2013...is it the year to buy?

gaius c

Zamboni wrote: »

Unfortunately, there are too many vested interests which will result in the demolition to a substantial portion of those properties.
They will never be allowed on the market (as they should be - everything has a price).
The tax payer will ultimately take the hit to destroy the supply side of the equation and reset the whole game again. Nothing will be learned.

So taxpayer ends up with less money => house prices go down.

It's a pretty simply equation but the government are determined to take the long (and expensive) route to get to the same place.

D3PO

gaius c wrote: »

So taxpayer ends up with less money => house prices go down.

It's a pretty simply equation but the government are determined to take the long (and expensive) route to get to the same place.

thats not a related impact and the equation isnt as simple as you make out.

Less money means less affordability. Less affordability doesnt by default mean cheaper houses. Likewise more money doesnt mean higher prices. Its all part of the housing marker but not what determines price (availability of credit, interest rates, inflation, property supply, rent allowance ceililngs, associalted costs etc etc etc the market isnt as straight forward as you seem to believe)

It could equally be argued it means more people have to rent with investors becoming a larger subsectiion of the property market. Which keeps the market at a particular level.

gaius c

D3PO wrote: »

thats not a related impact and the equation isnt as simple as you make out.

Less money means less affordability. Less affordability doesnt by default mean cheaper houses. Likewise more money doesnt mean higher prices. Its all part of the housing marker but not what determines price (availability of credit, interest rates, inflation, property supply, rent allowance ceililngs, associalted costs etc etc etc the market isnt as straight forward as you seem to believe)

It could equally be argued it means more people have to rent with investors becoming a larger subsectiion of the property market. Which keeps the market at a particular level.

Your overall view, however, does appear to be straight-forward and it's:

D3PO

gaius c wrote: »

Your overall view, however, does appear to be straight-forward and it's:

i dont know that thats supposed to mean but Im assuming its supposed to be some kind of reference to rising prices.

nowhere did I say that, and nor do I believe it either for the record. I just dont proclaim to make a statement as simple as less money means lower prices.

goz83

jmayo wrote: »

There is a hell of a lot of whatifs in there.

Forget the chance of cheap credit anytime soon.
The banks, particularly the Irish ones, will never be able to indulge in the cheap credit they did during the boom.

The big thing now is the availability of any credit.

For instance the recent announcement by PTSB is a bit of a joke.
Trust me with the amount of hoops they now make you jump through to even get an overdraft I can't see many getting their mortgages and even if they do their variable interest rates are big to counteract their tracker rate losses.

BTW the bubble years lending criteria and cheap credit were not the norm and will not be returned to any time soon.

Also forget the fear and greed argument.
The fear now is not that you will not get a house, the fear is that you buy a house for too much, lose your job and be saddled with the house whilst in negative equity.
The market sentiment has totally reversed and putting it mildly most of the ones who might have the where withall to buy aren't going to be suckered quiet as easily as some were during the boom/bubble.



Ehh please look at Japanese property market for a pointer on this.

Cheap credit won't be available for many years, I accept this, but it will happen again. It has happened before and will happen again. Someone buying now will only be buying if they feel secure enough to do so (stable income, savings).

IF a new buyer lost their job, their mortgage would be considerably less than the mortgage for a similar property bought from say 2002-2008 and so would be far more manageable, even if one lost their job. Restrictions are tigher now, so it's likely that the joint owner would be able to cover the mortgage. The likelihood of someone who buys in 2013 finding themselves in anymore than 5% negative equity in slim to nil, especially in the cities.

Japan, as you know, is a one off example and is in contrast to all other property market trends worldwide, with a stagnant to slow rise in property value, almost matching inflation. Nice try though.

D3PO

goz83 wrote: »

IF a new buyer lost their job, their mortgage would be considerably less than the mortgage for a similar property bought from say 2002-2008 and so would be far more manageable, even if one lost their job. .

You really should do your maths before such a statement. Thats not actually true if you assume that 2002 - 2008 mortgaee got a tracker.

even with the lower purchase price you will find the difference in actual monthly payments to be minimal.

think somebody did a thread in the politics forum 500k mortgage with a tracker monthly repayment after MIR approx 1510 per month

300k mortgage today @ 4.5% 1503 per month or somethign to that effect.

