First Time Buyer - Apartment

jleavy

Hello,
I'm a FTB and I was looking for advise about an area please?
I'm looking to buy a 1-bed in Hyde Square, Dublin 8 and I was wondering if anyone has any advise on the area?

I would also be really interested in any links you have regarding advise for me as a FTB. Check-lists etc?

I'm obviously totally new to this so would be really interested to see what steps other people normally go through.

So far, I have not even viewed this apartment, I've just seen it on myhome.com and it should be just about inside my budget (subject to AIB mortgage).

Another question:
Do people normally have loans approved before looking for a place, or do you get charged the instant the mortgage is approved?


Any links, any advise, any project plans most welcome.

Joe

JuliusCaesar

Link here. And look through the list here for what you'll need to do.

and no, you don't get charged until you draw the mortgage down. i.e. start paying it. There'll be a limit (around 3 months) for mortgage approval. If you don't draw it down within that period, you'll have to apply again.

Don't just apply to one lender! Go to all of them. There aren't that many. That way you can get the best deal. Don't forget you'll be paying it for 20-35 years, so you'll be paying them a lot anyway. It's your money!

Where exactly is it? Google maps says SCR Rialto/Dolphins Barn but they say the nearest Luas is Suir Rd.

AARRRGH

Before you do anything, spend a few weeks reading www.thepropertypin.com

I like Dublin 8, but I wouldn't pay more than 80k for a 1 bed apartment there. You might think that sounds crazy, but in 10 years when they can't sell them for that price, remember little ol' AARRRGH warned you!

jleavy

AARRRGH wrote: »

Before you do anything, spend a few weeks reading www.thepropertypin.com

I like Dublin 8, but I wouldn't pay more than 80k for a 1 bed apartment there. You might think that sounds crazy, but in 10 years when they can't sell them for that price, remember little ol' AARRRGH warned you!

SHOCK - you really think it will drop down that low?

I'm about to get into the wrong boat then.

stepbar

Joe how are ya? (you mite wonder who the hell is stepbar? Hint An old friend from Nci...) echo what the lads have said. However, would have no prob having a tete a tete with you on this if you wanted.

jleavy

stepbar wrote: »

Joe how are ya? (you mite wonder who the hell is stepbar? Hint An old friend from Nci...) echo what the lads have said. However, would have no prob having a tete a tete with you on this if you wanted.

OH GOD - someone who knows me..... run :-)
Well, I've no idea who you are so ya, give me a call !!!!

Joe
(looking behind me!)

stepbar

jleavy wrote: »

OH GOD - someone who knows me..... run :-)
Well, I've no idea who you are so ya, give me a call !!!!

Joe
(looking behind me!)

Another hint: IT Support Desk.... part of my name is in my username....

PM me your number, I lost it when I changed phone....

jleavy

stepbar wrote: »

Another hint: IT Support Desk.... part of my name is in my username....

PM me your number, I lost it when I changed phone....

PM sent

AARRRGH

jleavy wrote: »

SHOCK - you really think it will drop down that low?

I'm about to get into the wrong boat then.

Yeah, I can't see anything other than a total correction happening over the next decade or so.

Just off the top of my head:

• The Government now has massive debt (much more than Greece which is seen as a basket case) which will mean higher taxes
• Salaries are dropping and will continue to do so
• Multi-nationals are going to continue leaving Ireland. As yer man from Intel said recently, 12 out of the 14 reasons they came to Ireland don't exist anymore.
• Fear, debt and negative equity will keep people saving rather than spending
• We have a huge housing oversupply
• Emigration is going to mean less demand for houses and rentals
• Emigration will mean less tax revenue which means higher taxes
• Houses (especially apartments) are still way overpriced

Treehouse72

OP, I cannot believe you are unaware of what is happening in the property market in general and the apartment market in particular at the moment. Both are crashing by the day. There is hardly a commentator in the country who doesn't think property will drop another 10% - 15% this year alone. For apartments, those predictions are probably even more dire. And predictions into 2011 and 2012 are probably much the same. Overall, it's my belief that apartments in places like D8 will lose over 40% of their current value in the next 3-5 years.

