Housing Bubble Bursting

johnnyskeleton

Caoimhín wrote: »

While not trying to over dramatize, that site has probably saved hundreds of people from borrowing vast sums of money to buy poor standard, over prived houses.

And has sent many thousands more into underground bunkers with tinfoil hats, stacks of gold and crates of beans; waiting with their shotguns always pointed at the door for when the zombies come in.

norrie rugger

Fighting Irish wrote: »

And you have a safe job, it's grand. But prices are still falling, so why buy?

If you are looking to get into an estate etc then it is no problem
But, if there is a specific property there (and you have a safe job) it comes down to a simple choice (that all buyers of anything deal with)

Is it worth that to you

pawnacide

140,000 for a 1370 sq ft hse, I'm not taking land cost into consideration.. I'm talking about build cost.

pawnacide

norrie rugger wrote: »

If you are looking to get into an estate etc then it is no problem
But, if there is a specific property there (and you have a safe job) it comes down to a simple choice (that all buyers of anything deal with)

Is it worth that to you

Absolutely, I couldn't agree more. But there must be a house out there that suits. If there isn't then i suggest a site and build it yourself. Sites in areas with a lot of zoned land are being sold at close to agricultural prices. Not in major towns of course. Eg 13 Acres with full planning for 38 no. 3 & 4 bed houses .. 300,000.

johnnyskeleton

pawnacide wrote: »

140,000 for a 1370 sq ft hse, I'm not taking land cost into consideration.. I'm talking about build cost.

How much does it actually cost to build such houses? As a guide they say that a good spec own build is 100 per sq ft. That's 137k. A lot of houses around the country are not built to that high a standard, and in a large estate presumably there are large economies of scale. Further, there is good scope for negotiation what with the recession and all. So at 75 a sq ft it's 103k so at a profit excluding land costs.

If you could buy land at 10-20k in such an area, got medium materials and bargained with the builders you could probably build a house of that size for less than 140k, no?

Again, the site costs are the killer for those developments.

pawnacide

johnnyskeleton wrote: »

How much does it actually cost to build such houses? As a guide they say that a good spec own build is 100 per sq ft. That's 137k. A lot of houses around the country are not built to that high a standard, and in a large estate presumably there are large economies of scale. Further, there is good scope for negotiation what with the recession and all. So at 75 a sq ft it's 103k so at a profit excluding land costs.

If you could buy land at 10-20k in such an area, got medium materials and bargained with the builders you could probably build a house of that size for less than 140k, no?

Again, the site costs are the killer for those developments.

If you made the bricks yourself, were handy at carpentry and furniture making, a dab hand at electricals and gas fitting, fond of paving and concrete mixing, a master glazier with a good supply of sand for glass making and built a dyke and reclaimed the land from the sea you might have a shot.


Sale Price 140000

Basic Costs
Site 20000 (your figure)
Council Contributions 6000
VAT (13%) 18200

Total 44200

Leaving 95800


Price per sq ft (1370) 69.9270073

Fr0g

johnnyskeleton wrote: »

And has sent many thousands more into underground bunkers with tinfoil hats, stacks of gold and crates of beans; waiting with their shotguns always pointed at the door for when the zombies come in.

Sorry but that is completely untrue. I read and contribute regularly it is a very balanced site IMO. And is mostly accurate in predicting the direction of irish/euro/global economy.

Treehouse72

Fr0g wrote: »

Sorry but that is completely untrue. I read and contribute regularly it is a very balanced site IMO. And is mostly accurate in predicting the direction of irish/euro/global economy.

I think Johnny was just being playful.

Fr0g

Treehouse72 wrote: »

I think Johnny was just being playful.

Then I suggest he uses an appropriate smiley.

ozmen

In support of 20goto10. We have been searching for a house for several years. We held off during the boom, reading this site and the property pin we decided that houses were hugely overpriced and had to come down. Today we are sale agreed on a house that ticks all of our boxes and is in what we would term our dream location. Whenever we tell anyone that we have bought they congratulate us and tell us what a great time it is to buy. I always disagree and tell them that really if we'd waited a year or two we could probably find a similar house in a similar location for up to 50% less. Like 20goto10 we are buying now because we want a house now, not in two years. We are tired of renting, we want to settle down. (I dont prescribe to rent being dead money either, I believe that by renting for a few years we have saved hundreds of grand off the price of the house we are buying.) But its come to the point where we've found a house we love in a better location than we ever thought we'd be able to afford for what we consider an affordable price. Sure we could wait longer and get another house for cheaper but would it be as nice as the one we are buying? would the location be as perfect? or would we always regret letting this one go? Also, owning your own house gives you a sense of security and peace of mind that you just dont get from renting (at least not in Ireland).

