Advise on buying 3 bed semi in D18

Cancun2009

Hello all,


Looking for as much opinions on the following.

Boyfriend and I are looking to buy 3 bed semi-detach house in The Gallops, Leopardstown.
The location is just perfect for us; however the prices are not that affordable…
Most of the houses are available for 400-420 and our max budget is 330-340. We are first time buyers.
We went to see two houses there and tried to arrange viewing for few others, however we were told that the sale was agreed already.
My questions are...
Do you think it would be a good idea to wait for more properties in the area ?

Do you think that all the properties around 400k were sold as per asking price?
What would you offer for the house around 400k? / What do you think would be accepted?
Do you think we should wait longer til the prices will drop more?
Few links for references
Still on a market
http://www.daft.ie/searchsale.daft?id=543244
http://www.myhome.ie/residential/brochure/12-orby-avenue-the-gallops-leopardstown-dublin-18/347358
Sale agreed
http://www.daft.ie/searchsale.daft?id=550635
http://www.daft.ie/searchsale.daft?id=547394
http://www.daft.ie/searchsale.daft?id=547081

Thanks everyone for reading this, and all opinions welcome!!
K

Jaden

Honestly,
Don't spend over 300K for a house here. Prices will drop alot more. Have a look at the trends for this area on thepropertypin.com

Here's a house 100 yards away for alot less:
http://www.daft.ie/searchsale.daft?id=536751

Even then I would think this property over priced by a fair amount.

RasTa

Hah those are the exact same as my mothers but she lives in Carpenterstown. Anyway those prices are crazy, run... run very fast.

Idbatterim

do not pay anything like the kind of money currently being looked for! you can rent those houses for 1k a month id imagine. Believe me, if you buy now, the fall in value of the house (plus the extra you borrow) will come to a multiple of 12k! As i posted on another thread recently my mum sold an inherited house in 08 for E435k and there are now other houses on the street going for under E300k (god knows what they will actually get)! If you havent already, I would take a thorough read of alot of threads on this forum! It will literally save you a fortune!

RATM

Do you think we should wait longer til the prices will drop more?

Yes. Yes. Yes. You are saving money every day by not buying.

OP think about this, the mess we are in. When Lehman collapsed in the US it took another 18 months for the real effects to hit the Irish market. That was the bank crash. But now new figures from the US show that sales were down 27% in just the month of July alone. And we all know that when America sneezes the world catches a cold. This is the property crash mark 2, the true crash and the one to completely level the market back into some form of sanity.
In short hold tight. That house is way overvalued even for Leopardstown. And its overvaluation will be even more evident when the current turmoil the US is experiencing filters through to here and meets the perfect storm of a savage cutting December budget and Germany's desire to raise interest rates.

Given the choice most buyers who bought towards the end of the boom would get off the roundabout now and they bought when house prices were rising. You're planning to buy when they are falling, possibly an even worse decision IMO.

Cancun2009

Hi Guys,

Thans for your opinions.

My concern is if the prices in D18 will go down as for example in The Gallops lots of properties are sale agreed now? They are still on daft/myhome,however when i rang EA they said it's been already agreed

Do you think people are buying them for the asking price of 400k??

If so i presume the prices will remain the same ...

Wonder what would you Guys offer for the two below properties?

http://www.myhome.ie/residential/brochure/12-orby-avenue-the-gallops-leopardstown-dublin-18/347358

http://www.myhome.ie/residential/brochure/9-orby-court-the-gallops-leopardstown-dublin-18/226380

Thanks,

Mr. Loverman

Leopardstown is a nice area (I know it well) but come on, 400k? The days of the bubble are over. We are not a rich country. We have a long painful few decades ahead of us. We will have a falling population (emigration). Wages are going to decrease. Taxes are going to go up. Unemployment will continue to be double digits.

So does it make sense short-term, medium-term, or long-term to pay 400k for this sort of property? No, it definitely does not.

Just because there are fools out there willing to pay 400k for a semi-d doesn't mean you need to be a fool too!

Wait a few years and you'll save yourself at least 100k over the life of the mortgage.

Mr. Loverman

I would like to add that there is still a huge amount of denial out there (defo at least 50% of the population) so I think now is probably still a bad time to buy.

