What is stopping you from buying a home?

Dannyboy83

There have been a number of articles recently saying houses have become affordable again etc.
e.g.
http://www.irishexaminer.com/breakingnews/ireland/international-house-prices-study-irish-homes-affordable-again-537065.html

Just wondering, for the people who still intend to buy a home in Ireland at some stage,
A) do you feel that houses have become affordable again and
what is stopping you from buying?

RichardAnd

Good topic. My parents often tell me that I should get a mortgage and buy a home with the adage taking root; 'Now is the time to buy!' To this, I have always replied that I still think that 250 - 300k (price of a house in our area) is still too much to pay.

Further, I question the sagacity of mortgages. If I got one, I'd but putting myself in debt to the tune of 200k and I would be stuck in one location. Renting allows me to save up a pool of real money and I can move or downsize if the need arises. Debt is a modern form of slavery, I will avoid it.

Spudmonkey

Dannyboy83 wrote: »

There have been a number of articles recently saying houses have become affordable again etc.
e.g.
http://www.irishexaminer.com/breakingnews/ireland/international-house-prices-study-irish-homes-affordable-again-537065.html

Just wondering, for the people who still intend to buy a home in Ireland at some stage,
A) do you feel that houses have become affordable again and
what is stopping you from buying?

They certainly seem to have come down in value looking at prices near us. What is stopping me from taking the plunge is a reluctance to believe that the market is fully at the bottom.

That probably wouldn't occur until there is some sort of stabilization effect which there hasn't been yet. That coupled with the fact that there more than likely wouldn't be an immediate rebound which would give the potential buyer more time to weigh up their options.

During the property crisis in both Finland and Japan there were several years where property values didn't move before they started to climb again. I'm waiting for that trough...

Sleepy

1. Prices are still too high.
2. No-one would give me a mortgage even if they weren't.
3. I've no deposit saved and won't for the foreseeable future.

Nody

In so many words, value for money.

Stark

My monthly rent is lower than the interest I'd currently pay on a mortgage. So makes more sense to save up for a higher deposit. Also, my rent includes maintenance on the house and gives me the flexibility to move house if I move job.

kippy

I already have a house.
If I were to buy again it would probably be to move into a less built up area but it's not an absolute necessity.

Sleepy

Sleepy wrote: »

1. Prices are still too high.
2. No-one would give me a mortgage even if they weren't.
3. I've no deposit saved and won't for the foreseeable future.

So really 2) and 3)

antoobrien

Sleepy wrote: »

1. Prices are still too high.
2. No-one would give me a mortgage even if they weren't.
3. I've no deposit saved and won't for the foreseeable future.

Those 3 are bang on, #1 is especially pertinent with anything built in the past 10 years due to falling workmanship because the rush to finish got more intense. Saw a billboard up at a development in Galway at the weekend advertising €199,000 (with an ftb package) - about 100k too high imo for anything built in the past 5-10 years.

Chucky the tree

With another 3-4 years of austerity I can only see house prices dropping even more. You'd still want to have your head examined to consider buying a house now imo.

foxyboxer

Firstly, there's no imperative to buy (no kids etc), this would be the main reason for me to buy, I am quite happy to keep on renting, and secondly to buy now would be to catch a falling knife if you look at it from an 'investment' point of view.

Sleepy

RoverJames wrote: »

So really 2) and 3)

They're factors but even if I'd the cash in my pocket, I think I'd still be holding out for another 18 months at least. Think we're at least that from the bottom.

Max Power1

Lack of a deposit

Id buy now if I had it.

Howjoe1

bottom line..banks are not lending.

Max Power1

Howjoe1 wrote: »

bottom line..banks are not lending.

Odd

AIB told me that they would give me and my OH a 92% mortgage.

Dannyboy83

First of all, thanks to all for the answers, some good answers already.

Sleepy wrote: »

1. Prices are still too high.

Asking prices are still pretty high/unrealistic in Cork.
Less so on the outskirts, but a joke in the city.

I'm on 36k per year and asking prices on most houses I would tend to consider are about 4.5 times my salary - which is simply too expensive, even by the bank's expectations, not just my own.
(My girlfriends employment is too chaotic to depend on her salary - she's on a 2 month layoff at the moment due to lack of business)

I've been following trends for over 12 months now and asking as many people as I can & it seems usually the asking prices on houses which sell are frequently 20% over the actual selling price.

