Is now a bad time to buy?

lawred2

cruizer101 wrote: »

A lot of it comes down to where you are in life also, if you are young enough and just kind of considering it there might be no harm is waiting a bit to see what might happen, during the last boom a lot of young people were encouraged to get on the property ladder as soon as possible which was bad advice.
But if you older and planning starting family in near future at all, may as well buy when you find a house you like. So what if prices go down you should only be buying a house you would be happy to live in for the forseeable future anyway so once you can manage they payments the value doesn't really matter.
A house is much more than an investment it is your home.

It wasn't bad advice

Calling it bad advice now is just 20:20 hindsight

gct

Everyone will go through rough patches as a homeowner what with interest rates changing, negative equity etc. but the upside is in 25 years no more mortgage and no more rent. Do You really want to be a pensioner still struggling to pay ever increasing rents on a meagre pension?

smurgen

SNNUS wrote: »

smurgen wrote: »

When people start to talk with such certainty you know it's time to wait and see rather than make a foolish move.

You are the one talking with such certainty surely?

"Brexit won't happen" that's the certainty i'm quoting.

smurgen

gct wrote: »

Everyone will go through rough patches as a homeowner what with interest rates changing, negative equity etc. but the upside is in 25 years no more mortgage and no more rent. Do You really want to be a pensioner still struggling to pay ever increasing rents on a meagre pension?

You don't own a house until it's fully paid.could be old with a morgage and little or no income facing repossesion.

GingerLily

smurgen wrote: »

But if you but at the wrong time you will spend years paying off.excess mortgage interest before making a dent in the principle

Not if your mortgage is similar to rent anyway - my three bed semi house costs me only 100e more than my 1bed apartment to rent - there's a cost to not buying too!

smurgen

awec wrote: »

The thing people never seem to grasp is the reason property is cheap during a "crash" is because it's really difficult to buy. Ultimately the price of property is determined by the availability of buyers.

Also people seem to be predicting the extremes. What we saw in 2007 was absolutely exceptional, with huge percentage drops in property prices. Every time the media talk about a slow down, or a drop in prices, people seem to think we'll be seeing 2007 all over again.

Much more likely, IMO, is that supply eventually catches up and we see prices level off and very gradually start to come down. But this is years away.

What are you talking about? The set of circumstances we are facing now is exceptional.when was the last brexit?

smurgen

GingerLily wrote: »

smurgen wrote: »

But if you but at the wrong time you will spend years paying off.excess mortgage interest before making a dent in the principle

Not if your mortgage is similar to rent anyway - my three bed semi house costs me only 100e more than my 1bed apartment to rent - there's a cost to not buying too!

If you lose your job you can move when renting though.i suppose now you can just post keys back to the bank.

GingerLily

smurgen wrote: »

If you lose your job you can move when renting though.i suppose now you can just post keys back to the bank.

And where would I live? I have more rights as a mortgage owner if I try engage with that bank then I would as a renter.

And I can rent out the two spare rooms - 14k a year tax free, that would cover most of the mortgage.

Edit to add - it's not an ideal situation but when is losing your job ever easy?

smurgen

GingerLily wrote: »

smurgen wrote: »

If you lose your job you can move when renting though.i suppose now you can just post keys back to the bank.

And where would I live? I have more rights as a mortgage owner if I try engage with that bank then I would as a renter.

And I can rent out the two spare rooms - 14k a year tax free, that would cover most of the mortgage.

Edit to add - it's not an ideal situation but when is losing your job ever easy?

If the economy collapses you won't have demand on your rental property.you'll ne paying that mortage alone.

Jet Black

Another question you have to ask is where are the properties you are going to buy if a recession hits? The last one wiped out all the buy to let, speculators and new builds. Over the last ten years most bought a home to live in so they won't be getting kicked out and wont be able to sell. Theres sweet FA happening with new builds and if a recession hits that will be zero. Considering the lack of rental properties now, which will only get lower each year, they won't be getting sold either.

Mike Hoch

There is no viable reason that house prices will dramatically fall at any time soon. We will reach a stage where they will plateau. More new homes built = the plateauing or slight decline in the value of existing homes. It has started to happen already, and I'd imagine it will become more obvious in the next 18 months to 2 years. Brexit will have zero negative impact on the Irish economy trade wise.

