FTB - wrong time to buy now?

fjon

I realise this is not something that has a simple answer, and nobody can know what will happen in the coming years, but I was looking for a few different thoughts, possibly from others in the same situation.

We are nearly 40, two kids, possibly looking to get a mortgage soon. Being old enough to remember what happened in the 2000s I am conflicted as to what to do. Wait a few years, pay astronomical rent, get a shorter mortgage? Or move to somewhere I would need to drive 2 hours into work every day?

Just looking for stories of what other FTBers are doing currently. Waiting it out, or buying a not ideal house to "get on the ladder"?

[EDIT] - I knew I should have used the "ladder" term! I want a house as something my family can life in, not an investment

LincolnHawk

Can't answer for you really but don't buy a house unless you can live in it long term.
'getting on the ladder' and then trading up later is a risky strategy for a family, or anyone really. If the market drops, you're trapped in negative equity.

The_Conductor

+1
Like getting married- or having children- there is no such thing as the 'perfect' time- no matter what anyone tells you.
If you are approaching this looking at property as an investment- other than somewhere to bring up your children- you're going to be disappointed, no matter what happens.
There are almost 200,000 property owners out there- living in inappropriate accommodation- because they thought they were 'getting on the property ladder' and would trade up to a 'forever-home' down the road. Well- no, they didn't- and they're now stuck.

If you're in a position to buy- make sure its somewhere you're happy to live longterm- don't view it as a stepping stone to moving somewhere else down the line. If something doesn't stack up (such as a 2 hour commute- that is unsustainable)- then that property is *wrong* for you- regardless of how many other boxes it ticks. You can have a want and a need list- your needs must always be met- after that- the wants are icing on the cake.

There is nothing wrong with renting- if you can't find a property that suits your needs- however, we have a mental hangup about renting in this country- and Revenue and the Housing Department- are intent on painting renting as a stepping stone on the road to ownership- which is alien to how its viewed anywhere else on the planet.

Plenty of people made very bad mistakes buying property- notable since 1995- and are repenting at leisure. Don't add yourself to their company.

Graham

And for a contrasting outlook.

Property prices are forecast to continue increasing for the next few years, supply is nowhere near meeting current demand, interest rates are at almost record lows and there's a FTB grant on offer.

You could wait five years, save another €XX,000 euro, pay €50k - €80k in rent while watching property prices increase 25%.

Personally I'd be buying something now that's going to suit my families needs for the next 5 - 10 years. I wouldn't be put off by the experiences of some buyers during one of the biggest global financial meltdowns in history.

Interested Observer

Graham wrote: »

And for a contrasting outlook.

Property prices are forecast to continue increasing for the next few years, supply is nowhere near meeting current demand, interest rates are at almost record lows and there's a FTB grant on offer.

You could wait five years, save another €XX,000 euro, pay €50k - €80k in rent while watching property prices increase 25%.

Personally I'd be buying something now that's going to suit my families needs for the next 5 - 10 years. I wouldn't be put off by the experiences of some buyers during one of the biggest global financial meltdowns in history.

This is where I am now. Looking for a house with my fiance, we're anticipating having kids so the house will at least have to do us for a decade or so, and we're going to buy as soon as we can now I think due to constantly rising prices.

drunkmonkey

Can you get public transport to work, do you need to drive, you'd be a long way to cork in 2hrs on the train, I'm not suggesting you move to cork but somewhere along the train line with cheaper property.

Wanderer78

Graham wrote:

Property prices are forecast to continue increasing for the next few years, supply is nowhere near meeting current demand, interest rates are at almost record lows and there's a FTB grant on offer.

I take all forecasts with a pinch of salt, nobody can accurately predict future markets, particularly housing markets. I do believe we 're in another bubble again, and nobody knows the what, when, where and how it 'll end.

I would mirror others opinions, I.e. there is no perfect time to buy, but I certainly wouldn't rush it, I also wouldn't look at it as an investment, it will be your home. We really need to ditch this idea of 'the ladder', I'd agree with English economist Kate raworth, we 've been using funny language to describe all these things, and a lot of the time they're just scams.

I wish you and your family the very best

drunkmonkey

Interested Observer wrote: »

This is where I am now. Looking for a house with my fiance, we're anticipating having kids so the house will at least have to do us for a decade or so, and we're going to buy as soon as we can now I think due to constantly rising prices.

That's what everyone thought the last time, we have a supply and public transport problem, that will be fixed but could take 10 years or more.
The rise has to stop no surer thing it's not sustainable. As a young couple with no kids I wouldn't bog yourself down just yet with a big mortgage go enjoy yourselves.

lawred2

Interested Observer wrote: »

This is where I am now. Looking for a house with my fiance, we're anticipating having kids so the house will at least have to do us for a decade or so, and we're going to buy as soon as we can now I think due to constantly rising prices.

If you're planning on kids then you'll need to think about getting on with the mortgage now.

