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Flash

Another Irish Times Classic

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This is so beyond ludicrous that I wonder whether there is a conspiracy on behalf of certain powerful individuals to pump property, so that when the market collapses, it can be taken from distressed sellers at just cents on the Euro.

Worth the investment?

Edel Morgan

09/03/2006

The address: Number 7 Home Villas, Donnybrook, Dublin 4.

The agent: Sherry FitzGerald

The property: two-bedroom house for €775,000.

The look: Victorian terraced red brick with appealing interior.

The landscape: backs onto Herbert Park in what the agent calls a "leafy enclave" . Within a short walk of Donnybrook village.

The features: A 72 sq m (776 sq ft) house with a livingroom with original floor boards and understairs storage. The diningroom has semi solid floors and an original fireplace. Two skylights make the fitted kitchen a bright space. The bedrooms are doubles with original fireplaces and built-in wardrobes. It has a 30ft back garden. Residential disc parking.

How much for an investor? An investor requiring a 90 per cent mortgage at a PTSB tracker rate of 3.6 per cent over 20 years will have annual mortgage repayment of €48,975 . Interest-only mortgage repayments would be €25,110. The shortfall when the rental income of €15,000 a year (calculated to allow for one month's costs and one month's void) is taken into account would be €33,974, while the shortfall on an interest only mortgage would be €10,110 . On a 28 per cent mortgage at a PTSB tracker rate of 3.6 per cent over 20 years, an investor would break even on rent.

How much to buy? An 80 per cent mortgage at PTSB tracker rate of 3.6 per cent will have annual repayment of €47,714. On an interest-only mortgage it would be €24,464.

Potential: the house could be extended to the rear subject to planning permission.

Verdict: good rental location of interest to an investor willing to hang in for long-term gains.

Calculations by Simply Mortgages

Edited by Flash

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I don’t know whether to laugh in an hysterical mania, or break down in a flood of sobbing tears. Oooooooooooooooooohhhh the Humanity!!!!!!!!!!!

I’ve chosen the former (and am presently dusting down me daddy’s suitcases)

:)

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Comments like that (ok in the long term) rather suggest they know the game is nearly up...

It's the stuff of legend right before your eyes. Cut it to show your kids in 20 years time, otherwise they won't believe you.

Surely no economist can believe in the efficient markets hypothesis when this aberration exists?

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So in Ireland they now advertise property based on how little money you will lose each month? This is crazy, you don't even need the benefit of hindsight to see the sheer ludicrousness of this!

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Are you absolutely sure that this column isn't satirical? It sounds like the sort of thing you would see in Private Eye. :lol:

Sadly no.

To be honest I quite enjoy Edel Morgan's articles. I've even kept one or two. My alltime favourite was the one a few months back when she asserted that smart people were now buying houses because in future they will all be bulldozed to build apartments.

Tell people that in a few years time and they won't believe you. :rolleyes:

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Are you absolutely sure that this column isn't satirical? It sounds like the sort of thing you would see in Private Eye. :lol:

I must agree with this. Surely nobody could write that with a straight face. It must be satire. Shurely shome mishtake.

Billy Shears

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Sadly no.

To be honest I quite enjoy Edel Morgan's articles. I've even kept one or two.

Keep 'em all, you're quite right, in a few short years nobody will believe this nuttyness, nobody will want to :)

Edited by BuyingBear

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Another Edel Morgan Classic, this time from May 26, 2005. What else could we really expect from a leading property correspondent in the world's madest property market?

One can only surmise what the average millionaire will be able to buy in Dublin in another nine years.

A pokey one-bed apartment in the outer suburbs? Or maybe a townhouse on a new development bought under the local authority's affordable housing scheme? Will the semi-d become the preserve of the multimillionaire while only the super rich will afford the luxury of living detached?

She is just brilliant. I really look forward to Thursday's Irish Times. :lol:

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This is so beyond ludicrous that I wonder whether there is a conspiracy on behalf of certain powerful individuals to pump property, so that when the market collapses, it can be taken from distressed sellers at just cents on the Euro.

So let me get this straight, the owner of this house can sell it, put the money in the bank and for the interest he/she can almost rent TWO of these houses in the same street!

Or, he/she can sell, put the money in the bank (yielding about 25k), rent the house (for 15k) and still have an annual income of 10k from the interest on his bank deposit.

This is crazy. The rational thing for every real estate owner in Dublin to do right now is to sell.

Ireland is doomed.

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So let me get this straight, the owner of this house can sell it, put the money in the bank and for the interest he/she can almost rent TWO of these houses in the same street!

Or, he/she can sell, put the money in the bank (yielding about 25k), rent the house (for 15k) and still have an annual income of 10k from the interest on his bank deposit.

This is crazy. The rational thing for every real estate owner in Dublin to do right now is to sell.

Ireland is doomed.

Yes but you're forgetting that "rent is dead money". "property prices don't go down". "property is a long-term investment", etc etc ad nauseam. I've said it before- the VAST majority of Irish people simply don't accept that prices can fall in any meaningful way. It's a marginal, crazy, looney, 'begrudging' element of society that thinks prices will crash. This is what drives behaviour here-- €2.5m semis? what else would be rational if you believe prices cannot fall...

If any UK bear is feeling a bit unsure or is second-guessing themselves about where this is all leading, I advise you come over to Dublin for a refresher. You will see a situation far worse than London. I could market it as the The Bear Refresher Weekend!!

:):):)

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the link

plenty of other jems on there.

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It's Ireland's middle class that will be destroyed by this.

The geniunely wealthy will benefit as, although the book value of their assets will go down, they will be able to snap up more of the assets in the ensuing fire sale.

I think the outcome will be similar in other markets.

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In a coup for common sense, the modest semi-d with the nice address in Dublin (http://www.lisney.com/subnav.aspx?tabid=1&tabindex=1&inc=resProperty&ID=3065) went yesterday at auction for euro 3.7 million, nearly 50% over its AMV (advised minimum value) of euro 2.5 million.

See http://www.unison.ie/irish_independent/sto...&issue_id=13819 ....

"The successful middle-aged bidder, who arrived early and positioned himself at the front row in the auction room, quietly outbid his main rival, an unassuming 30-something man who bowed out when the bid hit €3.7m."

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