Idbatterim

Cancun, alot of uninformed people probably think that they are now getting a bargain due to the rip off price in 06/07, they are just less of a rip off now. If you factor in the amount you can save by waiting, plus the bigger a deposit you build up, the less you have to borrow. You are talking about major savings, that could go to fund, you card, holidays, kids education, pension etc. Just try to imagine what will happen to prices of we require a bailout! For those in the Ps or those lending to PS workers assuming they are no risk loans, I wouldnt be so sure!

Duckjob

I'd echo what other posters have said. There's still a huge amount of delusion out there over what a sensible price for a property is.

Many people 's value sensor has been knocked completely out of whack by 10 years of craziness. That is in evidence everyday - people viewing a 400K 3 bed semi as "value" because it used to be 700K.

Please, please, please, please, please wait for at least 6-12 mths before getting back into the market.

Remember that if you end up paying 100K less on the price, with interest included you will probably save the guts of 200K over the life of the mortgage. It's by far the easiest money you'll ever save / make in your life.

RasTa

Cancun2009 wrote: »

Do you think people are buying them for the asking price of 400k??

If so i presume the prices will remain the same ...

Wonder what would you Guys offer for the two below properties?

http://www.myhome.ie/residential/brochure/12-orby-avenue-the-gallops-leopardstown-dublin-18/347358

http://www.myhome.ie/residential/brochure/9-orby-court-the-gallops-leopardstown-dublin-18/226380

Thanks,

The houses are worth 250k max but you probably won't listen so what's the point.

Idbatterim

Id agree with the 250-300k max comment, at that prices I would say yeah that is acceptable.

Theboinkmaster

Idbatterim wrote: »

Id agree with the 250-300k max comment, at that prices I would say yeah that is acceptable.

Out that far id say closer to €200k, not a great area

rokossovsky

Cancun2009 wrote: »

Hello all,


Looking for as much opinions on the following.

Boyfriend and I are looking to buy 3 bed semi-detach house in The Gallops, Leopardstown.
The location is just perfect for us; however the prices are not that affordable…
Most of the houses are available for 400-420 and our max budget is 330-340. We are first time buyers.
We went to see two houses there and tried to arrange viewing for few others, however we were told that the sale was agreed already.
My questions are...
Do you think it would be a good idea to wait for more properties in the area ?

Do you think that all the properties around 400k were sold as per asking price?
What would you offer for the house around 400k? / What do you think would be accepted?
Do you think we should wait longer til the prices will drop more?
Few links for references
Still on a market
http://www.daft.ie/searchsale.daft?id=543244
http://www.myhome.ie/residential/brochure/12-orby-avenue-the-gallops-leopardstown-dublin-18/347358
Sale agreed
http://www.daft.ie/searchsale.daft?id=550635
http://www.daft.ie/searchsale.daft?id=547394
http://www.daft.ie/searchsale.daft?id=547081

Thanks everyone for reading this, and all opinions welcome!!
K

I presume you either have mortgage approval or the cash to buy? If its the former, be aware that some buyers with approval still cannot get there hands on the money as the mortgage approval is blocked further up the chain. If its cash (unlikely I know) your laughin.
Very few houses now sell for their asking price. If you get a survey or even look around the house yourself you will surly come up with something that is not right or something that you will have to change therefore cost to you. Add these costs up and subtract from the asking price. Worst thing that can happen is that they refuse. So what? there are many more houses and if you spread your viewings well enough you will come up with a comparable house that is a lower price than the one you propose a bid on. Dont believe ANY of the ****e that estate agents tell you. All they want is to get it off their books so they will pressurise the seller and swear to you thet a hundred people are baying to buy that house or as they would put it "your house". Stay calm and try to seem slightly unenthuiastic when talking to agents. Let them know you are looking around. Final bit of advice is dont buy now as there is a long way yet to go before prices recover. Another 3bn out of the economy this year? Possibly a default on the cards? Rent till next year. If the prices continue to fall (as I believe they will) you could save a a few years rent on the price you will pay for the house next year. My experience. Bought in 2008 should have rented. Rent 16K a year at the time. In those 2 years prices fell by 150K on the house we wanted and the refurb costs would have been cheaper now too. But hey we could afford it (as it was all imaginary money anyway) and we wanted to get into the house in the location and in the time frame we had chosen.

