Buying!!!!!!

Jollyhope

After reading the Morgan Kelly article, I take it that it's not a good time to buy a house probably for the next 5 years?

NIMAN

Jollyhope wrote: »

After reading the Morgan Kelly article, I take it that it's not a good time to buy a house probably for the next 5 years?

Correct, as long as you are going to let one individual run your life for you.

noxqs

No it is not a good time to buy. Open a news paper and you see:

- Economy is not recovering (world wide). Stock markets are in free fall.
- QE3 on the way, after a downgrade of the US credit rating - this is gasoline on the fire.
- There is NO sign of Irish house prices being anywhere near a tangible bottom.
- RA/RS is being slashed come December which will probably mean many investment landlords will burn their hands quite badly and this will mean more 'distressed' properties going up on auction.

5 years might even be very optimistic. Given that we've seen this phenomena before (Japan) there is no historical evidence that house prices will not decline for a decade to come.

Rent is dead money? No, rent is paying for security and peace of mind that you're not burning money on the bonfire of negative equity and reduced mobility.

Every day I see a thread about someone buying recently, I have to shake my head in disbelief.

namurt

Negative equity is only relevant if you plan to re-sell in the foreseeable future. I'm trying to sell at the moment to upgrade from a 2-bed I bought when I was single to a family home and know all about how restrictive negative equity is. However, if I do manage to sell I would be happy to buy somewhere that we plan on spending the next 40 years.

Duckjob

Value for money is always relevant though, or at least it should be.

D1stant

Jollyhope wrote: »

After reading the Morgan Kelly article, I take it that it's not a good time to buy a house probably for the next 5 years?

Theres an interesting article on Ronan Lyons blog about his view of the mortgage issue and Kelly's. I know Lyons is part of Daft and you may say he has vested interest, but I've always found his stuff to be well thought out

I'm not sure Kelly understands the property sector as well as Lyons

ShadowHearth

ah.... here we go again... its not so black and white as BUY and NOT to BUY.

if you plan to buy a house for 250k-300k then i will say - no.

if plan to buy a house for up to 120k then why not ( IF... )

If you find a house that you really like and plan to stay in it for awile for 100k ish, then i say why not.


i was closing deal ( but it went wrong and i needed back out ) on a lovely house for 80k, which just needed some minor TLC, which i could do myself. My repayments would be around 360eu per month for 25 years. i pay rent 650eu now... house was in nice area, really decent size with huge yard. if it would drop in price i wouldnt give two ****s about it as i was not looking to resale or trade in. There is really not much space to drop lower then 50-70k on it ( house is not in ghost estate so feck off with your US Detroit example )


and now we can listen to all negative equality and horror stories, how your penis wount be working in 20 years, your wifes tities will get soggy, cats will sleep with dogs, cars will be banned and alchohol will be only sold on weekends.

noxqs

I tend to agree with your overall assessment ShadowHearth. A decent property in a decent area at a good price even factoring in interest rate hikes may make sense IF and only IF people intend to stay there for a decade or more.

Young people who are not yet in a situation where they have kids and/or a stable job should not buy now. The reasons are simple.

There is a direct correlation between unemployment and home ownership. Simply because owning a home in negative equity AND/OR a long time before a sale can be agreed (usually related) can not just move to where the jobs are.

Detroit is not Dublin - but it is a good example of a place where it all went bust and the only thing to do is to move. Which some couldn't which lead to increased poverty.

The prudent thing to do now is to rent and see what happens unless you got a stable job/wife/kids and can answer yes to the question "will there be a job near the house you will buy in 10, 15 years?".

The interesting thing about Detroit is that its such an extreme example of home ownership leading to poverty and not riches. Which serves as a reminder that a house is not an investment. It is not a pension. It is a debt burden which may or may not pay off at some point in the future (and substract the end of term mortage value of the house from interest paid and its a near-if-not zero sum game).

robd

There's been some big movements in some areas of the country but others still have nuts prices. Every town or suburb is essentially a separate market albeit they somewhat influence one another.

I've seen some areas in Dublin starting to offer great value and it is hard to see these fall further. However that's just from the perspective of how high the were, it's hard to see them go so low. It just doesn't seem believable. That feeling is called cognitive dissonance which is something you always want to remove from decision making.

On the other hand certain areas of Dublin are still nuts. Clontarf springs to mind. 4 beds in particularly are generally 600-800k with the odd exception. That's just nuts given the time we're in and the rest of the market. There's room from >50% fall there easily.

