According to a multitude of recent reports (daft.ie, myhome.ie, CSO, Davy and others) rents continue to climb and have reached their highest level ever recorded in many areas across the country. Rents are higher than last year, and up over 50% from 5 to 7 years ago.
We in #GlobalProperties.ie find that “Beyond simply recovering to pre-pandemic levels, rents across the country are surging. Demand outstrips supply by a multiple of 10 in many urban centres.”
If you’re a tenant, and concerned about rising prices, now may be the time to consider purchasing a home, if your circumstances allow.
Monthly rents are higher than monthly mortgage repayments
When you weigh your options of whether to buy a home or continue renting, how much you’ll pay each month is likely top of mind. For many, monthly mortgage repayments are significantly lower than the typical rental payments, especially in Cork City and its suburbs, where the difference can be over 500 per month. And don’t forget that a large portion of your monthly mortgage pays down debt, so it is in effect “forced savings”.
With banks offering long term fixed rates, you can now lock in monthly repayment that offer significant savings. And let’s be real about matters. Rents do not look like falling any time soon. If they didn’t fall during a serious recession/ pandeminic, when will they fall?
The difference in monthly housing costs when comparing renting and homebuying today is significant, but many would-be homebuyers wonder about the future of rental prices. The rise in rent over time clearly shows one of the major advantages homeownership has over renting, stable housing costs. Renters face increasing costs every year. When you now purchase your home, your mortgage rate can be locked in for 10, 20 or 30 years, meaning your monthly payment stays the same over time. That gives you welcome peace of mind and predictability for many years ahead.
The bottom line is that with rents continuing to rise across the country, tenants should consider if now is the right time to buy. There are multiple benefits to buying sooner rather than later.
Talk to a mortgage provider, or a local estate agent (obviously Globalproperties.ie if you are in Cork), to discuss, and make an informed decision that works for you.
A note for landlords; while there are many news reports saying that landlords are exiting the market in droves, a very similar number of landlords or new investors are entering the market. They quote the current zero interest on savings in the bank, looking out for their future, the prospect of capital gains and pension planning as reasons to purchase.
PS. In case you think that we are biased, and to avoid “he would say that, wouldn’t he”, I’d like to point out that as an estate agent, it makes no difference to us, whether you buy or rent. We get professional fees from lettings as well as sales. These are services we provide, so we have no major “skin in the game”, as to whether you buy or rent. This piece is just for information. Treat it as such and decide what is right for you.
Pps. Feel free to contact us with any housing related queries