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

Mary D

Why don't you pay an estate agent to give you an approximate valuation of the house, ask them in reality what would it go for on the open market. Or alternatively you could just rent somewhere locally and wait till the house is up for sale and put an offer in then. The thing that helped me to decide to buy was I had to just look at it from the point of view of saying if the value of the house goes up €20k or down €20k, it was of no realy consequence to me because I needed somewhere to live and am happy with what I have, it's a home as opposed to an investment. I'm sure that during the course of the next 10-20 years house prices will continue to go up and down. I think the correct time to buy is when you are happy with the house and with the area.

cls

Duckjob wrote: »

That sounds supiciously like: "you've paid over the odds, but at least you're on that ladder and no longer one of the plebs spending dead money paying other peoples mortgages".

What a load of cock...That's the kind of thinking that got us into the mess we're in right now.

LOL. Its all relative. To me, what you're talking is cock and its the same cock that got us into this mess. The difference is things are going down instead of up but its all the same old cock. you think you're being smart but you're not. Good luck in your endeavors.

Duckjob

cls wrote: »

LOL. Its all relative.

What is relative to what, exactly?

To me, what you're talking is cock and its the same cock that got us into this mess.

People being advised to consider the price and value of what they're buying before they buy it got us into this mess? Do explain

The difference is things are going down instead of up but its all the same old cock.

Yes things are way down, and yes there will be sillyness expressed by bears on the way. That's not where I'm coming from though, sorry to disappoint....

you think you're being smart but you're not. Good luck in your endeavors.

Not trying to be anything.

The OP is one of many who believe that the house he's considering buying will be considerable cheaper in 12 months time.

As for most people, if he saved 50K by waiting 12 mths that making funding kids, college etc that much easier. It would probably be the easiest 50k he ever made.


OP, the decision is yours to make. If you want to buy now, then buy. Only you can decide whether an extra 12 mths of renting is worth the difference to you.

Good luck with whatever you decide.

Mary D

CLS, you're a very negative person. My position is I intend to stay where I am, well possibly forever. I'm in my early 30s now and bought my first house 8 years ago. I would be the first to say that my house would be cheaper today than it was 3 years ago (whose isn't). When I sold my last house 3 years ago, I got more then than I would have gotten now, so its apples and oranges really. The fact is, I love where I am, it's my home and I don't see it as an investment. I'm there for the longhaul, so when my mortgage is paid off, regardless of whether or not the property price has gone down now, in 30 years time how much do you think property will be worth. The only people loosing out on property at the moment are those who were in it to make a quick buck. If I was the OP and I had €300k in the bank, I'd put into property. In 30 years €300k cash wouldn't be worth as much as it is now, however invest it in a home and the value of his cash will certainly have appreciated in 30 years.

cls

Mary D wrote: »

CLS, you're a very negative person.

Do you mean somebody else? I think I'm being very positive.

AARRRGH

When people say "don't buy now" they mean "it doesn't make financial sense to buy now".

By all means buy now if you want, you may be more than happy with your purchase... but that doesn't mean it makes financial sense.

Mary D

Sorry CLS, that should have been Duckjob. My apologies.


ARRRRGH, just out of interest do you think it makes financial sense to pay someone else's mortgage for a year or so until house prices start to rise again (in which case you will ultimately pay more for your hourse than you would now, plus you would have wasted a lot of money on rent) whilst leaving your money sitting in a low interest bank account. Just curious as to how people think about their money, mortgages, investments etc.

latenia

I'm not getting involved in these circular discussions but the truth is prices have still along way to fall. 'Only 50k' costs 100k to pay back which is a lot of 'happiness' for those in the 'so long as you're happy' camp. Mary, why do you think prices will start to rise again? All indicators say the exact opposite.
A 2 litre bottle of Coke costs less today in nominal terms than it did 20 years ago; in real terms it's probably gone down 80%.
BTW, my landlord's mortgage was probably paid off years ago. I pay him 2k a month for a service which would cost me 10k a month with a mortgage. 2 years ago it would have been 15k a month.

cls

Thanks latenia. Glad to see there's someone out there that knows it all. Can you let us all know when to start buying again? I wait with anticipation.

ZYX

People keep saying OP will save €50k if he waits. What is this based on? He is already getting house 20% below what he reckons current market value is. On other threads on this forum people are generally advised to offer 20% below current market price for the property they want. This is exactly what the OP has done. What is so different here?

Mary D

Latenia, this may be a surprise to you, but once you post your comments and ask questions, you are involved in a discussion.

To answer your question, and obvioulsy this is only my personal opinion as I'm no expert, yes I do think property prices will rise again, I'm not saying this will happen today or tomorrow. The house prices will bottom out some point. All signs from the USA show that they have reached the bottom there as all indicators are starting to show steady trends. Coke & Houses, really you can't compare the two, one is a commodity and the other is a necessity.

