YOU SHOULD HAVE RENTED!!!!!
The American dream is quite simple. It’s only complete if you own a house. Renting is inferior and there’s no greater feeling than paying off your last mortgage payment in your 50s. The Kids have moved out and you and your spouse can enjoy retirement in peace with no financial worries.
The Celtic Tiger born Irish dream was quite similar. It also required that you own a house and renting was a frowned upon immigrant activity. Funny how things had changed from the days where up to 10 Irish guys would rent out flats in London during the 1980s.
As a result of this ‘own a house binge’, people paid huge prices for houses they couldn’t afford. They took out 40-year mortgages that they will be paying back long after they’re retired. Now most of these properties have devalued and many people find themselves in negative equity.
Today it was announced by property site daft.ie that rent prices nationwide have dropped by 15-20%. The highest drop was in Dublin of 20%. This compared with a fix rate mortgage is a huge saving and compared with a tracker or flexible rate it is still a substantial difference.
During the Celtic Tiger rents were high due to the lack of demand however it surprises me that people didn’t do so in order to avoid dangerous mortgages. People knew the property market was going to the wall yet people still threw fuel on the fire. It would have made perfect sense to rent in the past 5 years as all indications were that the prices would eventually go down.
Agencies like the Financial Regulator not only failed in “Regulating” the banks but their personal finance ads made famous by the quote “I don’t know what a tracker mortgage is” failed in advising consumers about the impending implosion of the property market.
This drop in rents is good news for consumers and a welcomed bad news for landlords who made millions on rents during the celtic tiger. The drop is due to greater competition and an increased demand for renting. It’s also good for those wishing to find accommodation for college and for those getting their first house or apartment.
However it a slap in the face for those conned in the so called prosperity of the past few years.