If the house is an executor sale, I would forget about even buying it, they never seem to budge on the asking price. Loads of these slums around Cork inner city, crumbling to bits. Awful shame but what can you do.

Of course, you need to factor in new taxes such as Property Taxes, Water Charges and so on, plus the loss of mortgage interest relief.
It's hard to calculate these in, so I'm taking it as 1 extra mortgage repayment per year.

It typically seems the asking price is a figure they don't expect to actually get, unless it's unusually low priced compared to neighbouring houses.

2. No-one would give me a mortgage even if they weren't.

I was offered a 300k mortgage in 2008 (which I refused)
I applied for a 180k mortgage in 2010 (they refused me - informally)
Max I can get now is about 160k, that's the absolute max I would want anyway.

I was under the impression that I couldn't get a mortgage myself.
Based on my last meeting, it seems I can.

You need to satisfy certain criteria which the banks are not exactly forthcoming with:
A) Net to have a net disposable income of €1200
Need to save €1000 per month to prove you can handle stress tests etc.
C) Need to save up your 8% yourself (cannot be gifted/helicoptered to you)

3. I've no deposit saved and won't for the foreseeable future.

[/quote]

I spent most of 2011 clearing up my debts as quickly as possible.
Has required some frugal living and took a while
This program has been an immense help to me, I would get comfortable with this program
http://www.microsoft.com/download/en/details.aspx?id=20738


I'm a good portion of the way toward my deposit now and would be on track to buy before the end of the year, altho I've been really put off buying for other reasons.

Sleepy

I'm at the clearing up debts / saving for a wedding stage myself Dannyboy83. Once that's taken care of the saving for a deposit begins (the additional tax credits should help with that).

snubbleste

Sensibility

Dannyboy83

Spudmonkey wrote: »

They certainly seem to have come down in value looking at prices near us. What is stopping me from taking the plunge is a reluctance to believe that the market is fully at the bottom.

That probably wouldn't occur until there is some sort of stabilization effect which there hasn't been yet. That coupled with the fact that there more than likely wouldn't be an immediate rebound which would give the potential buyer more time to weigh up their options.

During the property crisis in both Finland and Japan there were several years where property values didn't move before they started to climb again. I'm waiting for that trough...

I've no idea when the bottom will arrive, but my opinion is that this year would have seen the last of the big drops, only that Noonan insisted on screwing with Mortgage interest relief.
I think there will be more a stabilisation (artificial ceiling in 2012), followed by another big drop in 2013 to correct itself.

I think that will be the last of the big drops, then a slow decline for several years of tax increases and austerity.

A potential surge in interest rates could screw that of course.
Aswell as Irish bankruptcy.
A number of different events really.....d'oh

Dannyboy83

Stark wrote: »

My monthly rent is lower than the interest I'd currently pay on a mortgage. So makes more sense to save up for a higher deposit. Also, my rent includes maintenance on the house and gives me the flexibility to move house if I move job.

Rent is generally vastly overpriced in Cork, but the flexibility is pretty much the major issue.

I'm in IT and my job seems quite safe, so not worried from that angle.
But you're still investing in a country which on a real collision course with bankruptcy....

Most of the things which have happened in Ireland in the last 4 years - people would laugh you out of the country if you wrote it in a book 5 years ago.
It seems you can rule out nothing these days.

rodento

Here's a couple of reasons

1. Croke Park.
Chances are there will be cut in the next few years and that will effect everyone who's job is covered by this deal

2. Euro
No idea if the euro will survive

3. Austerity
County is suffering from austerity, no idea how much tax's are going to go up in the next couple of years

4. Tracker
Lack there of, will pay punitive interest rates to pay for someone else's tracker :mad:

5. Housing Stock
Very poor choice out there at mo, most of the quality houses are been kept off the market by the Nama and the lack of repossessions....

6. New Builds
Ever hear of priory hall, must be the tip of the ice berg

7. New Builds
Pyrite, Pyrite, Pyrite...

n97 mini

Max Power1 wrote: »

Odd

AIB told me that they would give me and my OH a 92% mortgage.

What line of work are you and her in?

snubbleste

Dannyboy83 wrote: »

Most of the things which have happened in Ireland in the last 4 years - people would laugh you out of the country if you wrote it in a book 5 years ago. It seems you can rule out nothing these days.