Of course, price might be less important to you than other lifestyle considerations, but in my opinion buying an apartment now is setting money on fire.

jleavy

Treehouse72 wrote: »

OP, I cannot believe you are unaware of what is happening in the property market in general and the apartment market in particular at the moment. Both are crashing by the day. There is hardly a commentator in the country who doesn't think property will drop another 10% - 15% this year alone. For apartments, those predictions are probably even more dire. And predictions into 2011 and 2012 are probably much the same. Overall, it's my belief that apartments in places like D8 will lose over 40% of their current value in the next 3-5 years.

Of course, price might be less important to you than other lifestyle considerations, but in my opinion buying an apartment now is setting money on fire.

interesting comments - thanks.
Of course I know the drops are happening, but I was hoping (thinking) that we were near the bottom. Yes, my decision to buy right now is due to lifestyle (paying 700per month in rent to be exact).

Yes, I see your point about burning money - but I'm really just burning money on rent @ the rate of 700 per month.

The mortgage (AIB - subject to approval) will only cost me 508 or so per month. In 10 years time I would hope that I could sell the apartment at the same price or slightly better....... but who knows what will happen in 10 years

//Joe

jleavy

AARRRGH wrote: »

Yeah, I can't see anything other than a total correction happening over the next decade or so.

Just off the top of my head:

• The Government now has massive debt (much more than Greece which is seen as a basket case) which will mean higher taxes
• Salaries are dropping and will continue to do so
• Multi-nationals are going to continue leaving Ireland. As yer man from Intel said recently, 12 out of the 14 reasons they came to Ireland don't exist anymore.
• Fear, debt and negative equity will keep people saving rather than spending
• We have a huge housing oversupply
• Emigration is going to mean less demand for houses and rentals
• Emigration will mean less tax revenue which means higher taxes
• Houses (especially apartments) are still way overpriced

I can defiantly say that you see the glass as half empty....

I read recently that rents went up last month so this is another key bench-mark for me to look towards buying......

Treehouse72

jleavy wrote: »

interesting comments - thanks.
Of course I know the drops are happening, but I was hoping (thinking) that we were near the bottom. Yes, my decision to buy right now is due to lifestyle (paying 700per month in rent to be exact).

Yes, I see your point about burning money - but I'm really just burning money on rent @ the rate of 700 per month.

//Joe

Joe,

If the apartment you are looking to buy is €200,000 and the market drops 10% this year, that's a €20,000 saving...In the same time you'd have spent €8,400 in rent. If the same thing happened in 2011, over those two years you'd have lost over €22,000. And that is to not even mention that 20% is very unlikely to be the full extent of the falls. If prices drop the 40% I'm expecting, you can see that the maths would make buying an even more losing proposition.

And those 2 years are 2 years less of interest payments and you also won't have 2 years of the costs of ownership (insurance, maintenance, management fees, decorating/furnishing, transaction fees etc). And any deposit you have is earning interest over that time. I think those savings could run into several thousand € in that time, which you need to feed into the equation.

I also just did a Daft search for apartments for sale in Dublin 8: it returned 101, and several of those listings would be for developments of mulitple units. And for rent there are - wait for it - 262. And that's just on Daft. There are likely dozens more advertised elsewhere. Shoot, there could be close on 500 apartments in D8 for sale or rent. And that's just the apartments.

I am not an economist or specialist in any of this. But as a layman if you asked me what all that means, I would say it looks like there's massive oversupply which means prices must continue falling. A look at the yields on investment properties would suggest the exact same thing.

