** is dead money, with the new banking rules and no rent controls its about to become even worse!
Renting in Ireland in the future could be different if attitudes changed and if laws changed also.
Why would I want to rent? I don’t want to pay someone else’s mortgage.
When I retire I want to to be able to sit in my family home without the worry of being evicted. Without having to scrape together a grand or two to pay rent. Without the worry of my landlord selling up his investment resulting in me having to move at 80!
If people want to buy a house let them buy a bloody buy a house.
Just because some people believe rent is the way forward doesn’t mean it should be forced down everyone’s throats. It simply doesn’t suit everyone. We’re not a communist state!
‘could’, ‘could’, ‘if’, ‘if’
not good enough.
The Irish never seem to change their ways. Attitudes don’t seem to ever change in this blighted land.
@ Andrew Matheson:
It isn’t that one option is better for all people over the other option. It is just that long term renting is not a viable option in Ireland and this is a bad thing because, put bluntly, there are many people who do not have the means and who will most likely never have the means to pay off a mortgage. And yet our society, our culture and our property market pressurises them into buying property when it is unsustainable for them to do so.
Providing an alternative, viable option to buying a house is not a bad thing. It allows people more choice and hopefully avoids a repeat of what we’ve seen in the past few years with the mortgage arrears crisis.
Ryan whike I agree with your sentiment it will not work until legislation is brought in in relation to rent. Basic standards of accommodation as well as caps on rent charged. Too many landlords are rising rents not because their apartment is that value but because they need to pay the extraordinary high mortgage on the place.
My landlord has upped his rent by €400in the last year (I live in ballymun so its one of the cheapest places for rent) and I will be priced out of the rental market. He still isn’t covering his mortgage.
I have accepted that I will most likely never own a house its my landlords situation that needs to be changed before renti g can become acceptable.
Hi Ryan,
I also agree with what you’re saying, the problem is that with the current new sets of banking rules and the lack of legislation around the rental market it is effectively penalising the people who do have the money to purchase their own houses.
I personally want to be able to leave my children something when I die and renting will simply not provide that option.
@ Karen: I agree with you, but it is not only laws that need to be changed – it is also the attitude and the culture of Irish people towards property ownership.
Also the situation with your landlord is a key part of the problem. We have too many people moonlighting as landlords as opposed to proper housing organisations such as De Key or DUO in the Netherlands.
@ Andrew: The proposed banking rules (consultation still going on I understand) have pros and cons. However one of the key things they should do is prevent people who cannot in the long run pay back a mortgage from obtaining a mortgage. My hope would be that this will lead to pressure on the government to improve the lot of renters so that laws are changed and long-term renting becomes viable in this country.
On owning a house so you can pass it on to your children, do you intend that they live in the house or do you simply expect that they will sell it when you pass on? I ask because if it is the latter, then you too are treating housing as an investment albeit a long term one. However surely there are other forms of investment too.
(That isn’t a personal attack, just asking genuine questions and having a general discussion as I find this topic and the Irish attitude to home ownership interesting)
I Just can’t figure out how rent could be anything but dead money..
Do you think buying food is dead money because after you consume it there’s nothing left? You’re just brainwashed.
Analogies should hold water, Guru. Food is a consumable – there is no other option but to eat it to live. With housing you have options.
When I’m 55 I’ll own my house forever – no more mortgage payments for the last 10-12 years before my retirement, and then when retired I never have to worry about paying rent ever. I’m secure – I’ll always have a home. I’d prefer that peace of mind any day. And then when I’m gone, it’s an asset that my kids can inherit, so I at least know they’ll have somewhere to live.
With renting you have none of that. You pay rent until you die, never own anything, and never have security. Do you want to get evicted when you’re 90 because the owners kid wants to sell the house? And you’ll have paid way more than I ever did for my mortgage, because my mortgage is €1550 for 30 years. Even if it’s a lower amount, rent is forever.
Plus you can’t even make the house your own – I’ve gotten my garden done twice, the attic converted, new en suite, driveway converted to fit both cars, new kitchen, shed built, and anything else I want to do. Renters can’t even paint without permission or someone looking over their shoulder.
I do feel sorry for people who rent & want to buy, but can’t afford it – but then you have the butthurt renters that get on defensive and actually try to convince you that renting is better, when nothing tangible actually backs up that notion.
Well said.