You mean something like On the likely extent of falls in Irish house prices, Morgan Kelly, 2007 ?

Dannyboy83

Chucky the tree wrote: »

With another 3-4 years of austerity I can only see house prices dropping even more. You'd still want to have your head examined to consider buying a house now imo.

I think 1 more big year after mortgage interest relief ends, then they will decline more slowly as more and more of our money is sucked up by taxation etc.

Also, I know this is an irrational answer so I don't expect a response, but I've been waiting nearly a decade at this stage and I'm tired of waiting now.

If I held out for another 4 years, until I was sure it had hit the bottom, I'd be 33/34.

Howjoe1

Max Power1 wrote: »

Odd

AIB told me that they would give me and my OH a 92% mortgage.

most seem to be lending to public servants only.

spoke with an auctioneer recently who told me stories of customers being turned down despite having 70% cash deposit and her college being refused because her job as an estate agent as seen as too unsecure.

good luck to you if you got offered mortgage. are you in the public service?

The Scientician

Apart from the fact I just lost my job, prices are going down each year by more than a year's rent in most instances, so why the frig would you commit now when in '12/'14/'15 you could get what you want at a much more reasonable price.

Dannyboy83

Howjoe1 wrote: »

spoke with an auctioneer recently who told me stories of customers being turned down despite having 70% cash deposit and her college being refused because her job as an estate agent as seen as too unsecure.

I have had, and heard of others, having a similar experience with 2 branches of the same bank which are about 800m apart here.

In my case, the branch who approved me for a 300k mortgage in 2008, were basically saying no under all circumstances.
The other branch asked me to come in, went through details and said they couldn't see any problems, give me the targets to meet which I wrote on Pg1 and said we'll see you in 6 months.

Finnbar01

I would be worried about interest rates sky rocketing in the coming years.

Nolanger

If you've watched this you won't buy yet!
http://www.youtube.com/watch?v=HfzlldvI3vk

ilovesleep

Freedom

snubbleste

Also OP, home ≠ house.
Home can vary from a cardboard box to a few bits of plywood in a shanty town to a caravan to a bedsit to a southfork-style humble abode.

Dannyboy83

snubbleste wrote: »

Also OP, home ≠ house.
Home can vary from a

Well, if you're into the Great Outdoors

Reason I said home as opposed to house, is because a home is your primary residence, whereas a house could be for investment purposes.

Negative equity doesn't matter too much if you're buying a home and regardless of when you may buy over the next decade in Ireland, you'll almost certainly go into some amount of negative equity.
I personally wouldn't consider 20k negative a big deal at all.

hmmm

Who'd buy a home in this country at the moment? There is far too much uncertainty.

1. Prices are plummeting
2. Property taxes are rising and we don't know where they end
3. Building standards haven't been properly enforced. Who knows what else is going to emerge after pyrite, priory hall etc.
4. Who knows where the Irish economy is heading
5. Who knows where the world economy is heading
6. NAMA is holding back a large stock of property

I can't see much downside for people continuing to rent, particularly those who haven't a 100% guaranteed salary.

D1stant

Dannyboy83 wrote: »

There have been a number of articles recently saying houses have become affordable again etc.
e.g.
http://www.irishexaminer.com/breakingnews/ireland/international-house-prices-study-irish-homes-affordable-again-537065.html

Just wondering, for the people who still intend to buy a home in Ireland at some stage,
A) do you feel that houses have become affordable again and
what is stopping you from buying?

It sounds from your posts that you are really studying this. And thats good. I presume you are reading the property economists, tracking price drops (collapso.net) reading public commentary propertypin etc

Please disregard the tattle you get in the newspapers (all of them) - its very lightweight and for every positive article, theres another negative one

It very much depends on the property type you want to buy. 'starter' homes, apartments, 5 bedroom period detached etc all have different variables

I bought 5 months ago. It is an old house in an good area , that dont come up for sale very often. I bought it at 130k lower than the one next door had sold for 15 months previously. Love the house, but you know what? I wish I had waited. My impatience is probably going to cost me north of 70k over the mortgage lifetime.

Things are going down. Hold for 12 months and revisit this thread then

Dannyboy83

The Scientician wrote: »

Apart from the fact I just lost my job, prices are going down each year by more than a year's rent in most instances, so why the frig would you commit now when in '12/'14/'15 you could get what you want at a much more reasonable price.

