Cash spent on rent could easily pay a mortgage
Published 18/06/2015 | 02:30
Economic commentators are sometimes scathing of Ireland's home ownership culture - but the spiralling rental crisis has led to a situation where it can be cheaper to buy than to rent.
If a first-time buyer in Dublin city can muster up a 10pc deposit, they could find themselves pocketing the keys of their own property for the same amount they are handing over to a landlord.
A case in point is a one-bedroom flat with a kitchenette and access to a communal garden on Dublin's North Circular Road, available for the princely sum of €600 a month.
Karl Deeter of Irish Mortgage Brokers says that €600 per month equates to a mortgage of €133,000, assuming the deposit is in place, and the sum is borrowed over 30 years at an interest rate of 4.3pc.
Myhome.ie property listings turn up a two-bed cottage, also on North Circular Road, for €120,000 - meaning the buyer would not be overly stressed to the limit and could perhaps stump up the cost of some small upgrades that may be required - such as the replacement of aluminium windows and storage heaters.
"For first-time buyers and indeed investors would be an ideal purchase. Good rental yield," the description cannily notes.
In Limerick city, the same sum will get you a much bigger bang for your buck, with a modern three-bed house in a secure development with electronic gates, a car space and an attractive kitchen on offer for €130,000.
For those seeking a rural idyll, the same €600 a month can secure a mortgage for a three-bedroom house on a large, landscaped, site with stunning views onto the Shannon Estuary at Tarbert, Co Kerry.
Moving up the scale, in Galway city, €1,000 a month in rent will get you a generous amount of space, with a detached four-bed home on offer in Knocknacarra for €220,000. Alternatively, you could go for a glorious five- bedroom house on two acres of land with spectacular sea views at Kerrykeel, Co Donegal.
The same amount, Mr Deeter said, can secure a loan of €200,000, equating to a purchase price of €222,000 - taking into account the 10pc deposit.
Meanwhile, a rent of €1,500 in Dublin city will allow you to spread your wings somewhat, with a tastefully decorated two-bed, two-bathroom apartment in Dundrum. However, this equates to a mortgage of approximately €300,000 - and therefore a purchase price of €333,000.
The same money translates to even more style in Cork city, with a contemporary two- bedroom townhouse on Mary Street on offer at €325,000. Or push the boat out in Schull, with a three-bed stone period cottage available with views of the Fastnet lighthouse, and a comforting range in the kitchen.
What's the real cost of renting in your area?