Theboinkmaster

Skr4wny wrote: »

I want to buy this year and was wondering what peoples take is on what way the prices will go? Obviously given our recent past I'm a bit hesitant to believe the first thing I read as the whole world is about spin these days and talking things up.

I have about 30% of what I'm willing to spend on the gaff in savings so I'm not in too bad of a position.

Ta.

No I don't believe it is. I'm a FTB currently savings away and renting, will buy a family home in south dublin but no chance this year. Will start looking seriously in 2014 at the earliest......probably 2015 realisitically before we purchase.

Too many factors putting downward pressure on prices and can't think of a single reason why they'd bottom out yet.

D3PO

Theboinkmaster wrote: »

Too many factors putting downward pressure on prices and can't think of a single reason why they'd bottom out yet.

even if they do / have its not like they are going to jump again anyway. Chances of somebody getting in at the bottom are low but nobody will worry that things will jump either so theres no pressure outside when somebody wants to buy in terms of their own circumstances really.

jmayo

goz83 wrote: »

Cheap credit won't be available for many years, I accept this, but it will happen again. It has happened before and will happen again.

So we are going to have the glory days of 100% (or even 100% plus) mortgages again ?
I can't recall anywhere in history seeing the same amount of cheap credit worldwide at the same time as was visible post 2002 ?

goz83 wrote: »

Someone buying now will only be buying if they feel secure enough to do so (stable income, savings).

And yet you claimed we could have panic buying, rising prices and the bones of another bubble ?

goz83 wrote: »

IF a new buyer lost their job, their mortgage would be considerably less than the mortgage for a similar property bought from say 2002-2008 and so would be far more manageable, even if one lost their job. Restrictions are tigher now, so it's likely that the joint owner would be able to cover the mortgage. The likelihood of someone who buys in 2013 finding themselves in anymore than 5% negative equity in slim to nil, especially in the cities.

What level of mortgage/deposit are we talking about ?

goz83 wrote: »

Japan, as you know, is a one off example and is in contrast to all other property market trends worldwide, with a stagnant to slow rise in property value, almost matching inflation. Nice try though.

Weren't we going to be a one off and have a soft landing ?

Well looking at our situation I could see us following Japan more so than UK, US, Finland, etc, etc.

Lets look at Ireland, our bubble and our economy.

Ireland had one of the biggest property bubbles ever.
Ireland has no indigeneous solvent banking system, high levels of unemployment and one of the world's largest levels of personal debt.
Ireland is almost totally dependent on FDI from multinationals for high end employment and exports.
Ireland has a tiny home market and is totally dependent on exports from said multinationals plus a few homegrown entities particularly limited to areas such as agrisector.

Yeah I can see how we are going to rebound and not end up like Japan. :rolleyes:

goz83

D3PO wrote: »

You really should do your maths before such a statement. Thats not actually true if you assume that 2002 - 2008 mortgaee got a tracker.

even with the lower purchase price you will find the difference in actual monthly payments to be minimal.

think somebody did a thread in the politics forum 500k mortgage with a tracker monthly repayment after MIR approx 1510 per month

300k mortgage today @ 4.5% 1503 per month or somethign to that effect.

Maybe you need to check your own maths. You are saying that payments on a 500k mortgage and payments on a 300k mortgage are minimally different (to the tune of €7 per month in your post)? Why didn't you tell me this in 2007? I could be paying €1900 a month for a mansion worth 10 million, instead of a 3 bed semi worth 200k!

I'm thinking you haven't factored in the mortgage term with those figures.

jmayo wrote: »

So we are going to have the glory days of 100% (or even 100% plus) mortgages again ?
I can't recall anywhere in history seeing the same amount of cheap credit worldwide at the same time as was visible post 2002 ?

At some stage, I believe we will, yes, or very near to it, but not for about 25 years, when memory fades again.

And yet you claimed we could have panic buying, rising prices and the bones of another bubble ?

Yes. Whenever it seems something is going to rise in value, people often throw logic out the window and buy.

