Buy now or wait a while longer

Edgware

A big part of the last property boom was the massive construction around the country.
Holiday homes, sapartment, housing estates being built in towns and villages of low population with no thought as to who was going to live in these buildings. We ended up with hundreds of ghost estates.
The Dublin market with its population and concentration of I.T. companies etc is a completely different market. Wll the new man in the Centra Bank ease the mortgage requirements. Anecdotally I know several professional couples waiting to get out of one and two bed apartments and into 4 bed houses. If the rules are relaxed there will be demand for such houses. This demand will be met either by empty nesting or new builds. The four bed in Ballinteer will be in the demand and will rise in price

Darc19

jim salter wrote: »

What we're facing is gonna be worse than 2008

Not a chance in hell of anything like the last recession.

The conditions are simply not there for it.


In 2008, banks were throwing money at people with no questions asked and everyone out bid everyone else on everything.

A 3 bed semi in ballinteer was 650k and interest rates were 5%, a similar one now on the same road is 475k

Take a 25 year mortgage @90%
Today's purchase with 427k mortgage would cost €2,000 a month on 10 year fixed (peace of mind)

In 2007 a five year fixed rate was 5%, 10 year was not available. So 5 year fixed @585k would have cost €3360/month.
Hence banks signed you up for 35 year mortgages.


So the net cost of then v now is 40% lower and you can be sure of payments for 10 years.

So costs of ownership is nothing like the boom times.

hmmm

Karson Small Connoisseur wrote: »

You got the drawn down value from 2012 totally wrong, are you sure all these numbers are right?

The US budget deficit in 2018 was 779 billion, not 1.5 trillion as he says. I think I'll get my economic advice elsewhere.

pearcider

Sorry my figures were out. I don’t check them before I post as I’m not writing a peer review paper here. However the thrust of my argument is unchanged.

https://www.bloomberg.com/news/articles/2019-06-12/u-s-budget-gap-hits-739-billion-with-four-months-left-in-year

The US is now incapable of bailing out the world and the worlds banks as they did in 2008 and the recession must be close as the US is now in its longest ever economic expansion. Therefore the recession is quite close. Unless of course you believe we are in a new paradigm and there will be no more recessions...

If you can afford to wait, I would wait. You want to buy property and other assets that are tightly correlated to credit when credit conditions are poor, which is not the case now. At the moment it’s a sellers market.

pearcider

I would also say that in Ireland our budgetary situation remains very grim and there are significant macro risks to our country quite unrelated to our correlation with the US economy.

1) Brexit which will greatly affect our economy.

2) No significant pay down of our national debt which is 200 billion up 165 billion from our situation in 2007...at the moment the interest is manageable as the ECB is buying bonds but the debt is a drag on growth. I would also note that a German 30 year bond auction (with negative yields) failed today. The risks in the bond market are growing and with over 15 trillion in negative yield debt the entire market is clearly unstable.

3) When you consider our favorable demographics, employment numbers and the fact that we have had massive (if somewhat dubious) economic growth in the past few years and then realize we are still running a budget deficit...The potential for emergency tax increases here is high. This will bring down property prices significantly.

utmbuilder

gosh with the price of rent now, you could be loosing 24,000 a year in rent not buying.

its unlikely to be a property crash, maybe slow growth when we are up to our nuts in new builds.

mortgage draw downs are slow, will be even slower when the public feels the impact of brexit, still
old builds will hold their value due to social economic factor's of diversity with new build owner and tennentship

If its a forever home and within 20 minutes commute of work I dont think sitting by will save you much

DubCount

I'm impressed with the knowledge many posters have about the economic outlook for the property market. The reality is, nobody knows what way property prices will go, especially on an area by area basis. This time next year, prices may have fallen or increased or stayed the same. The same is true of 3 years time. Issues come and go. Brexit is a big deal today, it will be something else in 3 years time.

Instead of trying to second guess the market, consider your own finances and ability to meet mortgage repayments, and your desire to live in a particular area for a long time. Property is a long term purchase. 20 years from now, nobody will remember Brexit, and whether you waited a couple of years to purchase will be a distant memory

reg114

We've been trying to sell a property in the south side of the capital since January, and its my experience that in the mid to upper range nothing is moving , this has also been backed up by estate agents I've spoken to. Since the last bust we have had multiple years of economic growth and price rises but the global economy has been showing signs of a correction . Germany is on the brink of a recession, American manufacturing output figures are down and Trumps tariff war with China is having an adverse effect on consumer sentiment in the US. Throw in the massive unknown that is Brexit and the high liklihood of a recession in the UK and its ramifications on the Irish economy and you see reasons why people are becoming twitchy here especially when it comes to buying property.

Ultimately if people feel that property has a good chance of coming down in price in the short term then its only human nature to want to sit and wait for a drop despite a property being a long term investment.

