Houses

Blue_Wolf

What's the prediction on houses?

I'm looking to buy in a years time or so. When do they think they are going to hit the bottom and than start going back up?

A lot of people are saying 2 years on average but I'm looking for someone who works in the area and has an idea....

Senna

Read this thread;
When will the property market bottom out

As for asking someone in the industry, thats probably the worse thing you could do, they will have a VESTED INTEREST in people buying houses, as their job relies on it.
If you want to know if smoking was bad for you, would you ask a tobacco company?

zootroid

Blue_Wolf wrote: »

What's the prediction on houses?

I'm looking to buy in a years time or so. When do they think they are going to hit the bottom and than start going back up?

A lot of people are saying 2 years on average but I'm looking for someone who works in the area and has an idea....

1. Stay well clear of anyone with a vested interest. I think I remember someone on the news representing auctioneers saying a couple of months ago that the market has bottomed out. Obviously it's in their interests for people to start buying again.

2. Look out for the indicators where you intend to buy. Even if the market as a whole starts to improve, there are bound to be huge variances between the different areas within the country. For example, Dublin might start to recover first, and the rest of the country lag behind for a few years.

Finally, even if I were in a position to buy at the moment, I certainly wouldn't. But that's mainly because I think prices are still far too high, and I don't see any value There hasn't been enough pain in this recession yet. The "boom" was built on a property bubble, but developers are still surviving. Until a good few of them start going under (by which time they will accept anything to get rid of their properties) I wouldn't dream of buying.

Just my 2 cents.

harsea8

I'd agree with previous posters that you won't get an honest answer from anyone working in the business. However, I also think that you have to take any advice you receive on these boards (even mine) with a grain of salt as the reality is that we can only guess when it will bottom out. My recommendation would be to buy if you feel you want/need to buy (eg, because of expanding family, children reaching school age). The reason I say this is because if you are buying a "home" to live in for the foreseeable future rather than a "house" to live in for a while and then trade up, the booms and busts are in some ways immaterial.

Having said all of the above, one thing I would say is that I think the old saying that "location is everything" will be even more relevant in the current and future market. I think the bottom hasn't been reached, but some houses have a lot farther to fall than others because they are just in a sh*t location. This is particularly true for many of the new developments that have popped up all over the place in recent years.

I guess what I am saying is that if you want/need to buy in a years time do so, but be choosy about where you buy, don't just buy the cheapest house

gurramok

Wait for value as it has not arrived yet. Everywhere is still overpriced.

Some houses are still asking for 300k in junkie central, corpo houses are also still asking for 300k, alot of apts are asking 300k as standard, now ask yourself is that value?

Sponge Bob

Bottom is around 2 years away , maybe more . That would be in the larger cities where maybe 12%-15% of the housing stock is lying empty right now and where much of it will end up in the claws of NAMA .

Outside the larger cities up to a third of the housing stock is lying empty , eg in Leitrim .

God knows when the bottom will hit there.

The OP is advised to concentrate on saving hard in the interim because the banks will only be giving around 70%-80% mortgages by then.

Blue_Wolf

Thanks guys

That's some really good advice you all gave. Ya I have saved up a good lump sum of cash 30k to be exact which would cover 10-15% of the mortgage. I'm single and only 23 years old so don't need it for expansion of family etc. Just have been waiting for 2 years to buy and starting to become an itch as the place I'm living in isn't nice.

Reason being that I'm asking the question is that I want value for money and want a property for the future. In other words not a 1 bedroom apartment, looking for 3 bedroom house.

So 1 year to 2 years, at least I can keep saving and maybe hit 20% off mortgage

who what when

Blue_Wolf wrote: »

Thanks guys

That's some really good advice you all gave. Ya I have saved up a good lump sum of cash 30k to be exact which would cover 10-15% of the mortgage. I'm single and only 23 years old so don't need it for expansion of family etc. Just have been waiting for 2 years to buy and starting to become an itch as the place I'm living in isn't nice.