Kids and increasing age can reduce your appeal to prospective lenders. Unless you're both on the big bucks of course.

e: I confused you with the OP who said they were nearing 40.. presume you're not.

fjon

lawred2 wrote: »

If you're planning on kids then you'll need to think about getting on with the mortgage now.

Kids and increasing age can reduce your appeal to prospective lenders. Unless you're both on the big bucks of course.

e: I confused you with the OP who said they were nearing 40.. presume you're not.

Totally agree. This is the one thing I would advise younger people - mortgage before kids, if possible. Applying for a mortgage with even one kid will seriously impact what you can get.

Wanderer78

I do agree that the op's age is a concern, you don't want to be heading into your 70's still dealing with your mortgage, but I suspect this will become the norm for our and younger generations. Will we see intergenerational mortgages?

Westwood

Like the saying 'buy now cry later' everyone is throwing themselves now at the property market in the fears they'll pay 20% more which the ESRI have predicted prices will continue to rise in the coming years, which is creating panic and everyone is piling in due to fear, but the 2nd hand housing vendors are staying put cause they know they'll get another 20% down the road so creates a severe shortage to buy and the renters have to stay put creating a shortage in that sector too. I've been watching closely new builds on the comutter Dublin towns and seeing price increases of 100k within 6 months (madness). In my opinion now is not the right time to buy. The construction wheel will eventually catch up with supply the won't know when to stop and we'll reach over supply levels by 202? And the market should correct itself. Don't buy a shoe box or a house in the middle of nowhere just cause you can't afford one in town

Villa05

To the OP
My own feeling on this is that yes we are in a bubble, however there is plenty of air to get into that bubble yet mainly because of pent up demand and complete lack of action to correct the demand/supply imbalance.

In fact one could argue that polices pursued by those in control have suppressed demand in a deliberate attempt to raise prices

We're I in your position I'd reluctantly Buy, however I'd give considerable thought to 're locating if you are in the Dublin or Galway city catchment area.

fjon

Villa05 wrote: »

To the OP
My own feeling on this is that yes we are in a bubble, however there is plenty of air to get into that bubble yet mainly because of pent up demand and complete lack of action to correct the demand/supply imbalance.

In fact one could argue that polices pursued by those in control have suppressed demand in a deliberate attempt to raise prices.

Could you explain that a bit more?

The_Conductor

I suspect he meant to say suppressed supply- rather than suppressed demand.......

One way or the other- supply is being ramped up- however, its not really where its needed- nor is it the type of units that are critically needed. E.g. we need vast numbers of 1-2-3 bed apartments in Dublin and Cork city centres- we don't need all the agricultural land in Dublin, Meath, Kildare and Wicklow- to be rezoned residential- what the hell good is that- if it'll take you 3 hours to get into Dublin. As for Dublin City Council putting the quays down to one lane and suggesting anyone visiting Dublin should use pubic transport- thats nice- however, it would be helpful if the public transport was provided- before they make it hell on earth for people to get in or out of the city........

Sarn

Speaking for ourselves we’ve been looking to buy in Dublin since the summer and are of a similar age to the op, sans children.

There are very few decent properties coming up in the areas that we’re interested in and there won’t be anything built any time soon. Those that are built are in the 800k to 1million range. This has caused a few bidding wars on the decent properties. The thing is, for several properties we’ve been down to the last two buyers. But people just want to keep bidding. In each case we could easily have added another large sum to the bid but felt it was just getting ridiculous and pulled out. We’re now starting to think that we might have to go a bit ridiculous ourselves as the concern is that we will have to pay an even larger premium next year to get the same thing. We would still easily be able to afford it and they would be houses that we would live in for the next 20 years.

I would agree that prices are getting bubbly. However, in the areas that we’re looking at I can still see them going up over the next couple of years, even if only marginally, given the inability to build any sizeable new developments.

The other thing to consider is that the mortgage term you can take when older means that the monthly repayments will be a lot higher than for a 35 year mortgage. The advantage of course is that you will pay less interest in the long run. But the ability to get the mortgage you want, especially when children are added in, will become more and more difficult.

Sleeper12

fjon wrote:

Just looking for stories of what other FTBers are doing currently. Waiting it out, or buying a not ideal house to "get on the ladder"?

What we you hope to wait out?

Prices will continue to climb for 3 years at least as demand by far outstrip supply. Even if supply catches up its unlikely to be in 3 years & even then I think the best you can hope for is for price to tapper off.

Maybe Trump or Brexit will cause another resection but that's the crystal by gazing.

drunkmonkey

Lot of we need to do it before the kids come as we won’t get a mortgage. Prices rising 20% a year, panic buying at its finest.
Cost in 3 kids and 1 parent working or Creche fees if 2 working, can you still afford the house without the kids living on water and dressing in bin liners.
You can absolutely get a mortgage with kids but it’ll be an amount you can afford.
Don’t over stretch yourselves there’s people still not the better of the last bubble.

catrionanic

If you are looking to buy a house that you and your family will live in for a large number of years, then I don’t think you need to worry about what the value is going to do in the short to medium term.... because you’re not going to be in the moving market anyway.

