How long are you holding out for?

mastermind2005

Im currently saving to buy a house, im early twentys and want to buy a 3 bedroom house. Everyone is aware house prices are mad money at the moment.

personaly im waiting for the prices to come down about 50,000 - 70,000 on an average 400k home...

What price decrease are you waiting for? or maybe its a case of you waiting till they stop going down?

Macca206

Ive just bought a house for 395 which started at 425 so you arent too far off it at the minute

seamus

There's a fair argument to say that you could wait for the prices to drop, or you could aggressively drop it yourself by offering less than asking.

I'm holding out till next Jan/Feb, mainly for reasons of cash flow, but also because I'm fairly certain that most vendors should be in full panic mode by then.

As it is right now, I'd offer 10% less than the asking on any house in Dublin.

offaly1

im hoping if the house prices drop by another 50000 i should be in with a good chance to buy in offaly. the prices are round 300,000 on average for a 3 bed semi! its madness...but if they come down 50grand i hope to look into purchasing!

mathias

I just sold mine in Celbridge ( contracts signed last week ), nice estate , houses usually go up for the 325 mark , as surprising as it may seem , they are creeping up in price around here , 4 houses went up the same time as ours , all at 325 , and all in July , all are sold now , but two went for 329 , one of the others and ours had an initial offer of 329 fall through , we both put back up at 329 and got it.

So thats 8 weeks from start to finish , not bad !

Its not unusual for there to be a lot of interest in houses in this estate , and they generally do go fast enough according to the estate agent.
They are 3 bed semis , in the castletown area. I see now on remax / DNG / that a lot of them are going up at 329 now.

So just a small area , a small sample , and not indicative of the general trend , but creeping up nonetheless.

tHE vAGGABOND

In the process of buying an large 3 bed apartment quite near town for 395 [I'm all ready to go, waiting on contracts from their solicitor]..

I'm in for the long haul, and see myself living there for quite a while, so don't give a monkeys about short term market conditions.

gurramok

Had a quick look at myhome for Castletown, specifically Walled Gardens as i know it well as my bro lives there.
Range is 315-330 with 1 each at 315, 320, 325 and 2 priced at 330 with nothing obvious to explain the price difference

Seems to be about the same range as it was when i last checked a couple of months ago.
I'd personally wait at least a couple of years if i was jumping in anywhere.

PS- don't beleive a word what an EA says, make your own observation.

mathias

Had a quick look at myhome for Castletown, specifically Walled Gardens as i know it well as my bro lives there.
Range is 315-330 with 1 each at 315, 320, 325 and 2 priced at 330 with nothing obvious to explain the price difference

I know the area well ( tis one of these I just sold !) , the houses are nice , red brick , solidly built , however the price differences are based on the work done on the house as they are all 25 years old at least , a walled garden house in its most basic form has no double glazing , no central heating just coal fireplace, etc . So thats going to be the basis of the price difference , the higher end will all have features like central heating , new floors , double glazing and all that nice new stuff.

Based solely on my experience selling , there is no shortage of viewers and they go fast enough , cant see any house going faster than 8 weeks , so I wouldnt expect a price freefall around here anytime soon. As posted , with ours and the few nearby selling in the past few weeks , there has even been a small increase.

patrickolee

gurramok wrote:

PS- don't beleive a word what an EA says, make your own observation.

Things always seem simple and clear until you look into the details...

P.S. Don't believe a word you read on an internet forum, make your own observations

mastermind2005

Patrick how long have you been an EA

patrickolee

Lol, I wish

Dalfiatach

Until houses are no longer overpriced. And I don't care how long that takes, there's more than enough rental supply out there.

Saying "when they drop another 40K or 50K" is just fooling yourself. The house in question might still be way overpriced at that level. Or it might indeed be underpriced and a good bargain.

So when do houses stop being overpriced? There's a few traditional measures you can use. When considering buying a house, try and find out what it would rent out for. Take 11 months rent as your notional net annual rent income. Your notional net rental yield is then (annual rent/house price)*100.

If the net yield is under 6% the house is overpriced, if over 8% a real bargain.

A simpler calculation along the same lines is (monthly rent * 120). If this is higher than the house price, the house is a bargain, if lower then the price the house is overpriced.

Look at your mortgage term and LTV (loan to value ratio). If you are getting more than 90% mortgage, then you can't afford it. Keep saving.

If you are relying on always having two incomes coming in to make the repayments work, then you can't afford it.

If the mortgage term is 30 years or more, it's likely that you can't afford it.

Interest Only mortgages are a scam. If you have to consider an IO mortgage, then you can't afford it.

Readjusting to credit and house price normality is going to be very painful for a lot of people in this country. Most people I know really don't seem to have any concept that loans have to be paid back, in full, with cold hard cash, plus interest.

Tom123

tHE vAGGABOND wrote:

In the process of buying an large 3 bed apartment quite near town for 395 [I'm all ready to go, waiting on contracts from their solicitor]..

I'm in for the long haul, and see myself living there for quite a while, so don't give a monkeys about short term market conditions.