As guru said. Brainwashed. No mention of any negatives to buying? Costs, interest rate hikes, maintenance, lose your job you may find it hard to move.
Nobody mentions that you spend the best years of your life hoping to make it to the end of the mortgage. Sad.
“Costs, interest rate hikes, maintenance, lose your job you may find it hard to move.”
Eh, Pat – all of those things apply to renting too. Replace ‘Costs & interest rate hikes’ with ‘Rent & Rent Hikes’. Maintenance I’ll give you, but that’s a small price to pay to own a property. And lose your job you may find it hard to pay your rent too – how is “losing your job” only a hassle for someone with a mortgage? What if you have a lease? Do renters get to stop paying rent if they lose their job?
“you spend the best years of your life hoping to make it to the end of the mortgage.”
What an odd statement. People cannot live while paying a mortgage? WTF?
Eh, clearly not all apply Andy. If you rent and you lose your job you are Mobile. The statement is not odd. It’s true. If my rent increases I have a CHOICE. Pay or move. The Costs are not smalll they are substantial.
And when I’m 55, I own my house. What happens you when you’re 55? Or 65? Or 75? You rent like a sucker. No security.
If there’s a sucker here Andy, it isn’t me.
I have spent the last decade saving money Andy and when I am 55, 65 or 75 then I will choose what I want to do with my money then.
I have rented within my budget and saved.
If the roof was leaking – the LL fixed it.
New fridge needed – LL bought it.
All I have paid is my rent, the money in my bank and in my investments and in my pension are all the security that I need Andy.
You have security? You have your job for the next 5 years?
You have the same income for the next 10 years?
Is your mortgage interest rate fixed for the next 5 years?
You have far less security than you think, the bank however have your signature on a mortgage.
For you to remain just where you are now Andy you better hope that your job is safe, your income is safe, that there will be no more hiking taxes, the cost of living will stay the same, diesel,petrol, busfare, cost of living will all remain the same and that there are no interest rate rises.
Because no matter what happens – your mortgage repayment will be the same or higher – while my rent may increase – I can simply move.
WIth the shit storm heading this way I can tell you that this argument will be meaningless.
Also you can take out insurance on a mortgage in case you lose your job. Can you insure rental money in the same way?
Not in today’s rental market. Rental allowance being refused, and odds on you won’t get a decent apartment or any kind of apartment at the rate you paid in the previous one.
Yes Mary – it’s called Income protection.
Yes and of course rents are simply only going one way – and that is up, up and up!!
We have a tatty old 2 up and 2 down old stone, lot of problems. It is home and paid for.
Trying to save for bathroom on side, one bedroom out of use as council put toilet in end of bedroom, no wall or anything, madness! We have shower next to it and just use as dressing room.
We hope to do better, wallboards going on next so may be warmer and then Lino over tiles we put in a while back over cement.
It is not great but we do not have rent now on pension. We hope not to be homeless for that is the end.
Bit of land, mess, we hope for gardener to want land to work and we could get a bit of produce. Important to have dreams isn’t it?
We know we are amongst the lucky ones nowadays and want to say that mansions are not the way to happiness for all but a home is all. Most do not want to rent, we all want safety.
At least my friend’s grandchildren will have something too. I agree these things mean so much to us.
It depends on proper controls and regulations for the rental market. I’m renting in Zurich. Yes, it’s expensive but relative to pay etc. it’s not much different for the same type of property in Dublin. The difference is, the building is very well maintained, the rent is dropped if the central bank reduces interest rates and my rent hasn’t gone up in 2 years, no sign of it going up anytime soon. Three months notice for both tenant and landlord, most utilities included (except electricity). I’ve taken a look at similarly priced places in Dublin and it’s not exactly pleasant viewing. Here, you are considered for properties according to your wages. It’s odd but it works. If you earn too much, the property will go to someone in the right bracket.
People need security when they rent otherwise of course they will want to buy. You don’t want to constantly worry about rent hikes or being turfed out for wealthier tenants. Until that changes in Ireland, I can’t see the trend to buy changing either.
It’s easy for him to say, I imagine that someone who is a top advisor to the government on anything at all will probably never have to worry about affording somewhere to live. Also, he says that now, what’s the betting when retirement approaches he’ll suddenly change his mind and splash out on a cosy little place in a nice part of town!
Don’t attack the messenger, discuss and debate the message instead.