In regard to your only in negative equity if you come go to sell. That's very dangerous given state of banks. They could in theory ask you to pay back negative equity portion if they felt house had dropped in value significantly. Also, paying double what you should pay (and will in a few years time) is an extreme waste of money in terms of servicing the mortgage. Money that could be put into retirement savings which is important given government is bust, most of us are part of a baby boom meaning pension pot is going to have to stretch further. Also their's you kids further education which you can bet your life you're going to have to pay for now too.

Dades

ShadowHearth wrote: »

if you plan to buy a house for 250k-300k then i will say - no.

if plan to buy a house for up to 120k then why not ( IF... )

If you find a house that you really like and plan to stay in it for awile for 100k ish, then i say why not.

Problem with that is you need to pay more to buy a house you'll be happy to live in long term.

the groutch

remember, mortage interest relief ends this year, so holding out til next year might not save you as much as you'd think.

Duckjob

the groutch wrote: »

remember, mortage interest relief ends this year, so holding out til next year might not save you as much as you'd think.

Will it though? It was supposed to end earlier this year...

My cynical side says the gov will deliberately string that one out as long as possible, always extending at the eleventh hour so as to make as many suckers jump as possible.

ShadowHearth

Dades wrote: »

Problem with that is you need to pay more to buy a house you'll be happy to live in long term.

people got waaaaaaaaaaay carried away with all this negative equality ****. If you buy a HOME, negative equality on 100k is not an issue, if you looking for investment, then you are not a sharpest tool in the shed.

now if you plan on buying a house, it means you did your homework and you know where you stand financially and what can you afford and how can you reassure yourself. if you are one of those who make thread: " i am living in council house working 16h per week, can i get a mortgage? :pac: ", you shouldnt even think of buying anything more then a packet of potatoes and carton of milk.

if i pay now 70k and pay 360eu per month for 25 years i am happy. i will own that house in 25 years. i know that i iwll pay 70k+ FECK TRUCK of intrest. ( yes yes, property police, i know that repayments can go up, but they wount go up to idiotic limits, like people who took 300k mortgages with 0% deposits )

i pay 650eu for rent for 25 years and i wount own jack ****. i will be in squire one like i was 25 years ago.

25 years of 360eu payments or 650eu payments?

yes, you pay a lot intrest, but you will own the fecking thing, not your landlord.

thats way i am saying that property in 100k (ish) is not a bad deal if you look at it with clear head.

i am just back home after checking a savage 3 ( all HUGE ) bedroom bungalow. It needs work inside, painting, new floors and ather minor bits and pieces. its on sale for 80k and i bet it will go for 50-60k. If your hands are not growing out of your arse you can take a loan of 20k and make a wonderfull wonderfull family house.

so 100k property has its catches too. if you buy a 1 bed apartment for 100k, then you are an idiot. if you buy a 100k house in which you can live, and later on upgrade( extention etc ) then its a great buy.

Firetrap

namurt wrote: »

Negative equity is only relevant if you plan to re-sell in the foreseeable future. I'm trying to sell at the moment to upgrade from a 2-bed I bought when I was single to a family home and know all about how restrictive negative equity is. However, if I do manage to sell I would be happy to buy somewhere that we plan on spending the next 40 years.

It all depends where you're coming from of course but if someone's shelling out hundreds of euros extra a month on their mortgage, that's no joke either. For that sort of money you could replace your car, accumulate savings, take a holiday, have more disposable income...

Supercell

I find the Ronan Lyons Rent Or Buy calculator pretty good for this sort of question.

Put down how much you have to pay to rent a similar place and it will pretty much tell you whether you would be better off renting or buying.
I particularily like the the suggested price you should be paying for that house if there was a resaonable rental yield of about 5%, quite an eye opener as to so current values.

I'm going to look at a gaff on Thursday that not far off the 5% yield mark and will be making a bid (if the place looks reasonable) based on that calculator.

D1stant

ShadowHearth wrote: »

people got waaaaaaaaaaay carried away with all this negative equality ****. If you buy a HOME, negative equality on 100k is not an issue, if you looking for investment, then you are not a sharpest tool in the shed.

now if you plan on buying a house, it means you did your homework and you know where you stand financially and what can you afford and how can you reassure yourself. if you are one of those who make thread: " i am living in council house working 16h per week, can i get a mortgage? :pac: ", you shouldnt even think of buying anything more then a packet of potatoes and carton of milk.

if i pay now 70k and pay 360eu per month for 25 years i am happy. i will own that house in 25 years. i know that i iwll pay 70k+ FECK TRUCK of intrest. ( yes yes, property police, i know that repayments can go up, but they wount go up to idiotic limits, like people who took 300k mortgages with 0% deposits )

i pay 650eu for rent for 25 years and i wount own jack ****. i will be in squire one like i was 25 years ago.

