Apartment vs. House discussion

thierry14

dave29ken wrote: »

Thanks for this post, really enjoyed reading through it. Agree with your take on how the location can really benefit. As far as taking a long term view, the right apartment in the right location is somewhere i could imagine us settling in for 10/15 years if not longer i would say, but kids are the unknown for us I suppose and how that may change our thinking (We plan to have 1). Personally I wouldn't place a huge emphasis on having a back garden if good communal green areas or parks are within easy walking distance. I'm glad to hear that you are seeing the lifestyle benefits of your decision, while having a family life.

A big part of this thought process for me is that i have a lot of friends and colleague that were enticed into buying homes in disconnected locations during the boom. They hate where they are and as with many apartment owners, are also stuck in negative equity with no hope of trading currently.

I'm not adverse to renting (currently renting same apartment for last 4 years in super location, love it) but dont want to get to an age where obtaining a first time mortgage is going to be difficult.

At your age it makes sense to buy now

Wait a few more years when your over 40 and it's going to be difficult getting any mortgage over 20 years

Plus it's better to get a mortgage when both of you are working and kids come along

Crash might happen who knows, but if your approaching 40 that's not a good thing as credit will dry up and you could be getting on a bit once out of the crash

If you were 25 I would say wait to buy

Dublin is pretty small, why not something around D15? Northside of Dublin

Lovely houses around there brand new for under 300k with good specs

hytrogen

Samuel T. Cogley wrote:

Paying for a service - Okay but you're paying twice or more the going rate for the same property on a mortgage and you have to keep doing that as long as you need a place to live. Most of us don't want to be paying (or can't pay) upwards of 3 or 4 grand a month for a one bed come 2050. You have no doubt structured your pension better than I.

Yeah fair enough most landlord out there want to break even at the very least on the loans they took out to buy a rental property, hence as you say, most rents are nearly double the price they should be, as in matching a mortgage payment unfortunately. Equally with the annual maintenance costs etc. Some are just cold hearted blood drawing heathens that really should be taken out of the market (shot) and buried quietly..

Samuel T. Cogley wrote:

Rights though - you really don't. Even with the increased Part IV tenures the LL can, at any time, move back into the property or sell it out from under you. That's without the issue of vast numbers of BTL properties in arrears and the potential for a reciever to rock up at any money.

Yeah I suppose I was a bit vague by what I meant, it was mostly aimed at the rpz caps which has really upset the market overall in a very cocked fashion. Good for tenants pockets and piece of mind, bad for landlord relations.
I still think if I was starting out again post graduation in these times I'd plan to rent for about 10years while in a decent job before I'd go near purchasing a property with the way things are so volitile and just weather it out, then look to buy a granny's old gaf when I made middle management

Nika Bolokov

Starter home isn't such a horrible term. As you progress in your career you earn more than you did at the start so you buy a bigger house. This practice has been around for decades and having a goal to do so and so using that term shouldn't be such a big deal.

Usually I find people who object to the term are a) paranoid about property prices or b) bought a house in a field off the M50 with no transport and hate people implying that it's not a great house.

If it's a big apartment OP and the location is great then go for it. Spending hours every day on the M50 or in the car is not worth it. The phrase 'apartments don't hold their value' has no statistical foundation when you compare like for like and is far better than buying a house out in a West Dublin lego land development with crap transport also with no outside space.

Whenever someone says there from SCD and there just over the moon with their new tiny house in what was once Tallaght but is now renamed by an estate agent think pinnoccio

The_Conductor

Nika Bolokov - I assure you that the majority of people who have issues with the term 'starter home' did not buy a shoebox in the arse-end of nowhere- as you're implying.

When property prices are increasing by almost 10% year-on-year- but wages aren't even keeping pace with consumer price inflation (2.1% currently according to the CSO)- and there is a large cohort of people who bought in the last bubble and are still in negative equity- you can rapidly see how and why there is such scepticism about the whole 'starter home' and 'forever home' terminology. Wholly aside from this- keep in mind- we don't build family homes such as were built in the 40s/50s/60s/70s- hell even the bankrupt 80s....... We aren't building them. And- people are very location conscious- you rapidly see people can't afford to live where they want to- and a significant portion of our pre-existing 'family housing' stock- is owned by older people whose children have flown the nest. Add the incentives being offered to first-time-buyers to buy new builds- and you can see that the deck is stacked against those who imagine they'll buy a 'starter home' and upgrade to a 'forever home' down the road.

There are hundreds of thousands of Irish living in accommodation which does not meet local authority housing needs qualifications (740,000 according to the CSO stats released a few weeks back- obviously this includes children etc- its not a measure of housing units). The standard not being adhered to is property size and bedrooms per family size units- i.e. you have families living in properties with too few bedrooms for their needs- and most probably a lot else thats not ideal besides.