Reason being that I'm asking the question is that I want value for money and want a property for the future. In other words not a 1 bedroom apartment, looking for 3 bedroom house.

So 1 year to 2 years, at least I can keep saving and maybe hit 20% off mortgage

Wow thats a very impressive position for a 23 year old to be in!!
Fair play

Blue_Wolf

Thanks but no matter how much money you have you will always think that it's not enough :rolleyes:

Sponge Bob

Blue_Wolf wrote: »

Thanks but no matter how much money you have you will always think that it's not enough :rolleyes:

Well done for the saving so far. I strongly urge you to consider having 25%-30% of the price saved because I think mortgage indemnity bonds are coming back with a bang for those who have less than 25% of the price up front . This will cost you dear if you are on the margins .

This cost is hidden within the overall mortgage package in recent years but was an explicit cost in years gone by , it is not certainly payable on loans of 70% or less of the price of the property , sometimes 80% and sometimes 75% depending on the bank etc .

Also make sure you save a bit with each bank that looks like it might give you a loan , do not put your eggs in one basket .

You have nothing to fear about over the next two years , price wise , quite possibly as many as 4 years but certainly 2 .

Keep saving !!

Blue_Wolf

Thanks Spongebob for the sound advice, will keep it in consideration.

AlekSmart

I wonder if Blue Wolf and others in that position might be gainfully employed questioning whether they need to BUY a house at all.

As other posters have pointed out the falls in the market have already commenced,but mainly in the "Bubble" developments which were facilitated by our crooked Political system.

Travel for example out towards Dundalk and check out the apartment and town-house developments now sporting asking prices sub 190K...It`s a start but there are now so many of them and so few who want to buy that its a static market.

I personally feel that this country represents a very dangerous place for any young person to contemplate as a full-time base right now.

If I had the gift of youth once again I would be looking abroad to locations where my skills might allow a better chance of regaining a confidence in life,something which is rapidly draining from the Irish phsyche.

The sheer emotional and even physical trauma of locking oneself into a 30 year mortgage situation on a 3 Bed Semi somewhere in Commuter Belt Dublin is scary to me.

It is almost as if much of our national effort is going into picking up where we left off when the recession ends.......just look at the "First Time Buyer" focus in many of the public pronouncements of both Financial and Political leaders....

Wake up and smell the (Irish) Coffee ????

W123-80's

AlekSmart wrote: »

I wonder if Blue Wolf and others in that position might be gainfully employed questioning whether they need to BUY a house at all.

As other posters have pointed out the falls in the market have already commenced,but mainly in the "Bubble" developments which were facilitated by our crooked Political system.

Travel for example out towards Dundalk and check out the apartment and town-house developments now sporting asking prices sub 190K...It`s a start but there are now so many of them and so few who want to buy that its a static market.

I personally feel that this country represents a very dangerous place for any young person to contemplate as a full-time base right now.

If I had the gift of youth once again I would be looking abroad to locations where my skills might allow a better chance of regaining a confidence in life,something which is rapidly draining from the Irish phsyche.

The sheer emotional and even physical trauma of locking oneself into a 30 year mortgage situation on a 3 Bed Semi somewhere in Commuter Belt Dublin is scary to me.

It is almost as if much of our national effort is going into picking up where we left off when the recession ends.......just look at the "First Time Buyer" focus in many of the public pronouncements of both Financial and Political leaders....

Wake up and smell the (Irish) Coffee ????

Good post.

Alot of late 20's and early 30's irish people still seem to be of the opinion that they have got to buy a house. Regardless of their financial status.

I firmly believe we need to take a step back and really consider what is important. (Quality of life, schools etc..)

I see no issue with renting once it is affordable. The whole "must own your own property" mentality is nuts considering the quality and location of some of these properties.

A complete change of mindset is required which will not happen overnight.

