Have we hit bottom yet?

socco

I'm 27 and thinking of buying my first place... Am I mad to be considering it!? Everyone keeps telling me rent is dead money but at the same time if it means I save more / have to borrow less I'm happy to keep renting. That said if we're close to the bottom it might be a good time to buy and then the newspapers like tomorrows independent headline are like a sales pitch to go out and buy now! I get confused over what to do...

Oh any if anyone can post what Wednesdays lotto numbers will be it'd be appreciated.

Im looking at houses around 120,000 and I have 10,000 saved so far for a deposit. I'm on 41,000 a year and in a steady job where I've been employed for 4 years. I would be looking to borrow around 90-108k depending on what final selling price could be negotiated. The house is one I can see myself living in long term.

Is there any point approaching the bank now or should I wait until I have 15,000 or more saved? Is anyone else looking to buy at the moment?

D1stant

Why do you want to buy right now? Prices are still falling so wait

Rent is dead money is BS. Dead money is paying an extra 20k for something rather than waiting a while

My prediction is the bottom is in 12 months time

shangri la

What sort of a house will you get for that price? Daft/myhome link?

are you single with no kids?

are you buying now solely because you keep thinking rent is dead money?

for some people its a good idea, for others its not great.

shangri la

To answer your title question, no.

john t

property prices are still falling and very much a buyer has the negotiating in his hand... but rent also is dropping.... if you can afford too buy yes buy but offer under asking and you can get a bargain...

Ritchi

john t wrote: »

property prices are still falling and very much a buyer has the negotiating in his hand... but rent also is dropping.... if you can afford too buy yes buy but offer under asking and you can get a bargain...

Is rent dropping. We moved into our apartment in Rathmines over a year ago, had a look the other day and there's nothing near us that's as good as ours for the same price or cheaper. Maybe it is dropping in other areas, but not around me.

jobless

socco wrote: »

I'm 27 and thinking of buying my first place... Am I mad to be considering it!? Everyone keeps telling me rent is dead money but at the same time if it means I save more / have to borrow less I'm happy to keep renting. That said if we're close to the bottom it might be a good time to buy and then the newspapers like tomorrows independent headline are like a sales pitch to go out and buy now! I get confused over what to do...

Oh any if anyone can post what Wednesdays lotto numbers will be it'd be appreciated.

Im looking at houses around 120,000 and I have 10,000 saved so far for a deposit. I'm on 41,000 a year and in a steady job where I've been employed for 4 years. I would be looking to borrow around 90-108k depending on what final selling price could be negotiated. The house is one I can see myself living in long term.

Is there any point approaching the bank now or should I wait until I have 15,000 or more saved? Is anyone else looking to buy at the moment?

on those numbers i dont think you're mad considering it as long as your job is stable.... it's not a massive mortgage...

on the other hand you're only 27 and there is no rush in you buying it...it is not exactly going to shoot up in price any time soon and the whole rent is dead money thing is crap in a falling market...

you've gotta ask yourself is this somewhere you want to stay if you wanted to start a family etc in the future....

odds_on

socco wrote: »

I'm 27 and thinking of buying my first place... Am I mad to be considering it!? Everyone keeps telling me rent is dead money but at the same time if it means I save more / have to borrow less I'm happy to keep renting. That said if we're close to the bottom it might be a good time to buy and then the newspapers like tomorrows independent headline are like a sales pitch to go out and buy now! I get confused over what to do...

Oh any if anyone can post what Wednesdays lotto numbers will be it'd be appreciated.

Im looking at houses around 120,000 and I have 10,000 saved so far for a deposit. I'm on 41,000 a year and in a steady job where I've been employed for 4 years. I would be looking to borrow around 90-108k depending on what final selling price could be negotiated. The house is one I can see myself living in long term.

Is there any point approaching the bank now or should I wait until I have 15,000 or more saved? Is anyone else looking to buy at the moment?

After 4 years you've only managed to save 10,000 - I think a mortgage is going to crush your lifestyle.

UDP

Doesn't look like we have hit the bottom yet from these graphs anyway:




Id say it will be another few years before house prices stop falling or at least slow right down.

Do not listen to that "Rent is dead money argument" that is the same rubbish that got people into negative equity.

Rent is going to drop in the next 2 years as long as the government dont try and keep the property market inflated or over help those in arrears from losing their properties. The drops in rent allowance in the next 2-3 years+ will make big changes in rent amounts too as long as the government don't back out of dropping the amounts.

I suspect it might be around 2016 before property prices reach a stable level but it all depends on government policy and how they will try and slow the drop so it could go on much longer if they slow it down.

gurramok

Looking at the graph, it appears we are at the 2001 level(Dublin) and even later for outside Dublin. From memory as i'm old enough(:)), house prices were still in crazy territory back then.

D3PO

UDP wrote: »

Doesn't look like we have hit the bottom yet from these graphs anyway:




Id say it will be another few years before house prices stop falling or at least slow right down.

Do not listen to that "Rent is dead money argument" that is the same rubbish that got people into negative equity.