Anyhow- I'm sure I'm not telling you anything you're not familiar with. If you'd like a good read- visit the CSO website- they have very good housing statistics published- it was the first data from the Census that they released, as they knew it was of such concern.

amtc

I bought where I'm from...which happens to be in d15. I don't have children but love the illusion of gardens (actually all I own is the patio). It's 83 sq metres. I pretty much use spare room as dressing room or overnight for a friend who needs to get red eye flights which are not accessible from her house in the country. Wouldn't change it for the world.

My mate lives in Dublin City Centre and had three children in three years. In a two bedroom apartment. Both on good salaries but neither drive. She has inherited house but miles away. It's rented out but below market rent. They're seriously considering board ing school

The_Conductor

amtc wrote: »

I bought where I'm from...which happens to be in d15. I don't have children but love the illusion of gardens (actually all I own is the patio). It's 83 sq metres. I pretty much use spare room as dressing room or overnight for a friend who needs to get red eye flights which are not accessible from her house in the country. Wouldn't change it for the world.

My mate lives in Dublin City Centre and had three children in three years. In a two bedroom apartment. Both on good salaries but neither drive. She has inherited house but miles away. It's rented out but below market rent. They're seriously considering board ing school

In your friends case- if they have no intention of ever living in the property they inherited- are letting it at below market value and its in an RPZ- there is no rational reason to keep the property. Sell it. Either invest the proceeds locally for them- or buy something that suits their family needs. Living in a 2 bed apartment- does not for most people equate with- lets the ship the kids off to boarding school, then we don't have to worry about bedrooms for them......... Seems to be someone taking very weird choices/decisions in my opinion- esp. as you say they're in quite reasonable jobs and definitely have the means to move, if they so choose to do so.

ThisRegard

Nika Bolokov wrote: »

.........b) bought a house in a field off the M50 with no transport and hate people implying that it's not a great house.

.........is far better than buying a house out in a West Dublin lego land development with crap transport also with no outside space.

Whenever someone says there from SCD and there just over the moon with their new tiny house in what was once Tallaght but is now renamed by an estate agent think pinnoccio

Have you ever been outside of the M50? And they either bought a house in a field, or bought a house with no outside space, it can't be both.

johnnyskeleton

The_Conductor wrote: »

Forget about a 'starter home', a 'forever home' or any other such manipulative term- can you see yourself living in a property long term- or is it a short term measure? If its a short term measure- don't buy- there is a strong and growing liklihood that your 'starter home' may end up as a 'forever home' and you may end up unhappier and unhappier- that you bought something somewhere- purely for the sake of buying something somewhere- and not because you actually wanted to live there.

While this may be good advice as a general rule, it isn't always so.

A person will only end up in a starter home forever if they cannot sell it. However, if they don't buy for fear of this happening and rent instead, they may spend the rest of their lives renting.

So let's say person X has two options - to buy an apartment or keeping renting.

To Buy
The risk in buying is that the property will go down in value to such an extent that the bank won't let them sell the property or they will have to take on a residual loan such that buying a property in future is unlikely.

The potential benefit is that it will go up in value and they will then have a larger deposit if they decide to move on.

A guarded, but more realistic scenario is that the property will stay more or less the same price and, between the deposit, money paid off the principle and the money they save on rent, less solicitor's fees, stamp duty etc, they could break even or come out slightly ahead if they were to sell after 5 years.

To Rent
The risk is that rents keep going up, making it ever more unaffordable. At the same time, prices could continue to go up, making the chances of purchasing in the future even more remote as rent swallows up more and more of a person's savings.

The potential benefit is that rents and/or prices go down, such that the cost of renting is cheaper than buying so they are saving on both and can afford a better house.

The most realistic scenario, in my view, is that rents can't go up much more, at least not without massive inflation, but with landlords pulling out it competition to get a tenancy is going to increase massively.

Each person must decide for themselves what they think is likely to happen. They can then hope for the best but prepare for the worst.

For example, let's say person X is renting for €1,500 a month, has a 100k deposit and ultimately wants to buy a house but doesn't need it in the short-medium term. If he buys an apartment for €200k, the mortgage interest will be approximately €4,000 per year, plus management fees of say €2,000. That's €500 a month, a grand less per month than what he is renting for. And the interest on the 100k might be less than a grand a year after DIRT.

Let's say that the stamp duty, solicitors fees, repairs and furniture etc cost €6,000 upfront as the one off cost of buying. Over 3 years that's €2,000 per year.

So if over 3 years the property goes down by €9,000 per year, he's still in a break even position.

Lycoge

@ Nika Bolokov, as someone from the SD area who moved, your sweeping comments have struck a nerve.

Nika Bolokov wrote:

As you progress in your career you earn more than you did at the start so you buy a bigger house.

It is a risk though. A change in circumstances (economy / personal / health/ financial) is all that is needed to prevent you buying the next home.. it would be prudent when investing such a significant amount of money and making a 30 year long financial commitment to question whether the starter home / first house would suit your needs if things went wrong. The risk might work out in the end, but that needs to be taken into consideration before taking it.

