Continue renting or buy?

borderlinemeath

OP what type of house do you want? Just a nosey on daft and houses in the €200-€250K bracket seem very nice indeed. This one at €200K, 4bed/5bath seems more than adequate.

http://www.daft.ie/searchsale.daft?id=698935.

But there's plenty available at a lot less money, this one is 4bed/3bath for only €100k.

http://www.daft.ie/searchsale.daft?id=652260

It's hard to tell how much prices will fall, but only you can work out the calculation as to how much more and is it worth your while waiting. How much of your savings are you planning on using for the deposit? I would try and borrow as little as possible and keep repayments as manageable as possible. Remember interest rates are extremely low but will not stay that way forever so that must be added into the calculation of what one salary can bear to cover in the long term.

gurramok

Prices will continue to fall, the last of the ones who fell for the removal of the MIR gimmick have been flushed out. Follow on to that is where is the next incentive to lure buyers in? There are none. The "free" property tax for a few years for a FTB is hardly worth anything to a buyer, price falls will be more important. Also if one were to buy this year, buyers will want to buy within the cheapest property tax band possible (instead of buying at 221k they'll try to buy for 199k!) for future reference when they are liable for the tax.

cookie1977

If you feel you can afford the mortgage even after stress testing yourselves (kids, creche, interest rate rises in the long term) and you find a house that you want and can afford then I don't see why you wouldn't buy

murphaph

cookie1977 wrote: »

If you feel you can afford the mortgage even after stress testing yourselves (kids, creche, interest rate rises in the long term) and you find a house that you want and can afford then I don't see why you wouldn't buy

If renting was significantly cheaper then there's a very compelling reason right there. Other than that, your post is spot on.

Even in Germany where renting is still more predominant than home ownership, the same plus points are used to sell homes: no uncertainty in old age, no rent to pay, mortgage is effectively compulsory savings plan that you may well not have adhered to if renting etc.

I think in Ireland home ownership is the right solution for some people, possibly even the majority of people, but not everybody can afford to buy their own home and this is the crucial point that is often whitewashed over. People in certain low paid jobs simply shouldn't have an expectation of home ownership. It's unrealistic and always was.

pwurple

djimi wrote: »

You do not need to own a house to start a family; do not let that influence your decision one iota.

That is true, however buying a house after you have started a family can be more difficult.

Some banks run a calculation on net disposable income to decide what mortgage you will be offered. They take your post tax salary, and after mortgage repayments (stress tested), and utilities, and anything like cars, they will expect you to have 1000 euro per adult, and 500 euro per child left over. So each child will reduce your repayment capacity in the banks eyes by 500 euro per month.

Also, your wifes income may be reduced by maternity leave, or she might take unpaid leave after maternity leave. Makes for a weaker looking P60.

You both sound like you have good jobs, decent savings history and a good deposit. If you see a house you like, for a good price, I see no reason not to buy if you can get a mortgage.

djimi

pwurple wrote: »

That is true, however buying a house after you have started a family can be more difficult.

Some banks run a calculation on net disposable income to decide what mortgage you will be offered. They take your post tax salary, and after mortgage repayments (stress tested), and utilities, and anything like cars, they will expect you to have 1000 euro per adult, and 500 euro per child left over. So each child will reduce your repayment capacity in the banks eyes by 500 euro per month.

Also, your wifes income may be reduced by maternity leave, or she might take unpaid leave after maternity leave. Makes for a weaker looking P60.

You both sound like you have good jobs, decent savings history and a good deposit. If you see a house you like, for a good price, I see no reason not to buy if you can get a mortgage.

Im fairly sure that banks take into account that a young married couple are likley to have children at some point during the life of the mortgage and take that into account when assessing the repayment capability.

cookie1977

djimi wrote: »

Im fairly sure that banks take into account that a young married couple are likley to have children at some point during the life of the mortgage and take that into account when assessing the repayment capability.

You'd think that but they didn't before the recession.

MMAGirl

cookie1977 wrote: »

You'd think that but they didn't before the recession.

I posted about our experience on this before and a mod started a new thread with it.
http://touch.boards.ie/thread/2056793110?page=1

Now I'm sure you can get horror stories too. This is just our experience.

It's like politics. Some people are blindly fighting for one side and can never see the other side. Opinions will differ. Buying may be good for some and not for others. Simple as that.

But one thing that is very important- when you have children your opinions on renting will change big time.

jmayo

Procrastastudy wrote: »

You forgot that a market at the bottom rebounds back up.

Mind giving a time frame for that little nugget of logic ?
Perhaps you should think of Japan before you comment. :rolleyes:

Procrastastudy wrote: »

I'm astonished that people so blinkered by a natural cycle in a market worryingly see fit to criticise others without checking their own facts.

Maybe you should have thought about natural bubble/burst cycles before you bought an apartment at the height of one of the world's biggest property bubbles.

beaner88 wrote: »

I don't think you should be lecturing people on natural market cycles when you bought in 2006 when there was as "a permanently high plateau".

Brilliant retort.

Procrastastudy wrote: »

Because to many it simply doesn't matter. Many renters are beyond help in that if you only rent over the period of your lifetime you are worse off that someone who bought at the peak.

Well if you had been renting you wouldn't be stuck with an asset that has lost 123,000 and makes it very hard to move.
And before you mention becoming a landlord ask some of them about the pitfalls, the headaches of being one.

the_syco wrote: »

...
Read the law, and you'll see a note about keeping the family home when they go bankrupt.

That is going to be an interesting one.
After all the reason most will be looking for personal bankruptcy is because they can no longer afford their family home and they want to get out.
So are we going to have Bankruptcy Irish Style where someone declares bankrupt because they can't repay debts, larhest chunk of which is on family home, and yet they will get to keep that same family home, writing off some of their debts ?

Hey isn't that just a bailout for the negative equity generation ? :rolleyes:

Procrastastudy

jmayo wrote: »

Mind giving a time frame for that little nugget of logic ?
Perhaps you should think of Japan before you comment. :rolleyes:



Maybe you should have thought about natural bubble/burst cycles before you bought an apartment at the height of one of the world's biggest property bubbles.



Brilliant retort.



Well if you had been renting you wouldn't be stuck with an asset that has lost 123,000 and makes it very hard to move.
And before you mention becoming a landlord ask some of them about the pitfalls, the headaches of being one.



That is going to be an interesting one.
After all the reason most will be looking for personal bankruptcy is because they can no longer afford their family home and they want to get out.
So are we going to have Bankruptcy Irish Style where someone declares bankrupt because they can't repay debts, larhest chunk of which is on family home, and yet they will get to keep that same family home, writing off some of their debts ?

Hey isn't that just a bailout for the negative equity generation ? :rolleyes:

Are you just going for the most unhelpful post of the year award or is there a point to your post?

Luca Brasi

In certain parts of the country e.g south Dublin there does appear to be a slight increase in prices and a shortage of family suitbale homes. However in many other locations there is ample good properties on the market. Many of these will never achieve the asking price and if you want a particular property you will get it with a bit of bargaining. There is the risk of course that prices will drop again but at the same time, and moving from the financial argument, you will have got the home of your choice. This opportunity may not arise again. Its all about priorities