I'd also like to +1 AAARGGGHH's post. It's not a "glass half empty" analysis, it is a very sensible one. Put it this way: when the property bubble was inflating and prices were rising, you could have written the exact same list only exactly the other way around. Compare and contrast:

• The Government now has low debt (much more than Greece which is seen as a basket case) which will mean lower taxes
• Salaries are rising and will continue to do so
• Multi-nationals are going to continue entering Ireland. As yer man from Intel said recently, Ireland has many competitive advantages.
• Fear, debt and negative equity don't exist/matter and will keep people spending rather than saving
• We have a huge housing demand
• Immigration is going to mean more demand for houses and rentals
• Immigration will mean more tax revenue which means lower taxes
• Houses (especially apartments) are still well priced

So, if all those arguments can be so perfectly reversed to explain past price rises, then why isn't AAAARRRGGG's list predicitive of future price falls? Answer: it is.

AARRRGH

jleavy wrote: »

I can defiantly say that you see the glass as half empty....

I read recently that rents went up last month so this is another key bench-mark for me to look towards buying......

Haha you'd be surprised to know I am very optimistic about life!

I'm just a realist about the Irish economy. It is destroyed and will take decades to recover.

You need to forget all the nonsense that was said over the past few years about Ireland being wealthy or rich or successful. It was all a load of bull****. And the current crap in the newspapers about Ireland's debt being under control... more nonsense.

The "bottom" is probably a few years away, as people are still in denial about the economy and are hoping a new bubble will somehow magically reappear. Fortunately, it won't, so we're going to have a slow painful return to an 80's style economy.

I have nothing to gain from saying this stuff. I just can't see there being any other outcome with our current government's strategy of trying to drag out the pain for as long as possible.

JuliusCaesar

On the other hand, the oversupply in houses etc is in places that are barely communte-able for Dublin. A place in a good location will devalue much less.

astrofool

AARRRGH wrote: »

I'm just a realist about the Irish economy. It is destroyed and will take decades to recover.

Are you still living in Ireland? Why/Not?

AARRRGH

astrofool wrote: »

Are you still living in Ireland? Why/Not?

I have a good, secure job so I'm ok for the moment. But I am looking at my options to see what I might do in 9 - 12 months.

NewDirection

Treehouse72 wrote: »

Joe,

If the apartment you are looking to buy is €200,000 and the market drops 10% this year, that's a €20,000 saving...In the same time you'd have spent €8,400 in rent. If the same thing happened in 2011, over those two years you'd have lost over €22,000. And that is to not even mention that 20% is very unlikely to be the full extent of the falls. If prices drop the 40% I'm expecting, you can see that the maths would make buying an even more losing proposition.

And those 2 years are 2 years less of interest payments and you also won't have 2 years of the costs of ownership (insurance, maintenance, management fees, decorating/furnishing, transaction fees etc). And any deposit you have is earning interest over that time. I think those savings could run into several thousand € in that time, which you need to feed into the equation.

I also just did a Daft search for apartments for sale in Dublin 8: it returned 101, and several of those listings would be for developments of mulitple units. And for rent there are - wait for it - 262. And that's just on Daft. There are likely dozens more advertised elsewhere. Shoot, there could be close on 500 apartments in D8 for sale or rent. And that's just the apartments.

I am not an economist or specialist in any of this. But as a layman if you asked me what all that means, I would say it looks like there's massive oversupply which means prices must continue falling. A look at the yields on investment properties would suggest the exact same thing.

I'd also like to +1 AAARGGGHH's post. It's not a "glass half empty" analysis, it is a very sensible one. Put it this way: when the property bubble was inflating and prices were rising, you could have written the exact same list only exactly the other way around. Compare and contrast:
So, if all those arguments can be so perfectly reversed to explain past price rises, then why isn't AAAARRRGGG's list predicitive of future price falls? Answer: it is.

If ifs and buts were candy and nuts....

seamus

jleavy,

You will find people with all sorts of opinions about property and the economy and some with more tempered opinions than others. ARRRRGH for example is the eternal pessimist and you won't find a single post from him over the last five years that doesn't say, "Ireland is fncked forever, pack up and run away". Other people have been saying here that a recovery is "imminent" since September 2008.