There is no impending economic crash. It's a baseless conspiracy theory peddled by Gemma O'Doherty, Ruth Coppinger, and various other economic illiterates from the moan and whinge parties, as without an economic crisis or a housing crisis these snake oil merchants have no pitch to sell. Ireland has close to ten years of backlogged construction to initiate, and it has only picked up a steady pace since last year. There will be a building boom, but a within our means building boom. As long as the 3.5 income to lending rule is kept there is no reason to see an explosion in house prices.

GingerLily

smurgen wrote: »

If the economy collapses you won't have demand on your rental property.you'll ne paying that mortage alone.

If I lose my job and there's a collapse I'm screwed either way - can you explain why renting would be better for me?

smurgen

Mike Hoch wrote: »

There is no viable reason that house prices will dramatically fall at any time soon. We will reach a stage where they will plateau. More new homes built = the plateauing or slight decline in the value of existing homes. It has started to happen already, and I'd imagine it will become more obvious in the next 18 months to 2 years. Brexit will have zero negative impact on the Irish economy trade wise.

There is no impending economic crash. It's a baseless conspiracy theory peddled by Gemma O'Doherty, Ruth Coppinger, and various other economic illiterates from the moan and whinge parties, as without an economic crisis or a housing crisis these snake oil merchants have no pitch to sell. Ireland has close to ten years of backlogged construction to initiate, and it has only picked up a steady pace since last year. There will be a building boom, but a within our means building boom. As long as the 3.5 income to lending rule is kept there is no reason to see an explosion in house prices.

Head of the Federal reserve gave a slowdown warning last week as did the head of the Bundesbank.Bank of England raising interest rates today and equity markets rolling back.Ireland is an exposed economy and we are very dependant on only a few companies and the risks are high. That's without even going into talks of brexit,trade wars or supply increases. https://www.irishtimes.com/business/economy/ireland-s-reliance-on-five-huge-multinationals-is-a-threat-to-the-economy-1.3582410?mode=amp

awec

smurgen wrote: »

If the economy collapses you won't have demand on your rental property.you'll ne paying that mortage alone.

If the economy collapses there will be much bigger issues than her mortgage.

smurgen

awec wrote: »

smurgen wrote: »

If the economy collapses you won't have demand on your rental property.you'll ne paying that mortage alone.

If the economy collapses there will be much bigger issues than her mortgage.

Not for her personally though.

Beta Ray Bill

RisingDamp wrote: »

What are peoples thoughts on the market stability? Is it crazy to buy now when the value of the property could be flattened by 2020?

Hi OP

Lots of people talking on here about The Market and Brexit

Ultimately it's down to you whether you think it's a good time to buy or not.

If you are living at home and everything is going ok with the folks, you've no kids or family and you're happy to keep saving, then now would not be a good time to buy for you.
Regardless of whether the prices go up or down you'll still be able to keep saving and saving, the prices will come down at some point but technically, that could be 10 years from now.

If you are renting and have just manged to save enough for a deposit, and you have a family (kids) and a good job and want the security of your own house and you plan to live in this house for the foreseeable future, then now would be a good time to buy. As having security for your family out weighs the hassle of renting (You can't put a price on hassle)

Totally depends on your situation.

LuckyLloyd

awec wrote: »

The thing people never seem to grasp is the reason property is cheap during a "crash" is because it's really difficult to buy. Ultimately the price of property is determined by the availability of buyers.

Also people seem to be predicting the extremes. What we saw in 2007 was absolutely exceptional, with huge percentage drops in property prices. Every time the media talk about a slow down, or a drop in prices, people seem to think we'll be seeing 2007 all over again.

Much more likely, IMO, is that supply eventually catches up and we see prices level off and very gradually start to come down. But this is years away.

I think the issue is Brexit and Nationalist economic game playing by the States and China might force a negative jobs reaction that affects Ireland square in the jaw. In that scenario:

a) demand will significantly deteriorate
b) someone buying now may be on the hook for a mortgage in a declining market while out of work themselves or taking employment at less than their current salary

The fact of the property market itself don't necessarily matter in such a context. It won't be a 'property bubble', but prices will be tumbling all the same. You could lock yourself in at a bad price with no flexibility to up sticks and move when you need it the most.

The other side as pointed out in this thread is of course that you have to live somewhere and if you can afford the price of something that fits your needs long term go on ahead. I think the reality is most buyers are working off the min deposit and the max borrowings available compared to their income so those people are - by default - stretching themselves.

If you held a strong deposit relative to what you wanted to buy and were borrowing less than the max for something that you really like, go for it. But in that scenario you are particularly primed to benefit from a drop off in prices. Typically that's not the case though.

oceanman

awec wrote: »

The thing people never seem to grasp is the reason property is cheap during a "crash" is because it's really difficult to buy. Ultimately the price of property is determined by the availability of buyers.

Also people seem to be predicting the extremes. What we saw in 2007 was absolutely exceptional, with huge percentage drops in property prices. Every time the media talk about a slow down, or a drop in prices, people seem to think we'll be seeing 2007 all over again.

Much more likely, IMO, is that supply eventually catches up and we see prices level off and very gradually start to come down. But this is years away.

a soft landing!

LuckyLloyd

Mike Hoch wrote: »

There is no viable reason that house prices will dramatically fall at any time soon. We will reach a stage where they will plateau. More new homes built = the plateauing or slight decline in the value of existing homes. It has started to happen already, and I'd imagine it will become more obvious in the next 18 months to 2 years. Brexit will have zero negative impact on the Irish economy trade wise.

There is no impending economic crash. It's a baseless conspiracy theory peddled by Gemma O'Doherty, Ruth Coppinger, and various other economic illiterates from the moan and whinge parties, as without an economic crisis or a housing crisis these snake oil merchants have no pitch to sell. Ireland has close to ten years of backlogged construction to initiate, and it has only picked up a steady pace since last year. There will be a building boom, but a within our means building boom. As long as the 3.5 income to lending rule is kept there is no reason to see an explosion in house prices.

This is the type of bullish post that might be oft quoted in three year's time!

The Student

LuckyLloyd wrote: »

I think the issue is Brexit and Nationalist economic game playing by the States and China might force a negative jobs reaction that affects Ireland square in the jaw. In that scenario:

a) demand will significantly deteriorate
b) someone buying now may be on the hook for a mortgage in a declining market while out of work themselves or taking employment at less than their current salary

The fact of the property market itself don't necessarily matter in such a context. It won't be a 'property bubble', but prices will be tumbling all the same. You could lock yourself in at a bad price with no flexibility to up sticks and move when you need it the most.

The other side as pointed out in this thread is of course that you have to live somewhere and if you can afford the price of something that fits your needs long term go on ahead. I think the reality is most buyers are working off the min deposit and the max borrowings available compared to their income so those people are - by default - stretching themselves.

If you held a strong deposit relative to what you wanted to buy and were borrowing less than the max for something that you really like, go for it. But in that scenario you are particularly primed to benefit from a drop off in prices. Typically that's not the case though.

I am not sure property prices will "tumble". The last bubble we had impacted on the banks because they did not have the capital reserves to continue operating.

With the new lending criteria and the fact that the European Central bank is monitoring what all banks are doing will result in the situation that the same € is not being loaned out by multiple banks (as what happened in the crash).

As a result of the crash banks had to "clean up" their balance sheets and non performing loans which is why the loans are being sold to Vulture funds (a fresh injection of capital to the banks).

My own view is that prices will stabilize with additional supply coming on board, if people do go into negative equity assuming they are paying their mortgage then there is no issue. If they cant afford the full mortgage then the banks (with the capital reserves they now have) will extend the life of the mortgage until the mortgage payer's situation improves.

I can't see another property crash like the last one. This however is a personal opinion but the current property and financial sector are far removed from the one that existed up to 2008.

awec

Yes, but the misconception is if prices come down that people who wait will be picking up these houses on the cheap. If the market crashes like that (with widespread job losses) buying is going to be extremely difficult. If it wasn't, prices wouldn't come down.

The people waiting could lose their jobs (job losses have knock on effects). Banks will invariably tighten their belts and getting a mortgage will be difficult. People approved for a 300k mortgage today might struggle to get approval for half that. There was no mad queues for cheap houses after the last crash.

Which is why when people say if you're buying your long term home then it's not really accurate to say it's a bad time, because you may not get to buy at all in the near-to-medium future if the doomsday scenario arises, and if you have a family this is obviously a big issue.

On the other hand, if you are buying a short term home it makes no sense. These are the people who had the biggest issues last time, they ended up being in properties that no longer suited their needs. Likewise if you are buying for investment it makes less sense.

smurgen

I genuinely feel like estate agents etc post here to quash any negative talk.massive concerns are dismissed at a whim.

Idbatterim

to me, one large factor would be, are you currently being done on rent? if you are living at home and saving, or have a place with reasonable rent, waiting might be a worthwhile option. If you are being fleeced with rent, it probably would push me to buy, sooner rather than later. Also all these people waiting for it to crash and then get a mortgage, no problem with that plan, but you'd want to be sure the bank will lend to you in that event, i.e. you will need a fair whack saved!

GingerLily

smurgen wrote: »

I genuinely feel like estate agents etc post here to quash any negative talk.massive concerns are dismissed at a whim.

I am not an estate agent, I'm just someone who bought a house after getting evicted twice by landlords selling - maybe I'm particularly unlucky but I much rather the risk of owning then the risk of renting, at least I have some control over owning!

zl1whqvjs75cdy

smurgen wrote: »

I genuinely feel like estate agents etc post here to quash any negative talk.massive concerns are dismissed at a whim.

Not an estate agent, just observing market fundamentals. Demand greater than supply means increased prices. It doesn't really get more simple than that. We are miles off meeting demand still.

DubCount

OP. Buying a house to live in is not a typical investment. If this was a discussion about buying an investment property, then Brexit, Trump, world economic forecasts etc. are all relevant. This is not an investment property, its a home to live in. If you have the savings, have the income and have the nerve, then go for it. If prices go up, great. If prices go down, so what, if you can still afford the mortgage and live where you want to live, what difference does it make. If you sell, its probably to buy somewhere else to live, and the house prices where you are going to move to will probably have gone up or down in price relative to the price of your home. Prices will go up and down many times over your lifetime, and guessing the next move is a mugs game. In 2008, people said property can only increase in value - they were wrong. In 2014, people said we haven't reached the bottom yet - they were wrong. Whether you bought in 2008 or 2014 wont matter in 2040 if you paid off your mortgage by then. Maybe it would have cost you less money, maybe more, but you dont get to know the maybes in advance. Anyone that knows the future would be better off working on next weeks lotto numbers than posting on boards !!

Edgware

Samuel T. Cogley wrote: »

If you can get a house you can live in for 20 years + at a reasonable mortgage relative to your income go for it. Negativce equity/massive posative equity is cyclical and only effects you if you need to move.

I agree with this summary and the poster who made the very valid point about renting as well

Arthur Daley

You have to stand back and ask yourself where all this ferocious demand has come from? Ireland has 500,000 more mouths to feed now than it did in 2006.

So you would need to try to understand where all these extra people would go in a recession, especially if Britain is not a very attractive outlet for them due to the ongoing Brexit. It is highly unlikely Ireland could face a meltdown like 2008-2012 again this decade. But with so much extra labour out there this time (the labour driving the housing demand that everybody acknowledges, even over and above the demand at peak Celtic tiger levels), some parts of the job market may be hit even harder than they were in 2008-2012. Something to consider at least.

I think the banks and central bank are more prepared for this at this stage. Hence their caps on lending, because they know right well that there is a proper risk this time that they really won't get the money back if there is a bloodbath in parts of the labour market.

Quaderno

DubCount wrote: »

Buying a house to live in is not a typical investment. (...) If prices go down, so what, if you can still afford the mortgage and live where you want to live, what difference does it make.

I never quite understood that way of thinking about property. Of course it matters how much you pay for the roof over your head, especially if you have to feed a family. Either you think it is a good investment or not, because in the end you will pay for that house with more or less of your lifetime. In the long run it makes a huge difference if you need to borrow even a small amount less. You could work shorter hours to spend time with your kids, go on the extra holiday together or even put something away for your children's education.
What you get with your kind of attitude however is a cycle where "investors" fleece people who genuinely seek a home as long as they can, because the latter think they have to keep buying into a bubble and prices don't matter anyway. They do.

astrofool

smurgen wrote: »

If the economy collapses you won't have demand on your rental property.you'll ne paying that mortage alone.

Here's the secret.

A lot of the voting population is paying a mortgage, or have close family paying a mortgage. If the economy collapses, the first thing to be protected will be the mortgage holders. At the last collapse, interest rates brought their repayment costs way down, policy was in place to ensure they got tax relief, and the chance of a repossession, even in case of years of non payment, is virtually zero.

The goal is to be in the biggest boat with people in the same circumstance, government policy will then protect you much more than any other groups during a downturn. Renters have had it much worse than a mortgage holder in the 10 years since the last collapse. All the people on the property pin holding off investing because the world would tank missed the bottom of the market, and are now 10 years of their life on waiting for the next collapse.

The markets are already pricing Brexit in, so no deal/deal Brexit won't affect the markets to any great extent (I'd imagine we'd have a black "day" of a large drop or gain, depending how it ends up, but really, that's the day the brokers make money as everyone else panics).