Been waiting for prices to fall further..going to buy now..am I mad?

TheCityManager

Ive been sitting on the fence waiting and watching as prices fall and fall ever since I sold my last house a year and a half ago..

Ive been renting a lovely 3 bed semi in south dublin...in need of much modernisation mind you.

The landlord has now offered that I buy the house if I wish..I've agreed a great price even in todays market (lowest by far in the area ...but it does need to be gutted and redone..)

But I do wonder am I mad?
Should I wait till next year and save even more?
Will I be disgusted if other houses in area are going for say 50k less next year?

Any advice?

Gurgle

TheCityManager wrote: »

Will I be disgusted if other houses in area are going for say 50k less next year?

Trust nobody who claims to know the answer to that question.

My opinion: Now is a good time to buy a home, a reasonable time for investment, a stupid time for speculation.

tesslab

Plus with so many people out of work ya could prob get work done at reasonable price. If you like the area and are happy there i say why not. Good luck.

meditraitor

Trust no-one as no-one has the answer but I would say HOLD YOUR HORSES for another 12 months and then you will get a real bargain......

TheCityManager

meditraitor wrote: »

Trust no-one as no-one has the answer but I would say HOLD YOUR HORSES for another 12 months and then you will get a real bargain......

This is what I was thinking too...but we'll be fceked out of current house in May if we dont buy as landlord wants to sell...I did offer him 30k less than he wanted ...and he accepted..much to my surprise....:)

I dont really want to drag kids off to another rented house for a year and then another when we buy..........however I do reckon prices will continue to slide....

decisions decisions.......:(

meditraitor

TheCityManager wrote: »

This is what I was thinking too...but we'll be fceked out of current house in May if we dont buy as landlord wants to sell...I did offer him 30k less than he wanted ...and he accepted..much to my surprise....:)

I dont really want to drag kids off to another rented house for a year and then another when we buy..........however I do reckon prices will continue to slide....

decisions decisions.......:(

Rent is going down rapidly, you should be able to rent a 3 bed anywere outside of the city centre for 1200 or less come May. Thats €14,600 a year.

If you look at the price of a 3 bed semi dropping by 15-25%(speculation but why not) by May next....
a 20% reduction in prices (300,000- 3 bed semi)will save you 60,000

So all in all you should save your family a good 45,000 yoyos by renting for another year.Thats college for one of you little ones!

If I am living in dream land and houses are not going to fall by 20% in the next 15 months then ignore this post.

I can tell you one thing,,,,,, Prices will not go up in the next 15months so its fair to say it can do you no harm to sit on the fence a while longer.

And as for your landlord- any money says he will not put you out come May..... You are a paying tenant and that is a valuble commodity for anyone with property.

TheCityManager

meditraitor wrote: »

Rent is going down rapidly, you should be able to rent a 3 bed anywere outside of the city centre for 1200 or less come May. Thats €14,600 a year.

If you look at the price of a 3 bed semi dropping by 15-25%(speculation but why not) by May next....
a 20% reduction in prices (300,000- 3 bed semi)will save you 60,000

So all in all you should save your family a good 45,000 yoyos by renting for another year.Thats college for one of you little ones!

If I am living in dream land and houses are not going to fall by 20% in the next 15 months then ignore this post.

I can tell you one thing,,,,,, Prices will not go up in the next 15months so its fair to say it can do you no harm to sit on the fence a while longer.

And as for your landlord- any money says he will not put you out come May..... You are a paying tenant and that is a valuble commodity for anyone with property.

I actually think that prices may slump by a LOT more than 20% - I think they could go 50% more....

Budget next month will be TOUGH and will further drive down the economy..plus I'm public service so already have income and pension levies to deal with...

Problem is that gf wants the house (badly..) so Ive made landlord a low offer and the fceker accepted....I thought be would refuse...

So looks like I'm buying....:(

meditraitor

TheCityManager wrote: »

Problem is that gf wants the house (badly..)

So looks like I'm buying....:(

Some things money cant buy :P As long as the Misses is happy........

TheCityManager

meditraitor wrote: »

Some things money cant buy :P As long as the Misses is happy........

So true
:rolleyes:

Akrasia

Gurgle wrote: »

Trust nobody who claims to know the answer to that question.

My opinion: Now is a good time to buy a home, a reasonable time for investment, a stupid time for speculation.

What do you base that opinion on?

Don't trust people, but you should listen to the reasons for why they hold such an opinion and then decide accordingly.

