Can you afford a house?

darkman2

Hi, for ppl (like myself) under 25 the sight of queues for appartments in a Dublin suburb selling for over 1.5 million euro each is a bit devestating to say the least. How the hell are young ppl going to get on the property ladder with such inflation in houses. This is gonna end up in a very sorry mess at some stage when the property marktet crashes. And it will because immigrants, the vast majority of them, cant afford to buy either and were gonna have 1 millon of them in 15 years time:eek: Where are they going to live? On the street? Houses are increasingly looking simply too expensive for most of us. Does anyone else find this is reality?

Archeron

darkman2 wrote:

Hi, for ppl (like myself) under 25 the sight of queues for appartments in a Dublin suburb selling for over 1.5 million euro each is a bit devestating to say the least. How the hell are young ppl going to get on the property ladder with such inflation in houses. This is gonna end up in a very sorry mess at some stage when the property marktet crashes. And it will because immigrants, the vast majority of them, cant afford to buy either and were gonna have 1 millon of them in 15 years time:eek: Where are they going to live? On the street? Houses are increasingly looking simply too expensive for most of us. Does anyone else find this is reality?

Good thread. I agree 1000000% with what you see and I think its looking bleak for many. I know how people in this country feel about trailer trash and so on, but I honestly think that is where its gonna be for many. On the plus side, I've looked at those trailers (mobile homes as we call them) and they're bloody lovely inside. Question is, can you live with the stigma attached? Theres a thread over in accomodation/property about living in a mobile home if you are looking for any info.

3 suggestions
Get onto the council and inquire about the shared ownership scheme.
The council will own half the house/appartment and you will get a chance to buy their half later if you can.

The plus is, you need only a small mortgage and the house is as yours as is possible with the hope that it will be fully yours when you have a better income.

OR: Buy with a friend (as a stepping stone)

OR: Move to waterford where house prices are still reasonable ( even do a shared ownership there)

darkman2

Hi EM, yes I think most of us know the schemes but there are other issues with that as well. Affordable housing for example, thats a joke mate.

Yes it seems most of us will have to get well away from Dublin to even have a chance of putting a roof over our heads.

Green_Martian

Well at this rate it looks like i would need to rob a bank or something before i can afford a house...........lol:D

I am not condoning robbing banks by the way..:p

birdwatcher

To be fair to Earthman, buying with a friend, or friends is definitely the way to go.

I can't afford a house, but I bought one with my bird. We are quite prepared to live the life of paupers for a while until we're a few years down the line with the mortgage.
Bottom line: 12 months ago I had nothing, now I have a house and a HUGE f***ing mortgage.

If you get the chance to buy,....as one of the larger sports manufacturers like to say...."JUST DO IT"

seanos

There was fairly extensive thread on this last weekish,
http://www.boards.ie/vbulletin/showthread.php?t=2054902902

Dave!

Well there'll be no choice but for people to move down the country, which is a good thing really, the government should probably invest more outside of Dublin. All that space in Ireland (relative to the population) and it's not used evenly at all. If more people moved outside of Dublin, would things not get better? I dunno, I'm no economist as you can tell , but seems like that would make sense.

Don't panic, what is fueling the current housing boom is the panic that people won't be able to afford houses. People are rushing out thinking if they don't buy now they will never be able to.
That and the 20% of people who are buying a houses as an investment rather than living in it.

Nearly everyone except predicatbly the property companies and home owners are saying the current property growth is unsustainable.

I for one am not rushing out to over extend myself anytime soon. Just look at the rental market at the moment for a taste of things to come.

darkman2

birdwatcher wrote:

To be fair to Earthman, buying with a friend, or friends is definitely the way to go.

I can't afford a house, but I bought one with my bird. We are quite prepared to live the life of paupers for a while until we're a few years down the line with the mortgage.
Bottom line: 12 months ago I had nothing, now I have a house and a HUGE f***ing mortgage.