Rent is going to drop in the next 2 years as long as the government dont try and keep the property market inflated or over help those in arrears from losing their properties. The drops in rent allowance in the next 2-3 years+ will make big changes in rent amounts too as long as the government don't back out of dropping the amounts.

I suspect it might be around 2016 before property prices reach a stable level but it all depends on government policy and how they will try and slow the drop so it could go on much longer if they slow it down.

If your going to use graphs to support your argument how about using recent ones and not ones from 2009 and 2010 :rolleyes::rolleyes::rolleyes:

Forest Fire

That graph does not take for inflation nor for general global property index increases which is always rising constantly through the peaks and troughs so I would think we are near bottom but property will decrease at very low rates from summer on...thus making it difficult to decide whether to rent or buy.
If rates of decrease are very low it would make sense to buy.

Ritchi

I like they way second hand houses were free in 1977

Duckjob

I would hazard a guess that anyone still telling you that "rent is dead money" is either

a) an estate agent
b) a house owner still wondering what's "wrong" with the market now that people aren't rushing out to buy very normal properties at 10X-12X salary anymore.

I think you can safely disregard the "advice" of such people.

socco

odds_on wrote: »

After 4 years you've only managed to save 10,000 - I think a mortgage is going to crush your lifestyle.

41k is my current salary. I only started out on 25k and 10k of a college loan to pay off to be fair. I did also enjoy life so the first few years as well though . Im only really starting to save in the last year.

socco

Duckjob wrote: »

I would hazard a guess that anyone still telling you that "rent is dead money" is either

a) an estate agent
b) a house owner still wondering what's "wrong" with the market now that people aren't rushing out to buy very normal properties at 10X-12X salary anymore.

I think you can safely disregard the "advice" of such people.

Family and friends mostly. My job is stable enough at the moment but it is a private company so you can never be certain. I'm living in the midlands.

Duckjob

socco wrote: »

Family and friends mostly. My job is stable enough at the moment but it is a private company so you can never be certain. I'm living in the midlands.

House-owning family and friends?

Probably the thing I've come to realise from observing the bursting of our property bubble is the truth of the phrase:
"None so blind as those that will not see"

Spend 10 mins with a pen paper and calculator. Take a 12 mth period and work out the break even points between renting at your chosen price level for 12 months and then maybe buying vs buying now.

Generally you'll find that if the market drops by more than a couple of %, you'll can save by renting the 12 mths instead, and if the market falls by anything like the >10% predicted by most economists, you can save a lot.

UDP

D3PO wrote: »

If your going to use graphs to support your argument how about using recent ones and not ones from 2009 and 2010 :rolleyes::rolleyes::rolleyes:

I dont get what you are saying. It may not show the latest figures but the it does show the historical figures. Has that much happened in 2010 and 2011 to change the graph dramatically? (:rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:)

Forest Fire wrote: »

That graph does not take for inflation nor for general global property index increases which is always rising constantly through the peaks and troughs so I would think we are near bottom but property will decrease at very low rates from summer on...thus making it difficult to decide whether to rent or buy.
If rates of decrease are very low it would make sense to buy.

Apparently this one does take inflation into account (source):

Idbatterim

Op, where do you want to buy, what type of property is it, is it close to an employment centre, good services etc? Im looking at moving out and renting with the brother, the mum was like would you not buy "rent is dead money" i flipped the lid, I am so sick of this old Irish mentality, those saying that to you have absolutely no idea what they are talking about and the ignorance is astonishing. The way I see it, depending on age, owning a property can be a major ball and chain around your leg, depending on if you want to travel, may have to relocate for job etc... Op, you should ask those who say that rent is "dead money" to draw up a list of all other costs associated with buying a house...

johnnyjb

My advice to OP is dont listen to everybody in here either.

Alot of the talk on this site and www.thepropertypin.com is focused on dublin and middle class areas where people are looking to make a steal and it doesnt seem to be happening.You have to realise people are looking for totally different properties so what might be a bargain to you may not interest alot of people replying so take that into account. Im in the munster area and prices are reasonable compared Stillorgan but im still gonna wait a bit longer. South Dublin prices dont interest me so i take some of the replies with a pinch of salt.

You said your in midlands so do some research in your area on daft.ie, myhome.ie

Download the propertybee toolbar for daft(it can show price reductions of property so you can track trends in your area)http://www.property-bee.com/

If i were you i would wait at least year and try get as much money as possible.

Realistically your gonna need 15-25k to be comfortable, deposit, legal fees,buying or moving furniture appliances, decoration etc..

Your gonna need a good history of savings to get a mortgage these days i.e no existing loans,no gambling sites popping up on your bank statements either(paddypower etc..)

But then again maybe now isnt the right time. Prices will def come down,your 92 year old gran could tell ya that but no one knows when it will stop and what areas the drops are most going to effect.

MadsL

Official figures show that prices of houses and apartments across the country fell at their fastest annual rate in almost two years last month.

http://www.rte.ie/news/2012/0124/houses-business.html

Dead money is looking at the 250k you are paying a mortgage on compared to the 105k your apartment is now worth.
Dead money is the insurance paid over 40 years for your house.
Dead money is the cost of legal fees in buying the house.

