Is €380-400k ridiculous money for a 2-bed apartment in Dublin 18?

blah

fret_wimp wrote: »

What I mean by "dead money" is that you are simply chucking 500 quid per month away, it pays for someone else's mortgage, but aside from the benifit of allowing you a room and a place to rest your head for a month, it does nothing to help you. in 10 years, you will have paid god knows how much of your landlords mortgage, he is a good deal closer to owning his home, and you are still at the starting line.

I think if you were to ask the question on this forum, "If I paid rent on a house for 10 (or 20, or 30) years, when I could buy the same house, with the same monthly payment, would that be considered 'dead money'", then I'm sure everyone would agree that rent was dead money. But when you're comparing rent vs mortgage, you're not necessarily comparing the same thing.

And in answer to the original question I would not buy the D18 apt because I believe the price will go down.*

*but I am not any kind of expert

Glenbhoy

Since you've got at least a year, you can monitor individual apartments - watch for ones on the longest and make your offer accordingly!!

The_Conductor

fret_wimp wrote:

What I mean by "dead money" is that you are simply chucking 500 quid per month away, it pays for someone else's mortgage, but aside from the benifit of allowing you a room and a place to rest your head for a month, it does nothing to help you. in 10 years, you will have paid god knows how much of your landlords mortgage, he is a good deal closer to owning his home, and you are still at the starting line. His rent (your landlord)is not dead money as it is going toward paying for his own home, or money he/she will get back if/when they sell.

I now see that rent is only dead money if it is more than the interest on your mortgage per month, so its not as bad as i thought. Id still rather be paying my money to help me gain a house or money when i sell, over paying someone elses mortgage.

Re: your original question- is 380-400k ridiculous money for a 2-bed apartment in Dublin 18- yes, it is.

The most expensive apartments to rent in D18- probably Beacon South Quarter- go for about 1700-1800, elsewhere can be gotten for as low as 1100-1200 for a nice 2 bed have a look at daft here.

This 1700-1800 would service the interest component (alone) of a mortgage of about 390k. Those 2 bed apartments (Beacon Court) are on the market at 475-600k. Were a landlord to purchase one and rent it out to you- it would cost him perhaps as much as 400 (perhaps more) a month to rent you the apartment- i.e. the apartment itself is deadmoney- not your rent.

Based on a return on investment of between 4 and 6% (quite conservative) this would indicate that at current levels, apartment prices in D18 have the potential to fall between 20 and 35% before they would be considered a reasonable investment in nominal terms.

You would thus be better off renting in D18- unless your rent went up by over 30% or the price of the units fell by about 35%- in which case you would be better longterm buying.

faceman

dublindude wrote: »

You should probably buy a farm so you can grow your own food as well, as buying food in Tesco is dead money!

dont really get your analogy, sorry.

OP, boards is full of opinions and some of us who claim to know it all. Dont base your decisions on what you just read here.

Heres my 2c. As present the property market is in decline. Its a buyer's market, although viewings have increased dramatically since the start of the year in some areas in dublin. A property is only worth what people are willing to pay for it. So while people think 400k is a ridiculous price to pay, the price is determined by demand. I recently saw a hosue in dun laoire with an asking of 750k go for 990k and a house in rathfarnham ask for 730 and go for 660.

What you need to do is assess your situation carefully with your partner because if you do buy, you are going to be stuck with the property for a long time as the boom time is over. Do you want kids? Are you always going to want to live there? Apartments have been hit hardest since the downturn in the market. They are proving harder to sell. While thats good for buyers at the moment, if your circumstances changed in a few years and you had to sell, you could have a problem.

For a start do searches to assess the price of similar type properties in the estate and in the area. Work out the average price as an indicator.

When viewing properties, try to assess the sellers situation. You are in the best buying position as you have no where to sell. (the amount of times i have heard estate agents saying sales had fallen through as buyers couldnt seel their existing houses). Make sure the estate agent knows that. Find out how desperate the seller is to move. Have they a house already eyed up, have they a deposit down already?

When bidding, undercut the asking prices by about 20% and take your time. Granted it will not be accepted but if there are no other bids then they have to start taking you serious.

Avoid a bidding war no matter how much you like the property. There are plenty of places out there being sold.

Best of luck with it. It can be a stressful time but its worth it in the end. Buying a property/home is a long term asset. When you reach 50/55 and if you made sound purchasing decisions, you will hopefully have an asset that will outweigh the alternative of having rented for 20/30 years. The argument of dead money has a different meaning then.

Third_Echelon

starky wrote: »

The whole “rent is dead money” is a bit of controversial view on this particular forum, I cringe any time I see some one post it, as I know people will be on complaining about it soon afterwards

The point is that evaluating rent as dead money should be done so on individual circumstance, and market circumstances.

For some it is dead money for some its not. Some see it as paying for a service, some see it as paying some ones else’s mortgage. It really depends what side of the fence you’re on.

