Sunday, May 30, 2010
A cautionary tale
Irish Independent: That starter home is now permanent for so many
Up and down Ireland, there are young people, carried along on the wave of what we now recognise as property hysteria, who are now living in places they hate, all because they wanted to get their foot on the first rung of the ladder. Buying a "starter" home simply to have a property, confidently expecting to sell it easily and profitably and move on in a short few years to bigger and better, was an expectation.It turned out so many young people got left with the property, unable to sell it. This must never happen again.
Posted by little professor @ 06:14 PM (1041 views) Add Comment
4 Comments
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1. Maihem said...
Be careful what you wish for... "This must never happen again" might come about via government promises to buy starter homes at "market value" (ie, the price that the company offering a mortgage on their next home values it at). All using your hard-earned cash... more gifts to the bankers.
2. nubbers said...
Ah, I remember that feeling so well from 1992. You are completely stuck. You can't move anywhere else because you can't transfer the negative equity. To sell up is more expensive than staying put and paying the mortgage because to do so will convert the outstanding loan into an unsecured loan at a much higher rate of interest.
Perhaps there is a case for non-recourse loans, as they have in some parts of the US (ie. you can just walk away from negative equity). That way the lender has to take responsibility if they lend too much on a property, rather than just sucking the life blood out of the young and inexperienced.
ReCaptcha: to swearers (1st attempt)
3. fubar said...
Firstly I can't stick the syntax of the article;
"expecting to sell it easily and profitably and move on in a short few years to bigger and better, was an expectation."
expecting something is an expectation?
Second the writer makes the error of saying "We all did it.." Actually no we didn't. There are a large number of sensible people who didn't get sucked into the madness who's lives were made harder by all the greedy barstewards running with the herd.
No sympathy for these clowns.
4. tenant super said...
I quite agree. The tone of the article is designed to make us believe those stuck in their starter home weren't really neither foolhardy nor greedy and as fubar says, 'everyone was at it'.
In fact many people were not suckered in and those who were, were suckered in by the notion that after a couple of years and a fresh coat of paint, they could flog their box on to the next greater fool at some stupendously inflated price. And now they want pity??!