Personally I believe theres a perfect storm brewing for Ireland and by next year we will be in a full blown recession due to a no deal brexit, German recession and a further global economic slowdown. You will see an exodus of foreign nationals from Ireland which will free up large amounts of rental properties which will have a knock on effect on the residential sales market and property prices. I'm convinced of this.

Addle

What do you consider mid range to be?

mloc123

The Nutty M wrote: »

Wait another 2-3 years in or around. It'll be easy buy houses again.

If you have cash to buy...

Kenno90

mloc123 wrote: »

If you have cash to buy...

Ye and dont mind spending an extra 30k on rent in those two to three years

SEPT 23 1989

If you work for the government or a large multinational go for it

Working anywhere else i would hold off for another few months

The effects of a hard brexit are starting to be felt now

Edgware

There are two bed roomed apartments still not making the price people paid for them in 2007. If you check Daft etc you will see ones with unrealistic asking prices just sitting there wheareas similar properties 10/15 % less are being sold. Owners either have had ten years occupation or ten years rental income but stil can accept he facts of supply and demand

parkhouse

Mooooo wrote: »

If buying as an investment, work off the roi of rental income and not return from capital appreciation, as in selling on cause the price may rise assuming I used that phrase correctly

Just want to understand! this part. I am not sure I understood? Thanks

parkhouse

Mooooo wrote: »

Haven't read all the thread so apologies if this is gone over already. But basically if buying to live in make sure it's something you can live in for 10/ 20 years, starter homes etc and other phrases are what put a lot of people in bother last time around. Paying over the odds for a small apartment and then getting caught when circumstances change. While the property market was part of the cause of the last recession and negative equity hitting people hard, the next one may not have the same massive effect on house prices but it may have an effect on incomes and employment. If buying as an investment, work off the roi of rental income and not return from capital appreciation, as in selling on cause the price may rise assuming I used that phrase correctly

zig wrote: »

Im not an economist but I do wonder how much this really matters and what affect it has on your life unless we literally repeat the same thing as what happened in 2008. Given that we are clearly not in a crazy property bubble at the moment I dont see how something that extreme can repeat itself any time soon.

Supposing you buy a house now that is lets say 20 grand over what it will cost in 3 years time, what happens then?

1. You continue living there, so it has no effect other than a mild sucker punch that you are paying more back on your mortgage. Well keep in mind, you will also have 3 years paid off on this mortgage and also a load of hassle out of the way.

2. You want to move, sell your house and prices have gone down, well in this case its likely the house you want to move to has gone down relatively also.

3. You want to move, sell your house and prices have gone up. Well the same logic applies, your house is worth more but you will be paying more for the next house too.

4. You want to buy a second house and keep your current one. In this case you will still be doing well to be buying a house in a slumped market.

And to top all of this off, none of it is really relevant because it may not become an issue for at least 5 to 10 years, at that point the dynamics will have changed anyway, possibly population increase, possibly reassurance in house prices (if they have gone down).

I dont think things are insane enough at the moment to believe they will change too drastically in the near future to have any great affect on your personal finances.

As someone else pointed out, generally a slowdown in the economy also means a slow down in employment, earnings and therefore mortgages.

Thanks for your input, that will be great to share your input if someone buy a property cash and rent it out... is it a good time to buy to rent is there any risk .

theballz

It’s a sellers market at the moment.

I sale agreed a property back in May after an incredibly difficult bidding process, the vendor and solicitor have been extremely difficult. Making threats for me to sign without deeds to the house (that they have misplaced.) As a result (on top of may other things), I am withdrawing my offer this week.

Their ask is illegal and I find sellers feel untouchable as banks are handing out mortgages like no tomorrow and in turn it is driving interest and prices up.

Right now, the whole property situation in Ireland seems very unstable. As mentioned by many posters it might be best to hold off, the global economy is incredibly unstable and with a hard border Brexit looming it will becoming increasingly volatile.

From my personal perspective I would hold off, I am doing the same - not a decision taken lightly.

baldbear

If you are currently renting then i would buy now if the right property comes up. Why wait for something that mightn't happen?

parkhouse

It is for investment rather than living it!

Darc19

Servicing a mortgage is cheap these days. Prices are stable or in some cases falling slightly.

Back in 1993 a 3bed semi in Rathfarnham cost about €130,000
Interest rates were over 12%

A similar house today is €390,000

In 1993 your mortgage repayments (using full price for comparison) would have been €1466/month over 25 years. High rate tax was 60% and a very good salary would have been €30,000 with net take home about €18,000

Similar house on same road today will cost €390,000 (property price register)
A 25 year mortgage for €390,000 can be had with 5 years fixed at 2.6%.
Monthly repayment would be €1769

A similar good salary would be €70,000 and net take home circa €46k


On a historic basis, house prices are quite reasonable at present especially as you can fix rates for 10 years for under 3%.


