Should I Buy a House or Rent in Ireland?
With house prices soaring, it could be cheaper to buy a home than rent in Ireland. Is it time to get on the property ladder?
Should I Rent or Buy?
Is it cheaper to buy a house than rent in Ireland? Are rental prices really that high that a mortgage could be cheaper? According to figures released by Daft.ie, Ireland’s number #1 property website app, the answer to both of these questions is a resounding ‘YES’ and if you intend to move home in 2019, it might be time to speak to a mortgage broker, rather than shopping around for an affordable rental.
In the Daft.ie Rental Price Report, an analysis of 2018 trends in the Irish Rental Market, it was revealed that, for the 25th consecutive quarter (that’s 6 years in plain English), rents have risen across the country, setting a new record high. National rents are now 30% higher than they were back in the peak of 2008, with the average rental price now standing at €1.334 per month. But that will not get you a home in the capital.
Average rental prices in Dublin now range from €1.847 per month in North Dublin City to €2,156 per month in South County Dublin, and as the demand for rental properties in Ireland continues to far outstrip supply, growing rental prices are not expected to diminish anytime soon. And so how do they compare to mortgage prices?
What Are The Average Mortgage Prices In Ireland?
In a report in the Irish Times, based on figures released by Cairn Homes, it was discovered that buying a property in Dublin could be as much as 42% cheaper than renting a similar property in the same development, with monthly mortgage payments costing €1,374 per month, compared to the rental rate of €1,952 per month for the same three-bed house.
This equates to a saving of €578 a month, €6,936 a year, and a substantial €35,000 over five years, proving that buying a home really is cheaper than renting in certain parts of the country.
The same Daft.ie report also listed the average mortgage prices in Ireland, which vary considerably from county to county. In Dublin, you can expect to pay anything between €705 to €1,825 per month for a two bedroom house, while in Cork City the average monthly rental price for the same size property is €629, in Galway City €612, in Limerick City €454, and in Waterford City you could get a mortgage for just €397 per month.
Buy or Rent: Which Is The Best Option for You?
When it comes to cost, it seems that buying a house in Ireland really is cheaper than renting a property in 2019, but is it still the right option for you? Buying a new home comes with a list of pros and cons that you should weigh up before signing on the bottom line, and so to help you make a more informed decision, here are points you should consider as a potential home buyer in Ireland:
Mortgage & Additional Costs
The first step in buying a home is calculating exactly how much you can afford. In addition to your mortgage deposit and monthly instalments, there are other expenses such as stamp duty, estate agency fees, legal fees, surveyor costs, mortgage protection insurance, buildings insurance, home contents insurance. This list goes on and on, and so it is recommended that you seek the advice of a mortgage broker to help you get the best deal all round. We’ll be covering this in more detail in our next article, Mortgage Deposit – What Can I Afford?
Security & Investment
Buying your own home is an investment. It may be costly to get your foot on the property ladder, but once all the initial costs have been paid and your mortgage broker has secured a monthly payment that you can comfortably afford, it’s nice to know that every instalment is actually going towards something that you own, and not your landlords bank account.
Homeowners ultimately have more responsibility than tenants, and if something goes wrong with your house, you have to fix it yourself, but providing you have building and home contents insurance in place, will be covered for the unexpected.
Then there’s security. If you buy a house,you own your own home, you don’t have to worry about being kicked out at the end of your tenancy agreement or being subjected to a hefty rent increase year upon year. Peace of mind is priceless, and this is why many people decide to buy rather than rent.
Renting a home in Ireland is the stress-free option. You only have to worry about paying your monthly rent on time, taking out contents insurance, and taking care of your own utilities, and so it comes with less responsibility than owning your own home.
Damages and repairs are, in most instances, the responsibility of the landlord, so if a pipe bursts or the heating breaks down, you only have to make a phone call to sort it out, so again, it’s the carefree option, but at the end of your rental agreement, you leave with nothing but your personal possessions, and every cent you have paid in rent is gone, and you have nothing to show for it.
Whether you should buy a house or rent a home in Ireland is completely up to you. But with rental prices set to increase in the foreseeable future, now might be the perfect time to make the leap onto the property ladder and start investing in your own future. It could even work out cheaper, and you’ll have an investment to call your own.