You'd still be looking at €9,600 per year here for a fairly basic rental in Cork.
Factor in the dodgey cowboy landlord who keeps your deposit and passes on the property tax, plus other odds and ends, you're look at closer to 11k.
Not that much of a saving in the end.

One of the primary reasons I want to buy is because I have had so many bad experiences renting in Ireland.
I did it for 8 years and it's something I never want to do again, if at all possible.
But I would if I had to.

later12

Oops, thought this was another forum.

On topic, i don't think I really want to own a home for the foreseeable future. If i were, I don't think i'd be in a rush. Any increase in house prices is going to be very slow to take off when it does eventually occur.

Dannyboy83

ilovesleep wrote: »

Freedom

This is one of the ones that has me sh1tting bricks.

So many of my friends, particularly skilled friends, some who had a salary over double mine, have gotten the hell out of Ireland because they see no future here at all.

I mean, if the Euro implodes, then it's all the same difference, we're all equally fcuked anyway.

What happens if the Euro doesn't implode and we keep the CPA for 2 decades and 2 decades of bailouts and austerity and tax increases?

The Scientician

Dannyboy83 wrote: »

You'd still be looking at €9,600 per year here for a fairly basic rental in Cork.
Factor in the dodgey cowboy landlord who keeps your deposit and passes on the property tax, plus other odds and ends, you're look at closer to 11k.
Not that much of a saving in the end.

One of the primary reasons I want to buy is because I have had so many bad experiences renting in Ireland.
I did it for 8 years and it's something I never want to do again, if at all possible.
But I would if I had to.

But sure how much would you be paying for a house? How much are houses in the range you're looking at contracting in value at?

MadsL

Dannyboy83 wrote: »

Reason I said home as opposed to house, is because a home is your primary residence, whereas a house could be for investment purposes.

Could I make a general appeal. The next time you hear someone talking about buying a house as 'an investment', slap them. A house is a utility, not an investment. We have to stop talking about investing, look where it got us.

OT, I've emigrated and bought a house overseas. Feel that where I am is at the bottom, Ireland's house price drops are accelerating however, I'd seriously wait a long time -I think the second bailout and the tsunami of repossessions is coming and will depress the **** out of everyone the market further.

Maura74

UK government have put a cap on housing benefits they are saying that will bring down rents as landlords are charging too much and as such this puts rents up especially in metropolises.

I think Ireland should do the same.

antoobrien

hmmm wrote: »

2. Property taxes are rising and we don't know where they end

It'll be interesting to see what happens next year when the full property tax comes in. My bet is that a lot of buy to lets will come on the market.

hmmm wrote: »

3. Building standards haven't been properly enforced. Who knows what else is going to emerge after pyrite, priory hall etc.

This is a major problem in north Dublin & PH is only the tip of the iceberg. I've heard of a few estates that have serious pyrite issues (that afaik haven't been in the media).

Zamboni

Mobility
If I lose my job in the morning I can up sticks and follow the labour opportunities.

Services
Ireland will probably be a second world country in the provision of basic services over the next few decades as there will be little or no investment in the repair, maintenance or upgrade of water & road infrastructure.

Education
We are dropping rapidly in the tables. Our system is based on memory repetition rather than critical thinking, problem solving and entrepenuerial skills.
We do not and will not have the workforce required to comepete in the 21st century global labour market.

Welfare State
We live in a welfare state were we value non contributors to society and as a result we have intergenerational welfare recipients who do not value employment.
If I bought a home with my hard earned I would not like to live next door to somebody that got it for free.

Scofflaw

Maura74 wrote: »

UK government have put a cap on housing benefits they are saying that will bring down rents as landlords are charging too much and as such this puts rents up especially in metropolises.

I think Ireland should do the same.

They've reduced rent allowances: http://www.rte.ie/news/2012/0116/rent.html

cordially,
Scofflaw

Solair

The economy just seems like a slow motion car crash!

I am not willing to buy into a situation where I am stuck here.

It's absolutely insane. Who'd have ever thought that in 2012 we couldn't even be sure of whether we could trust our currency or that we'd be in IMF receivership.

Honestly, what the last few governments did and allowed to happen to this country is utterly unforgivable.

The numbers simply don't add up. I still think that we are in for another set of massive economic shocks.

