Is it madness to buy our first home now??

Treehouse72

Hunter Mahan wrote: »

What the scaremongers in this thread...

Yup, I was called a begrudger during the bubble, and now that I - and thousands upon thousands of others like me - have been proven right, the insults and name-calling goes on, and it comes from the exact same people with the exact same mentality who got it wrong, wrong, wrong, wrong, wrong, wrong, wrong during the bubble.

Ireland - a country where bullies who shout loudest and are most insulting get by, and then when they are proven wrong they shout some more, insult some more and then demand debt forgiveness.

It's a great wee country, it really is.

Diarmuid

investment wrote: »

should I buy as an investment

If you have read this thread, you'd know the answer to that.

Idbatterim

What a ridiculous statement: "spend 300k and its worth 200k in 2 years time" as if it was fact. Similar to the statements during the boom "if I don't buy now house prices will keep rising indefinately"

but if people dont buy now, prices will drop, regardless of whether they represent value or not... its the exact opposite of the boom, people leapfrogging each other prepared to pay anything to get on housing "ladder"!

magneticimpulse

No it is definitely not a good time to buy. The price of houses are dropping by 2.5% each month!!! That is a huge amount of money over the space of 12 months.

I have been using property bee with daft.ie and I am surprised to see that asking prices dropped 10% in the last 4 months (on top of the 50% since 2008)....they are dropping in price faster then ever before...definitely no bottom out yet!!!

The ECB and Euro are really unstable. The guy from the ECB resigned on Friday. Then there was the DSK scandal with IMF. NAMA is only starting to kick in and has lots of property tied up which will eventually have to be sold. The USA is also doing very badly. The worldwide economy is bad. Then look at Ireland? Last week 575 jobs gone in Talk talk...just an example of what to come...not to mention tax hikes etc. Council tax, water charges etc.

What do you think is currently holding the country of Ireland together now that the Property boom is gone? Where do you think Ireland is getting its GDP? I tell you, it is currently only making a profit from Pharmaceutical companies. However the truth of the matter is that these Pharma companies are running out of Patents (they only last 25 years for a drug). Which means any company in China will be able to make the same drugs for far less. Why is this important? Because if the Pharma companies go...Ireland is really screwed and there will be very little besides Google and Facebook to keep Ireland going.

There is still a long way down.

My total rent is €7800 a year and I live by myself. If I had a partner it would be split. However I have followed house since 2007 on daft.ie. Up until this month, I have seen houses drop 565,000!!! It is no joke. I have a friend who bought a house for €750,000 in 2007. I have seen these same houses drop 10% just since June....I am happy I am still renting. It might be dead money...but at least i dont owe €565,000 negative equity to the bank.

magneticimpulse

mathie wrote: »

People who are saying houses will be X down in X years time are only guessing.

Nobody has a crystal ball.

Was it mad to buy in 06 / 07 when everyone was saying to buy? Yes.
Is it mad to buy in 11 when everyone is saying not to buy? Who knows?
Time will tell.

If you can get a good deal then I'd go for it.

I speak from experience. We bought early this year.
We got 25% off the current average (and 60% off peak) in the area as the seller was desperate.
We'd a large chunk of change that was earning very little interest.

A lot of conditions will dictate if it's a good or bad time for you personally to buy.

But it certainly isn't as bad a time to buy as 06 / 07

It was mad back then but it is certainly crazy now!! If people have not learnt they are living in cuckoo land.

Just get property bee add on for daft.ie and you can follow the asking prices dropping like crazy...you dont need a crystal ball....just property bee and to follow the International news.

magneticimpulse

Hunter Mahan wrote: »

Well said, and best of luck. Enjoy it. As you say I think, it's not an investment anymore at present, but a lifestyle choice. With a bit of luck and plenty of time then it may well become a valuable asset once more.

you sound like an estate agent or someone who has investment in property trying to fool people into buying now.

magneticimpulse

iguana wrote: »

There is also the whole, OMG, wait who knows how many years to buy while your life passes you by crap. Buying a house doesn't suddenly mean you are living while before that you are stuck in a painful purgatory.

