Right now, would you buy or rent???

Keyzer

I'm on the verge of purchasing a house with my partner.
After all the hype and media interest over the last couple of days plus keeping a watchful eye on proceedings I am starting to have second thoughts.

We can afford the mortgage, not a problem.
I'm worried that the house will lose considerable value in the next couple of years...

Simple question - Given the current situation with the market, would you rent for a while and see what happens or buy now and risk the "impending" crash ???

Dalfiatach

Can ye afford the mortgage when ECB rates go up to 5%? Higher? Can ye afford the mortgage when base rates are 5% on one salary when herself gets pregnant in a few years time? Would ye be happy living in the property for the next 20 years and raising a family there - cos if values do fall and you buy at the top, yer gonna be stuck there for a loooooong time? Are ye getting a repayment or an interest-only mortgage, and over what term?

ctc_celtic

i'm in the same situation, i've decided to continue renting for another year or so. the problem i have is i can well afford a house in a new estate, even allowing for increases in repayments, but that not what i want for the long haul.
but the price of my ideal house, (detached, out of town, large garden) is just pushing my finances.

i remember being told that, your home is not like any other investment, it is somewhere your family belongs. if you can afford it and your happy in it, then it will not be a mistake.
my problem is i wont be happy (long term) in what i can afford now, and if i buy now, i may have to stay for a long time.

jesus_thats_gre

Would happily buy if I could genuinely afford somewhere that I like. So, for the time being, I will be renting.

Gurgle

Keyzer wrote:

Given the current situation with the market, would you rent for a while and see what happens or buy now and risk the "impending" crash ???

Lol, I'm the first person to vote 'buy'.

Assuming you mean buying a house to live in for at least a decade, not some lunatic plan to buy a 1-bed apartment in Ardee so you can trade up on the equity in 6 months :rolleyes:.

I think now is as good a time as any to buy a home, so long as your smart about it. You have to allow for the possibility of further interest rate hikes, and make sure you can pay the mortgage.

You can take advantage of the current panic and make an offer well below asking price.

Theres plenty of people who have been 'renting for a while' for several years waiting for the 'impending' crash.

conor_mc

Gurgle wrote:

Theres plenty of people who have been 'renting for a while' for several years waiting for the 'impending' crash.

It's one thing waiting for house prices to slow down from 15% growth rates, it's a different thing altogether to wait because they've already stopped.

warrenaldo

Personally i would rent for a bit longer. over the next few months - sure what harm is it waiting another couple of months. can see loads of people just like yourself asking themselves the same question right now.
Id give it a couple of months to see how its panning out. No point rushing into it - esp at the moment.

dan_y

if only nobody bought houses. then they'd have to drop the prices. you could start a revolution maybe keyzer? then by the time I have enough to buy a house your shining example will have dragged house prices back down to reasonability(I know, I made it up)...

sorry, that was totally unhelpful. I don't think you should buy.

seamus

Just ask yourself two questions:

1. Can you afford the mortgage if the rates increase by 1.5%?
2. Do you intend on living in the house long-term (five years or more)?

If you answer no to either, I vote rent. Otherwise I vote buy.

tHE vAGGABOND

buy buy buy

My rose tinted glasses tell me the world is perfect and that I would throw all my cash at a nice place of my own so I can get the hell out of home ASAP!

Keyzer

1. Can you afford the mortgage if the rates increase by 1.5%? Yes
2. Do you intend on living in the house long-term (five years or more)? Yes
3. Can I afford the mortgage on my income alone if the missus gets pregnant ? No

iguana

If it was three bed + house within 3k's of the city centre (or some other area that suits your lifestyle long term), maybe.

If not, no.

And I detest renting, I think it's a huge waste of money but I would think long and hard about buying property in Ireland right now. I certainly wouldn't touch a starter apartment in commutersville.

patrickolee

I listened to George Lee et. al. for several years talk about impending doom, so I didn't buy a home. First saved up my deposit back in 1999, decided to travel instead as at that time he was talking about a bubble! Finally bought about 2 years ago, when they were still talking about the bubble and all the things that were going to cause the crash. Of course the places that I had been looking at over the years had all gone way over my budget, so I was cursing myself for listening to RTE over the years. Glad I bought now as the place I bought of 317.5 would be out of my reach now just 2 years later.