Would you not prefer to have an extra €50,000 in your pocket rather than giving it to someone else?

Tom123

Very similar sentiments to Dalfiatach

I'll buy when rental yields are 6% or over.

OR

The number of properties on http://daftwatch.atspace.com/ returns to a more realistic number. By my estimates there is nearly 12 months supply on the market IF nothing NO new properties go up for sale.

amtc

I know a guy who's been saying this for the last ten years - i.e. I'm not rushing into buying as prices are over-inflated etc...

He's now 39 and living with his mammy for the last ten years.

his excuse now? tighter lending means that his salary (which hasn't kept pace wth house price growth) won't qualify for a mortage.

Personally, I live in an area where the house prices are falling but I love it and get more out of living in a house I love than worrying about value.

Tom123

amtc wrote:

Personally, I live in an area where the house prices are falling but I love it and get more out of living in a house I love than worrying about value.

I'm the exact same except I'm renting and the places around me ARE falling.
It's not a question of if prices will fall any more it's by how much they will fall.

Dalfiatach

amtc wrote:

I know a guy who's been saying this for the last ten years - i.e. I'm not rushing into buying as prices are over-inflated etc...

Better to sit out 10 years of a bubble than to chain yourself to wage-slavery for 40 years, spending 10 of them stuck in negative equity!

amtc wrote:

He's now 39 and living with his mammy for the last ten years.

That bit's just sad though

I just don't understand the Irish obsession with owning property. I'd rather have the freedom of renting myself. Granted, that'll doubtless change when/if I get married and kids come along, but at that point yer chained to the kids for 21 years anyway, so chaining yourself to a mortgage is no great additional burden. But for young free and single people to be utterly obsessed with buying is pure mad. IMO.

amtc

the point i'm making is that while house price trends are one factor (and a very important one), I wanted to leave home, I didn't want to rent and I have a view that I will have this place for ever -they were my priorities. There are emotional reasons for owning too - or is that too female?! I could've stayed at home and had a great lifestyle. But to have my own place, do what I want to do and still have a good lifestyle is what I want to so. Horses for courses!

Tom123

amtc wrote:

the point i'm making is that while house price trends are one factor (and a very important one), I wanted to leave home, I didn't want to rent and I have a view that I will have this place for ever -they were my priorities. There are emotional reasons for owning too - or is that too female?! I could've stayed at home and had a great lifestyle. But to have my own place, do what I want to do and still have a good lifestyle is what I want to so. Horses for courses!

I've never understood why some people have such a problem with renting.
It seems to be mainly a Dublin thing in my opinion.

stovelid

Tom123 wrote:

I've never understood why some people have such a problem with renting.
It seems to be mainly a Dublin thing in my opinion.

I think it's an age thing.

The problem with renting in Ireland is that you have zero rights as a tenant and when you want to improve your living environment, it's just benefiting somebody who can boot you out /raise the rent /impose draconian rules on a whim.

That said, I was happy enough when I rented by myself. What I couldn't eventually take was sharing a house with other people after a certain age.

I can honestly say that I'm as aghast at anybody at the property mania in this country but a lot of people of a certain age just want their own space and are not thinking in terms of investment.

Tom123

stovelid wrote:

The problem with renting is that you have zero rights as a tenant and making home improvements, having a nice garden is just helping out somebody who can boot you out /raise the rent /impose draconian rules on you on a whim.

That said, I was happy enough when I rented by myself.

What I couldn't take was sharing a house with other people after a certain age.

It all depends on the type of lease you can arrange.

SkepticOne

I think this question will cease to be important as the fall in prices continues. People who don't own houses will stop thinking of themselves as "holding out" and will start thinking of renting as the norm with house owning (after a long period of saving) as a long term aspiration.

This will not be because houses are expensive but because, without the belief in always rising prices, people will be able to weigh up the pros and cons of renting compared to buying. The "rent is dead money" thing will be dead.

18 months ago the belief that house prices always rise meant that just about any purchase, no matter how unsuitable, was justified in the mind of the purchaser for fear of being left behind. Now, at the turning of the market we talk about holding out for cheaper prices.

At the bottom of the market, I think buying a house will be regarded as a slightly eccentric thing to do, which of course is why it will be the time to buy.

stovelid

Tom123 wrote:

It all depends on the type of lease you can arrange.

i.e. wangled out of some landlord on their terms.

SkepticOne wrote:

At the bottom of the market, I think buying a house will be regarded as a slightly eccentric thing to do, which of course is why it will be the time to buy.

And therein lies the seeds of the next bubble

My wife lived in the UK through the late 80's boom (and bust) and she's amazed that it's all happening again.

yankinlk

Dalfiatach wrote:

A simpler calculation along the same lines is (monthly rent * 120). If this is higher than the house price, the house is a bargain, if lower then the price the house is overpriced.

Please explain this calculation. It makes absolutely no sense to me. Does it apply to investment property only? You must be looking for a house on the moon cause you aint gonna get that ratio in any country anywhere. If you can show me one example where this works please share. Ill buy it in the morning.