What level of mortgage/deposit are we talking about ?

This will depend on circumstances and how far into the future you want to look. Presently, when people meet the banks criteria, they are being turned down. In 20 years, we will have the 80%+ mortgages being thrown at people.

Weren't we going to be a one off and have a soft landing ?

No. That was never going to happen. FF were simply hoping the bubble would burst after they got re-elected.

Well looking at our situation I could see us following Japan more so than UK, US, Finland, etc, etc.

Time will tell, but remember that we have a home owner culture here, unlike other places, where people are happy to rent for life, so I doubt it.

Lets look at Ireland, our bubble and our economy.

Ireland had one of the biggest property bubbles ever.
Ireland has no indigeneous solvent banking system, high levels of unemployment and one of the world's largest levels of personal debt.
Ireland is almost totally dependent on FDI from multinationals for high end employment and exports.
Ireland has a tiny home market and is totally dependent on exports from said multinationals plus a few homegrown entities particularly limited to areas such as agrisector.

Yeah I can see how we are going to rebound and not end up like Japan. :rolleyes:

Against all odds and dangerously stupid decisions, we are slowly recovering. Each bubble will surpass the one before it. Where there is a need for a home, a person will try to purchase a home. Where there is opportunity to profit from anothers needs, there is always some smug little c**t in a suit. I would indeed like to see property levels at reasonable levels. I wouldn't hope they rise, to satisfy my own bank account in years to come at the expense of my childrens generation, but I am afraid that it will happen again.

That's my opinion, you have yours.

halkar

I would say wait and continue saving. Every cent you save will reduce the interest you will pay on the mortgage. It may save you more than the few % in the rise of the property prices (which I doubt will happen anytime soon).

Galego

halkar wrote: »

I would say wait and continue saving. Every cent you save will reduce the interest you will pay on the mortgage. It may save you more than the few % in the rise of the property prices (which I doubt will happen anytime soon).

You also have to consider that renting is not free. Someone who pays =>12k eur annual rent also has to factor that expensive.

Skr4wny

repsol wrote: »

At the price point you are looking at (150k) it would take a big % drop to have a huge effect on you in terms of cash so I would go ahead and try to organise a mortgage as this might be difficult.You should then look around and put really low offers on several houses you like.You will get a lot of rejections but it doesn't sound like you are in a hurry,you have nothing to sell (no chain,a big plus for a seller)and you only need to find 1 desperate seller to get a real bargain.If you buy at 10% under value you should be protected from future falls as they are unlikely to be double digit.I bought an investment house in D15 for 135k in '96 sold it in '05 for 346k and its worth 140k now. I think its pretty near rock bottom in that area.

Good plan of attack there actually. With myself and my partner in permanent jobs (6 & 9 years respectively) I can't see the mortgage being a problem especially when we have a third of the money up front.

My first post probably gave the impression I was buying alone, the other half over the moon at the use of "I"

We're hoping to get a 10-15 year term on it but many people told me generally 15 is as low as they go.

Skr4wny

goz83 wrote: »

Cheap credit won't be available for many years, I accept this, but it will happen again. It has happened before and will happen again. Someone buying now will only be buying if they feel secure enough to do so (stable income, savings).

IF a new buyer lost their job, their mortgage would be considerably less than the mortgage for a similar property bought from say 2002-2008 and so would be far more manageable, even if one lost their job. Restrictions are tigher now, so it's likely that the joint owner would be able to cover the mortgage. The likelihood of someone who buys in 2013 finding themselves in anymore than 5% negative equity in slim to nil, especially in the cities.

Japan, as you know, is a one off example and is in contrast to all other property market trends worldwide, with a stagnant to slow rise in property value, almost matching inflation. Nice try though.

OP here

I can confirm you are right on two counts.

1) We have savings and stables jobs (as stable as can be expected)

2) We're only looking to borrow 2/3rds of what we are willing to spend and I've calculated even if we both lost our jobs we could still manage it to pay it.

goz83

Skr4wny wrote: »

OP here

I can confirm you are right on two counts.