Interested Observer

catrionanic wrote: »

If you are looking to buy a house that you and your family will live in for a large number of years, then I don’t think you need to worry about what the value is going to do in the short to medium term.... because you’re not going to be in the moving market anyway.

You still will want to buy it for as little as possible. Once you do that, then yes I agree.

Wesser

FTB here.
I'm jumping in.

I have really thought alot about these issues..
Those whom I have discussed it with have advised me: if you want to.buy a house now at this time in your life and you like the house and it suits your needs and you can afford it then go for it.

I don't think there is any perfect time to buy a house in ireland anymore.

LincolnHawk

I'm all for people buying their house now if they have the money, but I implore you to assume you'll be living there forever. Probably not the case but a good thought experiment to carry out before deciding if you want to buy it

LirW

drunkmonkey wrote: »

Lot of we need to do it before the kids come as we won’t get a mortgage. Prices rising 20% a year, panic buying at its finest.
Cost in 3 kids and 1 parent working or Creche fees if 2 working, can you still afford the house without the kids living on water and dressing in bin liners.
You can absolutely get a mortgage with kids but it’ll be an amount you can afford.
Don’t over stretch yourselves there’s people still not the better of the last bubble.

If you're earning the median wage and have 3 children with a stay-at home parent the banks are not going to touch you with a pole. You practically have 4 dependents. You need to earn for two people on good wage to afford this as a family.
Same goes with 2 working parents and 3 kids, the banks are going to deduct a huge chunk off your AIP.
If you are a young family on lower to average income you won't be able to afford anywhere near the city yet you won't get a council house either because there are quadrillion people on the list before you.
We've been there ourselves and it was an absolute nightmare.

mirrorwall14

We are in secure jobs. One baby. We jumped last year. We made sure the house and location is somewhere we can be happy for the rest of our lives. One year of mortgage payments down, we are increasing our monthly payment as the interest rates dropped and we're happy. Loving the house, loving the feeling that its going to be ours one day. We did compromise, slightly on location and slightly on lack of driveway but like a poster said earlier-we had a wants vs needs. We hit all our needs and some of our wants.

Mortgage is significantly less than the rent for a similar 3 bed property in the area and slightly less than the very reasonable rent we were paying due to luck with our landlord (we were a good 500e below the going rate)

you2008

Read the news that google is building their google town in town. Youcan urge they had millions to spend on whatever they want. But to be top one Co in the world. Google is not fool either. Google might have done the analysis for you.

Plus -Those extra staffs need to find somewhere to stay as well. The market wnt be quiet any soon.

Zoney

No easy answers if you're in Dublin. Outside that, if you can find a reasonable location for the area standard, commute, access to other jobs, then after that just get the smallest house you can get by with, esp if neighbours have extended and you can later. Most Irish estate 4/5 bedroom houses are the same as the three bed with garage conversion or side/back extension, but massive price difference appearing.

Even 20% increase or decrease isn't as drastic if you are starting by looking at 150k houses rather than 300k, and the spare disposable income goes a long way to improving a property as time goes on, or just your quality of life in other areas, holidays etc. Freer to up and leave, sell up and move elsewhere in Ireland or abroad too.

Victor

fjon wrote: »

We are nearly 40, two kids

Are there likely to be more children? If not, buying doesn't mean it has to be a ladder. Buy what you need.

If yes, you should be buying for the family size you expect.

In the short-term, prices are likely to continue rising. Medium-term, who knows. Long-term, prices are likely to continue rising.

johnnyskeleton

The_Conductor wrote: »

If you're in a position to buy- make sure its somewhere you're happy to live longterm- don't view it as a stepping stone to moving somewhere else down the line. If something doesn't stack up (such as a 2 hour commute- that is unsustainable)- then that property is *wrong* for you- regardless of how many other boxes it ticks. You can have a want and a need list- your needs must always be met- after that- the wants are icing on the cake.

There is nothing wrong with renting- if you can't find a property that suits your needs- however, we have a mental hangup about renting in this country- and Revenue and the Housing Department- are intent on painting renting as a stepping stone on the road to ownership- which is alien to how its viewed anywhere else on the planet.

Plenty of people made very bad mistakes buying property- notable since 1995- and are repenting at leisure. Don't add yourself to their company.

While this is all correct and good advice, Id maybe modify it slightly and say that it depends on the figures and your own circumstances. If you see a property that is not ideal long term, but its for sale at a reasonable price, you can comfortably afford it, its well located and it works out cheaper than renting, I dont see the harm in buying.

If the price goes down, sure you take a hit, but this is offset by the money you save on rent. If you have a large deposit its probably earning little to no interest so why not use it to reduce your monthly accommodation bill? There is risk but sure life is risk!