I know this is probably a wishy washy post, but I guess what I'm trying to articulate is that those individuals lucky enough to have avoided the noose of a 30-35 year mortgage in the last 4-5 years should consider taking a step back. Relax. Rent and save a few quid.

I hope one of the lessons learned from this great big recession mess is that owning your own propery no matter the cost is not the most important thing in life.

harsea8

W123-80's wrote: »

Good post.

Alot of late 20's and early 30's irish people still seem to be of the opinion that they have got to buy a house. Regardless of their financial status.

I firmly believe we need to take a step back and really consider what is important. (Quality of life, schools etc..)

I see no issue with renting once it is affordable. The whole "must own your own property" mentality is nuts considering the quality and location of some of these properties.

A complete change of mindset is required which will not happen overnight.

I know this is probably a wishy washy post, but I guess what I'm trying to articulate is that those individuals lucky enough to have avoided the noose of a 30-35 year mortgage in the last 4-5 years should consider taking a step back. Relax. Rent and save a few quid.

I hope one of the lessons learned from this great big recession mess is that owning your own propery no matter the cost is not the most important thing in life.

Although I totally agree with most of your post and, given my time again, I don't think I would have bought property when and where I did, I think a lot of people look to buy vs. rent as traditionally (note that I am not saying this will happen moving forwards) a home/house has given much better returns over 25-30 years than putting money into a saving account. For example, for my parents generation, property was a great way to give yourself a nest egg for retirement as they bought in early 70s and sold mid-90s at a huge (and I mean huge) profit that they got 100% of (as they had paid off mortgage). With so many people struggling to put any money from their salary into a pension and the probability that the state pension will be worth sh*t all in 20-30 years time, it is perhaps not surprising that some people (rightly or wrongly) might still see owning a property as a good LONG-term investment for retirement. Whether or not it turns out to be a good investment for those of us who have bought into the circus, remains to be seen

Blue_Wolf

W123-80's wrote: »

I see no issue with renting once it is affordable. The whole "must own your own property" mentality is nuts considering the quality and location of some of these properties.

The main reason why I have my heart on buying is not so much for "investment" but to have something in the future, kind of like a security. Although, being tied down for 30 odd years is quite daunting.

Maybe I'm wrong but maybe the best idea for those in my position is to buy in with a best friend?!

I agree with you that your quality of life is more important than buying. ie rent and have more money etc. But in the future you will hit a wall.

My very good friend lives with his mother. She doesn't own the house, just renting. He is 27years old. If he moves out than his mother can't afford to pay the rent. He's left in a very awkward position. That scares me. All that money they have spent on rent over 20-30 years and they have nothing to show for but for a pleasant lifestyle for last 20-30years?

The Hubby left when he was 6 and he has an older brother who moved out leaving the 2 of them. Sad really

W123-80's

Blue_Wolf wrote: »

The main reason why I have my heart on buying is not so much for "investment" but to have something in the future, kind of like a security. Although, being tied down for 30 odd years is quite daunting.

Maybe I'm wrong but maybe the best idea for those in my position is to buy in with a best friend?!

I agree with you that your quality of life is more important than buying. ie rent and have more money etc. But in the future you will hit a wall.

My very good friend lives with his mother. She doesn't own the house, just renting. He is 27years old. If he moves out than his mother can't afford to pay the rent. He's left in a very awkward position. That scares me. All that money they have spent on rent over 20-30 years and they have nothing to show for but for a pleasant lifestyle for last 20-30years?

The Hubby left when he was 6 and he has an older brother who moved out leaving the 2 of them. Sad really

To be fair, you strike me as a pretty well grounded chap and your reasons for buying are sound.
You have saved the cash and I get the feeling you are not intending to dive feet first into the first deal you encounter.

As other posters have said, its hard know whose opinion to trust in relation to property. If you find an affordable property that ticks all your boxes, go for it. If that is what will make you happy.