If you get the chance to buy,....as one of the larger sports manufacturers like to say...."JUST DO IT"

Yes he is definatley right. I think it is the best way to go at the moment. I know several ppl who have done that already. Of course no win with the mortgage which is the biggest challenge after purchasing:rolleyes:

darkman2

ronoc wrote:

Don't panic, what is fueling the current housing boom is the panic that people won't be able to afford houses. People are rushing out thinking if they don't buy now they will never be able to.
That and the 20% of people who are buying a houses as an investment rather than living in it.

Nearly everyone except predicatbly the property companies and home owners are saying the current property growth is unsustainable.

I for one am not rushing out to over extend myself anytime soon. Just look at the rental market at the moment for a taste of things to come.

A 'correction' is coming you reckon? Just bide time if thats the case:rolleyes:

ronoc

ronoc wrote:

Nearly everyone except predicatbly the property companies and home owners are saying the current property growth is unsustainable.

True, but people have been going around for 10 years now saying the growth is unsustainable and they have been proved more wrong. Most predict that, while there may be some cooling down, there won't be any crash. So while prices might rise at a lower rate, I don't see it matching inflation any time soon. The really big news as far as I see is that people are still willing to invest millions in development land. It's very easy to speculate on a website that the market will crash, but the people who matter ie. those putting their money up, are oozing confidence in the market. They are in fact paying more and more every day, these are not people who gamble millions idly or ignore sound advice.

loopyloulou

I bought a house in december 2004 with my brother, wouldnt have gotten the mortgage if he hadnt have been on it, but im the only one on the deeds. He already has his own house as hes married but if he hadve stayed on the deeds i wouldve had to pay capital gains tax when the house was sold as hes not a first time buyer. I pay the mortgage, insurance etc. The house is in Drogheda, moved up from Dublin and to be honest even if i do make a lot of money in the future by selling up i dont think ill be moving back to Dublin. If youre prepared to move outside of Dublin id advise it, its the best thing i ever did. Its tough money wise but at the end of the day its mine and im delighted i did it when i did, if i had waited until this year i wouldnt be able to afford it as the prices have jumped so much..

jrey1981

I would have to buy in certain parts of Kilkenny or somewhere to be able to afford something.

Here in Wicklow a garden shed goes for €300k

As for the "crash", wait for the Germany economy to recover and interest rates to rise and then see what happens...of course you might be waiting a while.

dr zoidberg

In a way this could be a blessing in disguise, we can start to develop an apartment culture like the rest of Europe due to the high house prices and increase population density in the cities while preserving the green belts and countryside. Although it seems to be leading to urban sprawl, long distance commuting and frustration, and also social problems from a lack of a provision of services in tandem with development at the moment.

BaZmO*

ronoc wrote:

Don't panic, what is fueling the current housing boom is the panic that people won't be able to afford houses. People are rushing out thinking if they don't buy now they will never be able to.
That and the 20% of people who are buying a houses as an investment rather than living in it.

Nearly everyone except predicatbly the property companies and home owners are saying the current property growth is unsustainable.

I for one am not rushing out to over extend myself anytime soon. Just look at the rental market at the moment for a taste of things to come.

I've been saying that for the last 5 years mate, as a result I've just bought a house (with a friend) for the knock down bargain price of 365K :rolleyes:
Better than paying rent I suppose.

darkman2 wrote:

This is gonna end up in a very sorry mess at some stage when the property marktet crashes. And it will because immigrants, the vast majority of them, cant afford to buy either and were gonna have 1 millon of them in 15 years time Where are they going to live? On the street? Houses are increasingly looking simply too expensive for most of us. Does anyone else find this is reality?

How do you reckon the market will crash if there's gonna be such a big demand? Surely you realise that one of the main factors for pushing prices up is demand?

Deleted User

Deleted User wrote:

True, but people have been going around for 10 years now saying the growth is unsustainable and they have been proved more wrong. Most predict that, while there may be some cooling down, there won't be any crash. So while prices might rise at a lower rate, I don't see it matching inflation any time soon. The really big news as far as I see is that people are still willing to invest millions in development land. It's very easy to speculate on a website that the market will crash, but the people who matter ie. those putting their money up, are oozing confidence in the market. They are in fact paying more and more every day, these are not people who gamble millions idly or ignore sound advice.

You are confusing growth in our econmy with house prices.
Many leading economists have come out and said house prices are overpriced, our own central bank has said it, the IMF has said it.

