What's the max house price I should consider

kennyb3

JuliusCaesar wrote: »

Not to be personal, but are you thinking of having kids in the near future?
If your spouse goes part-time, how does that impact on your finances?
If the child goes to a creche, they are VERY expensive. By the time my youngster had been in a creche 2 years, I was thinking of school just in terms of free child-minding

excellent point - missed by so many its actually incredible. myself and my oh are in same position as op but trying to be more sensible - looking at cheaper houses, waiting as long as possible - but most of all working off 25% to 30% for repayments of one of our incomes. just in case and also as you ve metioned for when we have kids.

ei.sdraob

@Mike_Hunt

i presume both of you have to live & work in dublin?

500K+ can get you a real "taj mahal" out the west

I lived/worked in dublin before (D6) during the peak
I shudder to think of people spending half a million here million there on dreary, old & badly insulated & small houses, that are not even detached
I was very happy to get out of the "rat race" there, my life has been much better and stress free since here in Galway
I still remember with horror people in office talking about mortgages and houses in back in '06, madness madness i tell ya!

ocokev

Mike_Hunt wrote: »

€1796 Thats approx 25% of our combined monthly salary.

Hello Mike.

You have a combined monthly salary of 1796 x 4 which equals 7184 per month.

Your take home pay and I am splitting your 2 salaries evenly is approx 4000.
This leaves you with 2200 per month left over.

Then you have to pay all the fees, furnish the place etc, expect to spend another 20,000 -30000.

As you said yourself you have skimped and scraped this last few years so why not buy a house for 1/2 million.

Mike_Hunt

Hey all - a lot of constructive feedback overnight - thanks to all the contributors. Where do I start....

I didn't want to get into a debate on this issue but contrary to popular belief we have both worked extremely hard in the public service (for our whole careers) to get to our current position. I think some people are under the impression that the whole recession is lost on me but I've been dealing with the job losses and decline in our economy on the front line and I know how hurt people are and how massively damaged our country is right now. I know we are very lucky to be working, we both have friends and family who have become unemployed.

ei.sdraob I do wish we could be located outside Dublin and then buying a house wouldn't be such an ordeal but unfortunately its just not possible especially for me as I'm based in an agency and transfers are not possible.

We will be waiting until September/October I reckon before we buy so hopefully we will have a better picture of further price drops to come and build up the savings a bit more.

Anyway I'll keep reading all the property articles and watching the market and hope that when we buy we won't get into negative equity. A close friend lost over €100k on an apartment bought in the boom and it's like a noose. Its hard to find the balance, we don't want to end up like that but we don't want a small house that we'd just be settling for. Theres so much to consider.

Jesh1 yeah thats a good point about contacting seller directly but are many people open to that - do you just knock on the door? Also, we recently made an enquiry on a property (out of interest) and were told its being sold by tender i.e. sealed bids in an envelope and highest bidder gets it - that was a new one on me - is this common out there?

Idbatterim

Hey Op, how about this house and a bit of a commute!

http://www.daft.ie/searchsale.daft?id=510475&s[provider_id]=1

In my area dublin 14, Id say youd get a semi decent 3/4 bed, DIY project for about 500k!

When you say dublin southeast, what areas are you contemplating? where are you living now?

ei.sdraob

Mike_Hunt wrote: »

ei.sdraob I do wish we could be located outside Dublin and then buying a house wouldn't be such an ordeal but unfortunately its just not possible especially for me as I'm based in an agency and transfers are not possible.

I understand, yeh (un?)fortunately Dublin does have most of the jobs
just wanted to point out the same money would go a loooong way rest of country

Hell if I had 500K budget (mines about less than half of that for selfbuild+all furnishing+high spec eveything) I would go mad an put in a covered pool or something and plaster the roof in photovoltaics and get windmill :eek:, and still have enough left over for a Bentley :P

Idbatterim wrote: »

Hey Op, how about this house and a bit of a commute!

http://www.daft.ie/searchsale.daft?id=510475

In my area dublin 14, Id say youd get a semi decent 3/4 bed, DIY project for about 500k!