TheCityManager

Idbatterim wrote: »

Id agree with the 250-300k max comment, at that prices I would say yeah that is acceptable.

Totally agree....

Id say average three bed semis in places like lucan, clonsilla, swords etc will bottom out less than 200k, maybe 175k.....

I'm waiting..

My OH has just sold her house and we're going renting for a year :cool:

NotInventedHere

TheCityManager wrote: »

Totally agree....

Id say average three bed semis in places like lucan, clonsilla, swords etc will bottom out less than 200k, maybe 175k.....

I'm waiting..

My OH has just sold her house and we're going renting for a year :cool:

Following Ivan Yates back of the envelope figures from yesterday's Examiner. The assumption is that 1400 rent per month represents 5% return.

1400 x 12 = 16800 per year

16800 x 20 = 336000

Realistic price in the GAllops, 290 - 330k for 4 bed

Theboinkmaster

NotInventedHere wrote: »

Following Ivan Yates back of the envelope figures from yesterday's Examiner. The assumption is that 1400 rent per month represents 5% return.

1400 x 12 = 16800 per year

16800 x 20 = 336000

Realistic price in the GAllops, 290 - 330k for 4 bed

1 - that rent will continue to decrease
2 - not sure about that return, id think more like 7%

IMO €300k far too high, i think more like €200k.

Think about it - if a 4 bed in gallops is €300k that would mean a 4 bed in rathfarnham would be €400k and in blackrock €500k etc...

Cancun2009

Thanks for all the replies… probably you’re all right but taking into consideration we are paying someone else mortgage is pushing us… Also the fact that lenders are reducing the amount that we can borrow is bit annoying and does not leave us any choice… therefore we made an offer on brand new house in The Gallops (70k less than an asking price)- offer was refused by the agent saying the maximum the developer will go down is 15k …so we’re still looking – also why you think all the 3beds in the Gallops are still over 400k????

Wibbler

Cancun2009 wrote: »

also why you think all the 3beds in the Gallops are still over 400k????[

The Gallops has always been in demand and it may be taking owners some time to adjust to reality. That said it's a pleasant enough area, close to the M50 and with the LUAS arriving before the end of the year.

mathie

Cancun2009 wrote: »

Thanks for all the replies… probably you’re all right but taking into consideration we are paying someone else mortgage is pushing us… Also the fact that lenders are reducing the amount that we can borrow is bit annoying and does not leave us any choice… therefore we made an offer on brand new house in The Gallops (70k less than an asking price)- offer was refused by the agent saying the maximum the developer will go down is 15k …so we’re still looking – also why you think all the 3beds in the Gallops are still over 400k????

Supply and demand.

As others have stated some people are willing to pay over 400K as they're comparing them to bubble prices.
See here...

http://www.irishpropertywatch.com/salesSearchResults.php?Address=gallops&Beds=3&Type=House&Region=Co.+Dublin

...some were listed at over 600K just TWO years ago.

They've fallen a third in value in just TWO years.

Now you point out one area of the economy that shows a sign of improving and there might be a hint of bottoming out.
But it's almost impossible to find one.

1. Unemployment up consistently in the last few years http://www.cso.ie/statistics/sasunemprates.htm
2. Rents are down http://www.daft.ie/report/
3. Banks are increasing interest rates
4. Banks are notl lending as much as before
5. Many, many, harsh budgets lie ahead
6. Anglo and NAMA
7. 10-year bond yields at close to 6%

But knock yourself out and buy.
Plenty of people (http://www.boards.ie/vbulletin/showthread.php?t=2055860687) bought in the face of advise that told them not to and you seem as if you'd like to do the same.

I heard before that people don't seek advise, they seek an affirmation of what they believe.

I think everyone on this thread advised you not to buy and you didn't listen.
People just don't learn from others mistakes *cough* Alison *cough*

Idbatterim

with areas around Leopardstown, ie the Gallops, given the fact that the Luas will shortly be servicing the area and developers arent going to stop buidling forever, is it likely that over the next few years that they start building in this area again? but not selling for crazy prices, based on ridiculous land prices.

