Been waiting for prices to fall further..going to buy now..am I mad?

ZYX

Senna wrote: »

So how many couples do you think both have enough job security to buy a house? the answer is not many. There are plenty of higher earners and trader-uppers who have more money but the market has still stalled because prices are still far to high. The market will find its level by itself and no amount of regulations or outside influences will chance that. When the average house price is 3.5 (4.5 i always believed) times one average wage (which is falling) then some kind of bottom might be near.
Its ridiculous to think two average wage works should be looking at a mortgage of a quarter of a million euro, and this is a restricted level for mortgages:rolleyes:

The point was being made that new UK style regulations would see house prices drop. I was simply pointing out that the new regulations if they came would see 1st time buyers being able to get a mortgage of €250,000.

johnnyskeleton

newestUser wrote: »

My argument was that property prices in prestige, in-demand areas are buoyed not just by income, but by wealth. This increases the price of property there beyond the 3.5 ratio. Property in prime areas are also trophies. There were a couple of lads on thepropertypin the other day mocking some guy who owned a large house valued at several million, who was renting it out. They pointed out that the rental yield was 1%, pitifully low. However, while I'd agree that the property was overpriced, I'd argue that the yield might not get to 6/7% or so, because it's a trophy property, and salary-price ratios/rental yield are meaningless for such high value properties, they're not purchased by PAYE folk, they're purchased by rich business owners, or landed gentry, Michael O'Leary, or whatever, who are prepared to pay a premium for the snob factor.

Just throwing it out there, but would it be fair to say that for every rich business owner or landed gentry buying a trophy house, there are several other "upper professionals" buying the same. The old redbrick terraced houses near the city centre e.g. Ranelagh have not always been exclusively for the rich and wealthy - in fact, 20 years ago they were for among the poorest, living in flats or artists living in tumbledown garrets. It is only in the last few years when the money poured in and turned them into the trophy homes we read about. 100 years ago they were tenaments. My point is first of all that there are probably more people in these areas that borrowed too much to buy their properties, and second of all, there is nothing to say that these properties will keep their value and current use. In fact, history shows that when the big houses are too expensive for rich people, they are turned into cheap accomodation for poor people or else offices.

newestUser

johnnyskeleton wrote: »

Just throwing it out there, but would it be fair to say that for every rich business owner or landed gentry buying a trophy house, there are several other "upper professionals" buying the same. The old redbrick terraced houses near the city centre e.g. Ranelagh have not always been exclusively for the rich and wealthy - in fact, 20 years ago they were for among the poorest, living in flats or artists living in tumbledown garrets. It is only in the last few years when the money poured in and turned them into the trophy homes we read about. 100 years ago they were tenaments. My point is first of all that there are probably more people in these areas that borrowed too much to buy their properties, and second of all, there is nothing to say that these properties will keep their value and current use. In fact, history shows that when the big houses are too expensive for rich people, they are turned into cheap accomodation for poor people or else offices.

All this is valid.

Perhaps there'll always be people with more money than sense though who want to buy into 'trendy' neighbourhoods. While the location of those neighbourhoods may change across the decades, people who have lots of money, or access to large amounts of credit, will often pay above the odds for property with a 'good' address. I don't dispute there are very high-earning professionals who took out ludicrous mortgages to buy property in prestige locations, and that they paid way over the odds. The price of these properties will come down a lot, *but* the snob factor associated with their address will prop up the prices somewhat, ie Legoland Drive, Longford will fall to 3.5 times average earnings (or less!) but Toffs Close, Ranelagh will fall to a slightly higher multiple (ie 4.5/5). I am pulling figures out of the air here, I understand, but I think that the logic holds in real life.

TheCityManager

Wow.....plenty of debate on this ... thanks people

Still haven't decided but sure Ive plenty of time yet .....:D

JuliusCaesar

Hi there. I've recently bought a house. I did it because I need somewhere to live, I liked the house and I intend to stay there for the rest of my life (pretty much). My job is secure and I can afford the mortgage easily enough. It needs work, but nothing urgent. I will eventually get the attic converted but I don't need it now. The value of the house has fallen since I bought, but seeing I'll be there 30 years or so I don't care. Will it go up to what I bought it for? Nobody knows.

So my advice would be: if you can afford it and you've said you love the place having lived there a while, buy it. Get a valuation from an estate agent, and you'll know if you offered too much. The EA will give you a reasonable evaluation given the current market and it'll cost you around E120.