1) We have savings and stables jobs (as stable as can be expected)

2) We're only looking to borrow 2/3rds of what we are willing to spend and I've calculated even if we both lost our jobs we could still manage it to pay it.

Good to hear. Best of luck in the hunt.

Skr4wny

WhatNowForUs? wrote: »

You must first ask the question what you want to buy for. Is it an investment or is it for the long term to live in. Each might give you a different answer.

Personally I think prices will go down slightly as the property tax kicks in water rates are introduced and whatever else there maybe, Job losses and emigration will continue (job losses to a lesser extent) which will further stagnate the market.
Then there are the NAMA properties that are being held back (I don't know how many) along with Mortgage and Rent relief that the Government will have to look at.
Also the market some would say is still overpriced if you compare the average industrial wage x 4 against the average house price.

Against all that you have people saying that there is a shortage of property in Dublin (that could be coming from special interest groups) which will prevent the market from plummeting.

The international trading market would need to be looked at as a downturn there would mean that there wont be any job growth in any of the multinationals within Ireland but against that it would mean that there would be less emigration as there wont be as many jobs in other countries.
Australia is also going through a boom it would seem so if that bursts we could be seeing the return of all the emigrants who have saved all their money ready to buy at the first opportunity.

If you see a house you want to live in for the rest of your life and you have a secure job BUY. If not well your guess is as good as mine if not better.

For me I'm looking to buy a home with no plans to move in the short term.

I've been keeping an eye on daft all the time since about October but is hard to gauge from that if things are dropping but there seems to be value out there. Based on the responses to date I think given my position and how much I'm spending this year is not a bad year but may wait until a bit later in the year.

Will keep everyone posted anyway when I do take the plunge.

StillWaters

Skr4wny wrote: »

We're hoping to get a 10-15 year term on it but many people told me generally 15 is as low as they go.

Go for at least 15. I'd say 20-25 with a SVR. Throw extra money at it if you wish to shorten the term, but the longer term allows more flexibility.

Good luck with the house hunting. I think 2012 was the year to buy, but I think there will still be value out there for the next year or so if you are not looking to buy in SCD.

Bigcheeze

D3PO wrote: »

You really should do your maths before such a statement. Thats not actually true if you assume that 2002 - 2008 mortgaee got a tracker.

even with the lower purchase price you will find the difference in actual monthly payments to be minimal.

think somebody did a thread in the politics forum 500k mortgage with a tracker monthly repayment after MIR approx 1510 per month

300k mortgage today @ 4.5% 1503 per month or somethign to that effect.

Didn't see the thread but did they also calculate the 50k of stamp duty that would have been paid on the 500k house ?

goz83

Bigcheeze wrote: »

Didn't see the thread but did they also calculate the 50k of stamp duty that would have been paid on the 500k house ?

The stamp duty that was usually borrowed from the banks too? Lets not forget about the car that was thrown in for good measure. Crazy stuff and this was encouraged by the lenders, without the mention that the extra 20k borrowed for the car would cost you about 20k in interest.

A certain bank manager tried to sell me a 40 year mortgage of 400k when I only needed 380k and insisted on 35 year mortgage. She ignored me, took 3 weeks to get an answer, but in the mean time a broker got me exactly what asked for in less than a week with the same bank...no BS. The manager of the bank came back with the 400k and 40 years I said I didn't want and then had the loan put on hold when she found out a broker had got me approved more quickly with her bank. We had to use a different bank in the end at a higher interest rate, because some greedy little cow wasn't getting her commission for mistreating a customer.

D3PO

goz83 wrote: »

Maybe you need to check your own maths. You are saying that payments on a 500k mortgage and payments on a 300k mortgage are minimally different (to the tune of €7 per month in your post)? Why didn't you tell me this in 2007? I could be paying €1900 a month for a mansion worth 10 million, instead of a 3 bed semi worth 200k!

I'm thinking you haven't factored in the mortgage term with those figures.