At the moment there are so many people holding back and builders have stopped building, less developers are applying for planning persmission, when things level off here, I think we will see the old supply and demand rush happening again. Again, that's just how I think, I'm sure there are plenty of people that will argue against what I've said but everyone is entitled to their opinion and who knows who's right!

cls

I think the difference is a crash and burn situation suits some people. Lets call a spade a spade here. some people don't want to hear that prices have dropped enough for some people. Good news is bad news when it comes to the property market.

AARRRGH

Mary D wrote: »

ARRRRGH, just out of interest do you think it makes financial sense to pay someone else's mortgage for a year or so until house prices start to rise again (in which case you will ultimately pay more for your hourse than you would now, plus you would have wasted a lot of money on rent) whilst leaving your money sitting in a low interest bank account. Just curious as to how people think about their money, mortgages, investments etc.

This whole "paying someone else's mortgage" like that's a terrible deed is a ridiculous concept which lots of people have unfortunately bought into. Renting is a service which you pay for. The concept of paying for a service is totally normal.

Rent is not a waste of money. You are paying for a service.

I currently rent a two bedroom apartment next to Grafton Street for €1100. If I were to own this apartment my mortgage would be more than this, and the value of the apartment would be dropping every month, and I would have to pay maintenance fees, and I would be trapped (can't emigrate) unless I sell the apartment for a figure I can afford. Etc.

I currently save about half my salary every month. As house prices drop (and they have a long way to go) I will continue saving. Yes, the interest rates are fairly low, but they are enough to keep up with inflation. So I am not losing money.

I should also add I am ok with the concept of renting. I don't feel insecure or sad that I am not like everyone else, you know, house, 2.5 kids, etc. I don't feel any social pressure to buy. I don't care about the Jones'.

In a few years I will maybe (unlikely) buy a home in this country when I see value, but more than likely I will emigrate to a country with a better standard of living, e.g. France.

I do, of course, know that owning a home is nicer than renting. But I don't think it's so nice that I'm going to get into crazy debt.

Mary D

Arrrgh, thanks for the reply. Renting is for some people and buying is for others. I was justed interested to see what way people thought. We have completely different ways of thinking, but it would be boring if we were all the same.

ntlbell

Mary D wrote: »

Arrrgh, thanks for the reply. Renting is for some people and buying is for others. I was justed interested to see what way people thought. We have completely different ways of thinking, but it would be boring if we were all the same.

Are you not paying someone else's mortgage when your paying 200k over 30 years on a 250k mortgage?

Rent is not dead money you're getting a service

the same way you get line rental, NTL or any other service

Mary D

I'm not critising anyone who rents, I'm saying I have a different opinion that's all. By paying the interest on my mortgage I'm also paying for a service plus I will own my house at the end of it.

ntlbell

Mary D wrote: »

I'm not critising anyone who rents, I'm saying I have a different opinion that's all. By paying the interest on my mortgage I'm also paying for a service plus I will own my house at the end of it.

and if you paid rent and saved the money you didn't spend on interest, you could own your own house for a hell of a lot less?

this is not about opinions it's about financial sense.

one right now is financially sound.

one is financial suicide ?

Johnny Bitte

ntlbell wrote: »

and if you paid rent and saved the money you didn't spend on interest, you could own your own house for a hell of a lot less?

this is not about opinions it's about financial sense.

one right now is financially sound.

one is financial suicide ?

Surely paying off a mortgage is better than giving some else 400 or 500 hundred a month that you will never see again!

Fianacial sucide is a bit much :rolleyes:

Duckjob

Mary D wrote: »

Duckjob, you're a very negative person.

Why?

Because I'm not cheerleading people into buying with the "Ah sure the price doesn't matter, gawwon gawwon" line?

Listen, I've no problem with the OP, You or anybody else buying if that's what they feel is right for them. However, the OP noted from the outset that it would bother him to buy something and then see it going a lot cheaper in 12mths time.
As I said to the OP, its up to him to decide whether or not the drop in price (and HE believes prices have further to drop) is worth more or less than the convenience of buying now.

btw, we've exercised the "keep your sunny side up" approach to property for the last 8 yrs, and look where it got us. Bertie blasted the likes of Morgan Kelly, David McWilliams and others who were correctly predicting the personal debt fiasco we are in now, as negative people who should "go off and commit suicide".

If not wanting to run out and buy an overpriced and swiftly depreciating asset makes me a negative person, them I'm happy to be labelled a doom and gloomer

BendiBus

Mary D wrote:

do you think it makes financial sense to pay someone else's mortgage for a year or so until house prices start to rise again

Yes, I do.

in which case you will ultimately pay more for your hourse than you would now, plus you would have wasted a lot of money on rent

No I wouldn't. If you disagree then explain with the aid of an example.

whilst leaving your money sitting in a low interest bank account.