Me, I think that house Prices still have a very long way to fall to reach the bottom of the market. There are still a huge number of empty properties, the Irish population is no longer growing at the rate it was a few years ago(it may even be declining)
Historically average house prices have remained at about 2 to 4 times the average salary, this would put them at about 130- 160k for average 3- 4 bed semi and significantly less for houses in less desirable locations or in need of refurbishment.

Market bubbles also tend to overshoot on the way down so if you are prepared to wait, you might be able to pick up a genuine bargain in a year or two. (despite the media focus on the recession, we have yet to enter the panic phase of the bust, people are still sitting on empty properties hoping that the market will turn, and banks are still rolling over debt for developers. The panic phase will probably start when banks start reposessing BTL houses or assets of developers and selling them off at auctions for whatever they can get.
This is inevitable, the banks need liquidity, they can't keep rolling over debt and many developers can't even meet the interest repayments on their loans, the banks are in no position to become property developers or professional landlords, so they'll offload the properties and get the taxpayer to cover the bad debts (aren't we very generous)

If I were you, I would wait another year or two when you will probably be given the choice of a very large number of properties at a lower price.

jmayo

TheCityManager wrote: »

This is what I was thinking too...but we'll be fceked out of current house in May if we dont buy as landlord wants to sell...I did offer him 30k less than he wanted ...and he accepted..much to my surprise....:)

I dont really want to drag kids off to another rented house for a year and then another when we buy..........however I do reckon prices will continue to slide....

decisions decisions.......:(

Sounds like the landlord wants to cut and run, he may be overstretched and by sounds of it he reckons he is getting good deal.
I agree with meditraitor and i think prices are going to go much lower.
There is nothing there to point to anything but lower property prices and this recession we are in will soon become a depression when the full effects are felt.
It is a pity emotion has come into it, worse thing that can happen when buying property. It tends to throw logic a curve ball.
Maybe landlord twigged this and said that he was putting it on the market in order to up the ante and get you to buy ?
Anyway good luck with the purchase.

EDIT: have you signed anything ? If not try and knock a few more quid off.
Of course now I will be pillored for recommending somebody gazunders, but it is money that this guys family could do with and being realistic the landlord will be looking at even less of an offer in a years time.
Call me cynical but the one thing I have learned from our major government party over the last 12 odd years is look after yourself.

TheCityManager

jmayo wrote: »

Sounds like the landlord wants to cut and run, he may be overstretched and by sounds of it he reckons he is getting good deal.
I agree with meditraitor and i think prices are going to go much lower.
There is nothing there to point to anything but lower property prices and this recession we are in will soon become a depression when the full effects are felt.
It is a pity emotion has come into it, worse thing that can happen when buying property. It tends to throw logic a curve ball.
Maybe landlord twigged this and said that he was putting it on the market in order to up the ante and get you to buy ?
Anyway good luck with the purchase.

EDIT: have you signed anything ? If not try and knock a few more quid off.
Of course now I will be pillored for recommending somebody gazunders, but it is money that this guys family could do with and being realistic the landlord will be looking at even less of an offer in a years time.
Call me cynical but the one thing I have learned from our major government party over the last 12 odd years is look after yourself.

Oh God....I've got to get myself out of this...........;)

Akrasia

TheCityManager wrote: »

Oh God....I've got to get myself out of this...........;)

Another thing to consider is the fact that your current home needs renovation which can be just as disruptive for your family as moving to a different rental property...... (depending of course on the amount of work you intend to do)

AARRRGH

If you remember watching the original Star Trek, you'll remember Dr. Spock was a relatively cold individual. He would remove emotion from his decision making and always choose what was the most logical option.

If you were to ask Dr. Spock for his opinion, what would he say? I'm pretty sure it would go something like this:

It makes no financial sense to buy now. The longer you put off buying, the more money you will save. Current economic conditions suggest this rule will apply for a number of years. Long term economic conditions suggest the current value of your home will never be seen again. Therefore you are setting yourself up for a life of negative equity if you buy now. If you are certain you won't need to sell within perhaps the next 6 - 10 years, this won't make much of a difference, but if you believe you might need to sell before then, you should not buy now.

Your girlfriend is being emotional. She is not thinking logically. It does not make sense to let your emotions do your decision making when you are spending hundreds of thousands of euros.

You need to tell her to cop on. If she won't listen, set your phaser to stun...

EKRIUQ

The property market is really on a downward spiral but there is grades of seller's,
(1) People who are in no panic of selling and still looking for crazy prices but don't really care because they've nothing planned and are still testing the market,
(2) The people who are very eager to sell but have to get a figure to pay what ever they had planned with their money (I'm guessing the OP landlord is in this situation) and then you have
(3)The desperate! The developers, the people who over stretched them self’s and then lost their jobs.