I rent an excellent cottage second nextdoor to a river, 15 minutes by bus from Grafton St. My livingroom is 30sqm, I have a big kitchen diner overlooking a 50ftx50ft rear garden, which is not even slightly overlooked. I have two side garden and a front garden filled with trees and blackberry bushes which overlooks a big green, some other cottages and the river. The river is surrounded by green leafy walks and leads to one of Dublin's nicest parks (imo) which my dogs enjoy very much, especially as they rarely need to be put on a lead.

There is a shopping centre with a big Tesco a few minutes walk away, the nearest village has shops, my doctor and a few cafe/restaurants. I can walk to Terenure, Rathgar, Rathmines, Rathfarnham, Ranelagh or town. I rent unfurnished and have my own furniture. And according to what I know the last of these cottages sold for in late 2009, a few months before I moved here, my rent is less than half of what my mortgage would be and I would no longer have my savings.

I also have few financial responsibilities to the house. When the boiler pack in, it's no my responsibility to fix it. I owned a house years ago and spent a very cold winter where my boiler broke 3 times and the last time it broke I couldn't afford to fix it for 2 weeks. So if anything is like living in purgatory it's paying over the odds for housing and having to buy a can of dry shampoo because you can't wash your hair.

^ This is so true!!!

My 1st house I rented: Was a huge house a stone throw away from a beach/canal/river in Cornwall, I had 3 housemates. Rent including the bills was £150 per month. The same house is now rented out as holiday home for £1000 a week.

Another house: Lovely suburb in Cambridge, £300 a month including bills

The final place is more expensive at €7900 a year (if I shared with a partner it would be split). It overlooks a vineyard and chateau in the south of France with fantastic sunshine. The place I live in at the moment is more expensive because it is practically a long term hotel. There is a receptionist, a cleaner, a breakfast room (which also can be booked for big parties), a gym etc. If anything breaks, I just call the reception for them to fix it. I have lived here for 5 years....so renting the same place doesnt have to be just for 1 or 2 years.

Overall renting has meant I have lived in wonderful houses with no mortgage, no furniture or repairs. If a place gets old fashioned or i want to change jobs, I can do so in a flash and move onto the next place. I am not tied to the one place and I know for a fact I would never be able to "afford" to buy these types of places as they would be well over £2 million etc....whereas that one cost me £1800 a year in rent.

Renting is not all negative.

magneticimpulse

Hunter Mahan wrote: »

What a ridiculous statement: "spend 300k and its worth 200k in 2 years time" as if it was fact. Similar to the statements during the boom "if I don't buy now house prices will keep rising indefinately"


It's simple for me, if he wants it and can afford it then have it. It bafflles me how people still view property as some sort of market they can read and get right, at the minute people with money can buy houses like they would a new car.

Yes but you can buy a kIA car or you can buy a BMW M series...the amount the Kia devalues will be a much smaller % then the amount the BMW M series will lose in value.
Which the person decides is up to them based on how much they rather not lose and for whatever other reasons.

Aug2009

Anyone here heard of people doing house swaps. I know a load of people who want to trade down but cant because their house is in negative equity. Surely the bank sees the person is making an effort to owe them less and this is good for all concerned - cutting the cloth to measure. We are all being encouraged to 'be prudent' but surely this flies in the face of that.

Ratzo Rizzo

Buying a home involves many factors. During the 'Celtic Tiger' years the perceived wisdom was that property prices were going to keep on rising and that you simply had to buy your own home at virtually any cost. Now, since the collapse of the economy, the perceived wisdom is to hold off until we reach rock bottom, then buy. But the problem with both of these scenarios is that no one knows when we will reach the peak or the bottom of the market until it's happened.
I made a conscious decision not to buy during the boom times. However, I've just recently bought a house. I managed to negotiate 25% off the asking price, which in effect, if property values continue to decline at the current rate then theoretically I have bought the house at 2013 value.
Value for money is just one single element when considering buying a house. You must weigh up all the pro's and con's of buying but right now there are many good deals to be had. Without doubt house prices will continue to drop, the demand simply isn't there but if you're serious about buying the choices and options available to you right now are huge.

cgarrad

People like the OP are the cannon fodder we need to prop up the ailing housing market.

