Excellent article in Indo about apartment buying

I found the article fairly self-indulgent. As previous posters have said, her lack of preparation was astounding for someone who works as a financial journalist. I can't see anything particularly newsworthy in the piece.

Don't get why this article is good? Surprised at someone who is doing this kind of journalism didn't check the costs of living in an apartment. She must have had some experience renting beforehand which would have given her some idea surely.

tvman said:

It's frightening that this is written by a finance journalist on a national broadsheet newspaper. There's too many of gems to pick out but I particularly like this one

"Do the sums on the impact of interest rate rises. If prices fall another 10pc this year, will you lose more there than you'd have paid in rent?It's tedious but could save you a lifetime of regret and negative equity."

How many Sunday Indo/Indo scribes are going to share their tales of woe after buying property, Alison O'Connor, Brendan O'Connor, Laura Noonan...

How is this news?

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Imo BOC's articles are pure fiction most of the time and always about the same things (usually negative equity which is only relevant if youre actually trying to move house... Then there are his articles about the public service dont get me started he knows nothing about theworkings of the civil service dont know how he's allowed write them..but I guess if he sticks the 'agenda' haha

As for this article from what I've seen of it here...I cant believe she was so naive?? I mean the interest rates thing is obvious who has any idea how the financial system works isn't it its the reason I'll be sitting tight for a good while at least myself...did she mention the management fees issue...they're my other big reason for avoiding apartments in particular?

Brendan Burgess said:

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We see a lot of anonymous people on askaboutmoney and elsewhere looking for solutions to their problems. These problems often arise because of their own mistakes - e.g. they didn't read the small print, they didnt' get the house surveyed. It's rare for someone to write about their own flawed decision making process in public. And I say well done to Laura for doing so.

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Yeah I agree with the last bit re: owning up to her possible/probable poor decision making depending on which way you look at it. I think a lot of people in this country dont take responsibility for their poor financial decisions and I understand that sometimes its easy to blame somebody else weall do that probably from time to time to some extent at least....

I still cant understand how banks are still blamed totally by some people if I took out a loan tmw for a ferrari I didnt need which I later considering wasteful like paying for an over-priced house that would be much more my fault than the bank or whoever lent me the money.

People have to stop looking to make a profit on the value of a dwelling and be conscious of the need to save up and time it right from the point of view of not over-stretching themselves rather than thinking of getting rich quickly...though in fairness to some extent at least that is now the case. I still think lots of people are in too great a rush to buy and 'get on the ladder' despite the bad press....

Sunny said:

Whatever about management fees etc, she bought an apartment in a prime city centre location in the Country's capital. She didn't buy an apartment in Longford or Kildare (no offence to those Counties). A 10% fall in such a short space of time with zero liquidity in the market means nothing. Interview her again in 5-10 years and it will be a different story. I think the thing about the interest rates etc is added for effect. I am willing to bet if she got a mortgage for an apartment last Autumn when everyone was saying there was no mortgages being given, her financial ability to pay is greater than what comes across in the article. She is far from stupid. Seems like a smart young lady to me.

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I'd agree on this.

I think it's a fairly ordinary article, what I find surprising is the amount of people out there willing to brand someone stupid for buying a place in the current environment.

Fair enough she said she didn't think about the interest rates or the management fees, but think about it:

1) You are going to pay management fees on most apartments, and €1400 p.a. is actually lowish, so if she hadn't taken this into account in her comparisons it would not have led to her making the wrong decision.

2) Anyone who thinks rising interest rates are a reason to hold off buying is more stupid than her. There is no correct way to time when to buy based on whether interest rates are rising or falling. Interest rates will probably rise for the next two years till they reach 4%. Can someone explain what great insight they have to the effect that it's better to wait till interest rates hit 4% to buy rather than buy when they are at 1% but expected to rise to 4%??

3) So say she ends up paying a flat €1600pm + €100pm management fee over 30 years compared to a rent of €1200pm increasing to god knows what over 30 years. No one can tell me with certainty how rents will move over 30 years and as a result no one can tell me how this financial decision will pan out.

4) There's probably half a million to a million people (couples, families, singles) who bought from 2003 - 2007. She'll do better than all of them whatever way you look at it!

5) Finally, as Oldnick has said, there was a bit of emotion involved. Some people actually get a feeling of satisfaction out of having their own place. If you can well afford it, and it's something that's hugely important to you, it's not a straightforward financial decision as people here would have you believe

In relation to interest rates, I don't believe (can't believe) a financial journalist didn't factor in interest rate rises, it's all over the news for the last couple of years. Luckily for her, even if she didn't factor it in, the banks are now doing so and would have given her a mortage without a lee way of affordability based on interest rate rises.

The more one thinks about it, that article was a slow day at the office for her.

.did she mention the management fees issue...they're my other big reason for avoiding apartments in particular?

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Why ? How much do you pay annually for a standalone building if you decided to pan out over ten years the maintenace of your front door, hall stairs and landing, the electricity, annual insurance on building, roof maintenance, boiler maintenance, cleaning etc.