Perhaps if he had been the one giving the advice ten or fifteen years ago, things could have been very different.
I’m not attacking anyone Ryan Ash, that’s very presumptuous of you to say when we don’t know each other. Precisely 15 years ago, my husband and I were both working full time in good jobs and couldn’t get a mortgage for a very nice 80,000 pounds house. We settled on what we could afford, a 68,000 pounds house, 86,000 euro in todays money. Fast forward to ’05-’06 and our little house had trebled or quadrupled in value and working people were having mortgage approval thrown at them left right and centre. We’re now struggling to pay our little mortgage as I’m no longer working. If we’d waited a few more years to buy we’d now be out of our house because we’d have defaulted on the mortgage. Barring any major problems we will be mortgage-free 5 years from now and I’m counting it down.
But you personalised your first message, focusing it on Mr Skehan rather than the proposal he makes.
Regarding renting verses buying, what is your view on that? Would Ireland be less at risk of another property boom and bust if renting was a more attractive option? Should we consider adopting a European style model of renting, as outlined in the article? Should Irish people “move away from the feeling that they should profit from housing”?
Glad for you miss!
Sold the gaff in 06 and have rented since. One of the best financial decisions we ever made. Don’t be afraid to rent, when you buy with a mortgage you are just renting money rather than a house. We rented a very nice house within 15 minutes walking distance my work and the kids college, and the rent was 1% of the market value of the house at the time. Now living in UAE with no house to worry about, that’s easy living! Might buy when I retire, or might not. Do not give in to property market propaganda by buying at today’s crazy Dublin prices, rent and if you must buy, save up and purchase during the next crash which will arrive sooner or later.
PS, make sure you invest the saved money in a pension, it’s tax deductible at 40% while there is no tax deduction on a mortgage payment. I’d rather be retired with a good pension and without an ageing property to maintain than own a house that’s probably bigger than I need, costs a fortune to heat and maintain and have only a small pension. Cash is always king, it buys you freedom and choices, and is that not what most of us want?
So you sold your house at the height of the boom – of course that was the best financial decision you made. I would rather rent money than rent a house, because at the end of renting money you have a big pile of money saved up in the value of your asset. In renting a house, you have an empty bank account and no asset.
We have bought and sold a number of times, sometimes made money, sometimes lost.
Good for you Ross and that’s exactly what we did.
@George – if you buy a property for 250k then it’s cost you at least that again to be mortgage free at the end of the mortgage and sit on the value of the asset and look out your window.
If you rent and save in a good pension and/or investment then at the end of 30 years you can spend the actual MONEY that you have saved.
Haha. So Pat is here on her high horse calling everyone idiots for buying houses and then it turns out that she herself bought a house. What caused you to change your mind from being an idiot Pat?
Its in the Irish national Psyche to own property. If you look at the rates of home ownership in the Eurozone, it is highest amongst the poorer nations, notably Ireland, Spain and Portugal.
In Germany and France it is far less common to own your own property but the terms and conditions are much fairer to the tenant. You sign a lease with a fixed price (or fixed indexation) for years or even decades at a time. The landlord is responsible for upkeep of the property and the amenities (parking/bins/basement storage and shared washing facilities) are generally of a much higher standard (they often don’t exist even in modern developments in Ireland.
When you factor in the outrageous salary:rent ratios in Ireland and in particular Dublin it is easier to understand why people would rather be working towards owning their own property rather than pay (in many cases) more per month towards someone else’s mortgage.
Create a nation of feudal landlords again? No thanks!
Or create a nation of non-profit housing associations.
Ryan
This is gombeen Ireland!
I think part of the reason why Irish people (or indeed why I) want to own a property is the ability to pass something on. If I rent then a large portion of my wages goes on rent, the rest on living.At the end of the day when I die I’ll have nothing real to pass on to my children. However if I pay a mortgage for 30 years and eventually own the house I will have that to pass onto my children. That for me is a major reason to favor paying a mortgage over renting as well as the security of knowing that when I retire I would own my own house and won’t be under pressure to continue paying rent. This is the situation for my parents who are in their early 60′s and have completely paid off their mortgage. They will live in the house now for the rest of their lives and then they will leave it to us. They are not well off so its nice for them to know they can leave us something of value.