25 years of 360eu payments or 650eu payments?

yes, you pay a lot intrest, but you will own the fecking thing, not your landlord.

thats way i am saying that property in 100k (ish) is not a bad deal if you look at it with clear head.

i am just back home after checking a savage 3 ( all HUGE ) bedroom bungalow. It needs work inside, painting, new floors and ather minor bits and pieces. its on sale for 80k and i bet it will go for 50-60k. If your hands are not growing out of your arse you can take a loan of 20k and make a wonderfull wonderfull family house.

so 100k property has its catches too. if you buy a 1 bed apartment for 100k, then you are an idiot. if you buy a 100k house in which you can live, and later on upgrade( extention etc ) then its a great buy.

Over emotive text aside. I cant disagree with you

Except this. Where can you buy a good home for 50-100k?

Good is a subjective term of course

I mean 'good' as good area (no undesirables, priced out), central to a city (car not needed if push comes to shove, likely that kids can have fufilling local lives, friends, college, work), with good schools within walking distance, room to extend, privacy etc

Seriously - what area are you looking in?

D1stant

Supercell wrote: »

I find the Ronan Lyons Rent Or Buy calculator pretty good for this sort of question.

Put down how much you have to pay to rent a similar place and it will pretty much tell you whether you would be better off renting or buying.
I particularily like the the suggested price you should be paying for that house if there was a resaonable rental yield of about 5%, quite an eye opener as to so current values.

I'm going to look at a gaff on Thursday that not far off the 5% yield mark and will be making a bid (if the place looks reasonable) based on that calculator.

Yep. This is a good yardstick, but it doesnt take into account some soft (but important for me at least) items. Like sitting around the table with your family and thinking.... This is home... no one can move me, if I pay the mortgage. If I want to do x, y or z to the house. Thats cool. I am more engaged in the communiity / neighbours because I want the area to work and be nice, and that has positive spin offs in terms of getting to know people and not living in temporary block X etc

I dunno, but psychologically there is an upside. It's hard to measure, but it is important.

Lyons calculates Euros over the next 20 years. I'm equally interested in quality of life over that period.

ShadowHearth

D1stant wrote: »

Over emotive text aside. I cant disagree with you

Except this. Where can you buy a good home for 50-100k?

Good is a subjective term of course

I mean 'good' as good area (no undesirables, priced out), central to a city (car not needed if push comes to shove, likely that kids can have fufilling local lives, friends, college, work), with good schools within walking distance, room to extend, privacy etc

Seriously - what area are you looking in?

I am not in Dublin, so I guess that helps too. The house we checking are not In the middle of nowhere. And as you said: "good" can be a very different for each individual. The properties we checked were not in ghost estates or in the middle of rapist forests. Good few were in mature estates, were mostly old and very tidy people live.

We personally don't want a house in town centre, as it's not a house anymore. We have 3 cars, so we don't mind driving. I checked few properties already. Some of them were rubbish and dreamers others were bang for the money. Some of them up to 10 miles from our work places, some less then 1mile.

I am going to check 2 semi-d houses in estate which is in town we live in, I couldn't see them yesterday as EA could not arrange a viewing as owners still live in them, and he couldn't contact them. Bouth properties less then 100k.

There are bargai s out there and there are lunatics, you just need go and check. For example: I found on daft a funniest thing ever: 2 semi-d houses. Number 9 amd 10 ( same biulding, identical bouth sides). One goes for 300k the other one for 140k... Lol...

Jesus Wept

noxqs wrote: »

- RA/RS is being slashed come December which will probably mean many investment landlords will burn their hands quite badly and this will mean more 'distressed' properties going up on auction.

Define slashed? Really doubt they will. I think it is their usual trick of talking about slashing and then following up with a tame cut and the people in question are relieved.

D1stant wrote: »

Theres an interesting article on Ronan Lyons blog about his view of the mortgage issue and Kelly's. I know Lyons is part of Daft and you may say he has vested interest, but I've always found his stuff to be well thought out

I'm not sure Kelly understands the property sector as well as Lyons

I think daft and Lyons are full of it. I stopped reading what they had to say 12 months ago.

