Starter home

caoimhe321

Is now a good time do you think to buy a starter home-
thanks

Victor

Its a bit more complicated than that.

First off, yes there is lots of property available. Some of it in good condition, some of it not. Location is also another issue. It makes sense to buy somewhere that is useful for you - near work, study, family, services, etc.

Also be wary of the concept of a "starter home". Buying a small property now and "trading up" soon has complications. First off you will likely need to pay stamp duty on the bigger property, but also, you might find your self stuck due to negative equity or other issues.

Finally, be aware that interest rates are likely to rise. this could have the effect of further suppressing prices, although repayments would stay the same. Alternatively, if you buy now, before the interest rate increase, your repayments could rise if you aren't on a fixed rate mortgage.

ricman

SAY you buy a home now, at 3.5 per cent , in 2 years time interest rates could be 6per cent.SO if loan =1000 per month, loan would rise to 1700 , plus value of home will could decrease by 25percent.
Theres areas of dublin, private estate, safe ,near shops where you can buy a nice house for 220k.
if you buy in area x and say i,m gonna live here for 30 years then if the value falls by 20 per cent it doesnt matter.IT would prbly be cheaper to rent for the next 2 years ,ie and wait for the market to reach the bottom.
nobody can tell you what house x will be worth in 2040.I Think we r gonna be in a recession for 5 to 7 years.
we are ruled by a government that runs on cronyism, unions, bureaucracy ,grossly overpaid wages and pensions etc
IT doesnt inspire confidence.
IF you are on a high income in a stable job well then it would be no disaster to
buy a house now, just say i can afford this loan now plus more ,even if interest rates go up.
IF YOU buy now for 250,in a year it,ll prbly be worth 210k.

JuliusCaesar

Victor wrote: »

Also be wary of the concept of a "starter home"..

I'll second that. The concept is an estate agent invention.

I'd love to know how long people stay in general in the first home they buy - my guess is that it used to be that people bought a home when they got married, stayed there till they outgrew it (as in 3rd child) or moved for work or whatever. But most of our parents would have stayed in the same home. There's an awful lot of couples now who have a 1bed apartment each, in negative equity and can't afford to sell and buy something more suitable.

Treehouse72

caoimhe321 wrote: »

Is now a good time do you think to buy a starter home-
thanks

Could you give us your own opinion first please? Before responding to you it would be helpful to know your current understanding of the market.

ricman

IF you buy an apartment at x price, you may be stuck there if the price go,s down by 20 per cent.Whats your budget .Depends on what savings you have what risk you take.How much rent are you paying.You could rent an apartment, 600 euro per month and see what happens in the next year.
Prices will not be going up in the next 4 years.The only question is how much will they decline by ten, 20, 30 per cent.
IF your paying 12k per year , you wait 3 years ,3x12=36 k.
ON an average house 220,that might go down by 30k.
DO you want to buy an average 3bed semi in an average area.
ITS hard to give advice without knowing that data.

AARRRGH

The fact that you want a "starter" home suggests you plan to sell it and move within a few years. If this is the case, now is not a good time to buy as house prices are still quite overpriced and you most certainly will be in negative equity for a long time if you buy now.

However if you want to buy a home for the next 15 or 20 years and are confident you will have enough income to pay your mortgage when interest rates increase, then the concept of negative equity is more of an irritant than someone which will hold you back.

But for me personally (31 years old, have the money to buy) I would wait at least another 18 - 24 months.

ricman

IF you buy home x, its probably gonna lose 20 percent of its value, if you r going to sell in 7 years.IF you live there 4 20 years ,its almost impossible to predict the market for that timespan.IF you have a good income, and can buy a house for 220, and say well ,if it loses value to 180,its ok, cos im living there for ten years,and maybe the next house ill buy will be 20per cent cheaper.I See houses going for 270 to 220 in the same private estate ,so the market is in a state of flux.

caoimhe321

Thank you very much for all this great information
regards
Caoimhe