Nika Bolokov wrote:

Usually I find people who object to the term are a) paranoid about property prices or b) bought a house in a field off the M50 with no transport and hate people implying that it's not a great house.

Who doesnt hate anyone implying their house isnt a great house? Everywhere off the m50, other than the OP'S mentioned areas (which are also off the m50), is fields? No Luas / busses / easy access to the m50 anywhere else?

Nika Bolokov wrote:

Spending hours every day on the M50 or in the car is not worth it. The phrase 'apartments don't hold their value' has no statistical foundation when you compare like for like and is far better than buying a house out in a West Dublin lego land development with crap transport also with no outside space.

Assuming the OP works close to the areas they mentioned and works in those areas for decades to come, then yes they will save themselves a commute by staying in those areas.

But living in those areas doesn't guarantee they won't spend "hours" on the m50. Traffic north bound on the m50 from carrickmines onwards is substantial if they need to travel in that direction. South to city centre on n11 or West to city centre have same travel times in peak traffic. In my case 40-50 minutes to Dun Laoghaire and visa versa in peak times isn't the equivalent of "hours on the m50".

No outside space outside? Some lovely parks out this way, replace Cabinteely park nicely. Dont have the seaside nearby though and nothing can replace DL pier but it's worth a drive out on a Sunday all the same

Nika Bolokov wrote:

Whenever someone says there from SCD and there just over the moon with their new tiny house in what was once Tallaght but is now renamed by an estate agent think pinnoccio

I have so many questions about this piece....No large houses outside of the OP'S stated areas no? All tiny? None that are bigger than the average house in SD? None of the areas outside of OP'S areas have their own names / villages / history, they're all just an extention of Tallaght? Yes the ideal for those of us from SD would be to afford a house where we grew up but that can't happen for everyone. It's not all about the area you grew up in either. It's not as simple as saying, just buy in SD because everywhere else is crap (paraphrasing here, but close enough to the quoted comments). It's about identifying what you a) can afford to pay, b) want out of a house c) want in the area you buy in and then finding something that ticks those boxes that you're happy with... Before you part with 100,000s over the next 30 years.

All of this is mute of course if the OP has heart 100% set on their original areas and isn't open to exploring the "wild west" fields off the m50. In which case, for them, it does come down to whatever house/ apartment they chose to buy after weighing up the pros and cons of those 2 options. It just happens that when we were faced with only those 2 options, we moved a couple of exits up the m50.

No pinnochio here.

Paulw

I bought my apartment when I was single. I bought a top floor apt, in a decent area, but a very new area.

It has a nice large green area just outside the front door, and a playground in our courtyard.

Since I bought, I met someone, got married and we have a 3 yr old child now. Problems? Not really. The stairs were a little awkward, but nothing that you don't get used to. Problems with space? None. It's great to go out in to the park with the little one, or else around to the playground. She loves walking around the park. She likes watching others play football in the park, or watching people walking their dogs. She can also run around and play while we relax in the park.

Is it perfect and ideal?? No. Nothing in life is, especially when you buy. But, we are more than happy here and have no plan to move any time soon.

I bought it as my first step on the ladder. But, I was smart. I bought a 3 bed apartment, that was within my budget. Yes, I've a long mortgage, but my mortgage isn't crippling me. Lots of transport, shops, facilities, etc all close by. Not everyone starts with a little poke in the wall.

What would I house bring me? The hassle of having to cut the grass and maintain the garden. Other than that, it wouldn't be a whole lot different.

Murrisk

Pkiernan wrote: »

A nasty dwelling in a nice area ALWAYS beats a nice dwelling in a nasty area.
Always.

There's very few truly nasty areas in Dublin. I lived in a lovely, large house with a decent back garden in a slightly shabby area of the inner suburbs for five years. Give me that over a shoebox in Ballsbridge or Ranelagh any day. People can be mighty snobby towards perfectly decent areas of the city.

Eire Go Brach

Nika Bolokov wrote: »

Starter home isn't such a horrible term. As you progress in your career you earn more than you did at the start so you buy a bigger house. This practice has been around for decades and having a goal to do so and so using that term shouldn't be such a big deal.

Usually I find people who object to the term are a) paranoid about property prices or b) bought a house in a field off the M50 with no transport and hate people implying that it's not a great house.

If it's a big apartment OP and the location is great then go for it. Spending hours every day on the M50 or in the car is not worth it. The phrase 'apartments don't hold their value' has no statistical foundation when you compare like for like and is far better than buying a house

Paranoid? It's happened to me and lots of people. We done all you said. But still in negative equity. Earn good money and can't afford to get out.

Starter house, It's just another marketing term.
This has been a good thread all the same. It's show that people value different things over others. Where I live we don't even need a car. We have everything that close. Still I would love a house for the kids.