But really it's all academic it's a home and even if prices drop by 30-40% at this stage I'll still have a home.

Just buy something somewhere and don't worry too much about it, as long as it's not for investment. Take a leaf out of Michael O'Leary's book, when other people are buying, sell, when others are selling, buy. You will get good value now, compared to if you wait for 8 months, simply because you will have more choices and less competition.

Then join us in the DIY section :-)

donaghs

House hunters, take a moment to empathize with the Hospital Consultants who've been offered Public Sector-only (i.e. jobs for life) contracts for only €205,000 a year. Its a 39-hour week, with a annual bonus of €40,000 if they meet their targets. 'Mickey Mouse' money as one spokesman described it.

Another man-of-the-people PJ Breen has demanded: ""What kind of house could you buy for €205000?" (Consultant Anaesthetist, Limerick Regional Hospital and IHCA spokesman)

I'm presuming he wants to buy a house every year that he works....

kmick

Ok so if you wait there are three scenarios
1) the market goes down and you dont have a 'home' housing becomes more affordable and everyone rushes to the market
2) the market goes up and you dont have a home
3) the market goes neither up nor down and you dont have a home

Then the buy secenarios
1) You buy and the market goes down. You are stuck in that property for probably 5-10 years. However you own your own home
2) You buy and the market goes up. You follow natural cycle and trade up in 5 years. However you own your own home
3) You buy and the market goes neither up nor down. You follow natural cycle and trade up in 5 years. However you own your own home

My point is whenever you buy you are buying a 'home'. It is your castle and your refuge and no one can touch you there (as long as you keep up repayments.) What are you waiting for? Do it today. The crash has happened 700,000 euro homes are going for 600,000. 2m homes are going for 1.75. I know the 700,000 and 2m were way overpriced in the first place but prices HAVE gone down. Also remember smart people buy when everyone else has stopped doing so (with the subsequent price drop) in every market.

Dont know if I am making sense but I own two properties and would have no hesitation in buying a third now If i could afford it.

Zambia

patrickolee wrote:

I listened to George Lee et. al. for several years talk about impending doom, so I didn't buy a home. First saved up my deposit back in 1999, decided to travel instead as at that time he was talking about a bubble! Finally bought about 2 years ago, when they were still talking about the bubble and all the things that were going to cause the crash. Of course the places that I had been looking at over the years had all gone way over my budget, so I was cursing myself for listening to RTE over the years. Glad I bought now as the place I bought of 317.5 would be out of my reach now just 2 years later.

But really it's all academic it's a home and even if prices drop by 30-40% at this stage I'll still have a home.

Just buy something somewhere and don't worry too much about it, as long as it's not for investment. Take a leaf out of Michael O'Leary's book, when other people are buying, sell, when others are selling, buy. You will get good value now, compared to if you wait for 8 months, simply because you will have more choices and less competition.

Then join us in the DIY section :-)

This is all true however please consider this , if you decide to buy now for example

365,000 for a 3 bed and Borrow 330,000 (inc stamp)

Then the market drops and it is worth 265,000 in 2008 December

As long as you are sure that this house in this area will last you till the slump passes then you are right fire ahead and well wear on the house.

During this time you cannot move , upgrade , emigrate , etc as if you do you will take the hit of approx 60,000.

I personally would prefer the freedom to move.

Zambia

patrickolee wrote:

I listened to George Lee et. al. for several years talk about impending doom, so I didn't buy a home. First saved up my deposit back in 1999, decided to travel instead as at that time he was talking about a bubble! Finally bought about 2 years ago, when they were still talking about the bubble and all the things that were going to cause the crash. Of course the places that I had been looking at over the years had all gone way over my budget, so I was cursing myself for listening to RTE over the years. Glad I bought now as the place I bought of 317.5 would be out of my reach now just 2 years later.

But really it's all academic it's a home and even if prices drop by 30-40% at this stage I'll still have a home.

Just buy something somewhere and don't worry too much about it, as long as it's not for investment. Take a leaf out of Michael O'Leary's book, when other people are buying, sell, when others are selling, buy. You will get good value now, compared to if you wait for 8 months, simply because you will have more choices and less competition.