Each to their own Anne, but work all your life – to keel over and die or live an old age in penury to leave everything to people who didn’t earn it ? I hope you have a healthy and hale old age – keep your house – it’s an asset and your independence – the next generation can earn it like you had to . As someone in their 30s of relatively well off parents I don’t expect a penny off them – they have me a great education- it’s worth more than bricks and mortar ever will be.
@Peter – It’s easy to be smug and blasé about money (i.e. pretending you don’t care about it or need it) when you know you’ve got a decent inheritance coming to you. Because deep down you’ve never actually had to worry about money – you know Mammy & Daddy have your back no matter situation you find yourself in. That’s ALWAYS in the back of your mind.
There is nothing smug about making your own way in life and not will watching. As for my Mammy and Daddy- they have raised and educated five children , paid a mortgage and are enjoying their retirement – I hope they spend every last penny they have on enjoying themselves – when they go the house and whatever else they own won’t be much consolation to any of us.
Peter – I agree with you. And I’m not belittling or having a go at your situation – it is what it is. My point is simply that you have never been in a situation where you’ve had to worry about money. Because no matter what, you always have the security blanket of “well off parents” – it’s what you’ve always known and you cannot get into any other mindset.
You can make your own way in the world all you want – more power to you – but my point is that you never REALLY have to worry about it not working out for you, because there’s always a safety net. Most people don’t have that. You cannot see things from their point of view no matter how hard you try, because it’s not what you grew up knowing – so it’s easy to say ” the next generation can earn it like you had to” and “I don’t expect a penny off them [my parents]” when you’ll always be sorted no matter what.
Au contraire Andy I most certainly have been in a dire situation. You grow up quick when you are there too. Would my folks see me homeless – no certainly not – you are right there. Would they give me their house or finance one for me – no sir ! Did they ever invest with the objective of passing it on – no sir again. Business is business. My perspective comes from growing up in rural Ireland, observing extended family and working on many cases with probate and wills – the expectations people have are astounding. I have seen many people ( many privileged people and poor people too) hang on and hang on, engineer and manipulate for years to inherit stuff and limit themselves and their own lives and never achieve their potential because of an expectation of inheritance from parents. The misery it causes. I think if it is a cultural norm in a family that you inherit from the productivity of the previous generation what incentive is there to make the most of your own life ?
Good points Peter, and fair enough.
Hi Peter, its not about whether they should earn it themselves or not. I was making the point that part of what would sway me towards a mortgage over renting is that I would own an asset at the end that I could pass on to my children. As someone in their 30s from parents who are not well off and at times could not support me as they wanted to, they are happy that when they die they have at least paid off their mortgage and are able to leave us an assets of some value, as someone who will never be exceptionally well off myself I like the idea of doing the same if at all possible.
Well said, Anne – fully agree.
And again – I wasn’t at all having a dig at you, Peter. But I know people who’s parents are rich – and while they say they pay their own bills; whilst they do indeed pay their mortgage, their Dad gave them the deposit, which they never had to pay back. Their Dad pays their VHI. They are on the company car insurance. Your Dad funded multiple whimsical start-up businesses for you. And when they say they’re broke, I can’t help but think – no, you’re not “broke”. You & your 2 siblings have millions coming your way eventually, multiple properties, and a thriving company to inherit – you’ll never be “broke”. You don’t know what broke is – it’s simply not part of your world. Broke to them does not mean the same as it does to others. And their parents will bail them out any time they ever need it (as would most parents if in the position to – but most aren’t). So they simply don’t have the same worry as 95% of other people.
So sorry, Peter – I assumed you were one of those. I know the type too well. They say “I’m just making my own way in the world – without my parent’s help” – yet their parents paid for half the stuff they own. They just think having a job that isn’t in Daddy’s company is “paying their way in the big bad world” and qualifies them as fully independent.
Well said Peter, the amount of intelligent, educated and rational people I know who have ploughed all their cash into their ‘home’s, and are now wondering how they will get their kids through college. Owning a home in this country is a mugs game.
@ Pat – how do renters get their kids through college? Do they not have rent to pay, the same way home owners have mortgages to pay?
My kids will be put through college on the money I didn’t hand over to the bank for a mortgage.
The deposit.
The interest on the loan not forgetting the other costs associated with owning.
When my kids are gone (last one next year ) we are trading our rented family home down to a small 2 bed apartment near the cost, effectively reducing our rent by 50%.
More money to save and/or enjoy as we head into our retirement.