And this is without a raise in interest rates, which by the way our country has no control over anymore.

Kersh

So buy now and fix for 10 years ...

BaZmO*

BaZmO* wrote:

How do you reckon the market will crash if there's gonna be such a big demand? Surely you realise that one of the main factors for pushing prices up is demand?

I read a figure recently that 20% of new houses are purchased with a view to further rental.

If there is a down turn in the economy who is going to rent those houses, and pay for those huge mortgauges?

What happens when those houses cannot be rented?

plenderj

I can afford to buy a house/apartment. My problem is finding one before the bloody things are sold

BaZmO*

dr zoidberg wrote:

In a way this could be a blessing in disguise, we can start to develop an apartment culture like the rest of Europe

Are you mad? Have you been in any of the dog boxes they call apartments that they're buiding in Ireland, especially Dublin, at the moment? Compare them to the type of apartments they build in the likes of Germany and France, etc., coupled with the rights you are afforded as a tenant and there's no comparison.

replytohere2004

There is some very interesting reading on David McWilliams site: http://www.davidmcwilliams.ie/Articles/index.asp

Also from the indo yesterday, I won't paste it all, just relevant part.

AIB banking on sale of branches:
[FONT=Verdana, Arial]Irish Independent
03.23.06 Business Section (Last story on page)
[FONT=Verdana, Arial]JIM AUGHNEY[/FONT]

AIB, better known to share traders as Allied, is believed to be considering the sale of virtually all its Irish property in order to shore up its capital base and allow it to continue expanding its loan book at a rate of knots. It may not be the only capital-raising measure used by the bank.
In one way it could mark the pinnacle of the current property boom, as the bank would be unlikely to sell off its bank branches this year if it expected their value to go through the roof over the next few years.
Allied's chief executive, Eugene Sheehy, strongly believes that AIB is a bank, not a bank which also holds property - and he wants to generate a higher return from lending than can be 'generated' by sitting on key sites in Ballsbridge, Donnybrook and Dame Street.



[/FONT]

rsta

DaveMcG wrote:

Well there'll be no choice but for people to move down the country, which is a good thing really, the government should probably invest more outside of Dublin. All that space in Ireland (relative to the population) and it's not used evenly at all. If more people moved outside of Dublin, would things not get better? I dunno, I'm no economist as you can tell , but seems like that would make sense.

Yeah I agree I'm all for moving down the country too. But the reason people dont want to move out of Dublin (me included) is the commute to work. As it is I only live 4 miles from home to work and on a bad morning of traffic it can take me up to an hour.... So if I moved out to Wicklow/Kildare etc I can only imagine the traffic would be even worse and thats wat stops me considering the move to the country.

It could work tho... if companies where given incentives to move out of Dublin city.

But then that might mean lower wages... as Dublin wages are higher than anywere else in Ireland....

ahh lots to think about this is a good thread, now i'll go back to reading the rest of it. Got inspired there by DaveMcg

Dave!

haha, nice to see I had an impact with my insightful comments!

rsta

hehe, ah its just madness, i certainly cant afford a mortgage for a place in dublin, i would be crippled with it so fcek paying a steep mortgage... im hoping house/apartment prices will become more available in the future, its just too ridiculous at the moment. the majority of young adults have no chance of buying a home for themselves.

PLUS what i recently found out. i was looking out of interest at some apartments and they were a decent price but the only ones left were for Section 23 only................. eh what!
So some fat cat rich as*hole gets to buy an apartment so they can let it out as an investment and make more money. they already have a home of their own... why like?
Especially when there are so many people like me who want to buy a place of their own but cant cos of Section 23... ahh its just crrraaazy. Why make a special Section 23 to help people who already have a home? The goverment should make a special 'First time buyers percentage of new homes' instead... to help us get a start on the property ladder.

It makes no sence to help the rich get richer...

