To buy or not to buy - advice required pls!

fly.on.the.wall

I would appreciate some advice from my fellow boardies!

I am a first time buyer, and don’t really have anyone to help me on this.

I’m mortgage approved and am currently seeking to buy a home for myself.
I’ve come across a place i like, and its well within my budget.

The question is, should I buy now?

The property itself is on the market for €175,000 (2 bed apartment). There are exact same properties around for the same area for 190k – 200k. So, it seems like a good price from my prospective.
The price of the property has progressively dropped over the past few months to its current price.

If I were to put in an offer to buy, what do you think I should offer at? Or indeed, what price do u think is should settle at?

Any advice or thoughts would be greatly appreciated.

spockety

Is it your intention to live in it for a long, long time?

irish_bob

fly.on.the.wall wrote: »

I would appreciate some advice from my fellow boardies!

I am a first time buyer, and don’t really have anyone to help me on this.

I’m mortgage approved and am currently seeking to buy a home for myself.
I’ve come across a place i like, and its well within my budget.

The question is, should I buy now?

The property itself is on the market for €175,000 (2 bed apartment). There are exact same properties around for the same area for 190k – 200k. So, it seems like a good price from my prospective.
The price of the property has progressively dropped over the past few months to its current price.

If I were to put in an offer to buy, what do you think I should offer at? Or indeed, what price do u think is should settle at?

Any advice or thoughts would be greatly appreciated.

might not be the answer to the question you asked but what i would do in that circumtance is rent the appartment which i assume is not much more than 1000 euro a month for a year , the appartment,s sale price will have dropped by at least 20 grand in a years time , you will have then lived for free for a year , at that point perhaps condider buying the place

fly.on.the.wall

spockety wrote: »

Is it your intention to live in it for a long, long time?

I'd say a time frame of 5 years or so.

Just to add, a mate of mine bought an apartment (exactly the same) in the same complex 4 years or so, - he paid 175k for it.

fly.on.the.wall

irish_bob wrote: »

might not be the answer to the question you asked but what i would do in that circumtance is rent the appartment which i assume is not much more than 1000 euro a month for a year , the appartment,s sale price will have dropped by at least 20 grand in a years time , you will have then lived for free for a year , at that point perhaps condider buying the place

thanks for the suggestion - its a great idea. Unfort, its not a runner with the present owners. They need the money to buy elsewhere!

Senna

fly.on.the.wall wrote: »

I'd say a time frame of 5 years or so.

Just to add, a mate of mine bought an apartment (exactly the same) in the same complex 4 years or so, - he paid 175k for it.

He paid 175k in 2004/5? the market was hugely inflated in 2004/5, so the price has a long way to drop before its at the bottom.

If you only intend to live there for 5 years i'd forget about it. More than likely the price in 2014 will be lower than what ever you pay in 2009, so you would not be able to sell it without having big savings to pay off the negative equity. I'd wait till the prices drop to a level where you can afford a house that you'll be happy to live in long term.
Buying now only makes scene (somewhat so) if you plan to live in the house for the next 20/30 years.

dny123456

I'd advise you not to take the advice you get on an internet forum too seriously. If you've done the sums and are reasonably happy to stay there for 5 years, go for it.

spockety

dny123456 wrote: »

I'd advise you not to take the advice you get on an internet forum too seriously. If you've done the sums and are reasonably happy to stay there for 5 years, go for it.

I'd say if you've done affordability sums and are happy with those, fair enough.

But the 5 year thing I'd be pretty concerned about.

I'd only buy a property now that you think you could happily live in for the entire term of the mortgage. Anything else, and you risk being stuck in a place you are not happy with for a long, long time.

Would you be ok with it if after 5 years it became apparent that you could not sell it, and would have to live there for at least another 5 or 10 years? the answer to that is important I think.

ravendude

dny123456 wrote: »

I'd advise you not to take the advice you get on an internet forum too seriously. If you've done the sums and are reasonably happy to stay there for 5 years, go for it.

Thats infantile advice at best. There's a lot more to be considered when making one of the biggest decisions of one's life. The decision to buy will have a large impact on your future wealth, life style and flexibility.

Personally, I wouldn't advise that you "go for it" simply because the sums add up. There is a real possibility, in fact a strong probability that you will end up in negative equity from the moment you first get your keys (unless you have a very,very large deposit). The stark reality of negative equity is such that you may be forced to stay in this property well beyond 5 years.

Wing Walker

As they say, the best way to see what the markets are going to do is through hindsight. Unless you've got a crystal ball, it's going to be pretty much impossible to tell what the housing market will be like in 5 years or more.

However, it doesn't look too good. "The only difference between Ireland and Iceland is 1 letter and 6 months", said one economist this morning. The simple fact of the matter is that the country appears to be in a very precarious position, and there's doesn't appear to be light at the end of the tunnel. Speaking to a friend in the construction industry last year, it appeared then that there was an over-supply of housing units, to last us for perhaps up to 5 fives. Take a look around and you'll see for yourself. Almost everywhere, there are apartments and houses just sitting there, as they have been for a long time now.

Advice? Sit tight, unless you are in a position where you need to buy now. Have a look at the market in 4-6 months, and continue to monitor it in the intervening period. I very much feel, as many others do, that the housing market has a long way to go before it "bottoms out". Keep your options open; apartments are fine, but for the mortgage that you have had approved, you may find that it will buy a starter house in the near future.

And as for internet advice, it's all very much like life! Take the advice you want and forget the rest.:)

Best of luck with it.

WW

BendiBus

spockety wrote: »

I'd only buy a property now that you think you could happily live in for the entire term of the mortgage.

Unfortunately, even in a steady market, it's impossible to know if a property will be suitable/desirable in much more than 5 years. Personal circumstances, work issues, the local environment can all change. So there will always be an element of risk.

SoupyNorman

fly.on.the.wall wrote: »

The price of the property has progressively dropped over the past few months to its current price.

And why do you assume the price reductions has ground to a halt?


In the current times, developers and auctioneers have their backs to the wall. If I were you I'd make an offer of 150k ...Maximum they may take it and the hand off you! I'd probably go lower. All they can do is say no. You basically want to insulate yourself from negative equity. My view is the supply of property across the whole of the country is way higher then the demand...natural market forces will dictate that price will fall and because the price fall is gradual, it will also be slow. A report today showed that house prices fell 9% last year, house prices dont fluctuate on a yearly basis. They tend to follow a trend over extended periods of time which are usually upwards or downwards, at the moment it is downwards,

My advice...Sit tight and watch the prices fall some more.