Don't go at all by asking prices around, the EA will always tell you to ask for more than it's worth if you're selling, on the grounds that you;ll have room for negotiation. If you've offered more than it's worth, withdraw your offer and give a reasonable offer. The landlord has offered you dibs on the house, he probably doesn't want to pay an EA to sell it for him if he doesn't have to. He saves the EA fees, and you get the house you want.

PS having builders in IS disruptive but do you absolutely have to get all the work done in one go?

TheCityManager

JuliusCaesar wrote: »

Hi there. I've recently bought a house. I did it because I need somewhere to live, I liked the house and I intend to stay there for the rest of my life (pretty much). My job is secure and I can afford the mortgage easily enough. It needs work, but nothing urgent. I will eventually get the attic converted but I don't need it now. The value of the house has fallen since I bought, but seeing I'll be there 30 years or so I don't care. Will it go up to what I bought it for? Nobody knows.

So my advice would be: if you can afford it and you've said you love the place having lived there a while, buy it. Get a valuation from an estate agent, and you'll know if you offered too much. The EA will give you a reasonable evaluation given the current market and it'll cost you around E120.

Don't go at all by asking prices around, the EA will always tell you to ask for more than it's worth if you're selling, on the grounds that you;ll have room for negotiation. If you've offered more than it's worth, withdraw your offer and give a reasonable offer. The landlord has offered you dibs on the house, he probably doesn't want to pay an EA to sell it for him if he doesn't have to. He saves the EA fees, and you get the house you want.

PS having builders in IS disruptive but do you absolutely have to get all the work done in one go?

Thanks for that JC...an excellent reply

Intend staying in house FOREVER..both myself and gf are divorced and we've both movwed several times in previous lives and intend staying in house and growing old :rolleyes:

Pretty much a lot of the work would have to be down immediately as it's a kip (but we could get over that ....)

I hear what you're saying re prices over 30 years etc...its just that we're not loaded..Im a public servant..poorly paid might I add..and if one was to save 50K odd by waiting a year it could mean a HUGE amount to us..

That being said we're ok money wise and could easily afford to buy etc..
It simply I suppose how would I feel seeinga similiar house going for sale in a year at say 50k + less...I'd not be too happy....otherwise it's perfect...

~Trixiebelle~

TheCityManager wrote: »

Thanks for that JC...an excellent reply

Intend staying in house FOREVER..both myself and gf are divorced and we've both movwed several times in previous lives and intend staying in house and growing old :rolleyes:

Pretty much a lot of the work would have to be down immediately as it's a kip (but we could get over that ....)

I hear what you're saying re prices over 30 years etc...its just that we're not loaded..Im a public servant..poorly paid might I add..and if one was to save 50K odd by waiting a year it could mean a HUGE amount to us..

That being said we're ok money wise and could easily afford to buy etc..
It simply I suppose how would I feel seeinga similiar house going for sale in a year at say 50k + less...I'd not be too happy....otherwise it's perfect...

I got a phonecall this afternoon from an EA who i was dealing with regarding a house i was really interested in buying in Early Oct... We put an offer in at 375k and he basically said "no hope" but he will pass it on to the builder. The builder (thank god!!) turned it down flat!! Basically, the EA rang back today and asked were we still interested and that builder would be now happy to accept the offer we made!! !! LOL!! I actually laughed and said "thanks but no thanks" and then he said that the builder would accept 355k!! The difference even a couple of months makes!! Hold your horses on buying seriously!! i would have snapped that house up even just a couple of months ago! I LOVE the house and yes i would happily live there for many years to come but i will buy either that house or one similar just for at least 75k less..... for the sake of another couple of months. 75k plus interest on top is ALOT of money... when you have waited this long, abit longer isnt going to kill you!! Your bank balance will thank you for it in the long run!!:)

Senna

JuliusCaesar wrote: »

The value of the house has fallen since I bought, but seeing I'll be there 30 years or so I don't care.

Thoie wrote: »

Negative equity only affects you if you're trying to sell.

Just to throw a few figures at these comments.

Say you buy a house today for 330k and take out a mortgage for 300k. Lets say thats a 30yr mortgage at 5% (average rate), that makes the repayments €1610. But say you wait for a 20% decrease in price, which in the current climate is nearly a given, just by waiting a year (roughly).
So next year you buy the same house at 264k, and take out a mortgage for 237k. Using the same terms as above 30yr 5%, then your repayments are down to €1288, that's a saving of €322 EVERY MONTH for the next 30 years. Thats a lot of money and could make a bit difference in your quality of life, which is most important.
The price you pay for the house is much more important that what the future value is, because unless your buying a house with cash, then your taking out a mortgage based on the purchase price which can last from 25 to 40 years.

leitrim lad

no harm in making a start on your mortgage but shop around for your house ,dont be mislead by an auctioneer either, there is houses being sold by developers for as little as €50,000 for a finished 3 bed semi d .thats how bad the market is and if you have the money ready it is your market.

maninasia

TheCityManager wrote: »

Thanks for that JC...an excellent reply

Intend staying in house FOREVER..both myself and gf are divorced and we've both movwed several times in previous lives and intend staying in house and growing old :rolleyes:

Pretty much a lot of the work would have to be down immediately as it's a kip (but we could get over that ....)