Treehouse72

Fr0g wrote: »

Then I suggest he uses an appropriate smiley.

Erm, ok, but if you visit the site you should know Johnny is one of the more respected posters over there.....:D

Calina

ozmen wrote: »

Also, owning your own house gives you a sense of security and peace of mind that you just dont get from renting (at least not in Ireland).

It doesn't and a lot of people dealing with mortgage arrears and repossessions proceedings in the court system would disagree with you about that peace of mind.

Congratulations on the house purchase but recognise that while it may be right for you, it is not necessarily in general, right for everyone else.

Fr0g

Treehouse72 wrote: »

Erm, ok, but if you visit the site you should know Johnny is one of the more respected posters over there.....:D

I hadn't made the connection

subway

Calina wrote: »

It doesn't and a lot of people dealing with mortgage arrears and repossessions proceedings in the court system would disagree with you about that peace of mind.

not that i disagree with your sentiment, but I'd counter that statement by saying that the lack of repossessions going through the courts is going to reinforcing that feeling of peace of mind and security.
much like the bank guarantee, the repossession moratorium is there to provide "confidence" to a market in tatters.

ozmen

Calina wrote: »

It doesn't and a lot of people dealing with mortgage arrears and repossessions proceedings in the court system would disagree with you about that peace of mind.

Congratulations on the house purchase but recognise that while it may be right for you, it is not necessarily in general, right for everyone else.

I agree with you on the second point, I think your first point should be clarified in the same way though. Owning your own home does give you peace of mind, being in negative equity or arrears obviously takes it away - but then again if you were renting and couldnt afford your rent and faced eviction that wouldnt be any less stressful - but even if you never miss a rent payment, in Ireland you could find that your landlord decides that they are selling etc and you are forced to move - this is more the stablility that I meant by peace of mind / security.

In the long term defaulting on your mortgage is obviously a worse prospect than being evicted from a rental but I think that if you take out a reasonable LTV loan over a reasonable period (and stress test yourself for significant interest rate increases - I wouldnt be surprised by 5 - 8% in the medium term) you minimise the risk of ending up in that position.

JONJO THE MISER

Opps wrong Forum.

Tea drinker

With that username Jonjo, I think you will fit in fine here.
Come back later ;-)

20goto10

ozmen wrote: »

In support of 20goto10. We have been searching for a house for several years. We held off during the boom, reading this site and the property pin we decided that houses were hugely overpriced and had to come down. Today we are sale agreed on a house that ticks all of our boxes and is in what we would term our dream location. Whenever we tell anyone that we have bought they congratulate us and tell us what a great time it is to buy. I always disagree and tell them that really if we'd waited a year or two we could probably find a similar house in a similar location for up to 50% less. Like 20goto10 we are buying now because we want a house now, not in two years. We are tired of renting, we want to settle down. (I dont prescribe to rent being dead money either, I believe that by renting for a few years we have saved hundreds of grand off the price of the house we are buying.) But its come to the point where we've found a house we love in a better location than we ever thought we'd be able to afford for what we consider an affordable price. Sure we could wait longer and get another house for cheaper but would it be as nice as the one we are buying? would the location be as perfect? or would we always regret letting this one go? Also, owning your own house gives you a sense of security and peace of mind that you just dont get from renting (at least not in Ireland).

The best of luck with it ozmen, I hope you have many happy years.

norrie rugger

I honestly am sick of renting.

from useless management agencies: Lifts not working, Electric gates failing, Leaks, Hall lights failing etc

to

The scum being given apartments, because they can not fill them.

For all this pleasure I am renting an apatment for more than the house I am looking at would cost me monthly.
Add to this the Irish mentality of many landlords, that they are just waiting to sell, and tennants be damned.

Quality of life has a cost too and I am coming to the end of what I can take, in apartments or Shoe Box estates

quozl

On the flip side of the coin, my Wife and I rented a lovely 3 bed apartment in Donnybrook last year, for a very reasonable rent. There is no way we could possibly have afforded to buy it, because house prices are still out of disjoint with rent multiples.