A high interest bank account actually (i.e. returning in excess of inflation)

Here's my example (purely theoretical as I am a homeowner)

Estimate 1000pcm rent.
Saving 500pcm for a deposit.
I currently have 30K saved.
My starting net worth is 30K (all cash no assets)

Say I buy now:

• 30K deposit
• 300K house
• 270K mortgage
• Monthly repayments of €1500 (4.5% over 25 years)

On 26.03.2010:

• Asset worth €270K (dropped by 10%)
• Mortgage outstanding €264K
• Cash NIL

My Net Worth is 6K (positive equity no cash) I'm down 24K in a year



Say I wait and buy the same (or similar) property in 12 months:

• 38K deposit (an extra 12 months savings plus interest)
• 270K house
• 232K mortgage (using all savings for deposit)
• Monthly repayments of €1319 (4.5% over just 24 years)

On 26.03.2010:

• Asset Worth 270K (just bough it)
• Mortgage outstanding 232K
• Cash NIL

My net worth is 38K. I'm up 8K in a year

So I'll own my house on the same date either way.

If I wait a year I'm better off by 32K immediately and another 180pm for the next 24 years.

If I'm confident prices will fall by 10% in the next 12 months then it's a no-brainer.

I've used Karl Jeacles Mortgage calculator to work out the figures above. Any errors are my own

ntlbell

The_Goose135 wrote: »

Surely paying off a mortgage is better than giving some else 400 or 500 hundred a month that you will never see again!

Fianacial sucide is a bit much :rolleyes:

you seem to be missing something.

what's the difference between giving a bank 500e in interest payments for a falling asset.

and paying 400e rent?

you get a service for both?

paying interest != buying a home

you get this right?

ntlbell

I can't belive in 2009 after 3 years of falling house prices and thread after thread people still don't understand when to rent and when not to rent

there is really no surprise the country is up to it's nipples in shiote.

we need to bring basic financial planning into primary schools

Johnny Bitte

ntlbell wrote: »

you seem to be missing something.

what's the difference between giving a bank 500e in interest payments for a falling asset.

and paying 400e rent?

you get a service for both?

paying interest != buying a home

you get this right?

Me get this right.
No not a service for both. A house for one, no house for the other!?!

n0fX

The_Goose135 wrote: »

Me get this right.
No not a service for both. A house for for one, no house for the other!?!

What? Read BendiBus post above. And he's assuming a very modest drop of 10%. I think the real drop between now and March 2010 will be closer to 14-16% .. Dublin properties anyway.

ntlbell

The_Goose135 wrote: »

Me get this right.
No not a service for both. A house for for one, no house for the other!?!

no, you're still struggling.

for interest payments you get a loan of money - to buy a house

for rent you get to stay in a house

you seem to be missing the part where you PAY for the loan of the money that goes to the bank and you never see again, it DOES NOT go off the price of the house?

penny dropping?

Duckjob

The_Goose135 wrote: »

Me get this right.
No not a service for both. A house for for one, no house for the other!?!

AARRRGH

The_Goose135 wrote: »

Surely paying off a mortgage is better than giving some else 400 or 500 hundred a month that you will never see again!

The 800 or 1000 a month you give to the bank in interest, are you going to see that again?

I don't think anyone is going to argue owning a home, long term, is probably the best option. We are saying buying a home in a falling market, in a country which is going to be screwed for many, many years... it does not make sense.

EDIT: It does not make financial sense. It might make sense in other ways, e.g. you have a family and a stable job and simply want a home.

Johnny Bitte

God you do like your question marks ntlbell : )

I have read the last 3 pages of the thread and i believe that lot of the people saying hold off are very crictical and may have missed the point that their assumtions are just that.

There is no garenentee that the house prices will drop like in Bendibus's example just like there is no garentee that buying now will save you money in the long term.

I think you need to calm a little and try to look at it for another perspective other than money money money money.

I m buying a home later this year that is worth what I am going to pay for because we need one and I can easily afford it.

What got the country the way it is is people borrowing far far more than the should have and should have been allowed too.

In the end, each individual will have to make up there own mind based on their unique situation.

Some may include what the house price will be in a year or what it will be in 30 years.

AARRRGH

The_Goose135 wrote: »

There is no garenentee that the house prices will drop like in Bendibus's example

Do you realise how ****ed the economy is? It is unbelievably screwed and there won't be any sort of recovery for years.

I would not be shocked if the average three bed was 100 - 150k in ten years. Seriously, we're that screwed.

The_Goose135 wrote: »

I m buying a home later this year...

Ah that explains why you don't want to see sense. Seriously, you are seeing reality as you want to see it...

jetski

Freddie59 wrote: »

Maybe you need to grow up yourself. Market in freefall, falls of up to 30% more expected this year. If you're offering advice then at least let it be sensible.;):)

Link or STFU