We should all be applauding his stupidity as a selfless act to mend a broken dream.

COYW

cgarrad wrote: »

People like the OP are the cannon fodder we need to prop up the ailing housing market.

We should all be applauding his stupidity as a selfless act to mend a broken dream.

The housing market isn't ailing, it's as dead a doornail. I'd imagine the the OP will struggle to get a mortgage at the moment to buy. I can't wait to see what the government are going to come up with the try and kick start the fun again.

Theboinkmaster

Treehouse72 wrote: »

Yup, I was called a begrudger during the bubble, and now that I - and thousands upon thousands of others like me - have been proven right, the insults and name-calling goes on, and it comes from the exact same people with the exact same mentality who got it wrong, wrong, wrong, wrong, wrong, wrong, wrong during the bubble.

Ireland - a country where bullies who shout loudest and are most insulting get by, and then when they are proven wrong they shout some more, insult some more and then demand debt forgiveness.

It's a great wee country, it really is.

+1 exactly how it goes for me

donalg1

If you can get a mortgage and like the house why wouldnt you buy now, sure if you wait it might come down in price slightly but who can say that will happen for sure, and even if the average house price drops by 2.5% or whatever this month it doesnt mean the price of the house you are looking at will drop by that amount. It shouldnt matter anyway as any bid you put in should be well under the asking price so drops in the average price of houses on the market doesnt matter in individual cases anyway.

If you want to buy it and can get the mortgage and are happy you can meet the repayments well then i say go for it.

CiaranC

zuutroy wrote: »

We decided to take the plunge and have gone sale agreed. I'm 32 and we've a kid on the way in December and I'm just sick of living in someone else's house at this stage. We're buying a decent sized house that has room to extend if necessary in an area that I know I'm gonna be happy to spend my life in.
I get a place to actually call home, with furniture I want in it, my choice of paint on the walls and grotesque American fridge freezer in the kitchen as a statuesque testament to the Celtic Tiger days gone by. House cost me 240k. Mortgage for the first few years is 400 p/m lower than renting a 3-bed semi in the same area and <1/5 of our combined income. I don't care if the house is worth e2.99 in 10 years time once I can afford to live in it.

Well done, youve just thrown away a huge amount of money you could have invested in your childs quality of life and future, and for what? So you can paint the walls and rent money off a bank instead of renting a house off a landlord.

The delusion hasnt gone anywhere folks.

Mr. Loverman

Ratzo Rizzo wrote: »

right now there are many good deals to be had.

Funny how the only people saying this are the estate agents, politicians, and people who recently bought.

The prices now seem 'cheap' compared to the insanity of 2006, but they are still incredibly expensive if you consider how weak the market is.

ionapaul

I don't think anyone should be given a hard time for making the decision to buy a house to live in for the rest of their life! There are more than simple financial reasons for doing so, which are unquantifiable.

I've been in a position to buy for about 10 years and am still holding off, as I don't see any value yet and desperately want to buy mortgage-free or close to this (it gets closer each year!), but everyone is free to make their own financial decisions and shouldn't be hounded for it... unless you're willing to coldly examine every financial transaction you make yourself and defend them!

Ever paid €5 for a sandwich you could make yourself at home? If so, for shame! Buy beer in a pub instead of brewing it yourself in your garage? For shame! And so on...

Ratzo Rizzo

Mr. Loverman wrote: »

Funny how the only people saying this are the estate agents, politicians, and people who recently bought.

The prices now seem 'cheap' compared to the insanity of 2006, but they are still incredibly expensive if you consider how weak the market is.

At the price I just paid for my house I was reasonably prepared for any future drop in its current market value!
And being mortgage free also has its benefits...