Dead money is the mantra I had parroted to me in 2007 as two colleagues plunged into property purchase that have now crippled them comments like "sure, it's only the media talking it down" "you never lose money on a 4 bed in the country" "We are getting in now before they sell out". Both are now financially crippled as a result of those purchases.

Write down and stick up someone you can see it "A HOUSE IS A UTILITY NOT AN INVESTMENT" - it might help you see straight.

Also - use something like this calculator to help you understand that a house purchase means you cannot invest your savings elsewhere;

http://www.ronanlyons.com/2010/04/20/your-very-own-rent-or-buy-calculator

Ireland is a particular unfriendly regime for house buyers too with associated costs and relatively poor mortgage fixed terms. We just bought in the US on a 4% fixed mortgage for 30 year term - a better interest rate than most countries are borrowing at!!

Also consider if buying a house a 27 is really, really where you want to be...it's a big old world.

Above all don't listen to relatives, especially those who have mortages paid off!

Tell

FoxT

I would not be in a big rush to buy a house, but you are certainly wise to look at it. You need to view it as part of a personal financial plan covering the next 15-20 years or so. This plan should include assumptions along the lines of
- starting a pension
- moving home, perhaps moving abroad
- possibly starting a family
- how secure your career is, and is this what you want to do for the foreseable future.


It would be certainly worthwhile to talk with a financial advisor to discuss the issue & develop a long-term financial strategy for yourself. These don't always work out, of course, but, generally, you are much better off with one than without.


Back to the house....You need to look closely at the pros/cons.

- If you stay renting, you have more flexibility. You can move easily if you change job, for example.
- but, of course, you are paying rent. Rent is NOT dead money - but it is always worth asking yourself if it is the best solution for you.

- if you buy a house
- you need to assume that you will not be able to sell it for the foreseeable future.(next 5 years say)
- as a 27 yo chances are you may wish to move (or be forced to move) at some point, what happens then?
- The house will likely be difficult to sell, so if buying - look closely at the types of property that will rent out easily. Thus, if you buy & need to move, you wil have a reasonable option of letting the property.
- Some good things to look for: Natural Gas, DSL or cable, Mains sewerage (not a septic tank)
- be aware that you will have the usual legal fees etc., as well as bank charges.
- as well as a mortgage you will need to factor in the cost of
- house maintenance
- insurance
- income protection insurance
- life insurance
- Water charges & property taxes are around the corner as well.

Some of these charges will hit you even if you stay renting, of course, but others will not.

Again - do your homework here.

- If you buy a house, would you consider subletting (ie roomshare) or do you want your own space? This needs to be part of the financial plan, too. If you rent out a room (or rooms) in your home to private tenants, the rental income you earn will be exempt from income tax, provided this income does not exceed €10,000 in a tax year. (Of course, this may change....)


Speaking personally, I would not consider buying an apartment in this country. I freely admit I am biased - but these are some of the things that would put me off:

- Risk of pyrite issues or similar (applies to newish houses as well ofc)
- Maintenance costs in general
- Risk of management company going wallop, or not having enough funds to cover large capital repairs/maintenance in the future. (ie replacing the lifts etc)
- noise/privacy
- parking
- security
- no green space ( and what if you become a daddy in the next 5-10 years, and cannot sell?)

Hope all this helps, good luck!

-FoxT

jmayo

UDP wrote: »

Doesn't look like we have hit the bottom yet from these graphs anyway:

Thanks, that is the graph I have been looking for.

Prices in ireland started ramping up during the real Celtic Tiger economy when the tech boom got going.
Then the prices really took off from 2002 when we had our cheap credit fueled bubble economy.
Why do people still call it the celtic tiger economy is beyond me. :mad:

Now whenever there has been a major bubble burst, the prices go back to a point before they started increasing.
At the moment I would say realistically prices are at about 2000/2001 levels and have a bit to go yet.

Why have prices not gone back any further ?
Well look what has happened we have had a slow downward spiral thanks to government intervention.
But for government intervention preventing banks from repossessing and if the market took it's natural course prices would have plummetted long ago.

The banks are just not foreclosing on all the defaulting mortgages and the state owned NAMA is not in any hurry to offload it's stockpile since it would lower the value even further.
Also the rent allowance and low interest rates are keeping a whole slew of landlords/investors ticking over.
If there are real changes in these then a whole other bunch of properties have to come onto the market.

To me living in Ireland over the last few years is akin to living in Britain/France through the phoney war of 1939/1940.
Nothing much is happening, there is the odd sale (or in WWII terms the odd far off skirmish between the major powers).
But most people, bar the barmy who still are living in forlorn hope, knows there is major pain ahead and there will be major casualties when things get right serious.

As it is that day has been kept at a distance by political will and lucky coincidences in foreign areas, but sooner or later something has to give.

I don't think there are any indicators to lead one to any other conclusion.