And at the moment theirs no hope in the market because theirs very little buyers in the market and the desperate are slashing prices as much as they can but no bank will let them sell in negative equity unless their sure they’ll get their money back through other ways. Thinking houses that were €350,000 selling for €120,00-€150,000 is wishful thinking but I don’t think that will happen not because people would just get re-possessed, bad credit and prefer live with that than having to repay bank a debt of €100,000 for the next 30 years.

At the moment advertised prices mean nothing because it’s a more take it of leave it market.

TheCityManager

House needs complete renovation..Im talking everything plus we're gonna add an extension and an attic room...we're talking 60k+....

Now here's the thing...we're getting it for 280k so plus 60k that 340k for a house that is exactly as we want it..exactly...

other house in the estate went on market today at 400k and that has no extension nor attic room and needs a lot of work too...

so am I still mad ?

AARRRGH

TBH I would stop looking at what houses are selling for today. Houses are still incredibly overpriced.

If you want the house, and you plan on living there for years, by all means go for it. But it doesn't change the fact that it is a bad financial decision.

Personally I would wait a few years as there is only a small psychological difference between owning and renting.

jetski

aarrrgghhh so you own a home?

not knowing too much about the house Id recond your not getting a bad deal... think how much youl pay on rent while your waiting so you can deduct that from any saving your going to risk makeing. The Usa has passed a one trillion dollar recovery plan and will see europe recover which means the interest rates will be going back up. if you can afford the house and you fix your rate youd be doing well.

TheCityManager

jetski wrote: »

aarrrgghhh so you own a home?

not knowing too much about the house Id recond your not getting a bad deal... think how much youl pay on rent while your waiting so you can deduct that from any saving your going to risk makeing. The Usa has passed a one trillion dollar recovery plan and will see europe recover which means the interest rates will be going back up. if you can afford the house and you fix your rate youd be doing well.

Did I mention that I can buy the house with no mortgage?

Will need to borow for renovations though :rolleyes:

jmayo

jetski wrote: »

aarrrgghhh so you own a home?

not knowing too much about the house Id recond your not getting a bad deal... think how much youl pay on rent while your waiting so you can deduct that from any saving your going to risk makeing. The Usa has passed a one trillion dollar recovery plan and will see europe recover which means the interest rates will be going back up. if you can afford the house and you fix your rate youd be doing well.

And seen as you don't know the hosue how de f*** would you know if he is getting a good deal or not ?
Ah yes the old rent money is dead money argument :rolleyes:
Wondered when that would appear. jetski you win the prize
BTW using your definition paying more today than tomorrow for the house wouldn't it also be seen as a waste of money ?

Glad you know the one trillion dollars will see US and by extension Europe recover. Now which part of Europe recovering are we talking about here, the giant export driven manufacturing German economy or the Irish borrow and build economy ?

TheCityManager wrote: »

Did I mention that I can buy the house with no mortgage?

Will need to borow for renovations though :rolleyes:

That is a major plus, but you need to take a few things into account when making this decision.
Will you be happy spending more for your house than the guy who buys a few doors down in a few years for 40% less ?
That can eat at a person because they feel they got bad value for their money.
Do you plan on staying there real long term say 15/20 years ?
Would you have any other pressing uses for your money ?

Oh and please don't take notice of what hosue down the road is advertised at, 400k is bullsh** (pardon my French) and probably won't be achieved.
Because of the way our market works and data protection we are not seeing the real sales prices and they are much lower than the advertised ones or sale agreed ones.

Fighting Irish

lol

Buying while prices are dropping?
Sounds like a good plan

Fighting Irish

TheCityManager wrote: »

House needs complete renovation..Im talking everything plus we're gonna add an extension and an attic room...we're talking 60k+....

Now here's the thing...we're getting it for 280k so plus 60k that 340k for a house that is exactly as we want it..exactly...

other house in the estate went on market today at 400k and that has no extension nor attic room and needs a lot of work too...

so am I still mad ?

Yes, cos you're comparing a price to what you are use to over the past few years

TheCityManager

Fighting Irish wrote: »

lol

Buying while prices are dropping?
Sounds like a good plan

This post actually makes the most sense............right...gotta get out of it .. wish me luck...:rolleyes:

TheCityManager

Thanks for all the replies people...