So when reading posts here, just bear in mind that everyone is appraising the situation from their own personal point of view. Someone who's in a tough industry or has just lost their job will tell you that everything is fncked and on the brink of collapse. Someone who's just gotten a raise will tell you that the Celtic Tiger is on the way back.

There are a few facts about buying property at the moment that very few people will disagree with:

1. Property prices will not rise by any appreciable amount in the medium-term (5 years).

2. Property prices are likely to continue to drop in the medium-term, especially outside of Dublin, and especially apartments.

3. Mortgage lending is much tighter at the moment, meaning that there are less buyers on the market with less cash to spend. This means that there is less competition for any particular property and it is *extremely* unlikely that you will end up in a bidding war.

4. Plan long-term. Don't even consider buying a property if you can't see yourself living there in ten years time. There's no point in buying somewhere that you'll have to sell in 3 years time at a loss.

Some general tips on house buying/house hunting:

- Get mortgage approval first. There's no point in wasting your time pounding the pavement only to find out that the bank won't give you anything.
- Maximise your budget. Look at places that are 10-25% above your budgeted price.
- Look at houses instead of apartments. We're in the middle of a baby boom which means that family-friendly homes will be given stability from an increased demand in 5 - 10 years time as current apartment owners outgrow their accomodation.
- If the EA starts telling you that a counter-offer is being made to trump yours, then walk away; There are thousands of other properties out there.
- Don't apologise for your offer - offer what you think is a reasonable price for the property, not what the EA tells you it's worth or what it says on myhome.ie. Remember that the seller should be glad that you're interested at all, you shouldn't be thankful for the priviledge of bidding on the house.
- It's a business transaction. Forget the other person and what their circumstances may be. Make your offer and stick by it. If they can't afford to sell to you at that price, they won't.

gurramok

seamus wrote: »

- Look at houses instead of apartments. We're in the middle of a baby boom which means that family-friendly homes will be given stability from an increased demand in 5 - 10 years time as current apartment owners outgrow their accomodation.

They won't when they are in severe negative equity. Yeh, its a mess.

seamus wrote: »

- It's a business transaction. Forget the other person and what their circumstances may be. Make your offer and stick by it. If they can't afford to sell to you at that price, they won't.

Very good advice, emotions should have no say in what a buyer or seller does. Unfortunately being rational was a minority pastime in the bubble years especially on the buyers.

Treehouse72

NewDirection wrote: »

If ifs and buts were candy and nuts....

You see this attitude folks? This is some good, old-fashioned, 2006-style gombeenism right there. It is an idiots' manifesto in which smart-arse answers, self-delusion and a denial of reality hold sway. It is precisely the mindless cretinism that got this country into the mess it's in now. You could rephrase this post quite easily: "I don't know why those people using those if's and but's don't just commit suicide". You see the picture?

Above anything else in this country we need to destroy this mind-set because we can't progress while this infantile nonsense continues. Nothing constructive, no attempt at analysis, no crunching of numbers....instead, cynicism and idiocy. It's nothing more than post-facto self-justification and probably repressed self-loathing too. These people simply cannot internalise that their precious fake boom was a lie and that, no, we weren't the second richest country in the world in 2006. Emotionally, it is too much for them to process and so they are reduced to schoolyard sneering. I for one am not prepared to suffer these idiots any longer.

NewDirection

Good advice from gurramok and seamus there.

Treehouses advice is so one sided and hypothetical its ridiculous. I think he's trying to say beware of the market, where he's wrong is, its not all doom and gloom.

Be careful and as seamus said its a business transaction and treat it as such. Take all the factors and do your maths. Treehouse will probably not agree with this, but there are good value properties out there, and at times it will make more sense to buy than to rent. Its up to you to do the maths and make that decision.