Sam Vimes

rsta wrote:

As it is I only live 4 miles from home to work and on a bad morning of traffic it can take me up to an hour.

its only 4 miles? why don't you walk or cycle? i cycle over 8 miles to work. i could get the train but the exercise is great

The OP

I bought a spacious 4 bedroom semi in Baldoyle in Aug 2004. Couldn't be happier. Value has gone up from the €381,000 I bought it for, to about €550,000 in 19 months. Sweet.

rsta

Commander Vimes wrote:

its only 4 miles? why don't you walk or cycle? i cycle over 8 miles to work. i could get the train but the exercise is great

no way! not in this weather! ... my hair would be ruined... :rolleyes:

nlgbbbblth

jrey1981 wrote:

Here in Wicklow a garden shed goes for €300k

That can't be right.

Look at

http://www.candssheds.ie/prices.htm

These guys are based in Tullamore but provide a nationwide service.

A 29' x 12'6" shed [8.9m x 3.8m] costs €3,600 + €735 for the tile effect roof. That's a top of the range shed.

Pictures here

gurramok

Deleted User wrote:

True, but people have been going around for 10 years now saying the growth is unsustainable and they have been proved more wrong. Most predict that, while there may be some cooling down, there won't be any crash. So while prices might rise at a lower rate, I don't see it matching inflation any time soon. The really big news as far as I see is that people are still willing to invest millions in development land. It's very easy to speculate on a website that the market will crash, but the people who matter ie. those putting their money up, are oozing confidence in the market. They are in fact paying more and more every day, these are not people who gamble millions idly or ignore sound advice.

10yrs ago till now, low interest rates especially when we joined euro fuelled house prices, now the rises will happen and bound to affect demand for prices
A bit silly buying development land at huge prices when there is a selling problem in a sector?

And they haven't publicised the fact that 10,000 housing units have been cut back this year due to lack of sale of especially Apts in central Dublin and regional towns. (From http://www.timesonline.co.uk/newspaper/0,,176-2078971,00.html)

Demand is still there but not at crazy prices for majority of buyers.

What will happen?...all eyes will be on ECB AND US interest rates I believe especially in May, its out of our control!

jonny68

Not a chance can i afford to buy my own house and not a chance am i gonna commit to a 30+ year mortgage either,talk about a rope around your neck,whenever my old dear dies (i don't mean this in a bad way) the house will be left to me so why should i get a mortgage.

Rudolph Claus

the house will be left to me so why should i get a mortgage

As an investment!
Get your folks to hand you the house now, and borrow a mortgage for another house on the security of your current house or something.

blu_sonic

jonny68 wrote:

Not a chance can i afford to buy my own house and not a chance am i gonna commit to a 30+ year mortgage either,talk about a rope around your neck,whenever my old dear dies (i don't mean this in a bad way) the house will be left to me so why should i get a mortgage.

i was gonna say something similar, i'm an only child of devorsed folks so (and i hope not too soon) when one dies i get their house (i'm willed in) otherwise its nothing short of a lotto win.

Rudolph Claus

otherwise its nothing short of a lotto win.

Depends on where the houses are! Crappy estates mightnt do too well.

junkyard

The only houses worth buying here are the ones with wheels under them so we can get out fast once the interest rates start climbing.:)

ST*

blu_sonic wrote:

i was gonna say something similar, i'm an only child of devorsed folks so (and i hope not too soon) when one dies i get their house (i'm willed in)..

I cannot even bear to think of one of my parents dying, let alone what I would 'get' as a result of their deaths. You are 'lucky' you are an only child. My mother is one of 6, and there was bitter disputes between the siblings over what was inherited. I told both of my parents that I dont anything off them, ever - because I seen the damage that was done to my mother and brothers and sisters.

And to answer the OP's question, no I cant afford my own home at the moment, Im studying. 30+ mortgage or not, I'll still try after I finish my degree. I need somewhere to call my own. Long term financial debt doesnt scare me, and Im not about to sit around waiting for someone I love to drop dead.

Diamondmaker

I bought 2.5 years ago off plans. At the time I thought a 300k mortgage would kill me. Now I wish I bought 2!
Buying off plans allows you to spend a year or 2 saving up cash with no mortgage to pay and your property set at a fixed price.
Also hopefully you will be in a better financial situation 2 years on with an old raise or 2 or promotion. Some developments will let you sign contract based on as little as 8k deposit balance on completion.
Its much more palatable to pay rent knowing yours is being built slowly but surely.

whizzbang

When the banks say they are going to sell off all their property and lease it back, it means its a good time to sell.