Best of luck whatever you decide to do.:)

Blue_Wolf

I haven't received a compliment in a long time, you have made my day

W123-80's wrote: »

To be fair, you strike me as a pretty well grounded chap and your reasons for buying are sound.
You have saved the cash and I get the feeling you are not intending to dive feet first into the first deal you encounter.

As other posters have said, its hard know whose opinion to trust in relation to property. If you find an affordable property that ticks all your boxes, go for it. If that is what will make you happy.

Best of luck whatever you decide to do.:)

big b

saw, or rather half saw on RTE news at lunchtime, bank of ireland were saying mortgage applications were the highest in 6 months (which maybe isn't saying a lot!) and that 4 out of 5 mortgage applications were successful.

Seems like positive news - relatively positive anyway.
My own advice to anyone thinking of buying is exactly the same as it was 10 years ago:
Don't overstretch yourself
Location. Location. Location.

Best of luck to Bluewolf!

Sand

My own advice would be to wait - right now interest rates are extremely low. Germany and France are going to recover long before Ireland does. When that happens interest rates will go back up again. Drastically to cut off inflation threats.

You're better off waiting because:

A) If you think property owners are wailing right now, wait till theyve been made unemployed and their mortgages are back up to 1800 euro per month. You'll pick up some bargains when the banks start to toss people out and auction them for whatever they are worth (**** all...)

You will have a better idea of if you can actually sustain a mortgage during a peak interest rate period. Better you know before you go in than 12 months later on when you suddenly find yourself under pressure.

AlekSmart

My very good friend lives with his mother. She doesn't own the house, just renting. He is 27years old. If he moves out than his mother can't afford to pay the rent. He's left in a very awkward position. That scares me. All that money they have spent on rent over 20-30 years and they have nothing to show for but for a pleasant lifestyle for last 20-30years?

That Scary position is the sadly typical result of the Irish manifestation of "Rental" in property terms.
IF we had a properly administered and regulated Rental market that type of scenario would not be typical.

However,since this State has for decades supported and skewed the Housing market in favour of single-ownership purchasing we are left with a frighteningly under-developed Private Rental sector.

TJJP

Maybe see this:

http://www.bankofireland.ie/html/gws/includes/investor/pdfs/debt_investor/irisheconomy_overview_0509.pdf

and this:

http://ftp.ncb.ie/economics/HousingReport2003.pdf

and these:

Spudmonkey

Sand wrote: »

My own advice would be to wait - right now interest rates are extremely low. Germany and France are going to recover long before Ireland does. When that happens interest rates will go back up again. Drastically to cut off inflation threats.

You're better off waiting because:

A) If you think property owners are wailing right now, wait till theyve been made unemployed and their mortgages are back up to 1800 euro per month. You'll pick up some bargains when the banks start to toss people out and auction them for whatever they are worth (**** all...)

You will have a better idea of if you can actually sustain a mortgage during a peak interest rate period. Better you know before you go in than 12 months later on when you suddenly find yourself under pressure.

I agree, I think the market is a long long way away from bottoming out, anyone who buys a house now is going to buy themselves negative equity. Best thing to do is to wait a year or so, see how the job is going, if the international market has levelled out or not and the job is more secure, if it is and houses are signicantly cheaper, then might be the time to take the plunge...

Firetrap

Aside from houses still being overpriced in my view, I think a lot of people are holding off on big purchases because of worries about the security of their jobs and uncertainty about what they're going to be earning. There can't be many people in this country who are now earning more money after taxes/levies/pay cuts than they were this time last year. As time goes on, who knows what could happen. More taxes/levies/pay cuts? Or even unemployment. Even public servants aren't safe. The market has a long way to go yet.

