Do I buy a house now or wait ?

Saskia

What's gonna happen ?

Price crash? Keep rising? Level off at current price?

I have pre-approval for a mortgage but really don't know what to do.

Everyone has a different idea of what's gonna happen in the housing market.

Any thoughts?

squire1

All indications are that the rise in house prices is gaining momentum again. I was speaking to an Estate Agent in the midlands recently and he was saying that 25% of all first time buyers are "non-nationals" (that includes irish people returning to Ireland). This seems to be driving the market.

Your decision depends largely on what your intentions are. Are you buying somewhere to live for the next 20 years? Are you buying to rent out? Are you buying with the intention to sell in 5-6 years?

It's a big decision but the same decision has been faced by everyone who bought a house in the last 10 years.

Best of luck if you decide to take the plunge:)

Dellgirl

Personally Im willing to take the gamble and buy a place. Even if the market is over inflated at the mo, the non nationals buying houses will fuel the fire - keeping it stoked even if prices level off over the next few years. Rent is expensive in Dublin and often a mortgage doesnt work out at too much more.

Just saw what squire1 wrote....so...what he said!


One thing I do wonder about is all these apartments - esp those built late 90's and early noughties. They are on track to looking well rough and dated in a decade or two. Will this take their price down d'ya think?

DublinWriter

I kept saying to myself "its gonna crash, its gonna crash" for years before buying two years ago just outside Dublin out of complete desperation.

The place is now worth 100K more than I paid for it.

I don't think there will ever be a 'crash', any reduction will be gradual and the signals will be there in advance.

However, the ECB look like they are going to push interest rates up 3/4 of 1% in 2006, which might push many Irish homeowners/investors out who are already mortgaged up to the hilt.

Even so, remember that the UK crash was caused by George Seros waking up with a sore head one morning and deciding to dump billions of Sterling reserves out onto the currency market, forcing the UK government to raise interest rates four times in one day.

My advice? Buy now and try and buy a semi-d at least. Apartments are always the first to lose value in any price-drop, and semi-d's are far more saleable/rentable.

DublinWriter

Dellgirl wrote:

One thing I do wonder about is all these apartments - esp those built late 90's and early noughties. They are on track to looking well rough and dated in a decade or two. Will this take their price down d'ya think?

I remember a Liveline show a year or so back about new apts. One caller said that the walls were so thin that he could hear his neighbour frying sausages.

The other problem with apartments is that many have rising management charges, some shoeboxes have charges of over 1.2K p.a.

As I said, apartments are always in the front line during any drop in prices. Many in Dublin are now held by investors with the rental covering mortgage interest only. Any substatial increase in interest rates (as is on the cards) will make many investors dump their apts out onto the market around about the same time.

JackieChan

DublinWriter wrote:

Any substatial increase in interest rates (as is on the cards) will make many investors dump their apts out onto the market around about the same time.

Its mooted that interest rates will rise by up to 75 basis points by the end of the year wouldn't the smart investor sell up now ahead of the pack? Are there an increase of one bed appts for sale now?

unkel

Very hard to say what's going to happen. If you are buying to live in the house for a long time, it doesn't really matter if the house will be worth a bit less in 3 years time (bad case scenario) compared to what you're paying for it now. As long as you don't have to sell

DublinWriter wrote:

remember that the UK crash was caused by George Seros

Not quite. The UK house market crash started in '89. Soros blew up the bank of England in '92

MorningStar

JackieChan wrote:

Its mooted that interest rates will rise by up to 75 basis points by the end of the year wouldn't the smart investor sell up now ahead of the pack? Are there an increase of one bed appts for sale now?

I think this is just a show of not realising what a property investor may be doing. THe vast majority of investors re not speculating in the short term. Very few people buy and sell with in 5 years to gain a profit. Most are looking at the long term.

Property prices will rise this year and next as the SSIAs come in. THey already rose towards the end of last year as many people borrowed on the grounds they will get the money the next year. 100% mortgages were driven moe by SSIAs than people really thought.

My advise would be to buy now before they go up over the year. Your first house doesn't have to be the dream house just a good buy. Make sure it has potential to increase in value or that you can add value. A good local rental market is helpful (college, hospital) and close to a desirable area is good too.

Donnycarney is good example of a place that showed a good purchase. Close to the Dart is it's first good point, DCU and Beaumount Hospital are close enough, Clontarf is close by and Kilester has an improving name. Close to town. If you bought a house 5 years ago in the area it is now worth close 80% (€180-200k)more which out performed the market. I think the benifit is gone there but it will rise another good bit.

I think Cabra is the next area to do something similar due to the new train station and massive building in the area.

If you don't like getting yor hands dirty expect to pay a lot of extra cash for the work already done.

http://www.yourmortgage.ie/Research/calcs.jsp