I hear what you're saying re prices over 30 years etc...its just that we're not loaded..Im a public servant..poorly paid might I add..and if one was to save 50K odd by waiting a year it could mean a HUGE amount to us..

That being said we're ok money wise and could easily afford to buy etc..
It simply I suppose how would I feel seeinga similiar house going for sale in a year at say 50k + less...I'd not be too happy....otherwise it's perfect...

Don't be an eejit, common sense is common sense, how long would it take you to save 50k euro, take a world tour for a year or two and you'd still save yourself years of work!
But the 'taking advice' thing from the crowd can be misleading. If you had asked the same question on here 3 years ago you would probably have been heavily influenced by the herd mentality and lost a lot of money. Of course hindsight is the easiest thing to have, nobody can predict the future very accurately but it would take a miracle for Ireland to reach boom valuations for at least 10-15 years (something like 100s billions of barrels of oil being found off the coast).
You should look at the economic state of affairs carefully and look at what is happening in other countries.

TheCityManager

Ok I am convinced - I really need to wait till at least years end..I always knew the answer TBH but I suppose I really needed to see it in front of me in black and white.......so thanks all...ye ae fab :rolleyes:

I just need to break the news at home now

'Hi honey...I am not buying this house ................. but we are saving at least 50k + in the process which will greatly increase our quality of life going forward.........'

Wish me luck :rolleyes:

AARRRGH

I'd advise you not to listen to people who have recently bought a home. They will not give you impartial, logical advice.

If you want to do the intelligent thing, don't buy now.
If you want to let your emotions trick you into making a bad decision, by all means buy now.

I know what I would do.

DJDC

From reading this and AAM I have come to the conclusion that a significant minority of people just aren't that intelligient. These are the people who are now starting to buy back into the market, taking out 5X 90%+ mortgages on houses they feel are bargains. I feel sorry in one sense because they can't see beyond the vested interests of the Irish newspapers, auctioneers, solicitors, politicians and developers. They dont realise this massive leach of the construction industry is like a dying diabetic desperately crying out for insulin and should just be let die. I am also makes me angry because they are the same people who are not allowing the market to return to normal efficient levels i.e 3X average wages and they will always be pricing out people who are wiser and less prodigal with their money. The whole Irish banking/political and construction incestuous family has taken a well deserved hit recently but I worry these suckers are going help it back on its feet.

quozl

DJDC, I'd guess (and it's only a guess), that they won't be able to really affect the direction the market is going.

There are too many negative factors imo.
So, all that will happen is that they'll end up losing a lot of money for themselves, and to a very limited extent bailing out the banks/Irish government, by offloading some of the developers debts on to themselves.

So, I'd be worried for them, not for the people not buying tbh.

I'd not advise anybody to buy into a rapidly falling market.

TheCityManager

DJDC wrote: »

From reading this and AAM I have come to the conclusion that a significant minority of people just aren't that intelligient. These are the people who are now starting to buy back into the market, taking out 5X 90%+ mortgages on houses they feel are bargains. I feel sorry in one sense because they can't see beyond the vested interests of the Irish newspapers, auctioneers, solicitors, politicians and developers. They dont realise this massive leach of the construction industry is like a dying diabetic desperately crying out for insulin and should just be let die. I am also makes me angry because they are the same people who are not allowing the market to return to normal efficient levels i.e 3X average wages and they will always be pricing out people who are wiser and less prodigal with their money. The whole Irish banking/political and construction incestuous family has taken a well deserved hit recently but I worry these suckers are going help it back on its feet.

Would you then be of the opinion that no one should purchase anything at the moment? Just curious?:rolleyes:

DJDC

Would you then be of the opinion that no one should purchase anything at the moment? Just curious?

Think about it for one second. Houses are like any asset, they are sold at a price where supply meet demand. If all the numpties currently looking at overloading themsleves with debt held back in unison until prices reached those approaching other countries then they could save themselves a lot of money.

DJDC, I'd guess (and it's only a guess), that they won't be able to really affect the direction the market is going.