Mr.Micro

Houses are still way overpriced and do not reflect the state of our economy and infrastructure. Interest rates at all time lows but in the near future will start to rise again. Do not believe any hype from estate agents. Do your research.

irish_bob

even allowing for the fact that banks are not lending , jobs are being lost etc , you also have to take into consideration the sea change in attitude to property , throughout this decade , property was seen as a stepping stone to wealth , now its seen as a boulder around you neck to poverty

Sponge Bob

AlekSmart wrote: »

That Scary position is the sadly typical result of the Irish manifestation of "Rental" in property terms.
IF we had a properly administered and regulated Rental market that type of scenario would not be typical.

That woman could not have afforded a mortgage either and would have qualified for social housing but evidently did not apply for it .

Spudmonkey

irish_bob wrote: »

throughout this decade , property was seen as a stepping stone to wealth , now its seen as a boulder around you neck to poverty

Well phrased

qwytre

W123-80's wrote: »

I guess what I'm trying to articulate is that those individuals lucky enough to have avoided the noose of a 30-35 year mortgage in the last 4-5 years should consider taking a step back. Relax. Rent and save a few quid.

A point to remember is that a lot of those people who took mortgages out in the last 4-5 years got tracker mortgages on very good margins. e.g. I have a tracker mortgage at a margin of 0.55% so my mortgage rate is currently 1.55%. You won't get much below 3% these days and tracker mortgages are rare if they are being offered at all.

This makes the cost of borrowing today more expensive.

gpjordanf1

If your going to hold onto your house for a number of years, then the smart thing to do is buy your own home.
I bought my home 8 years ago, when we moved in first, we couldn't afford a tin of beans, honestly.
Now today our mortgage is a small bill amongst others. We can offord to live a comfortable life, but not a lavish lifestyle. But we are happy, it's OUR family home, we have our first baby, 6 months now, and its her HOME!
What makes me say this to you is, I couldn't rent my house now for what my mortgage costs me, its actually 33% more expensive. Imagine that!
Now you can spend the next few years saving and wondering when to jump, its up to you. I didn't take the jump till I was 30. I regret that so much today!
Also my bro in law is buying a house this week, was 235k last year, he got it for 150k, with a little advice from me. I think thats a fantastic deal. He's 25 BTW, saved a bit for the past few years too.
Dont get me wrong its a big step with alot of risks, but if you've got secure employment and can afford the payments including for higher interest rates in the future, then go for it!
One way I got my payments down was to pay in 3-5k anually, take that off the principal and you dont pay interest on that amount. Sweet!
I'm not in the industry BTW, just giving you a real life experience. My regret is not buying sooner.
Just my 2 cents

Firetrap

One difference between when you bought and now is that your wages probably went up every year or so. Now they're decreasing and the tax relief is reducing as well.

gurramok

gpjordanf1 wrote: »

If your going to hold onto your house for a number of years, then the smart thing to do is buy your own home.
I bought my home 8 years ago, when we moved in first, we couldn't afford a tin of beans, honestly.
Now today our mortgage is a small bill amongst others. We can offord to live a comfortable life, but not a lavish lifestyle. But we are happy, it's OUR family home, we have our first baby, 6 months now, and its her HOME!
What makes me say this to you is, I couldn't rent my house now for what my mortgage costs me, its actually 33% more expensive. Imagine that!
Now you can spend the next few years saving and wondering when to jump, its up to you. I didn't take the jump till I was 30. I regret that so much today!
Also my bro in law is buying a house this week, was 235k last year, he got it for 150k, with a little advice from me. I think thats a fantastic deal. He's 25 BTW, saved a bit for the past few years too.
Dont get me wrong its a big step with alot of risks, but if you've got secure employment and can afford the payments including for higher interest rates in the future, then go for it!
One way I got my payments down was to pay in 3-5k anually, take that off the principal and you dont pay interest on that amount. Sweet!
I'm not in the industry BTW, just giving you a real life experience. My regret is not buying sooner.
Just my 2 cents

Nice story. You bought in 2001, good time to do it. Did you get a tracker/var or fixed?
Your bro got a good deal it appears, but not many gaffs going for 150k in the urban areas hence its still too pricey for urban dwellers to jump in and buy.