John Mason

If you are buying a home (not a house) and can afford the mortgage plus another 10% on top - to hell with negative equity. to have the freedom to do what you want with your own space is worth more then anything.

to be able to paint the house YOUR colours and to have YOUR furniture and to have sercurity, to know that the landlord is not going to turn around in and give a months notice is worth every bit of negative equity.

the groutch

Supercell wrote: »

I find the Ronan Lyons Rent Or Buy calculator pretty good for this sort of question.

Put down how much you have to pay to rent a similar place and it will pretty much tell you whether you would be better off renting or buying.
I particularily like the the suggested price you should be paying for that house if there was a resaonable rental yield of about 5%, quite an eye opener as to so current values.

I'm going to look at a gaff on Thursday that not far off the 5% yield mark and will be making a bid (if the place looks reasonable) based on that calculator.

that is a good indicator, with Mortgage Interest Releif factored in I'm paying about €200 less per month on my mortgage than if I was to rent this or a similar property in the area. so for me it made sense to buy.

Dades

ShadowHearth wrote: »

I am not in Dublin

That's all that is relevant here. You are in the lucky position then of being able to potentially buy a house to grow into for under €100K.

For those of us that live in Dublin or other urban areas where space is at a premium - buying a 3 bed with growth potential in an area you would happy to live in (and send your kids to school in) for 25 years requires a much more substantial outlay.

Though I wish they were, your figures just aren't relevant outside of your own situation.

ShadowHearth

Dades wrote: »

That's all that is relevant here. You are in the lucky position then of being able to potentially buy a house to grow into for under €100K.

For those of us that live in Dublin or other urban areas where space is at a premium - buying a 3 bed with growth potential in an area you would happy to live in (and send your kids to school in) for 25 years requires a much more substantial outlay.

Though I wish they were, your figures just aren't relevant outside of your own situation.

Yes, but doesn't that mean that " don not buy!!! Think of children! Negative equality! " **** ir really short sited. There are different situations.

All in all I just wanted to say: there is no black and White - buy - do not buy. There are situations where's buying is a good deal, and ofc situations wheres buying is a stupid thing.

Really annoying to see an army of sheep who just butch about negative equality, without even looking in to it more carefully.

I bet that you can find something nice in Dublin area for around 150k, just needs some time to look in to more carefully.

Dades

ShadowHearth wrote: »

I bet that you can find something nice in Dublin area for around 150k, just needs some time to look in to more carefully.

"Hi, welcome to Dublin. You're new here, right?"

ShadowHearth

Dades wrote: »

"Hi, welcome to Dublin. You're new here, right?"

Okay, fair play here .

So I guess Dublin is a country in country so?

noxqs

to be able to paint the house YOUR colours and to have YOUR furniture and to have sercurity, to know that the landlord is not going to turn around in and give a months notice is worth every bit of negative equity.

Actually, it isn't worth negative equity. The idea of 'your', 'freedom' is counter to the fact that negative equity functions like a ball and chain around your ankles - doubly so in a recession where mobility is key in job choices.

The chance that a landlord (in this climate) gives a tenant a months notice is ridiculous. Who would want to loose a tenant now.

You have to stop being emotional about your dwellings. Its just bricks and mortar. Most people don't even spend half their time in their homes anyways.

John Mason

noxqs wrote: »

Actually, it isn't worth negative equity. The idea of 'your', 'freedom' is counter to the fact that negative equity functions like a ball and chain around your ankles - doubly so in a recession where mobility is key in job choices.

The chance that a landlord (in this climate) gives a tenant a months notice is ridiculous. Who would want to loose a tenant now.

You have to stop being emotional about your dwellings. Its just bricks and mortar. Most people don't even spend half their time in their homes anyways.

to you maybe but for me after spending years of renting, i wouldnt change it for the world.

i am not sitting for 6 weeks around in middle of winter with no heating or hot water because the landlord wont get the boiler fixed. when the boiler went last year in my house, it was replaced within 2 days.

When the washing broke, the engineer was out the next day, same with the shower.

No fighting to get your deposit back, no inspections, no mental people sharing with you.

I have my space, i come home for work and close the door on my house where no one can telll me what i can or cannot do.

i have no intention or ever moving.

i spent 11 years renting - its hell

Dades

ShadowHearth wrote: »

So I guess Dublin is a country in country so?

It sure is!

I'm about to the rent, though, so I will be watching out over the next year or two and keeping my fingers crossed for those €150k semis in my preferred areas!