Prices keep on Falling...

highgiant1985

Ah but sure we've turned a corner now as they say. Are we near the bottom yet?

http://www.rte.ie/news/2012/0228/house-business.html

Official figures show that prices of houses and apartments across the country fell at their fastest annual rate in two years last month, with a particularly sharp fall in house prices in Dublin.


The Central Statistics Office said residential property prices dropped by 17.4% in the year to January, the biggest annual fall since January 2010.
There was a 1.9% decline during the month of January after a 1.7% drop in December. Prices nationally are now 48% below peak levels reached in early 2007.


In Dublin, residential property prices fell by 4% in January and were 21.1% lower than a year ago. Dublin house prices fell by 4.1% in the month - their biggest drop since March 2009 - and were 21.7% lower compared with a year earlier. Dublin apartment prices were 18.4% lower when compared with the same month of 2010. Dublin apartment prices dropped by 3.5% during January, having risen for the previous two months.


Prices of residential properties in the rest of Ireland dropped by 0.7% in the month, giving an annual fall of 15.1%.


The CSO says house prices in Dublin are 55% lower than their peak level in early 2007, while Dublin apartment prices are 59% lower than in February 2007. The fall in residential property prices in the rest of Ireland is lower at 43%.




I think this song sums up things well
http://www.youtube.com/watch?v=5gqT6En2O78

Snakeblood

highgiant1985 wrote: »

Ah but sure we've turned a corner now as they say. Are we near the bottom yet?

http://www.rte.ie/news/2012/0228/house-business.html

Official figures show that prices of houses and apartments across the country fell at their fastest annual rate in two years last month, with a particularly sharp fall in house prices in Dublin.


The Central Statistics Office said residential property prices dropped by 17.4% in the year to January, the biggest annual fall since January 2010.
There was a 1.9% decline during the month of January after a 1.7% drop in December. Prices nationally are now 48% below peak levels reached in early 2007.


In Dublin, residential property prices fell by 4% in January and were 21.1% lower than a year ago. Dublin house prices fell by 4.1% in the month - their biggest drop since March 2009 - and were 21.7% lower compared with a year earlier. Dublin apartment prices were 18.4% lower when compared with the same month of 2010. Dublin apartment prices dropped by 3.5% during January, having risen for the previous two months.


Prices of residential properties in the rest of Ireland dropped by 0.7% in the month, giving an annual fall of 15.1%.


The CSO says house prices in Dublin are 55% lower than their peak level in early 2007, while Dublin apartment prices are 59% lower than in February 2007. The fall in residential property prices in the rest of Ireland is lower at 43%.




I think this song sums up things well
http://www.youtube.com/watch?v=5gqT6En2O78

https://www.youtube.com/watch?v=IKe2OfXLxuc

I thought it'd be this.

Good news for non property owners, I guess. Still a bad time to buy. Keep saving!

Ritchi

Snakeblood wrote: »

Good news for non property owners, I guess. Still a bad time to buy. Keep saving!

It's not a bad time to buy, in my opinion. A bad time to buy was any time in the previous ten years. It's just, in all likelihood, not the best time to buy.

djimi

Ritchi wrote: »

It's not a bad time to buy, in my opinion. A bad time to buy was any time in the previous ten years. It's just, in all likelihood, not the best time to buy.

Of course its a bad time to buy when in all likelyhood you will get the same house in 1-2 years for quite a bit cheaper than it is now. Noone absolutely needs to buy a house; rent for now, keep saving, bigger deposit + smaller mortgage = win win!

pawnacide

Ritchi wrote: »

It's not a bad time to buy, in my opinion. A bad time to buy was any time in the previous ten years. It's just, in all likelihood, not the best time to buy.

Price rises and falls tend to follow a bell curve and it's actually quite difficult to find the absolute best time to buy for any given property.

As I mentioned in another post there is a very real possibility that we will see a two tier market emerge. One for cash buyers and one for those who need a mortgage as already evidenced in part by the Alsop auctions.

Snakeblood

Ritchi wrote: »

It's not a bad time to buy, in my opinion. A bad time to buy was any time in the previous ten years. It's just, in all likelihood, not the best time to buy.

I think if there's no levelling off of prices indicated, then it's a bad time to buy. The decline is getting steeper, and buying now would most likely lose you money compared to buying next year.

It's not certainly a bad time to buy, but a 17% house price drop is not likely to be reversed next year given the economic conditions which are broadly negative.

pawnacide

djimi wrote: »

Of course its a bad time to buy when in all likelyhood you will get the same house in 1-2 years for quite a bit cheaper than it is now. Noone absolutely needs to buy a house; rent for now, keep saving, bigger deposit + smaller mortgage = win win!

minus monthly rental payments

Ritchi

Snakeblood wrote: »

I think if there's no levelling off of prices indicated, then it's a bad time to buy. The decline is getting steeper, and buying now would most likely lose you money compared to buying next year.

It's not certainly a bad time to buy, but a 17% house price drop is not likely to be reversed next year given the economic conditions which are broadly negative.