The housing market is also still overpriced and unrealistic.

gurramok

Howjoe1 wrote: »

most seem to be lending to public servants only.

spoke with an auctioneer recently who told me stories of customers being turned down despite having 70% cash deposit and her college being refused because her job as an estate agent as seen as too unsecure.

Estate agent = very vulnerable sector, we are having a property crash!

My colleague is in IT and managed to obtain a mortgage last year.

Rabidlamb

Dannyboy83 wrote: »

If I held out for another 4 years, until I was sure it had hit the bottom, I'd be 33/34.

Yes, but you'd probably looking at a lower selling price & hence a shorter term mortgage.
Looking at the finish line not at the starting blocks.

Stark

Dannyboy83 wrote: »

Rent is generally vastly overpriced in Cork, but the flexibility is pretty much the major issue.

I'm in IT and my job seems quite safe, so not worried from that angle.
But you're still investing in a country which on a real collision course with bankruptcy....

I'm in IT as well and while my job is very safe, yearly payrises within companies are generally well below inflation. So I need to be flexible and able to move jobs in order to maintain standard of living/increase standard of living based on my experience. In Dublin at the moment, so even moving jobs within Dublin could mean the difference between a 15 min each way commute and a 60 min each way commute so it pays big time to have that flexibility.

Raskolnikov

I'm in the private sector and have had no problems getting mortgage approval on a 90% loan. With all this talk of people complaining about banks not offering mortgages, I still haven't met a single person who has been unable to obtain one. To me, I think that prices are actually starting to approach fair value. For example, if you're in Dublin and earning €40k, you should be able to afford a bog-standard semi in Lucan at 3x your salary (€120k) with a 10% deposit. that should give you a house price of €140k or so, which we are definitely very close to at this stage. I think at the higher-end of the market, there is definitely less value. I think it's ridiculous that the equivalent Lucan semi can be 4, 5 or 6 times the price it is just because of location.

jasonc5432

Why not buy now?

1. Prices are still too high.

2. Prices will fall plenty more.

3. Ireland's impending national debt default as a result of further slow down in Europe and further slow down in Irish economic activity, will drive prices down.

4. Because who wants to live in a country who just gifted 400euro for EVERY man, woman and child to speculators while hospitals and schools are closed (PLUS INTEREST on this because we BORROWED the 400 to give as a pressie)

ionapaul

Raskolnikov wrote: »

I'm in the private sector and have had no problems getting mortgage approval on a 90% loan. With all this talk of people complaining about banks not offering mortgages, I still haven't met a single person who has been unable to obtain one. To me, I think that prices are actually starting to approach fair value. For example, if you're in Dublin and earning €40k, you should be able to afford a bog-standard semi in Lucan at 3x your salary (€120k) with a 10% deposit. that should give you a house price of €140k or so, which we are definitely very close to at this stage. I think at the higher-end of the market, there is definitely less value. I think it's ridiculous that the equivalent Lucan semi can be 4, 5 or 6 times the price it is just because of location.

I know what you mean, but I think you may be slightly exaggerating with the x5 and x6 times the bog-standard semi in Lucan - 5 times €140K is €700K, 6 times this is €840K, those amounts will get you a big 5-bed redbrick in Ranelagh, a million miles away (figuratively speaking of course!) from a bog-standard semi in bland suburbia!

The reason house prices in Lucan are considerably lower than similar properties in Rathfarnham, Clontarf and Stillorgan is because the demand is much higher for those areas, property is truly all about location, location, location. Not slagging Lucan off by the way, my friends have a nice house there, but I know why a 3-bed semi there is half the price of a 3-bed semi in Clontarf and I've no problem with that, most people would simply rather live in Clontarf!

walus

At some point I considered settling down in Ireland but that was a time when the economy was going strong (as they were saying at the time - how wrong this so called expert were is another topic) and wanted to buy a house. What put me off at the time was price basically. I could not comprehend how on earth a 3-bed house should cost between 300-400k in Cork (apartments not much cheaper) whereas in say Berlin they are 30% cheaper. And you can not compare Cork with Berlin in terms of opportunities these two cities give.
Now to tell the truth the prices still do not reflect what properties are worth. And the sad thing is that NAMA keeps them still artificially high. On top of that we hear and will hear more and more about poor quality of recent constructions. So in my case unless these houses that were going for 350k in Cork a few years ago start going for 150k I'm not interested. I think that 150k reflects their natural value. Cheers