Remember, it's the monthly cost that matters and how affordable that is and at current long term fixed rates, it's very affordable

Edgware

theballz wrote: »

It’s a sellers market at the moment.

I sale agreed a property back in May after an incredibly difficult bidding process, the vendor and solicitor have been extremely difficult. Making threats for me to sign without deeds to the house (that they have misplaced.) As a result (on top of may other things), I am withdrawing my offer this week.

Their ask is illegal and I find sellers feel untouchable as banks are handing out mortgages like no tomorrow and in turn it is driving interest and prices up.

Right now, the whole property situation in Ireland seems very unstable. As mentioned by many posters it might be best to hold off, the global economy is incredibly unstable and with a hard border Brexit looming it will becoming increasingly volatile.

From my personal perspective I would hold off, I am doing the same - not a decision taken lightly.

I wouldnt agree that it is a sellers market in the apartment sector. There is definetely a slow down in that market

Spanish Eyes

I am long out of the market, bought years ago at a very good price in a good area (well before the bust). I feel so much for those who are trying to buy these days. I Sound like an old crone, but possibly I am!

My only advice would be to buy second hand. I know there is some incentive out there for FTB and help to buy or something WRT new builds, and they all have A ratings and so on, or at least they should.

But second hand houses are the dogs blx. You can look around and see what the neighborhood is like. That is not possible with new developments. And dare I say it..... there will be an element of social and affordable housing in every new scheme now. Not saying that is wrong, but just saying!

The slightly older houses were usually very solidly built too. They had a gaffer/overseer on site you see back in the day!

Spanish Eyes

Edgware wrote: »

I wouldnt agree that it is a sellers market in the apartment sector. There is definetely a slow down in that market

Landlords escaping, and who could blame them either.

Mad_maxx

Darc19 wrote: »

Servicing a mortgage is cheap these days. Prices are stable or in some cases falling slightly.

Back in 1993 a 3bed semi in Rathfarnham cost about €130,000
Interest rates were over 12%

A similar house today is €390,000

In 1993 your mortgage repayments (using full price for comparison) would have been €1466/month over 25 years. High rate tax was 60% and a very good salary would have been €30,000 with net take home about €18,000

Similar house on same road today will cost €390,000 (property price register)
A 25 year mortgage for €390,000 can be had with 5 years fixed at 2.6%.
Monthly repayment would be €1769

A similar good salary would be €70,000 and net take home circa €46k


On a historic basis, house prices are quite reasonable at present especially as you can fix rates for 10 years for under 3%.


Remember, it's the monthly cost that matters and how affordable that is and at current long term fixed rates, it's very affordable

Those figures seem off to me, no way have house prices in rathfarnham only trebled since 1993

Suspect houses were cheaper in 1993 than 130k

Darc19

Mad_maxx wrote: »

Those figures seem off to me, no way have house prices in rathfarnham only trebled since 1993

Suspect houses were cheaper in 1993 than 130k

Remember we had £ back then. £100,000.

Or to be precise £98,500 and it was mine. Bought in 1989 for £74,950

Same road last two sales were under €400,000 (£325,000)

Mad_maxx

Darc19 wrote: »

Mad_maxx wrote: »

Those figures seem off to me, no way have house prices in rathfarnham only trebled since 1993

Suspect houses were cheaper in 1993 than 130k

Remember we had £ back then. £100,000.

Or to be precise £98,500 and it was mine. Bought in 1989 for £74,950

Same road last two sales were under €400,000 (£325,000)

Property is up at least six fold in the past twenty five years

Tilikum17

Is now a good time to sell?

We’re very lucky in that we have a house with no mortgage at the moment. The house is worth 290-310k.

We’ve found a house in the countryside we love.

Should we sell now or wait?

Edgware

Tilikum17 wrote: »

Is now a good time to sell?

We’re very lucky in that we have a house with no mortgage at the moment. The house is worth 290-310k.

We’ve found a house in the countryside we love.

Should we sell now or wait?

It's not all about price. If you don't sell will the country house be there when you want it and at a price you can meet?
Is is worth the wait to maybe get another 10000 when you could be settling in well in the countryside?

smelly sock

I wouldnt touch the market yet. Way to much uncertainty with Brexit and the economy. We will have another massive crash. The million dollar question is when.

465000 for a semi d in north kildare isnt sustainable. IMO.

handlemaster

According to news paper reports that prices have dropped nation wide over the last six months. A part from brexit, germany is in a recession all but confirmed. The US is trying its hard est to stave one off. The Donald will do all he can next year been election year to pump more money out. Will this be enough ? China are no walk over as he has discovered.

handlemaster

According to news paper reports that prices have dropped nation wide over the last six months. A part from brexit, germany is in a recession all but confirmed. The US is trying its hard est to stave one off. The Donald will do all he can next year been election year to pump more money out. Will this be enough ? China are no walk over as he has discovered.