“My kids will be put through college on the money I didn’t hand over to the bank for a mortgage.”
And by that logic, mine will be put through college on the money I didn’t hand over to landlords in rent.
You pay rent – I pay a mortgage – they’re roughly the same amount. So stop acting like I have expenses that you don’t. Because your entire premise seems to be based on that flawed logic.
No Andy, you see it’s not a rent V mortgage argument.
You have contracted to pay the bank a monthly amount of money as determined by them every time your fixed rate needs to be negotiated, be it every 1, 3 or max 5 years.
You have no idea what they are going to ask you to pay.
I have complete control over my finances because I can choose my budget and stick to it, even if it means moving.
This interest rate and the associated costs of ownership are expenses that I do not have – I’m not acting like these are not costs, they simply are not.
I must say it never crossed my mind that I should “will watch”. My parents lived so long I was well settled before we inherited. I never counted their house as money in the bank. A bit insulting that comment I feel, Andy
Pat – there are good arguments on both sides of the story. But just out of curiosity I think you wrote that you sold your house during the boom. How may years had you being paying the mortgages before switching to rental ?
Hi gerbreen,
Just wondering why that’s relevant?
Pat I find it odd that you say you have complete control over the rent you pay? I was renting an apartment within my budget when the landlord put up the rent by 500 euro – I could no longer afford to pay and had to move out. I had absolutely no control over that – I am just lucky that my brother owns his apartment and is letting me stay with him short term. However I am finding it incredibly difficult to find rent that I can currently afford in Dublin at the minute. Maybe you have more control if you live outside of the city centre but at the minute in Dublin rents are sky rocketing. To stick to my budget and move as you put it I would need to move out of the city where I work.
Pat, bear with me and I apologise in advance if I am completely wrong!
But you are a year from last of the Pat brood exiting the household – of course I would never guess a ladies age. You sold in the boom – so maybe 5-10 years ago. Would have made a tidy profit by selling at the top of the market after a quite a few years paying the mortgage? So I wonder did you and Mr Pat make this decision when kids were young or middling. And with that – a nice bank account to boot giving you financial security. Thus the buying and selling of your home contributed to your situation when you can afford to rent your days out. Forty plus years I expect. Or did you enter married life\children with same opinion
Genuine question. Good points raised by both sides. And I can see the positives of both – but did you reap the benefit of both?
All very well Mr Skehan until the time comes to cash in. At least with buying you have a fair chance of getting your money back, a good chance of getting more than your money back, a high chance of getting your money back and with massive profits. With renting you get nothing back and the cost is the same. May need to speak to your bosses – the masters of the universe again – or go back to school and Lear some economics.
Again attacking the messenger rather than discussing the message.
“May need to speak to your bosses – the masters of the universe again – or go back to school and Lear some economics.”
And yet the economics of the housing market worked far better in recent years in countries with a higher percentage renting…
Ya and have we made the comparison between rental stock here to Europe.
You can have a soundproofed 3 bed apartment in the centre of Madrid housing a family for less money than a box of crap in any of our major cities.
But us irish must like low standards, that’s why we get em.
Something else to consider is that for the duration of the mortgage, the house also owns you. You don’t have anything like the flexibility to follow work, and this can lead to a loss of earnings and impact career prospects. The Irish notion of buying is a reflection of a “job for life” mantra that is at odds with the modern jobs market and modern higher education standards.
You could rent your own house out if you need to move for a job though. In theory you are still building an asset as the rent you pay out is offset against the rent you receive.
@ David – how do you not have flexibility? I’d argue it’s far MORE flexible. You can just rent your house out. Can be sorted within a few days – call an agent, they arrange viewings, pick someone, sign lease – move.
But with renting, you have a lease you’re contracted to – so how is that flexible if there’s 2 years left on your lease and you want to take a job offer elsewhere?
Oh dear Lord.
Cool reply, Pat. Pity you didn’t actually rebut any of my points.
Here’s a sample scenario – myself (a home owner) and a renter both get amazing job offers in London. I can be gone in a few weeks; I can call a letting agent and have my place gone within a few days in today’s market. I pack up, put my bulky stuff in storage, and off I go to London. Very handy.
But a renter has a lease – they either have to sub-let (which is most likely against the lease terms) or they’re stuck there until the end of it.
So how is being a renter “more flexible”?
Andy, it’s bizarre that you are of the mindset where it appears that the advantage of the rental market in your case – does not apply to me?