When you say dublin southeast, what areas are you contemplating? where are you living now?

Is that a sauna! **** me thats :cool:

Jesh1

Mike_Hunt wrote: »

Hey all - a lot of constructive feedback overnight - thanks to all the contributors. Where do I start....


Jesh1 yeah thats a good point about contacting seller directly but are many people open to that - do you just knock on the door? Also, we recently made an enquiry on a property (out of interest) and were told its being sold by tender i.e. sealed bids in an envelope and highest bidder gets it - that was a new one on me - is this common out there?

Mike,
The way i approached it was to ring the EA and ask them directly what the lowest possible price is. I only managed to get 30K below asking. I then wrote a letter to the vendor with an offer of another 35K below that. I feel the property is not worth much more. I put a deadline in the letter asking the vendor to contact the EA if there are any parties interested in this price range.............clear as mud!

This deadline has passed and i did not hear anything. I'm not at a complete loss however as i have bought a similar property close to what i feel is a fair price. 100K less than this time last year! It may drop another 100K in the coming months!!

the_syco

Mike_Hunt wrote: »

I'm seeing houses going to Sale Agreed so someones obviously buying - its how much they're paying is what I'd like to know.

Do you want to know the funny part? Look around. You'll see said houses going on sale again. A lot of houses that have "sale agreed" on a sign in front of them stay empty for a while, and then come back on the market.

johndaman66

Jesh1 wrote: »

I then wrote a letter to the vendor with an offer of another 35K below that. I feel the property is not worth much more. I put a deadline in the letter asking the vendor to contact the EA if there are any parties interested in this price range.............clear as mud!

I think that plan of action was worth a go in one case scenario you may have being in but chances are the idea will seldom be a runner. If you are looking at house in an neighbourhood which is not your own or you don't have family/ friends there how are you to know the vendors name? Quite often you won't even readily know their name if you do live in their neighbourhood for that matter. Frankly I'd be a wee bit freaked out if I got a personal letter through the post such as that. Furthermore 9 times out of 10 the property will be vacant and the vendor will be living elsewhere...judging on properties I viewed in the past.

Not trying to purposely find flaws in your methodology or not saying it is a bad idea....just trying to point out the difficulties in practice.

tenchi-fan

Op, sorry I'm going to repeat what everyone else said. In your first post you said you scrimped and saved? You will be scrimping and saving for the next 35 years if you do this. In dundalk there is an area which used to be known as "hungry hill" because people scrimped and saved for their houses but couldn't afford to put food on the table. I thought it was a typical begrudger attitude until I visited a couple of people who live there - normal people with normal salaries who went for "nice" houses. I've seen former council houses with better floors/doors/furnishings.

Interest rates are going up. A property tax is going to be introduced. You will need €460k of life cover. So your monthly outgoings on simply owning a property will be more like 1/3 of your income rather than 1/4.

Heating a house that size can cost a lot. Water charges are being introduced. You can hardly furnish a house of that cost with ikea wardrobes.

You don't have kids... what if you had kids? What if, at age 50, one of you decided to reduce their hours at work because of the workload?

Negative equity is still a problem:
what if your wife left you and stopped paying her share?
what if either of you had enough of your job and decided to pack it in?
What if you were relocated (at work) to another area and your house was out of commuting distance?

And of course you're right to be worried about new payroll taxes being applied to all PAYE workers across the board (public and private sector). This will more than likely happen in the next year or two.

I think you should aim for a mortgage which comes in at 1/4 your income max if interest rates rise to 5%.. even 1/5th, and that you'll have paid off in full in 30 years.

If you are certain house prices are on the way up it might be a good investment. It even makes sense to have a big house on retirement because you can sell it without paying cgt and downgrade to a smaller one. But I think you'll be in negative equity within 6 months of buying that house.