I agree. I think any rise won't last long because
a) Interest rates cant stay this low. Todays UK inflation figures are evidence of that.
b) Private enterprise is still losing thousands of jobs with no immediate upturn especially in Ireland
c) The Irish banking system has been exposed as a highly leveraged property lending system with their market caps devasted.

But you can guarantee the average joe on the street wont hear these facts. RTE, the Sindo etc. will continue to do their utmost to retain the status-quo in Ireland which is massively interwined with property.

the_syco

TheCityManager wrote: »

but it does need to be gutted and redone

Add a rough costing to get this done to the house price.

JuliusCaesar

AARRRGH wrote: »

I'd advise you not to listen to people who have recently bought a home. They will not give you impartial, logical advice.

All I can do is quote my experience, and my reasons for buying now. I don't think I'm being partial and illogical.

DJDC wrote: »

These are the people who are now starting to buy back into the market, taking out 5X 90%+ mortgages on houses they feel are bargains.

and some of them like myself took out 65% mortgages (X4 of salary), having worked the whole thing out carefully and having been saving for years!

City Manager, does your landlord want to sell immediately? or can you rent a while longer? If you decide not to buy now, will you have to move again? Who knows, your landlord may not find a buyer, leaving the house for you to snap up in 6mths/1yrs time.....

EKRIUQ

A person showed me a house to-day that would of been at about €350,000-€370,000 in the good old days but was being marketed at €295,000.

Auctioneer told them straight out that if they really wanted the house with no messing to put in a offer or €200,000 and the builder would accept it. They did and they got the house!. 2,500 sq feet 2 storey with brilliant views from all windows and on .75 of an acre with a long drive. The builder owned the land so didn't have to buy the site but was obviously desperate for money.

Fighting Irish

TheCityManager wrote: »

Would you then be of the opinion that no one should purchase anything at the moment? Just curious?:rolleyes:

WHY WOULD YOU BUY WHILE PRICES ARE DROPPING?

EKRIUQ wrote: »

A person showed me a house to-day that would of been at about €350,000-€370,000 in the good old days but was being marketed at €295,000.

Auctioneer told them straight out that if they really wanted the house with no messing to put in a offer or €200,000 and the builder would accept it. They did and they got the house!. 2,500 sq feet 2 storey with brilliant views from all windows and on .75 of an acre with a long drive. The builder owned the land so didn't have to buy the site but was obviously desperate for money.

Comparing a price to the higest possible price while prices are dropping is smaaart :pac:

hughs

EKRIUQ wrote: »

A person showed me a house to-day that would of been at about €350,000-€370,000 in the good old days but was being marketed at €295,000.

Auctioneer told them straight out that if they really wanted the house with no messing to put in a offer or €200,000 and the builder would accept it. They did and they got the house!. 2,500 sq feet 2 storey with brilliant views from all windows and on .75 of an acre with a long drive. The builder owned the land so didn't have to buy the site but was obviously desperate for money.

Was the house worth €200k? cant just compare it drop of €150k, that's only 33%. There are a lot of properties out there that are down 50%.

Johnny Bitte

Fighting Irish wrote: »

WHY WOULD YOU BUY WHILE PRICES ARE DROPPING?



Comparing a price to the higest possible price while prices are dropping is smaaart :pac:

Why wouldnt you buy while the prices are droppping and you find the house you want?


You can wait forever to see what the house prices fall too but then you ll never have a house!
Find a house that is a price you think its worth and buy it.

Myself and my gf have 2 houses in mind that are under 200k which I think is more than resonable for what we'll be getting!
Yes there is the chance that if we wait that we may get it cheaper but there s also the chance that the seller will decide that they cant go any lower and take it off the market.

The only really decider right now is whether you like the house and can afford the mortgage.

Senna

The_Goose135 wrote: »

Why wouldn't you buy while the prices are droppping and you find the house you want?

Because they are dropping, as in dropping not bottomed out. What part of saving money dont you understand?????

The_Goose135 wrote: »

You can wait forever to see what the house prices fall too but then you ll never have a house!

The longer you wait in a falling market the cheaper you will buy the house for and then spend less years paying off a mortgage. Is that not better? Most see the market as being more realistic in 2010/11. Once the market does bottom out it will stay at that level for a number of years. The argument of "if you dont buy now you never will get on the ladder":rolleyes: was thrown around during the bubble years and look how many people fell for it. Most have woken up to that now, obviously some haven't.

The_Goose135 wrote: »

Myself and my gf have 2 houses in mind that are under 200k which I think is
more than resonable for what we'll be getting!

You think they are reasonable because your only looking at what that house would have cost in 2006. You should look at how much that house would have cost in 2000, then it might not look like such a bargain.