That's my opinion, you have yours.

firstly if you read my post you will see i referenced a post in the politics forum secondly the maths stack up

500k mortgage over 30 years on a tracker of ECB base plus .75% I think was the reference versus a 300k mortgage over 30 years on a current variable of 4.5% pretty much the same monthly outgoings when you factor in the MIR net reduction that somebody buying now doesnt get.

i didnt do the math on that example just stating what was posted

but as for a specific example that I can stand by I have a tracker on a €347,600 mortgage somebody borrowing €238,000 now with the same banking institution will have a €4 a month more expensive mortgage than me over the same term.

D3PO

Bigcheeze wrote: »

Didn't see the thread but did they also calculate the 50k of stamp duty that would have been paid on the 500k house ?

i doubt it. but the post was in relation to the monthly outgoing not the TCO

as a reminder the response was in relation to the following post referencing monthly outgoings and not overall TCO

Originally Posted by goz83

IF a new buyer lost their job, their mortgage would be considerably less than the mortgage for a similar property bought from say 2002-2008 and so would be far more manageable, even if one lost their job. .

goz83

forgetting tracker mortgages, as they're not available now; my mortgage, drawn down Jan 2008 at 380k. rate was 4.3 i think. if someone bought it now for 190k, what would the approx average monthly repayment be in year 1, over a 35 year term?

D3PO

goz83 wrote: »

forgetting tracker mortgages, as they're not available now; my mortgage, drawn down Jan 2008 at 380k. rate was 4.3 i think. if someone bought it now for 190k, what would the approx average monthly repayment be in year 1, over a 35 year term?

why are you forgetting them you specifically referenced 2002 - 2008 when they were available.

Originally Posted by goz83

IF a new buyer lost their job, their mortgage would be considerably less than the mortgage for a similar property bought from say 2002-2008 and so would be far more manageable, even if one lost their job. .

Do you concede this statement you made is incorrect. Now of course not everybody in that period is on a tracker but the majority are. It may be considerably less if like you they didnt have a tracker but for the majority it would not be considerably less

goz83

D3PO wrote: »

why are you forgetting them you specifically referenced 2002 - 2008 when they were available.

No. But I am asking about those who did not get the tracker and there are many who did not, myself included. I referenced from 2002, because that's when prices really started getting out of control.

D3PO

goz83 wrote: »

No. But I am asking about those who did not get the tracker and there are many who did not, myself included. I referenced from 2002, because that's when prices really started getting out of control.

like i said your statement is correct for those who didnt get a tracker BUT the majority of people did 65% i think infact.

but you didnt specify you threw out a blanket statement that was incorrect.

goz83

D3PO wrote: »

like i said your statement is correct for those who didnt get a tracker BUT the majority of people did 65% i think infact.

but you didnt specify you threw out a blanket statement that was incorrect.

Glad we cleared that up

But I don't recall you saying that any of my statement was correct. I am tired now though.

Idbatterim

Good luck with the house hunting. I think 2012 was the year to buy, but I think there will still be value out there for the next year or so if you are not looking to buy in SCD.

from what I have seen, Id tend to agree with this, im referring to the D.14 area which is where im observing, id also say buying before the Autumn was probably at their lowest, they have definetly risen, whether they will fall back remains to be seen...

Galego

D3PO wrote: »

i didnt do the math on that example just stating what was posted

but as for a specific example that I can stand by I have a tracker on a €347,600 mortgage somebody borrowing €238,000 now with the same banking institution will have a €4 a month more expensive mortgage than me over the same term.

Taking MIR off the equation as this will not last for ever (till 2017) these are my numbers.

Loan amount: 500K
Tracker Interest: 2% (BOI average tracker)
Term: 35 years
Monthly Repayment: 1,656

Loan amount: 350K
Tracker Interest: 4.5% (BOI current Variable %)
Term: 35 years
Monthly Repayment: 1,656

The two persons above would pay the same monthly amount in a difference of 150k loan.

Skr4wny

Galego wrote: »

You also have to consider that renting is not free. Someone who pays =>12k eur annual rent also has to factor that expensive.

We pay 750 a month rent which is dead money, the mortgage would be cheaper by 150-250 depending on the term.

goz83

Skr4wny wrote: »

We pay 750 a month rent which is dead money, the mortgage would be cheaper by 150-250 depending on the term.

Not with the property tax on top...but I do see your point, i'm just being a smart arse :cool: