Is now a bad time to buy?

Glenbhoy

Tyson Fury wrote: »

But what do you plan to do for the next 3 or 4 years until you see what way the market is going?

Are you still living at home?

Or are you renting?

I've just moved from a dump to a brand new house and my mortgage is 300 euro less per month. Buying was a no brainer for me.

My rent is significantly lower than my mortgage repayments will be, I'll buy, but more through understandable rent fatigue on my wife's part. As others have mentioned, if prices drop (And I feel they will as downside pressures exceed upside imo) There's no guarantee banks will still be lending and they won't be lending to the same levels.

Arthur Daley

astrofool wrote: »

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.

I agree the vast majority pay their mortgage, and people got stuck in over the last ten years to get their mortgages paid off. Some people had to move abroad, and sacrifice a lot to pay off the ruinous debts they took on during the Celtic tiger.
But these are the unsung heroes of the Irish recovery. The government did little or nothing to help them in any meaningful way. The government needs the banks to be profitable and those profits have to be made off the backs of the majority of mortgage payers. Interest rates on Irish mortgages are the highest in the eurozone because a certain minority have defaulted and refused to pay, aided and abetted by the debt write off lobby. This cost doesn't get written off by the magic fairy, it is either borne by those paying their debt, or added to national debt for future tax payers to deal with.
We handed a bill of maybe €50 billion to future taxpayers thanks to this little stroke. Given the track record and state of the national debt, I wouldn't take the 'kindness of strangers' for granted next time Ireland busts a land bubble.

By definition, the majority of taxpayers cannot be, and were not 'bailed out'. 'Bail outs' are always for a minority, at the cost to the majority.

smurgen

astrofool wrote: »

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).

Policy is changing. The streamlining of the repossesion process is coming and hopefully those refusing to engage the bank will be turfed out faster.

LuckyLloyd

LuckyLloyd wrote: »

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.

Not necessarily. I'm outside Dublin and and if I could get a toe in the door on a fixed-rate mortgage on some places I could just about scrape by on the dole if I lost my job. Other than that the mortgage would be way less than what I'm paying in rent for a room while also having to save a load to get the deposit together.
It's hard to know what a fall in demand is going to look like should it happen. Rent prices are all over the place. Where I am you can get decent places for a family for well under 300k but again the rent is far higher than what the mortgage payments on such a place would be. If there's a fall in demand do people just disappear or do rents start falling again? If rents fall do the property prices fall with them or what?

If you can afford it and you'll be staying put for at least 10 years it's very rarely a bad time to buy.

Fol20

smurgen wrote: »

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

Time to get the tinfoil hats out again with conspiracy stories. Do you really think ea’s care what is being said on a forum. Maybe if it was on the news, they might like to spin it a bit better

adriaaaan

To clarify my “Brexit won’t happen” line...if you are putting off buying a home pending the result of brexit then God help you. The range of outcomes is enormous and totally unpredictable in the housing market.
Take one potentially negative outcome ...a hard border. Now that would be considered a negative outcome for the Irish people as a whole. But it would impoverish the people of NI. So if you were an early 30s couple in Belfast with no ties and good education where will you emigrate to? Dublin of course which will increase housing demand at a time the economy may slow.
Likewise the Irish in London who are stuck with a hard Brexit. Where is their most likely emigration location?
I’m not saying this will happen or is likely. Like I said the range of outcomes is enormous. But don’t take Brexit risk as steer for buying property.

LuckyLloyd

Deleted User wrote: »

Not necessarily. I'm outside Dublin and and if I could get a toe in the door on a fixed-rate mortgage on some places I could just about scrape by on the dole if I lost my job. Other than that the mortgage would be way less than what I'm paying in rent for a room while also having to save a load to get the deposit together.
It's hard to know what a fall in demand is going to look like should it happen. Rent prices are all over the place. Where I am you can get decent places for a family for well under 300k but again the rent is far higher than what the mortgage payments on such a place would be. If there's a fall in demand do people just disappear or do rents start falling again? If rents fall do the property prices fall with them or what?

If you can afford it and you'll be staying put for at least 10 years it's very rarely a bad time to buy.

Agreed! Every situation is different.

Don't forget that rent is a service. You pay more than a mortgage will be on the same property typically, but the difference is made up by flexibility, mobility, not being responsible for associated taxes and maintenance charges.

If there is a recession that precipitates a fall in demand for property purchases it will likely cause downward pressures on rent. People will emigrate economically and supply into the rental market will increase.

The real gamble here is, as always, the question of whether you're confident you'll hold onto your employment during a coming recession. Some sectors look more vulnerable to others relative to what type of recessionary drivers we're likely to see.

LuckyLloyd

adriaaaan wrote: »

To clarify my “Brexit won’t happen” line...if you are putting off buying a home pending the result of brexit then God help you. The range of outcomes is enormous and totally unpredictable in the housing market.
Take one potentially negative outcome ...a hard border. Now that would be considered a negative outcome for the Irish people as a whole. But it would impoverish the people of NI. So if you were an early 30s couple in Belfast with no ties and good education where will you emigrate to? Dublin of course which will increase housing demand at a time the economy may slow.
Likewise the Irish in London who are stuck with a hard Brexit. Where is their most likely emigration location?
I’m not saying this will happen or is likely. Like I said the range of outcomes is enormous. But don’t take Brexit risk as steer for buying property.

We'll know an outcome in mere months tbh. By Christmas either the worst type of Brexit will be coming down the tracks or the process will have been pushed back to December 2020 with enough of an agreement and understanding in place to steer towards much softer eventual outcomes.

I agree the range of outcomes is enormous, but people will only be waiting a couple of months to see. And waiting could see you avoid a life limiting incorrect decision.

Q&A

LuckyLloyd wrote: »

We'll know an outcome in mere months tbh. By Christmas either the worst type of Brexit will be coming down the tracks or the process will have been pushed back to December 2020 with enough of an agreement and understanding in place to steer towards much softer eventual outcomes.

I agree the range of outcomes is enormous, but people will only be waiting a couple of months to see. And waiting could see you avoid a life limiting incorrect decision.

Depends where you're looking to buy. Dublin will be insulated. What jobs might be lost there will be replaced by what firms will relocate there. The rest of the country in the other hand could be facing a bumpy ride.

LuckyLloyd

LuckyLloyd wrote: »

Agreed! Every situation is different.

Don't forget that rent is a service. You pay more than a mortgage will be on the same property typically, but the difference is made up by flexibility, mobility, not being responsible for associated taxes and maintenance charges.

If there is a recession that precipitates a fall in demand for property purchases it will likely cause downward pressures on rent. People will emigrate economically and supply into the rental market will increase.

The real gamble here is, as always, the question of whether you're confident you'll hold onto your employment during a coming recession. Some sectors look more vulnerable to others relative to what type of recessionary drivers we're likely to see.

Just out of interest, are there many places at the moment where rent is higher than a mortgage? A 100k gaff on a fixed rate is under 500 a month but is close to 1k a month to rent.

Situations differ but where I am if I had a deposit I could get somewhere with a spare room on a mortgage and insurance for under 500 a month, renting a decent-sized room is about the same.

M.Cribben

Q&A wrote: »

Depends where you're looking to buy. Dublin will be insulated. What jobs might be lost there will be replaced by what firms will relocate there. The rest of the country in the other hand could be facing a bumpy ride.

The effects of Brexit will take years to become clear, and the general consensus seems to be negative impact on property prices. If there's a capital flight out of London in the coming years when Brexit is actually in force.. the closest English speaking EU neighbour with among the most favorable corporation tax rates in the world could become a very attractive option though.

spaceHopper

Quaderno wrote: »

True, but image yourself next summer in a situation were Brexit has gone terribly wrong, the economy is slowing and property prices are on the way down. I don't say this will happen, but if it does, wouldn't you think that you should have been more prudent?
It's rare that a likely economic catastrophe has a clear date before it even happens, but this is one such occasion. The question you will be asking yourself is "why did I not see this coming?". Could you deal with that? Then go ahead and buy...

Imagen you've been waiting and waiting, you hold off till 2020 a crash comes the banks won't lend, you lose you job and have to live off your saving by the time the economy recovers and you can save a new deposit you're close to 50 and the banks will only give you a 17 year mortgage but the repayments are crippling and you are locked out of the market again

You have to jump some time. Are you investing or buying a home ?

Quaderno

spaceHopper wrote: »

Imagen you've been waiting and waiting, you hold off till 2020 a crash comes the banks won't lend, you lose you job

How are you going to pay off your mortgage if you buy now and lose your job in two years time? I personally would be quite happy not to be in debt should the next crash happen.

M.Cribben

Quaderno wrote: »

How are you going to pay off your mortgage if you buy now and lose your job in two years time? I personally would be quite happy not to be in debt should the next crash happen.

I'd much rather the legal protections offered to homeowners with a mortgage than the rights of tenants in the rental market. Banks are usually reasonable when you make some effort to restructure the mortgage or reduce payments (interest only, etc). Even if you stopped paying completely and did not engage at all, it can take 5-7 years for a bank to repossess the property. This happened a lot from 2008-2013. There is strong political will to keep these protections in place. I believe it's a result of our nation's history regarding plantations and colonisation of our land by the British in 16/17th century but that's for another day.

If you're renting and lose your job, you're pretty much snookered. Landlords don't "do" interest only or reduced payments.

Mike3549

Quaderno wrote: »

How are you going to pay off your mortgage if you buy now and lose your job in two years time? I personally would be quite happy not to be in debt should the next crash happen.

From your savings. Mortgage is cheaper than rent ATM.

GingerLily

Quaderno wrote: »

How are you going to pay off your mortgage if you buy now and lose your job in two years time? I personally would be quite happy not to be in debt should the next crash happen.

What's your plan to keep yourself housed for the next crash?

Quaderno

GingerLily wrote: »

What's your plan to keep yourself housed for the next crash?

I prefer to not divulge too much personal information on boards, but let's just say I survived the last crash without much hassle and expect the same for the next one. But that's not the point. The question was "Is now a bad time to buy?". I pointed out that there are some serious indications that the immediate future (say the next year) might be a particularly difficult one for Ireland and that I would be in no rush to get into debt right now. That's all. Buying a house in the hope that the bank will cut me some slack should things go south is no option I would consider, although I understand why some people come to the conclusion that this might be a good idea. Maybe I should add that I don't live in Dublin, things are certainly less extreme down here in the southwest. Good luck to anyone in the market right now, seriously.

GingerLily

Quaderno wrote: »

I prefer to not divulge too much personal information on boards, but let's just say I survived the last crash without much hassle and expect the same for the next one. But that's not the point. The question was "Is now a bad time to buy?". I pointed out that there are some serious indications that the immediate future (say the next year) might be a particularly difficult one for Ireland and that I would be in no rush to get into debt right now. That's all. Buying a house in the hope that the bank will cut me some slack should things go south is no option I would consider, although I understand why some people come to the conclusion that this might be a good idea. Maybe I should add that I don't live in Dublin, things are certainly less extreme down here in the southwest. Good luck to anyone in the market right now, seriously.

Most people survived the last crash too, your attitude sounds a tad bit hysterical. We're not talking about Armageddon

M.Cribben

Quaderno wrote: »

I prefer to not divulge too much personal information on boards, but let's just say I survived the last crash without much hassle and expect the same for the next one. But that's not the point. The question was "Is now a bad time to buy?". I pointed out that there are some serious indications that the immediate future (say the next year) might be a particularly difficult one for Ireland and that I would be in no rush to get into debt right now. That's all. Buying a house in the hope that the bank will cut me some slack should things go south is no option I would consider, although I understand why some people come to the conclusion that this might be a good idea. Maybe I should add that I don't live in Dublin, things are certainly less extreme down here in the southwest. Good luck to anyone in the market right now, seriously.

If we're not talking about investment property, what do you suggest as an alternative for people taking out a mortgage now for their family home? Keep renting? People have to live somewhere. I'd much rather be in a mortgaged property than renting if there happens to be another recession.

Samuel T. Cogley

A working class couple can still afford to buy in working class areas of Dublin. Taking 300K as a baseline you each person needs to be earning around 38K which I believe is around the average wage in Dublin. It sucks for lower income groups but really how many low earners are living within 30 minutes of Central London, Glasgow or Edinburgh? They have been priced out of Rusk, Lusk and Balbriggan now and that is an issue but Coolock and Tallaght are still options in some cases and we're not talking the middle of Darndale here either. Proper provision of social housing should be taking care of these groups.

Personally I think we're simply seeing a correction to reasonable house prices for a capital city, albeit a small one with a slightly overheated property market due to lack of supply and pent up demand. That will resolve itself in time but don't expect prices to take too much of a tumble. Working clas areas might fall a bit and I think apartments will too but we're talking c.10% here probably over a number of years, they've a little way to go yet but once Kilbarrack et al start hitting 400K we're at the peak of it IMHO supply will come on stream.

Yes Brexit is a major issue, so is the potential for PCP to cause issues with irresponsible lending going on there, but there will always be something on the horizon that could cause major issues.

What's a reasobale price for a house within 30 minutes of the CC in a reasonble area. Take Raheny as an example. Should the affordability be there for a 21 year old just coming out of uni, single, first job or should they be looking more at 1 or 2 bedroom apartments?

smurgen

Fol20 wrote: »

smurgen wrote: »

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

Time to get the tinfoil hats out again with conspiracy stories. Do you really think ea’s care what is being said on a forum. Maybe if it was on the news, they might like to spin it a bit better

You think estate agents are like stock market traders hahaha.they're in the same league as second care tradesmen in the professional rankings.why would they be talking bullish in a forum applicable to them on irelands biggest forum?

Graham

smurgen wrote: »

You think estate agents are like stock market traders hahaha.they're in the same league as second care tradesmen in the professional rankings.why would they be talking bullish in a forum applicable to them on irelands biggest forum?

Mod Note

Enough with the sweeping generalisations, they are not helpful and they are not accurate.

Fol20

smurgen wrote: »

You think estate agents are like stock market traders hahaha.they're in the same league as second care tradesmen in the professional rankings.why would they be talking bullish in a forum applicable to them on irelands biggest forum?

On a side note, I never understood why people rate second hand car salesman so badly, like every other job it pays the bills and provides for family’s. They have to be optimistic and energetic to make sales targets and kpi just like other jobs. Not everyone would be cut out for it, I know for myself and my own personality, I wouldn’t be good enough at all for it.

Arcade_Tryer

Samuel T. Cogley wrote: »

A working class couple can still afford to buy in working class areas of Dublin. Taking 300K as a baseline you each person needs to be earning around 38K which I believe is around the average wage in Dublin.

Why do people keep using the average wage as a measurement of earnings (with presumably a straight face) when it is so obviously skewed in this country? The median is a more accurate measure and is closer to 30k than 40k in Ireland.

Arcade_Tryer

Samuel T. Cogley wrote: »

What's a reasobale price for a house within 30 minutes of the CC in a reasonble area. Take Raheny as an example. Should the affordability be there for a 21 year old just coming out of uni, single, first job or should they be looking more at 1 or 2 bedroom apartments?

They're looking at paying more for a single room in Stoneybatter than the mortgage repayments for both.

Samuel T. Cogley

Arcade_Tryer wrote: »

Why do people keep using the average wage as a measurement of earnings (with presumably a straight face) when it is so obviously skewed in this country? The median is a more accurate measure and is closer to 30k than 40k in Ireland.

It probably is 30K in Ireland but Dublin commands higher salaries.

Eric Cartman

The issue I have with the market is a basic one of supply and demand.
The supply just isn't there and the houses currently for sale seem to be packed ever tighter together with more corners trimmed.

By the very nature of the market, when supply increases you're going to see price increases slow down or possibly reverse a little. It's not a credit contraction so your mortgage options will still be there.

I see it as you can either pick from the fruit scraps now or pick from the fresh fruit in the future but at a likely <10% swing higher or lower. If you find something you absolutely love and stay there forever then grand price is of no concern once you can afford it, but if you find yourself settling then wait.

Arcade_Tryer

Samuel T. Cogley wrote: »

It probably is 30K in Ireland but Dublin commands higher salaries.

Not so sure about that at the middle to lower end of the salary scale. Middle to high income earners can command higher salaries in Dublin; low paid workers are low paid pretty much everywhere and lack bargaining power.

riclad

Say you buy now, maybe prices will go down in 2 years ,
maybe not
Your mortgage is 30 years , rises and falls tend to even out after 20 years.
The average mortage is lower than renting a house.
in dublin the smaill no of house,s being built on is not enough to keep prices from rising .
i see no sign of excessive lending which caused the crash in 2007.
no one can predict the future ,
dublin is an international city,
With companys like facebook ,google employing 1000,s of people .
IF you buy a house ,you can rent out a room,
the room to rent scheme allows rental income of 12k approx per year,
before you pay tax on rental income.

myshirt

Eric Cartman wrote: »

The issue I have with the market is a basic one of supply and demand.
The supply just isn't there and the houses currently for sale seem to be packed ever tighter together with more corners trimmed.

By the very nature of the market, when supply increases you're going to see price increases slow down or possibly reverse a little. It's not a credit contraction so your mortgage options will still be there.

I see it as you can either pick from the fruit scraps now or pick from the fresh fruit in the future but at a likely <10% swing higher or lower. If you find something you absolutely love and stay there forever then grand price is of no concern once you can afford it, but if you find yourself settling then wait.

By the very nature of the market.... where are you getting or reading this information?

Wherever it is, move on to Chapter 2, elasticity of demand, elasticity of supply. You are not dealing with a simple supply up, price down model here. Far from it. Very far from it. Google is a dangerous place.