Tom123

stovelid wrote:

My wife lived in the UK through the late 80's boom (and bust) and she's amazed that it's all happening again.

History does have the habit of repeating itself

Dalfiatach

yankinlk wrote:

Please explain this calculation. It makes absolutely no sense to me. Does it apply to investment property only? You must be looking for a house on the moon cause you aint gonna get that ratio in any country anywhere. If you can show me one example where this works please share. Ill buy it in the morning.

It's a gross yield of 10%, which would probably equate to a net yield of 8% or so. That's historically normal in almost every sane, mature, stable housing market. There's been a global housing bubble in many, many countries around the world since 2001, and it is now unwinding, everywhere.

Prices will revert to a situation where net yields are 7-8%, and probably higher at the very bottom of the curve.. As sure as the sun rising tomorrow morning, that's where house prices will end up at the end of this bubble.

colc1

gurramok wrote:

PS- don't beleive a word what an EA says, make your own observation.

totally agree with this they're after their cut prices could well drop by way more than 50 or 70k even the way its going nothing selling I hear

yankinlk

Dalfiatach wrote:

Prices will revert to a situation where net yields are 7-8%, and probably higher at the very bottom of the curve.. As sure as the sun rising tomorrow morning, that's where house prices will end up at the end of this bubble.

Hmm, a bit one sided thinking me thinks. Ill give you a lowering of the house prices, but then you have to meet me in the middle with a raising of rents. 8-10% yeilds sounds great, bring em on!

Gurgle

Dalfiatach wrote:

It's a gross yield of 10%, which would probably equate to a net yield of 8% or so. That's historically normal in almost every sane, mature, stable housing market.

So just to be clear: In a sane, mature, stable market any investor would be able to buy a house by just stumping up the deposit and for the entire loan term the rent would cover the mortgage.

A sensibly termed 25 years later you own the house outright and you never had to put another penny into your investment. In fact, as the rent rises with inflation but your repayments don't, you would be able to pay it off much sooner if you kept paying the extra rent off the loan.

Surely anybody who had access to credit would be investing in property under those circumstances, and that would drive the prices up by 300% over a decade or so.

Sound familiar?

yankinlk

Gurgle wrote:

A sensibly termed 25 years later you own the house outright and you never had to put another penny into your investment. In fact, as the rent rises with inflation but your repayments don't, you would be able to pay it off much sooner if you kept paying the extra rent off the loan.

Better yet, do it interest only - use the money that would have paid off capital to diversify into other investments that earn more than the interest you are paying on the mortgage.

Gurgle

yankinlk wrote:

Better yet, do it interest only - use the money that would have paid off capital to diversify into other investments that earn more than the interest you are paying on the mortgage.

Ah bandwagons: invisible from the front, thousands of people hanging onto the back for dear life.

yankinlk

Gurgle wrote:

Ah bandwagons: invisible from the front, thousands of people hanging onto the back for dear life.

Drop into a less-biased less-bearish forum for a different point of view and you might find this method as simply a tax efficient manner of investing in property.

AARRRGH

stovelid wrote:

The problem with renting in Ireland is that you have zero rights as a tenant

Not true. You have more rights than the landlord. For example, once you've been in the property for 6 months, you can automatically stay there for 4 years.

iguana

dublindude wrote:

Not true. You have more rights than the landlord. For example, once you've been in the property for 6 months, you can automatically stay there for 4 years.

Unless the landlord wants you out because they wish to sell or use the property as a residence for themselves or a family member.

Most tenants also have no rights as far as redecoration or pet ownership is concerned. And also it is extremely difficult to rent unfurnished and I for one never want to live in a place where I get to sleep on the 5 year old cheapest bed in the Argos catalogue again.

antoinolachtnai

The residential tenancies act makes it effectively impossible for a landlord to enter a lease longer than 4 years without greatly prejudicing their rights. A ten-year term for example, would only be binding on the landlord, not on the tenant, so the landlord has no advantage in entering such an arrangement unless the tenant is paying a big premium.

patrickolee

iguana wrote:

Unless the landlord wants you out because they wish to sell or use the property as a residence for themselves or a family member.

Or if the landlord wants to paint the place. Tenants have bugger all rights, very easy for a landlord to turf them out if they want to.

stovelid

dublindude wrote:

Not true. You have more rights than the landlord. For example, once you've been in the property for 6 months, you can automatically stay there for 4 years.

Damn, are you saying that I could have forced my last landlord (the one who wouldn't let me redecorate unless he approved the scheme, wouldn't let me keep cats and who's rent increases regularly defied market logic) to let me stay another 4 years?

What a missed opportunity.

A Random Walk

yankinlk wrote:

Better yet, do it interest only - use the money that would have paid off capital to diversify into other investments that earn more than the interest you are paying on the mortgage.

You must have missed the news about the credit crunch that is ongoing. The 5/6 year period of silly loans (e.g. 100% interest only over 30 years) is coming to an end.

yankinlk

coming to an end? really? how about more like reducing the amount allowed to borrow - which should be no bad thing as prices of houses are coming down anyways.