Thursday 22 February 2018

No better time to buy a house

WHILE I agree with the sentiments of David McWilliams (Irish Independent, April 21) that we live in a bankocracy rather than a democracy, I must take issue with his flawed assertion that now is not the time to buy houses.

Mr McWilliams has used a seemingly plausible but ultimately incorrect comparison of the average house price of €250,000, versus the average rent of €863 per month, to argue that a yield of 3.48pc is insufficient to attract investors into the market where they would expect a yield of 7pc.

If instead you compared the average rental property price (which nowadays excludes almost everything above a three-bedroom semi, which can be currently purchased from €135,000 -- the same figure he quotes as a "fair value") you will find that indeed the yield will be much closer to 7pc, indicating that the pendulum of prices is near the bottom of its swing and that now is exactly the right time to consider a house purchase for investment or as a home.

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