I see RTE are doing a Prime Time special tonight on negative equity. In the preview, an economist reckons it is the biggest problem facing the country. But is it really that big a deal?
The way I see it, there are different categories of negative equity.
First group, people that are planning on staying their home for a long time and are able to make their repayments. No problem here and if they are on tracker have lower repayments compared to 2 years ago.
Second group, people that bought before the peak and want to move at some stage. If they have being paying off the capital and continue to do so, they should reach the point in the near future where what they owe is less than value of house (assuming no more major drop in house prices).
Third group, people that bought at the peak and want to move. This is the group that I feel sorry for. I have friends that bought one bed apartments and now are at the stage where want to start family but can't move to a house for many years. But if this group is in minority is it not something that has to lived with?
Surely the benefit of keeping house prices affordable and keeping wages down would outweigh the problem of negative equity?
The way I see it, there are different categories of negative equity.
First group, people that are planning on staying their home for a long time and are able to make their repayments. No problem here and if they are on tracker have lower repayments compared to 2 years ago.
Second group, people that bought before the peak and want to move at some stage. If they have being paying off the capital and continue to do so, they should reach the point in the near future where what they owe is less than value of house (assuming no more major drop in house prices).
Third group, people that bought at the peak and want to move. This is the group that I feel sorry for. I have friends that bought one bed apartments and now are at the stage where want to start family but can't move to a house for many years. But if this group is in minority is it not something that has to lived with?
Surely the benefit of keeping house prices affordable and keeping wages down would outweigh the problem of negative equity?