We've just signed a lease on a lovely 3 bed house in Ranelagh, for an increase over the donnybrook 3 bed apartment rent, but, still, much less than a mortgage for it would be costing us.

More importantly, we couldn't possibly afford to buy this lovely house in Ranelagh.

So, we get to live in a much nicer place than we could afford to buy, and maybe in a few years, we'll be able to buy someplace like this. If properties moved into line with rent multiples then we could. If not, well, I am confident house prices will not be going upwards in the medium term, so I don't see a downside.

Admittedly, finding the nice places to rent is a pain in the hole!

norrie rugger

quozl wrote: »

On the flip side of the coin, my Wife and I rented a lovely 3 bed apartment in Donnybrook last year, for a very reasonable rent. There is no way we could possibly have afforded to buy it, because house prices are still out of disjoint with rent multiples.

We've just signed a lease on a lovely 3 bed house in Ranelagh, for an increase over the donnybrook 3 bed apartment rent, but, still, much less than a mortgage for it would be costing us.

More importantly, we couldn't possibly afford to buy this lovely house in Ranelagh.

So, we get to live in a much nicer place than we could afford to buy, and maybe in a few years, we'll be able to buy someplace like this. If properties moved into line with rent multiples then we could. If not, well, I am confident house prices will not be going upwards in the medium term, so I don't see a downside.

Admittedly, finding the nice places to rent is a pain in the hole!

Especially if there is work stipulations, that mean you can only be a certain distance from work

ozmen

In our case we never did rent the standard of house that we looked at buying, while it might have been cheaper than the mortgage it was still more than we wanted to spend on rent, the purpose of renting for us was always to facilitate saving for a house, so we rented simple and cheap.

Caoimhín

norrie rugger wrote: »

Especially if there is work stipulations, that mean you can only be a certain distance from work

Jaysus, how strict can that be. I mean do you have to live within 5 miles of work?

With the exception of the emergency services, i doubt that one would stand in either national or labour law.

Blackjack

quozl wrote: »

Admittedly, finding the nice places to rent is a pain in the hole!

norrie rugger wrote: »

Especially if there is work stipulations, that mean you can only be a certain distance from work

Buying 50 miles away from your workplace resolves that issue entirely though.

norrie rugger

Caoimhín wrote: »

Jaysus, how strict can that be. I mean do you have to live within 5 miles of work?

With the exception of the emergency services, i doubt that one would stand in either national or labour law.

Not me but the missus does have a job that requires her to be within a certain time frame from work

norrie rugger

Blackjack wrote: »

Buying 50 miles away from your workplace resolves that issue entirely though.

true true. Although even that depends on the road network. I mean I would rather live 50 miles out with a motorway, than across Dublin to work

Blackjack

norrie rugger wrote: »

true true. Although even that depends on the road network. I mean I would rather live 50 miles out with a motorway, than across Dublin to work

Would it be OK to rent or to buy?.

Caoimhín

norrie rugger wrote: »

Not me but the missus does have a job that requires her to be within a certain time frame from work

Fair enough, i wont pry. But without getting into a rant, i cant see how that contract would go down if it was tested in the European Court of Human Rights.

Anyway, back on topic, where is the twit who predicted that unemployment rates would begin to level out therefore stabalising house prices. I might spend some time trawling through this thread to find him or maybe someone else could do the footwork so that i can do the sneering?

Treehouse72

I have to laugh when I hear people say the problem isn't affordability, but supply. And also that this affordability is evidenced by the abundance of crappy shoeboxes available at 8x average salaries.

Their argument goes something like this: "There's affordability for crappy shoeboxes that other people will want to buy, but which I wouldn't. But there's no affordability for the nice houses a discerning individual like myself would want to buy". If you think about this logically for 5 seconds it becomes clear what utter claptrap it is. Entirely tautological reasoning.

People still just don't get it and refuse to engage their brains, so I guess we're in for years and years more of this nonsense till people finally grasp what's going on with the property market.

Gurgle

Treehouse72 wrote: »

"there's no affordability for the nice houses a discerning individual like myself would want to buy". If you think about this logically for 5 seconds it becomes clear what utter claptrap it is.

Any chance you can explain why?