If you are going to be staying in an area long term, and the rent in an around the same cost as the mortgage then why not buy? But if you are not sure you want to stay where you are, then paying rent can give you the flexibility of being able to move. Some people don’t want the commitment of a 40 year mortgage, I am dreading the day I have to sign for one, but I know that I will most likely have to at some point before I get too old, so that I will have some security of tenure.

If I could rent an apartment and have security of tenure like in other European countries, I would be perfectly happy renting long term, but the reality of that in Ireland will force me into the housing market eventually.

For me in today’s market, rent is not dad money. I save the difference that I would be paying in interest every month anyway. I am paying for a service and that’s the way I see it at the moment. My view may change in the long term though.

I agree with you 100% starky. I also see it as paying for a service...

I'm in absolutely no rush to get into a crippling mortgage just so I can say that I own my house. Big frickin' deal. I think there are a lot of people in this country who are going to hit hard times with the massive mortgages hanging around their neck. Look at what has been happening in the US in recent months.... Albeit a slightly different economic situation I wouldn't be surprised to see some banks foreclosing on some mortgages. It may sound doom and gloom, but people paying well over the odds and then the value of the property dropping by 20 to 35% in a matter of months.... Its a slippery slope.

I hope someday to buy a house, but not in this climate.

faceman

Third_Echelon wrote: »

I agree with you 100% starky. I also see it as paying for a service...

I'm in absolutely no rush to get into a crippling mortgage just so I can say that I own my house. Big frickin' deal. I think there are a lot of people in this country who are going to hit hard times with the massive mortgages hanging around their neck. Look at what has been happening in the US in recent months.... Albeit a slightly different economic situation I wouldn't be surprised to see some banks foreclosing on some mortgages. It may sound doom and gloom, but people paying well over the odds and then the value of the property dropping by 20 to 35% in a matter of months.... Its a slippery slope.

I hope someday to buy a house, but not in this climate.

just to elaborate, if your property goes into negative equity, you are only in trouble if you want to sell it

Your mortgage is only crippling if you cant afford it.

House price growth is cyclical long term.

Afuera

faceman wrote: »

just to elaborate, if your property goes into negative equity, you are only in trouble if you want to sell it

How long do you reckon it takes for the average person/couple to outgrow a 1 or 2 bedroom apartment? Plenty of people have bought these "starter" properties in the last few years so they "could get on the ladder".

Third_Echelon

faceman wrote: »

just to elaborate, if your property goes into negative equity, you are only in trouble if you want to sell it

Your mortgage is only crippling if you cant afford it.

House price growth is cyclical long term.

I would tend to agree with Afuera's point... A lot of these properties are starter homes. People panic.... and there are people out there who have managed to get a mortgage beyond their means.

tHE vAGGABOND

How long do you reckon it takes for the average person/couple to outgrow a 1 or 2 bedroom apartment? Plenty of people have bought these "starter" properties in the last few years so they "could get on the ladder".

To be fair, in other countries some folks live in them their whole lives...

jam_mac_jam

tHE vAGGABOND wrote: »

To be fair, in other countries some folks live in them their whole lives...

in the middle of cities or towns maybe not that far out. You wont find many people living in the suburbs in cities in Europe living in small appartments.

gurramok

So apt blocks are royally fuggered.

Those that bought theirs as starter homes can't get out for years due to negative equity and those that would buy won't buy as they want either bigger apts or houses.

A load of grumpy people in tall buildings, new slums how are ya

Calina

tHE vAGGABOND wrote: »

To be fair, in other countries some folks live in them their whole lives...

the problem is that compared to other countries, many of the apartments here are disproportionately small and very poorly laid out. I could have lived in the one bedroomed apartments you get in Brussels for a very long. I'd be climbing the walls in a Dublin one inside six months. No storage. Basically designed for people who do nothing other than sleep.

patrickolee

Try visiting japan....

Tom123

IMO

380k is crazy for a city center apartment never mind an appartment in D18.

A rent is only dead money if it is less than the interest on the mortgage for the EXACT SAME property.

faceman

Afuera wrote: »

How long do you reckon it takes for the average person/couple to outgrow a 1 or 2 bedroom apartment? Plenty of people have bought these "starter" properties in the last few years so they "could get on the ladder".

im aware of that hence my comments in my first post on this thread.

Afuera

faceman wrote: »

im aware of that hence my comments in my first post on this thread.

Maybe I misread your first post but you signed it off in a very bullish way:

faceman wrote: »

Best of luck with it. It can be a stressful time but its worth it in the end. Buying a property/home is a long term asset. When you reach 50/55 and if you made sound purchasing decisions, you will hopefully have an asset that will outweigh the alternative of having rented for 20/30 years. The argument of dead money has a different meaning then.

Do you think buying a 2 bed apartment in D18 is a sound purchasing decision at this moment in time?

faceman

Afuera wrote: »

Maybe I misread your first post but you signed it off in a very bullish way:

Do you think buying a 2 bed apartment in D18 is a sound purchasing decision at this moment in time?

thats not what i said. my advice was to do their homework before making a decision. I dont know their personal circumstances and long term plans to be able to answer that, nor does anyone else on this thread for this matter at this juncture.