And it is really and truly staggering that you see a lease as more of a hindrance than a 30 year mortgage.
Even if I had to buy my lease out – I would still be in a better place than you Andy.
Unless this super agent that you will call is free?
Well there’s your first months rent gone.
And what taxes are you going to pay on the rent?
You will be in London Andy paying rent there and supplementing the mortgage here (and all the other crap) while I am just taking it easy.
If you have the money to buy/invest why on earth would you rent in this country ?
Portugal Ireland Italy Greece Spain = highest ownership rates in Europe = citizens endebted for their working lives.
Remember… Borrow 300, repay 600. Factor in maintenance, insurances and taxes and I’d say 700k would keep you in pretty fancy house for the rest of your days .
you have a valid point in that people over extend themselves and overpay. In countries like Germany your average big city is 80% apartments and 20% houses. In Ireland we have notions that everyone can have a house and garden on the smallest of incomes.
Dee you will find that Renting an apartment is much more expensive than a House.
@J , in my case I’d trade down and buy an apartment. A Dublin family home in a reasonable location is worth as much as 2 decent apartments. Even renting I doubt your statement stacks up.
What a ridiculous suggestion from a fat cat with a big pension! People are perfectly entitled to own their own home rather than pay for someone elses. Also this isn’t Germany and we’re nowhere near as efficient
Change the record
If people cannot afford to buy property it’s their problem
No one is entitled to property in this country ,Irish people need to get that out of their Mortgage obsessed heads
This is the kind of article landlords like to read, mainly the ones in Dublin, Meath, Kildare, Wicklow, Cork and Galway! As long as demand stays high and offer low they can increase the prices as they wish. Unfortunately the Irish Government seems to be made of some of these landords and as for that do nothing to change the laws.
When you think about it we never truly “own” anything anyway because we eventually die. The banks suck out on average of 30 years of your life with compounded interest to pay for this “ownership”. Throw in stamp duty, property tax maintenance etc and what is the true cost?
He can obviously afford to rent on his big nest egg and pension.
Change the record
Renting in Germany is very different from Ireland. You have a lot more freedom as a tenant in Germany. It is also much harder to get a mortgage in Germany.
I have rented in both countries and I’m glad to have bought a property in Ireland..
the problem is that property is seen as a commodity to make money and not as a human right ! we should all have the right to live in a decent secure home, without fear of being evicted, or turfed out because of a change in someone elses financial circumstances. the main cause of the rentel problem we have in ireland today came about because our political classes decided to follow the same route that the u.k went down under maggie thatcher, they allowed local authorities to sell off their housing stock without a commitment to replacing it . in the UK in the 1980′s the same thing happened and now they have the exact same problem , too few ‘social ‘houses , instead of the money the local councils made being re-invested in new housing stock it went to central government funds, leaving the l/a with nothing to show for the sale of property and no funding to build new homes. until Ireland embarks on a massive social housing building project nothing will change. NAMA should be forced to hand over all the domestic properties on its books to local authorities, these could them be let on long term or life time contracts to people who need housing , instead of which these houses are left waiting for some hedge fund or foreign investor to come along ,buy them for half nothing and then re -sell at a vast profit , this has to change, people have a right to a home, be it local authority, private rental or bought , we need to take the idea of making a profit on houses out of the equation.
No one is entitled to own property
No such right exists. If family A are working all the hours to put a roof over their head they have limited obligation to support family B “for free”. For sure the “system” should ensure that costs are not heaped on everyone
Yet again the irish people are let down.
I hope and pray this disgrace of a government comes to a bad end.
A lot of people here worried for their retirement yet ask many why they don’t have a pension the excuse they give is they’ll never reach 60.
Don’t be fooled there is a good reason why Germans rent… have a read
http://www.citylab.com/housing/2013/11/has-germany-figured-out-way-keep-rents-affordable/7639/
http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/
You become eligible for social housing after retirement, so if you could not keep up your rent with your pension/savings you probably be offered a nice wee bungalow.
You banking on that? Are you living in the real world?
