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Is buying a home still worth it if you only plan to stay in it for 3 years?

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  • 07-05-2017 10:28pm
    #1
    regi3457
    Registered Users Posts: 253 ✭✭


    My wife and I are torn between carrying on renting or buying a house. We saw one we like and have about 25% of the money down for the deposit. We also think we can comfortably pay in around 50k - 70k into the house over the next 3 years over and above our repayments. We then might sell the house and move from Ireland. Is there any reason why this might be a bad idea or are house purchases only a good idea if you plan to own them for more than 3 years? When we look at rental prices and the quality of rental accomodation we are very tempted to buy our own place but if it means we will lose money down the line maybe we will hold off. Any advice for us would be appreciated. thank you


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    #2
    nsa0bupkd3948x
    Closed Accounts Posts: 783 ✭✭✭nsa0bupkd3948x


    It could go either way. But if the next crash happens before you sell up you could end up stuck with the house for years in negative equity.


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    #3
    amcalester
    Closed Accounts Posts: 4,121 ✭✭✭amcalester


    I'm in similar bind to you.

    Need to move out of my rented accommodation in South County Dublin by August and contemplating buying an apartment for my gf and I.

    Like you we'd only be in it for 3 - 4 years before maybe moving out of Dublin.

    Just not sure if for that period renting or buying is better.

    2 sets of solicitors fee, auctioneers fees when selling plus management fees vs the increased cost of rent.


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    #4
    wordofwarning
    Closed Accounts Posts: 697 ✭✭✭wordofwarning


    My suggestion is look up the economists Schiller's opinion on home ownership. He has an excellent opinion on home ownership. He believes you should not buy a house, if you don't want to live there for 10 years or more

    http://theweek.com/speedreads/563510/economist-robert-shiller-buying-house-consumption-choice-not-investment


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    #5
    Villa05
    Registered Users Posts: 4,618 ✭✭✭Villa05


    If it's Dublin, Galway or Cork it would be safer to avoid buying. Prices are definitely in bubble territory with significant external risks. Better to save for the move in 3 years time.


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    #6
    Peregrinus
    Registered Users Posts: 26,511 ✭✭✭✭Peregrinus


    The frictional costs of buying and selling houses are high - estate agents fees, solicitors fees, stamp duty, etc. Plus, of course, the interest cost of borrowing part of the house price for the period of ownership. Even to break even on the deal, you're banking on the house value appreciating by enough to cover all those costs.

    Nobody can tell you whether the house price will appreciate by that much in three years, but it's at least possible that it won't.


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