J

blu_sonic

Shock_treatment wrote:

I cannot even bear to think of one of my parents dying, let alone what I would 'get' as a result of their deaths. You are 'lucky' you are an only child. My mother is one of 6, and there was bitter disputes between the siblings over what was inherited. I told both of my parents that I dont anything off them, ever - because I seen the damage that was done to my mother and brothers and sisters.

And to answer the OP's question, no I cant afford my own home at the moment, Im studying. 30+ mortgage or not, I'll still try after I finish my degree. I need somewhere to call my own. Long term financial debt doesnt scare me, and Im not about to sit around waiting for someone I love to drop dead.

i agree my next door neighbour had the problem of the will being contested. very sad. the house was left vacant and boarded up for about 6years. the reason behind my morbid post is i was talking about wills with my mother, or rather she was with me. not a nice conversation

Flukey

People tell you that they can afford to buy a house and the next thing they do is go out and get a mortgage. If you could afford to buy a house, then you would not need a mortgage. So on that, correct interpretation, very few of us can afford to buy a house.

daveirl

This post has been deleted.

blu_sonic

Flukey wrote:

People tell you that they can afford to buy a house and the next thing they do is go out and get a mortgage. If you could afford to buy a house, then you would not need a mortgage. So on that, correct interpretation, very few of us can afford to buy a house.

i think the O/P means can you afford to take on a mortgage, and hence buy a house. ie. can you keep up the repayments

Flukey

blu_sonic wrote:

i think the O/P means can you afford to take on a mortgage, and hence buy a house. ie. can you keep up the repayments

I know that Blu_sonic, but that is still different than being able to afford to buy a house. If you need a loan to purchase something, then that means you can not afford to buy it yourself out of your own money. In truth, banks buy houses, not people. It is with the money from the bank that people pay for the house, not their own. Then they pay the money to the bank, and an awful lot more besides. So the question should be, and it is a fair and reasonable one: "Can you afford a mortgage?" I am not being petty or pedantic, just correct and factual.

So people, can any of you afford to buy a house or, if not, can any of you afford a mortgage?

blu_sonic

point taken i think that most posters (or at least i did) see that thats what was ment, but your compleatly correct. in effect 95% of people can't afford a house

drdre

nah i cannot afford a house, but when im abit older the prices are going to be mad so i think i will just stay at the family home

Diamondmaker

Example:
Couple friends of mine are renting a 1 bed at 1100 p/m.
If they bought a 2 bed in the same area the mortgage would be about 1400/m (25yr).
Rent the 2nd room for 400 p/m. Mortgage works out cheaper by 100

Allow for first year outlay on furniture and fees etc.

How bust and how quickly does the economy have to go bust to make renting at -1100 per month better than owning at -600/m? with increasinf % of payment going into a savings account known as equity.

say 5 years renting= Effective Loss of 12x1100x5=66,000.

How bad must things get and how likely is it to happen soon, that the above makes more sense than buying???

jonny68

Nuttzy wrote:

As an investment!
Get your folks to hand you the house now, and borrow a mortgage for another house on the security of your current house or something.

No chance mate,anyway there's only my ma in the house and no way would she hand it over or would i ask for that matter,i wouldn't have any problem renting for the forseeable future anyway but im not committing to any mortgage...

daveirl

This post has been deleted.

ronbyrne2005

man A: why are prices going up so fast??
man B :its all supply and demand,theres obviously a massive demand for accomodation.
man A :if theres such a demand for accomodation why havent rents gone up since 2002?
man B: i dont know?
man A: maybe the demand is from people buying just because they think prices will rise,if enough people thought prices would keep rising then prices would keep rising!
man B: ah a bubble!
man A : exactly

The tax man

blu_sonic wrote:

i think the O/P means can you afford to take on a mortgage, and hence buy a house. ie. can you keep up the repayments

Eh..........No!!!!:mad:

whizzbang

I cannot afford to buy anywhere I want to live. Sure I could probably buy somewhere and hour and a half form where I work but I don't want to waste 3 hours a day in the car!