Then join us in the DIY section :-)

This is all true however please consider this , if you decide to buy now for example

365,000 for a 3 bed and Borrow 330,000 (inc stamp)

Then the market drops and it is worth 265,000 in 2008 December

As long as you are sure that this house in this area will last you till the slump passes then you are right fire ahead and well wear on the house.

During this time you cannot move , upgrade , emigrate , etc as if you do you will take the hit of approx 60,000.

I personally would prefer the freedom to move.

Keyzer

Good points made by all, thanks for your input....

Jaysis, I don't know what to do...

I keep thinking - I'd rather rent for 2 years and the price of house go up and be wrong than buy now and the house is valued 25% less in a year or two and be wrong, I could have saved a fortune and years on my mortgage buying at the cheaper price...

ixoy

I'm still of a mind to consider buying. It's with the proviso that Seamus mentions and already been discussed with the other half. Sproglets aren't a potential issue so we'd have no real need for more room once we buy.

Oh and I'm prepared to live in Commutersville as I don't particularly like the city centre as a place to live in (despite its handines to the cinema). Suburbia would suit me (Portmarnock's Links would be nice) but I can't forsee that benig affordable anytime soon, even if these crash scenarios take place.

Perhaps it's because I'm a bit tired of renting that makes me disinclined towards it. One thing that isn't always reflected in these things is that your own place does offer you far greater control than you get if you rent, where the landlord's rights can conflict with your own desires (e.g. I'd never hang a picture on a wall in a rented apartment because I could be accused of damaging, particularly if my DIY skills were poor).

delboy159

Was in the same shoes as yourself and myself and herself opted for the renting option. We have actually tied in for a 2 year lease....

Basically the house we are in would cost 2,600 per month over 30 yrs @ 5% mort rate (a rate which will rise), also, we would have to plug up over 30k (nearly 40k) for stamp, legal and furnishing costs on top of everything.

To contradict this financial burden our rent for the next 2 years will be €1,000 per month - fixed in a slightly nicer property in virtually the same spot... I'm saving pretty much the difference (€1,500 per month) as a discipline exercise..

You still get a "hunger" to jump in for a property purchase now and again, but saving €1,500 a month when property prices are predicted to stay stagnent - even by the optimistic experts and probably fall in the next 12 months versus €18,000 saved in the same time frame I feel okay... The hunger subsides!

Whatever you do - best of luck!

patrickolee

There is also the age of the person to take into account. If you are 29 for example and decide to rent for 2 years to 'wait and see'... by the time you go to buy, you will be 31 (maths were always good for me) and unable to get a 35 year mortgage... and limited to a 30 year. Mightn't be a bad thing, but will reduce your options.

Keyzer

patrickolee wrote:

There is also the age of the person to take into account. If you are 29 for example and decide to rent for 2 years to 'wait and see'... by the time you go to buy, you will be 31 (maths were always good for me) and unable to get a 35 year mortgage... and limited to a 30 year. Mightn't be a bad thing, but will reduce your options.

Good point, I am 29....

Jaysis, I dont know what to do...

ixoy

Oh that's an interesting point Patrick. I didn't even know that one - is that based on retiring at an age of 65?

As it was, I was hoping for a 30 year mortgage to reduce the interest I pay to the filthy banks, but it's still something to bear in mind.

ronbyrne2005

Why buy when prices are falling? Rent and wait and see where prices go over next year or more. If prices keep falling wait. If prices start rising again then consider buying . Try and detach the emotional element. This is the biggest financial commitment of anyones life and how much you borrow can limit your life options for decades.

patrickolee

ixoy wrote:

is that based on retiring at an age of 65?

AFAIK yes. Got mine through AIB, might be different for other banks but, they orginally quoted me for 35 and 30 year mortgage. But when it came to actually applying they said, oh, you're 31... sorry you can't have the 35 year and were very apologetic. As it turned out I wanted the 30 year anyway and am hoping to reduce that to 25 as per Eddie Hobbs 20waystowasteyourssia.

iguana

I just want to add that I think you should talk to lenders about fixed rate options before you make your decision. At least then you can budget without having to worry about nasty interest rate surprises.