Afuera

faceman wrote: »

my advice was to do their homework before making a decision. I dont know their personal circumstances and long term plans to be able to answer that, nor does anyone else on this thread for this matter at this juncture.

The OPs first post suggests that they are not considering this for the long term.

fret_wimp wrote: »

I have been considering jumping onto the property ladder with my partner. We both work in Sandyford Industrial Estate and so have been looking in D18. A 2 bed apartment would be fine for starters.

astrofool

Tom123 wrote: »

IMO

380k is crazy for a city center apartment never mind an appartment in D18.

A rent is only dead money if it is less than the interest on the mortgage for the EXACT SAME property.

I think the equation for renting vs. buying should be something along the lines of:

if (rent + intangible cost per month of owning a property) < (interest on mortgage principal + intangible cost of benefits of renting)

That intangible is different for everyone. If rent was less than the cost of interest, then everybody would buy a home on an interest only mortgage, at the least (negative equity in the current market aside).

Would you pay €5 more in interest than rent to own your property if it suited your lifestyle?

faceman

Afuera wrote: »

The OPs first post suggests that they are not considering this for the long term.

hmm, actually i overlooked this point. So then yes, it would not be a good idea to be anything "for starters" at the moment if for starters is a short term period. (less than 5 years depending on house prices.)

Al12

Yes, that's crazy money.The economy is badly in recession at the moment and due to this economic down property prices are going to drop further and further. I don't know your financial situation. However, have you looked into applying for the Affordable Housing scheme. This might suit yourself and your partner if you are looking for a 2 bed apartment and just trying to get onto the ladder. It only costs 50 euro to sign up, it might be an idea if you look into this. Contact Dublin City Council if you are interested

Supercell

This thread is a year old Al12 ..
I wonder if the OP has saved his deposit by now and is still thinking of diving into the D18 apartment non "dead money" market....
Probably would have saved himself at least 50k of that non "dead money" by now if he didn't pull the trigger.

Al12

Supercell wrote: »

This thread is a year old Al12 ..
I wonder if the OP has saved his deposit by now and is still thinking of diving into the D18 apartment non "dead money" market....
Probably would have saved himself at least 50k of that non "dead money" by now if he didn't pull the trigger.

Hi Supercell, I'm hoping to here how he's getting on. What do you think about property prices at the minute?

Martin07

southofdub wrote: »

You should hurry up and jump on the ladder, If you wait another year you will be
paying much more for a super 2 bed apartment in this area.
Have you considered looking for a 100% 40 year mortage?:rolleyes:
Sure you will probably be "Dead" before you have it paid back anyway:).
I heard a rumor that they are running out of airspace in this part of south Dublin:cool:.

While Southofdub was over optimistic ( or was/is connected to the business??) -have prices in this area come back as much as some predicted early last year

southofdub

Martin07 wrote: »

While Southofdub was over optimistic ( or was/is connected to the business??) -have prices in this area come back as much as some predicted early last year

That post was sarcasm;)

Martin07

That occurred to me but some in the business were stating just that. Hope I have not impuned your reputation!

southofdub

Martin07 wrote: »

That occurred to me but some in the business were stating just that. Hope I have not impuned your reputation!

No worries:)
Anyway if you do a serch on daft for D18 with a max asking price of 350K you
will get over 40 properties.
There is a 2 bed apartment (shoebox) with an asking of 289K. Before christmas one was listed at 280k, this has gone and I assume it sold.
So my guess is that the market clearing price for a 2 bed shoebox in this area is somewhere between 280k - 290K.:D

snubbleste

I know it's seven years on OP, but how did you get on?
Did you buy? Did you get a tracker mortgage? etc etc

The_Conductor

super_furry wrote: »

Take €100,000 of the prices you're mentioning and maybe then it's worth it. €400,000 for a 2 bedroom apartment in Sandyford is the kind of insanity that has been plaguing the Irish market.

7 years on- you can pick up a 1 bed in Sandyford for 170k or a 2 bed for 230-240k. No shortage on Myhome.ie

The OP was very against paying rent because its 'dead money'.
I wonder how they view the 200k in depreciation a 2 bed has incurred in D16/D18......... Dead money too? Somehow I suspect they are justifying it using other criterion..........

Have a little look here: http://www.myhome.ie/residential/dublin-16/apartment-for-sale-in-sandyford

Did the OP heed the advice they were given at the time- and wait? I wonder.......

The_Conductor

And a timely article from yesterday's Irish Times- entitled- I bought a 450k apartments in Sandyford, I never thought I wouldn't be able to sell it......

http://www.irishtimes.com/life-and-style/people/clara-malone-36-i-bought-a-two-bed-apartment-for-450-000-i-never-thought-i-wouldn-t-be-able-to-sell-it-1.2060530?page=1