Mr. Loverman

Ratzo Rizzo wrote: »

At the price I just paid for my house I was reasonably prepared for any future drop in its current market value!
And being mortgage free also has its benefits...

Yeah, being mortgage free does change things quite a bit alright!

I know a lad who after all the warnings about the bubble bursting etc. went and got a 40 year mortgage on a property worth about 1/3 what he paid for it. He now wants debt forgiveness. Madness.

donalg1

CiaranC wrote: »

Well done, youve just thrown away a huge amount of money you could have invested in your childs quality of life and future, and for what? So you can paint the walls and rent money off a bank instead of renting a house off a landlord.

The delusion hasnt gone anywhere folks.

I wouldnt say buying a house your happy with is throwing away a huge amount of money, sure renting is throwing away a huge amount of money as you have nothing to show for it in the end.

Plus the child will be better off if they are raised in the one house giving them a solid home for life, and if you mean investing in the childrens future, surely being able to leave them a house in your will is better than having nothing to leave them at all except maybe the phone number of a landlord.

Zamboni

donalg1 wrote: »

I wouldnt say buying a house your happy with is throwing away a huge amount of money, sure renting is throwing away a huge amount of money as you have nothing to show for it in the end.

Renting is not throwing money away in a rapidly deteriorating property market.
It is paying for a service without the shackles and responsibilities of a mortgage.
It provides the renter with mobility which is key in an uncertain labour market.

Imagine having a mortgage on a house in Waterford and losing your job in Talk Talk.
The renter can easily move to a place where there are better employment prospects.
The mortgage holder does not have that freedom.

zuutroy

CiaranC wrote: »

Well done, youve just thrown away a huge amount of money you could have invested in your childs quality of life and future, and for what? So you can paint the walls and rent money off a bank instead of renting a house off a landlord.

The delusion hasnt gone anywhere folks.

I'm not deluded at all. I fully expect the price to go down 20% from where I bought. The pertinent fact is that I don't care. Money means very little to me, having a home for my family is much more important. People worshiping the almighty euro is what got us into this mess in the first place. We've been very modest with our purchase and assured that a 3% rate hike will still see us outlaying less than 1/3 of our income.

donalg1

Zamboni wrote: »

Renting is not throwing money away in a rapidly deteriorating property market.
It is paying for a service without the shackles and responsibilities of a mortgage.
It provides the renter with mobility which is key in an uncertain labour market.

Imagine having a mortgage on a house in Waterford and losing your job in Talk Talk.
The renter can easily move to a place where there are better employment prospects.
The mortgage holder does not have that freedom.

Well they always have the option to rent out their house in Waterford and use that money to cover thier mortgage repayments while they move to another county to work.

Nowadays its unlikely you would get a mortgage without pretty much guaranteed job security so if you can get a mortgage chances are you wont have to move county in the next few years to find work anyway.

But thats beside the point, my opinion is that if you are happy that you can afford mortgage repayments and you find a house you like in the area you want to live, why shouldnt you buy. Granted its a risk to buy a house now but then it always has been a huge risk and commitment. Given the option i personally would buy everytime.

Snakeblood

donalg1 wrote: »

But thats beside the point, my opinion is that if you are happy that you can afford mortgage repayments and you find a house you like in the area you want to live, why shouldnt you buy. Granted its a risk to buy a house now but then it always has been a huge risk and commitment. Given the option i personally would buy everytime.

People who bought everytime over the last five years have lost 60% of the theoretical value of their house they bought in 2007, and the house they bought last year is worth 10% less than it was. At this point, it's not looking like a risk, it's looking like a certainty that prices now will higher than they will be next year, by a considerable amount.

That's money they are paying into their mortgage, that they could use to buy food\clothing\things.

ZYX

Snakeblood wrote: »

[

People who bought everytime over the last five years have lost 60% of the theoretical value of their house they bought in 2007, and the house they bought last year is worth 10% less than it was.
.

