Am I mad to even think about buying this?

The_Conductor

I'll just add to this-

The Economist had a comprehensive global house price survey 2 weeks ago.
They looked at the Irish market and decided on a scientific basis, that prices in Dublin are currently ~15% above where fundamentals might suggest they should be- and outside Dublin- ~25% above fundamentals.

Certain property types obviously are a deadweight- notably apartments/townhouses/duplexes and in estates out of Dublin (other than the previous property types)- semi-detached properties.

There are 3 separate issues at the moment.

1. Sellers are by and large being totally unrealistic with their pricing.
2. Buyers are similarly being unrealistic- but in the opposite direction.
3. Liquidity is pretty much non-existant- there are very few mortgages being offered and drawn down out there.

Add into this mix- market fundamentals- and we're in for one hell of a bumpy ride........

johnjohn3423

I know the area fairly well. The other estate next to it is larger and not of the same quality. It possibly has more students in it as well.
As in the original post the builder of the house in question has a good reputation. So taking all things into consideration it would worth more than in the next estate over.

But not going to do anything now for a few years, just sit it out.

Treehouse72

smccarrick wrote: »

1. Sellers are by and large being totally unrealistic with their pricing.
2. Buyers are similarly being unrealistic- but in the opposite direction.
3. Liquidity is pretty much non-existant- there are very few mortgages being offered and drawn down out there.

But doesn't No. 3 negate No. 2 to a large degree?

To take that to an extreme by way of illustration, if there were literally no credit for mortgages then the floor on house prices would be people's deposits. A few tens of thousands for a house.

So the question becomes, how much credit is there to top-up those deposits? NAMAwinelake says - using Irish Banking Federation stats - that the fall in the number of mortgages given out is - gulp - down 87% from peak by Q4 '10 (30,000>4,000), while the drop in Euro terms is - double gulp - 94%!!:

http://namawinelake.wordpress.com/2011/02/28/mortgage-market-freezes-up-in-q4-2010/

I am not enough of an economist* to properly analyse this, but I do ask myself if the credit pool available is down 90%, why shouldn't prices reflect a not dissimilar fall? After all, THAT was the money being used to set the prices, so....?

The final question then being, is there a reason to believe this credit stream will start flowing again? Me no think so.



* Ed: Actually, I'm not an economist at all!

ei.sdraob

@OP

for 260K you can build one kick arse house about 3x the size and fit it out to latest regulations and own taste about 10 mins drive from city

a house like the one you pointed out would cost about 120K to build
so you are paying 140K for the "site" and have the privilige of being attached to another home and small garden

the groutch

nice house, but needs a bit of modernisation and doesnt exact stand out front the crowd, you should be able to still get a similar place for less next year

coup1917

Am keeping a close eye on things as well myself at the moment..

I sold towards the end of last year...Got the full asking price as luckily there were 2 bidders, one fell away but had received the full offer from the remaining bidder..

I like the look of Oranmore, its close to Galway city, but it is seriously over priced - there are crazy prices on some places. 300k - 500k on some detached houses...

I'm not sure anyone could get a mortgage much more than 250K at the moment, and most people interested in buying would not want that sort of debt either.

We are still in no mans land currently as regards a property crash. I think that will change very soon as reality sets in; & interest only payments or moratoriums expire..

Then the fire-selling will really begin.. Its nearly time for people to get off the 'soft landing' & wake up to the crash we are looking at...