With a waiting list of 7years (and its only going to get longer if we continue like this) you’d be dead before you got your bungalow
there are NO ‘ nice wee bungalows’ ,thats the problem ! a severe lack of investment in social housing ! the governments housing policy is stacked against the provision of homes for people who cant afford to buy , there are not enough social housing/local authority housing units to meet demand , if people could move from ‘private’ rental accommodation to a decent L/A one, most people would , those former private rental homes could then be put on the market for people who want to buy, should the owner wish to do so, that would re leave the shortage of homes for first time buyers and those who could get a mortgage.
local authorities should also be barred from selling social housing, and developers should not be allowed to ‘buy there way’ out of the requirement to build a set % of social housing, if they do not wish to build or provide social housing on a particular site, then they should have to commit to building it elsewhere, say on a local authority owned site . at the moment they hand over a few grand and walk away – what happens to all that money is another of irelands great mysteries !
Why shouldn’t she bank on it? You’re banking on having a job for the next 30 years aren’t you? If you lose your job then you’re banking on snapping your fingers, renting outside your house, covering your mortgage, renting your another place. Lol of course renting more difficult!!!
“Why shouldn’t she bank on it?”
Eh, probably because people don’t get handed “wee little cottages” when they retire. This isn’t The Shire.
And you keep equating having a mortgage as some sort of death sentence. What do renters do if they lose their job? You’re implying only mortgage holders have a problem in that scenario. You’re making no sense. My house (a 4-bed semi in D13 – not a new build) can be rented out in the current market for €250 a month more than my mortgage payment of €1550 pm. So if I lost my job, I’d move & downsize – just like a renter would.
e.g. this poxy duplex with no driveway or garden around the corner is going for €1650 per month. That’s €100 more than my mortgage payment. http://www.daft.ie/lettings/red-arches-road-the-coast-baldoyle-dublin/1504781/ Houses on my road are up for €1800 pm.
Do you know what’s cool though? In 19 years (when I’m 55) I’ll never have any rent or mortgage payments again for the rest f my life. What about you?
I think you’re referring to the utopia Lorraine Higgins got herself mixed up (to be charitable) about. There’s a lack of affordable housing for everyone, young or old.
They will do what London tries to do.
Put social housing in another part of the country as a condition of getting it. They do not want to look at poor or disabled or old as it offends their view.
It will end up a locked city for the rich at this rate.
All very fine renting till the landlord decides to up the rent by 50% as in a recent case. You may be sure the same would never happen to this gentleman. Even if it did, I’m sure that on his salary and expenses he could well afford it. The extremely well paid pontificating on something they’ve never experienced.
This is just government speak! people like him have several homes.
I remember learning this in school
http://en.wikipedia.org/wiki/Three_Fs
nothing changes it seems
I guess it depends on what you are used to. If you are used to living in your own home it is something you wish to aspire to. If you’re used to living in rented acccommodation that is what is the norm. In Ireland, we are just not used to living our lives renting.
Andy – I keep equating a mortgage as a huge waste of money.
You repeatedly mention the “current market” so on top of everything else, you are now banking on the market staying the same.
“My house (a 4-bed semi in D13 – not a new build) can be rented out in the current market for €250 a month more than my mortgage payment of €1550 pm.”
So in your mind you believe that if you lost your job that you could move out of your home, receive 1,800 for this and without an income trade down – just like a renter would?
Somehow the 1,800 rental income would fully pay your mortgage and all the other costs associated with renting out your property – not to mention the taxes on the rental income as well as the NPPR?
Really – this is what you think?
If I had a penny for every person who thought that was the case, now I wonder where all the landlords are gone, normally they almost beat us to death here with the outrageous costs of letting out property……….
This idea only works with areas saturated with decent affordable accommodation bringing down prices and excellent transport systems running form the suburbs. Belgium, France and Germany are good examples of this.
He rents the house he lives in just like the people who live in the properties he owns
Let’s not forget that the land wars were a precursor to the 1916 Rising and the War of Independence. The Irish fought long and hard for generations against landlordism and now we appear to be retrogressing as a nation back to the same situation that our ancestors fought wars to escape from. The only difference between the past regime and the EU-IMF regime under which we live today is that at least while under the heel of the British Empire we knew that we were enslaved.
i don’t agree with most of the people on here. Surely rents are only going up at the moment due to the lack of landlords and properties Supply and demand.
All these wannabe property moguls out there, including it seems, those who responded to this article should take note. If you want to own a house, own it. Be prepared to to have thirty years of your life, probably more dictated by a mortgage. Not to mention having to pay to fix it up and buy new stuff for it every six months. Sounds shit to me.
have your say