What?

donalg1

Snakeblood wrote: »

People who bought everytime over the last five years have lost 60% of the theoretical value of their house they bought in 2007, and the house they bought last year is worth 10% less than it was. At this point, it's not looking like a risk, it's looking like a certainty that prices now will higher than they will be next year, by a considerable amount.

That's money they are paying into their mortgage, that they could use to buy food\clothing\things.

Yeah fair enough prices will probably be lower next year but that still isnt a reason not to buy. If you want to buy a house at its lowest possible price then sure you can wait a year or two and watch it to see if the price drops, but how will you know when it hits the bottom? And as i said if its a house you like and want to buy and you can afford the mortgage then by waiting you are risking losing out on that house or ending up in a bidding war with someone else therefore paying more than you would pay today. And given that it is most definitely a buyers market today nobody will actually pay the asking price so you will still be getting a house at a good price. Waiting a year may only lower the asking price but the actual sale price could be the same as the seller may have an acceptable figure in their head already which wont have changed by next year.

If you were to apply the logic of not buying something now because it will most likely be cheaper next year you would never buy anything.

ZYX

There are also many other issues to be factored in.
If the rent is less than the mortgage you have to factor in that saving.
You also have to consider TRS which will be abolished soon.
Also long term interest rates are quite good mow for borrowers and will not be available once the economy recovers.
It is more than simply saying "prices will fall 20% so if you wait you save 20%".

Theboinkmaster

donalg1 wrote: »

If you can get a mortgage and like the house why wouldnt you buy now, sure if you wait it might come down in price slightly but who can say that will happen for sure, and even if the average house price drops by 2.5% or whatever this month it doesnt mean the price of the house you are looking at will drop by that amount. It shouldnt matter anyway as any bid you put in should be well under the asking price so drops in the average price of houses on the market doesnt matter in individual cases anyway.

If you want to buy it and can get the mortgage and are happy you can meet the repayments well then i say go for it.

You sir deserve the biggest facepalm in boards.ie history :rolleyes:

There is so much wrong with your post - it might come down in price? slightly? you are joking right?

- give me one reason why houses prices may stop their rapid decline?
- if average home is say €250k how is over €6k PER MONTH only slight exactly? an asset losing 30% of it's value in a year is slight?!
- how is asking price any contributing factor to real value of an asset?

donalg1

Theboinkmaster wrote: »

You sir deserve the biggest facepalm in boards.ie history :rolleyes:

There is so much wrong with your post - it might come down in price? slightly? you are joking right?

- give me one reason why houses prices may stop their rapid decline?
- if average home is say €250k how is over €6k PER MONTH only slight exactly? an asset losing 30% of it's value in a year is slight?!
- how is asking price any contributing factor to real value of an asset?

And you can guarantee that they are going to continue at the same rate of decline i suppose.

And what happens then when interest rates have increased in the period you chose to wait for the price to drop. Plus then you need to take into account the reduced TRS you will receive in a couple of years and then see how much you will actually have saved. Plus you need to consider age as a factor as borrowing today you could be entitled to a mortgage over 30 years whereas borrowing in 2years time you may only be entitled to a mortgage over 28years therefore increasing repayments. so coupled with higher interest rates and reduced trs how much would you actually save.

So FacePalm that one!!!!

beeno67

You need to know how much property is going to fall to make a properly informed decision. Unfortunately no one knows that so no one can make an informed decision. More importantly you need to know how much the particular property (or type of property) you want will fall by.
For example you constantly see people writing here, or if you are ever talking to someone who is considering buying in the future, they say the type of property they want. The usual criteria are: No apartments, no ghost estates, must be 3-4 bedroomed house with garden, must be properly built (no boom rubbish) and must be near services such as work, schools, shops etc. Now clearly, there is a limited number of these type of properties and a still rising population. If everyone want that type of property or some version of it then they will not fall in price anywhere close to apartments, ghost estates etc. So people saying average prices will fall 30% so your house will fall 30% are not necessarily looking at the full picture.