The_Goose135 wrote: »

the chance that the seller will decide that they cant go any lower and take it off the market.

There is 70k house for sale and 300k houses unoccupied, is the house really that unique that if it goes there wont be another one like it again, i doubt it seen you say you're looking at 2 separate houses. Go on daft.ie and look at the map view of the area your looking at, everyone of those markers are a property for sale, i'm sure some are suitable.
Also most sellers have their house on the market for a reason, i.e. they actually want/need/have to sell. Not everyone of them can just take the house of the market and forget about selling.

~Trixiebelle~

EKRIUQ wrote: »

A person showed me a house to-day that would of been at about €350,000-€370,000 in the good old days but was being marketed at €295,000.

Auctioneer told them straight out that if they really wanted the house with no messing to put in a offer or €200,000 and the builder would accept it. They did and they got the house!. 2,500 sq feet 2 storey with brilliant views from all windows and on .75 of an acre with a long drive. The builder owned the land so didn't have to buy the site but was obviously desperate for money.

What county was the house in??

Im looking to buy in around Wicklow in Greystones/Kilcoole/Newcastle or even Wicklow Town. I dont know what the hell is going on in these areas with price drops but they aren't dropping like other areas. I dont understand how a house in Wicklow Town can be more money than in Bray?? and i dont understand how a similar house in Arklow can be worth 120k less than Wicklow?? come on its like only 17mins down the road and it has way more facilities than Wicklow Town!!?? It was always worth less but never over a third of the price in the diff!!

I just have no idea how the EA's are valuating these!! I know that supply and demand will affect price but how in the hell can you buy a house cheaper in a town with the dart and luas on your doorstep, than a house in a town 20 mins further out from the City Centre and they only have a greyhound coach service that provides 1 bus every 1hr 15 mins?

I just dont get the market anymore!! :eek: How could anyone possibly make a decision to buy!:rolleyes:

Fighting Irish

The_Goose135 wrote: »

Why wouldnt you buy while the prices are droppping and you find the house you want?


You can wait forever to see what the house prices fall too but then you ll never have a house!
Find a house that is a price you think its worth and buy it.

Myself and my gf have 2 houses in mind that are under 200k which I think is more than resonable for what we'll be getting!
Yes there is the chance that if we wait that we may get it cheaper but there s also the chance that the seller will decide that they cant go any lower and take it off the market.

The only really decider right now is whether you like the house and can afford the mortgage.

Lets face it 90% of the houses in Ireland are the same so...
I'm also not saying to hold off for years, buts imo the price drops picked up steam and are still dropping at full speed, at least let it die down a little. But then again its your money.

If you knew prices would start dropping would you have bought a house(a house you like, and can afford the mortgage) 6 months ago?

spockety

The_Goose135 wrote: »

The only really decider right now is whether you like the house and can afford the mortgage.

.... stress tested with interest rates upwards of 5-6%.

You have been checking that.... right...?

TheCityManager

spockety wrote: »

.... stress tested with interest rates upwards of 5-6%.

You have been checking that.... right...?

interest rates upwards of 5-6% ??????????????????

spockety

TheCityManager wrote: »

interest rates upwards of 5-6% ??????????????????

Eh, you do realise that interest rates are currently at historical lows? And that you can't fix for the entire term of your mortgage at current rates...? And that interest rates change...?

Ho hum.

TheCityManager

spockety wrote: »

Eh, you do realise that interest rates are currently at historical lows? And that you can't fix for the entire term of your mortgage at current rates...? And that interest rates change...?

Ho hum.

Ah yes ...well aware that rates will most likely rise in the short - medium term...tis only a matter of time

EKRIUQ

Fighting Irish wrote: »

WHY WOULD YOU BUY WHILE PRICES ARE DROPPING?

Comparing a price to the higest possible price while prices are dropping is smaaart :pac:

Some people use a bit of intelligent reasoning when buying not just listening to a mantra “don't buy , house prices are dropping” by the uninformed.

If the house sells at €200,000

Expenses as an estimate I don’t know the real figures

Govt gets 13,5% vat €27,000

Plans, Services Connections, Planning permission, Professional fees €20,000

Cost of site €35,000

Cost of build for a 2,500 sq feet house Lets just guess €60 per sq foot €150,000
(If insurance purposes it’s €130 per foot €325,000)

So €200,000 less expenses € 232,000 = - €32,000

The only possible way the builder could sell is because he owned the land the house was built on and you can scream “don’t buy house prices are falling don’t buy” the people who did buy knew exactly what they were buying.

The house was in Leitrim