The real problem here is that whilst I know it would make huge financial sense to wait..the current house is a **** hole, kids want their own rooms etc, we want somewhere we're not ashamed of..so its either rent bigger elsewhere or buy now....
Also the uncertainty of it all ..renting, not being able to do up a house (which we both love) not being able to settle in an area etc can be very wearing...
we've both lived at many addresses over th elast few years....it feels like time to settle down (finally..)
the kids are not mine, so I dont have a say there and she doesnt want to move them again..(there has been a few moves over last few years..)

Hard talking to be done at the weekend methinks :rolleyes:

jetski

jmayo your a fool go back to bed and stay there.

OP its not clear what your deciding to do?

jmayo

jetski wrote: »

jmayo your a fool go back to bed and stay there.

OP its not clear what your deciding to do?

Is that your usual reposnse when somebody queries your great insight into the property market and our economic outlook.
Hell with that attitude you are qualified to be in government :rolleyes:

PS I wish I could go back to bed, but sadly I have to work and no it's not to pay for a once overpriced pile of bricks

Akrasia

best of luck, but i you think about, a total renovation of a house would be just as disruptive as moving (and you might have to move while the work is going on anyway)
rents are falling at the moment and for the price of a mortgage on an average sized house, you could rent a very nice property for a year while you take the time to find a home with much more potential at a much lower price where you could live almost rent free if you put the 260k into a high yield deposit account (state secured) (10400k in interest on 260k at 4%)

Theboinkmaster

TheCityManager wrote: »

House needs complete renovation..Im talking everything plus we're gonna add an extension and an attic room...we're talking 60k+....

Now here's the thing...we're getting it for 280k so plus 60k that 340k for a house that is exactly as we want it..exactly...

other house in the estate went on market today at 400k and that has no extension nor attic room and needs a lot of work too...

so am I still mad ?

In my opinion - yes.

Property still has to fall significantly, anywhere from 5 to 50% in my opinion, depending on circumstances (location, build quality, house or apartment etc).

I believe that a 3 bed semi D in leafy south dublin asking today €400k will mostly likley drop to €200k over the next 3 to 5 years. That would still be 5 times the average salary and don't forget salaries are falling at the moment....

You'd get it now for €280k but ask yourself how you'd feel if I told you for certain that in 2 years time you could get it for €200k - does €80k mean much to you as it does to me!

Best of luck - you did the right thing coming on here and asking Qs. For more information do some research on www.thepropertypin.com and associated links.

dny123456

if it needs complete gutting, you will have to move out for a while anyway. you cant live in a building site and it always takes longer than you would expect. How much are you paying on rent?

johnnyskeleton

TheCityManager wrote: »

Any advice?

Yes, work it out for yourself.

Ask yourself:

1) Is my job secure?
2) If I were to sell the house on after 2-5 years, will I get back most/all/more than I put into it?
3) Can I easily afford the repayments & the cost of refurbishment?
4) Do I plan to move abroad or move somewhere else in Ireland in the near term?
5) Can I buy a similar property for less and/or in a better state of repair?
6) If I buy and the price goes down, will I accept that loss on the basis that I really want to live in this particular house?
7) Do I have enough for a deposit and can I get the rest from a bank?

If the answer to all of the above is yes, then I see no reason why you shouldn't buy now. Obviously if you think you can get a better price by waiting, then it's up to you whether you can wait that bit longer and get a better price.

However, if the answer to any of the above is no, while it doesn't mean that you shouldn't buy, it does mean that you should think very carefully before buying and realise that you are taking a gamble. For example, I wouldn't buy at the moment unless I could say with reasonable certainty that in 2-5 years time if I had to sell it, I would get back 95% or more of the purchase price. We are currently experiencing wage deflation, and we are also heading back to the more reasonable valuation of 3.5 times your income plus 1x your partner's to buy somewhere. This means that the average price of a house could fall to €150k or less. I'm not saying this is definately going to happen, but its on the cards. In the interest of fairness I should also say that we could be facing Zimbabwae style hyperinflation, in which case the price of an average house could go up to €346,500,000,000. So keep your ear to the ground listening to international trends, and see where you are. Try not to rely totally on the monthly mortgage payment as this can be quite misleading.

newestUser

Theboinkmaster wrote: »

In my opinion - yes.

I believe that a 3 bed semi D in leafy south dublin asking today €400k will mostly likley drop to €200k over the next 3 to 5 years. That would still be 5 times the average salary and don't forget salaries are falling at the moment....

While I agree that comparing the average salary/value ratio would lead one to conclude that houses are overpriced, I'd argue that salaries are higher than average in south Dublin, and I also think that historical salary/price ratios are somewhat redundant today because Ireland is much wealthier. Lots of people have parents who are willing to give them 10000's of euro towards their house.