AARRRGH

seamus wrote: »

ARRRRGH for example is the eternal pessimist and you won't find a single post from him over the last five years that doesn't say, "Ireland is fncked forever, pack up and run away".

I have never said Ireland is fecked forever, I have said it is fecked for at least a decade. (And that's a very optimistic prediction.)

I see no benefit in putting your head in the sand and pretending everything is ok. It's not. We have destroyed our economy.

Note my previous predictions have been spot on so far; don't know if that means much but...

Treehouse72

NewDirection wrote: »

Treehouses advice is so one sided and hypothetical its ridiculous. I think he's trying to say beware of the market, where he's wrong is, its not all doom and gloom.

"One sided"? If you were to ask me what 2+2 is, would it be "one-sided" to answer 4? Or would other answers - 3 or 7 say - be equally reasonable?

Your post is so limited and lacking in depth that it's honestly not worth taking seriously. You simply don't get it. You still think this is all about rhetoric and "taking sides". We are so far beyond this infantile nonsense you have no idea. And as I say, you seem emotionally and intellectually trapped in 2006, unable to accept the new reality. You are one of those folk who thinks "talking down the economy" actually matters, as we can see it your lame "it's not all doom and gloom" comment. None of that clap-trap means a goddam thing until you can back it up with some evidence or at least a compelling argument. You have neither. And it is so infuriating that a level-1 thinker like you accuses me of being "hypothetical" when I can back up what I say at the drop of a hat:

> Up to 500,000 people unemployed by year's end
> Over 300,000 empty properties in the country
> Wage cuts continuing in 2010, with more to come in 2011 - 2013, as set out by public and private employers alike
> A further €4b in spending cuts coming this year at the very least
> Yields on rental properties still suggesting investors will not return until another 30%+ comes off asking prices
> Taxes going up
> NAMA sucking vast sums out of the economy
> Emigration increasing a pace
> Bank lending for home purchases down 60%+ on last year
> Bank lending to small business non-existent
> Negative equity trapping thousands in their homes and adding to the complete gridlock in the housing market

You think those things are hypothetical? Where do you get the gall to be so confident in your ignorance? Almost proud of that ignorance, like a pig wallowing in its own filth.

NewDirection wrote: »

Be careful and as seamus said its a business transaction and treat it as such. Take all the factors and do your maths.

So could you take your own advice here and give us some maths to back up any of your claims? For example...

NewDirection wrote: »

Treehouse will probably not agree with this, but there are good value properties out there, and at times it will make more sense to buy than to rent. Its up to you to do the maths and make that decision.

....why not give us a yield analysis to back up your claim about value in the market? You're the one talking about business decisions and sound maths - so let's see it. Put up or shut up.

NewDirection

Treehouse72 wrote: »

"One sided"? If you were to ask me what 2+2 is, would it be "one-sided" to answer 4? Or would other answers - 3 or 7 say - be equally reasonable?

Your post is so limited and lacking in depth that it's honestly not worth taking seriously. You simply don't get it. You still think this is all about rhetoric and "taking sides". We are so far beyond this infantile nonsense you have no idea. And as I say, you seem emotionally and intellectually trapped in 2006, unable to accept the new reality. You are one of those folk who thinks "talking down the economy" actually matters, as we can see it your lame "it's not all doom and gloom" comment. None of that clap-trap means a goddam thing until you can back it up with some evidence or at least a compelling argument. You have neither. And it is so infuriating that a level-1 thinker like you accuses me of being "hypothetical" when I can back up what I say at the drop of a hat:

> Up to 500,000 people unemployed by year's end
> Over 300,000 empty properties in the country
> Wage cuts continuing in 2010, with more to come in 2011 - 2013, as set out by public and private employers alike
> A further €4b in spending cuts coming this year at the very least
> Yields on rental properties still suggesting investors will not return until another 30%+ comes off asking prices
> Taxes going up
> NAMA sucking vast sums out of the economy
> Emigration increasing a pace
> Bank lending for home purchases down 60%+ on last year
> Bank lending to small business non-existent
> Negative equity trapping thousands in their homes and adding to the complete gridlock in the housing market

You think those things are hypothetical? Where do you get the gall to be so confident in your ignorance? Almost proud of that ignorance, like a pig wallowing in its own filth.