Victor McDade

Cancun2009 wrote: »

but taking into consideration we are paying someone else mortgage is pushing us…

AAAAGGGGGHHHHHHH!!!!!! :mad::mad:

Seriously, try to get out of this mentality, it was this kind of logic that got the country into the mess it's in. Yes, you are contributing to someone else's mortgage but you are saving a fortune on your own!

RasTa

mathie wrote: »

I heard before that people don't seek advise, they seek an affirmation of what they believe.

I think everyone on this thread advised you not to buy and you didn't listen.
People just don't learn from others mistakes *cough* Alison *cough*

This is a great point, same with DeVore and that Lisa woman asking for advice. But yet the op still considers rent as dead money for whatever reason.

Treehouse72

Cancun2009 wrote: »

Thanks for all the replies… probably you’re all right but taking into consideration we are paying someone else mortgage is pushing us (1)… Also the fact that lenders are reducing the amount that we can borrow is bit annoying and does not leave us any choice (2)… therefore we made an offer on brand new house in The Gallops (70k less than an asking price (3))- offer was refused by the agent saying the maximum the developer will go down is 15k …so we’re still looking – also why you think all the 3beds in the Gallops are still over 400k???? (4)

Cancun, you have so much so wrong it is head spinning. On the four highlighted points:

1. But what if house prices are dropping more per month than you are currently paying in rent? Have you considered that? In the last 3 quarters, Dublin house price falls have been 7.5%, 10.3% and 3.5%:

http://www.esri.ie/irish_economy/permanent_tsbesri_house_p/

So, to take the most conservative possible reading of this, that is c. 1% per month falls. My opinion is that it's significantly more than that (using those figures it was over 3% pm in Q1 '10 and 2% pm in Q4 '09), but let's use the 1% figure to keep it simple and conservative. On a €400,000 property, that's a €4,000 monthly fall.

Meanwhile, here is a 4-bed for rent in the Gallops asking €1,400:

http://www.myhome.ie/343692

No doubt the actual clearing price is probably lower than this. So, if you are losing €4,000 pm after you buy, is that better or worse than spending, say, €1,200 pm on rent?

2. You say the amount you can borrow is declining all the time, and cite this as a reason to move forward with the purchase. Has it occurred to you that the reason banks will offer you less in the future than they will now is based on their belief that house prices will continue to fall? If they thought they could make money by lending you more, why wouln't they do it? And why would you want to borrow more than the bank is willing to lend? It is almost as though you are in a rush to lock in a high level of debt! Doesn't this intuitively strike you as perverse? In a sense, the banks are protecting you from yourself. For once with the banks, I would consider this wise counsel.

3. Why are you making a judgement about what you should pay for the house based on the asking price? What on earth has that got to do with anything? You should do the sums based on your income, and stress test that for significantly higher interest rates. THAT is the amount you can afford. By all means, if that is €70k below the Gallops asking, then fair enough. But I suspect that is not the case and you are actually having this major financial decision made for you by working off the arbitrary pricing of some gombeen developer who is probably busto. You have it all bass ackwards.

4. Why are prices still over €400k? Because large sections of our society are still in extreme denial about how rich we are(n't) and how far away a "recovery" in property prices are. Most people still think that at some point in the next few years property prices will return to 2006 levels. Denial simply isn't a big enough word to describe this lunacy.

Gone West

RasTa wrote: »

This is a great point, same with DeVore and that Lisa woman asking for advice. But yet the op still considers rent as dead money for whatever reason.

I read both of those threads, and made that point also.
These people don´t want your advice, they just want you to agree with them.
Relics from the celtic tiger days, house prices have a lot further to fall, and you are paying 350k for a 3 bed semi in a not too great area? Funny.

If you are determined to buy now and waste some cash (which is fair enough its your perogative) tell the estate agent that your offer was not a negotation, that you can pay that amount no more. Tell them not to bother contacting you unless they are going to accept it. Sale agreed does not mean much, and guaranteed there will still be houses on the market for years yet.

Somebody made a good point that the market prices will reflect what the dumbest people will pay. Then when no more will buy, all prices will drop another 10% and the next dumbest people will buy those, then another price drop, and so on.

Those houses are probably worth 220k (subject to good mid/long term growth in Irelands economy, which is not a given).