So could you take your own advice here and give us some maths to back up any of your claims? For example...



....why not give us a yield analysis to back up your claim about value in the market? You're the one talking about business decisions and sound maths - so let's see it. Put up or shut up.

The rental yield for my estate is just under 5% at the moment. That is working on the advertised price for a house, in todays market you could surely get it for cheaper.

House advertised at €200,000.
Checking up rent prices, average seems to be €800.


Your still making sweeping generic statements. Alot of houses or apartments are desperately over valued, but by going through the figures you can find a place with real value.
There are bargains out there, if your willing to look.


Also Treehouse, I am proud of my "ignorance" as you call it. I found a house I could afford comfortably, and this may surprise you but I'm actually better off financially than if I continued renting. As was said, its all about going through the figures and taking it on a case by case basis. Buying a house wont suit everybodies situation. And not every house will be good value. Conversely, buying does suit others and there are good value houses out there, if one is willing to look.

stepbar

NewDirection wrote: »

The rental yield for my estate is just under 5% at the moment. That is working on the advertised price for a house, in todays market you could surely get it for cheaper.

House advertised at €200,000.
Checking up rent prices, average seems to be €800.

(800*12)/5%*100= 192k

What you've just described there is not yield. You've forgot to include expenses such as maintence and insurance etc. 10% of rent is usually a good guideline, however it's acknowledged that it could be more.

Based on that:

((800*12)*0.9)/5%*100= 172,800.

How in ever, the property you've described would have to be some sort of "prime" property, as no one in their right mind would willingly accept a yield of 5%.

m5ex9oqjawdg2i

JuliusCaesar wrote: »

On the other hand, the oversupply in houses etc is in places that are barely communte-able for Dublin. A place in a good location will devalue much less.

No it's not, it's everywhere... don't be dilusional. Look at the likes of sandyford. All the new apartments, fully furbished and completely empty...

JuliusCaesar

I don't count Sandyford as a good location! Way too far out and lacking in amenities.

stepbar

JuliusCaesar wrote: »

I don't count Sandyford as a good location! Way too far out and lacking in amenities.

Way too far out from what? Town in 20 -30 minutes is nothing to be sneezed at.

Lacking in amenities? Well let me see... There's a golf course up in Stepaside. Kilmacud Crokes are down the road and Ballyboden St Enda's are not an eternal distance away either. Horse racing in Leopardstown and then you have not one but 4 shopping areas in the Sandyford locality. Pubs in the area, The Goat, Leopardstown Inn, The Step Inn, Kielys and the Morgan hotel are only a cab ride away. You're on the foot of the Dublin Mountains, lots of possibilties there - mountain biking, hillwalking etc etc.
Finally, you have easy access to the motorway.

Now, I'm not a poster boy for Sandyford but it's strides ahead of most industrial type locations IMO.

AARRRGH

JuliusCaesar wrote: »

I don't count Sandyford as a good location! Way too far out and lacking in amenities.

I would consider Sandyford a great location!

All the things stepbar said plus two other big ones:

Good public transport: 46a and Luas close by.
Non-skangery area (it's actually next to Blackrock and Foxrock).

seamus

Amenities = things you can travel to on foot.

The likes of Belarmine, for example, have nothing within walking distance except country roads and more estates. Aikens village is so enormous, it's a ten minute walk just to get out the estate and than a 20 minute walk to the Luas, at a fast pace!

For a place to have "amenities" it should be possible to walk to a shop, a school and a pub within 15 minutes. *Everything* is within driving distance, so you can't use that to count nearby amenities.

We looked in there and reckoned the place was beautiful, but very poorly located if you had any reason to leave your house.