I agree, house prices will fall over the next year. But the way some people are going on, it's the worst idea ever to buy now, even though if you bought now, you'd still be in a better situation that anyone who has bought in the past 12(?) years.

Snakeblood

Ritchi wrote: »

I agree, house prices will fall over the next year. But the way some people are going on, it's the worst idea ever to buy now, even though if you bought now, you'd still be in a better situation that anyone who has bought in the past 12(?) years.

I don't know anyone who is saying it's the worst idea ever. To be honest, I'm not concerned about the last 12 years, I'm concerned about this year, last year, and next year. I can't change the years before that, and they're not an instructive example because they are from a bubble and a bubble bursting. The prices from the last 12 years are unrealistic in the extreme.

Snakeblood

pawnacide wrote: »

minus monthly rental payments

Where I'm renting at the moment, it's 1000 for a 3 bed semi, to buy that at the moment is 250,000. If I pay 12 grand a year: 12,000. If prices fall 17% (I'm not saying they will, but it's certainly possible given the last year and more trouble on the horizon, the property price database exposing actual sale prices,) that's 42500.

42500
-12000
=30500 saved from the mortgage.

And if you can't save some money in addition to paying rent, you probably shouldn't be trying to buy. It doesn't speak well to the ability to save or budget.

StillWaters

Snakeblood wrote: »

pawnacide wrote: »

minus monthly rental payments

Where I'm renting at the moment, it's 1000 for a 3 bed semi, to buy that at the moment is 250,000. If I pay 12 grand a year: 12,000. If prices fall 17% (I'm not saying they will, but it's certainly possible given the last year and more trouble on the horizon, the property price database exposing actual sale prices,) that's 42500.

42500
-12000
=30500 saved from the mortgage.

And if you can't save some money in addition to paying rent, you probably shouldn't be trying to buy. It doesn't speak well to the ability to save or budget.

If houses are selling at 250k, and renting for 1k, that area has been fairly well insulated from the sharp decreases in value. So is unlikey to see a 17% drop.

Snakeblood

StillWaters wrote: »

If houses are selling at 250k, and renting for 1k, that area has been fairly well insulated from the sharp decreases in value. So is unlikey to see a 17% drop.

They're not selling at 250. They're on sale for 250, and have been dropping steadily.

Edit: you can track them with among other things: www.daftdrop.com which is invaluable for this sort of thing.

StillWaters

You stated they are 250k to buy, and based your sums on that.

How much are they to buy, and what % decrease have that type of house, in that area seen?

seamus

One thing I'm not seeing is where the CSO get their figures from.

Theoretically a sharper dive in house prices may indicate an increase in the number of properties being sold. That is, if it's the case that more people are jumping into the market, then that indicates that there's more house sales on which to base the information and the prices are "adjusted" to show what people are actually paying for them.

If there are few or very little houses being sold, then there's less available information and the drop in prices appears less.

Just spitballing really - the same would be true of a rising market; more properties selling == prices rising faster, less properties selling == prices rising more slowly.

Just in case anyone sees this as misplaced optimism or an attempt to call "buy now", I'm really trying to figure out why prices would decide to suddenly drop even more sharply now rather than continue dropping at the same pace as they have before.

Snakeblood

StillWaters wrote: »

You stated they are 250k to buy, and based your sums on that.

How much are they to buy, and what % decrease have that type of house, in that area seen?

Yes, if they're selling at 250, they're not going to drop the price, are they?

They're 250 grand to buy (roughly). The price drops range from 12-18% since May of last year.

Zamboni

seamus wrote: »

Just in case anyone sees this as misplaced optimism or an attempt to call "buy now", I'm really trying to figure out why prices would decide to suddenly drop even more sharply now rather than continue dropping at the same pace as they have before.

Everybody is smashed in January

Snakeblood

seamus wrote: »

One thing I'm not seeing is where the CSO get their figures from.

Theoretically a sharper dive in house prices may indicate an increase in the number of properties being sold. That is, if it's the case that more people are jumping into the market, then that indicates that there's more house sales on which to base the information and the prices are "adjusted" to show what people are actually paying for them.

If there are few or very little houses being sold, then there's less available information and the drop in prices appears less.

Just spitballing really - the same would be true of a rising market; more properties selling == prices rising faster, less properties selling == prices rising more slowly.

Just in case anyone sees this as misplaced optimism or an attempt to call "buy now", I'm really trying to figure out why prices would decide to suddenly drop even more sharply now rather than continue dropping at the same pace as they have before.

I would have thought that people decide to make changes in the new year. Decide to drop price/shift that millstone/get out. Wild guess.

daltonmd

seamus wrote: »

One thing I'm not seeing is where the CSO get their figures from.

The CSO get their data from the banks and it is the actual price paid for property, not asking prices.
What I would love to see is how the cash transaction figures would change the falls.

Bonbon12

seamus wrote: »

One thing I'm not seeing is where the CSO get their figures from.

Data comes from the banks based on mortgage's issued. I think there's also a degree of lag on these numbers so the January's figures may actually correspond to sale agreeds from a few months back.

Also, cash sales aren't included so a lot of the Alsop distressed auction sales aren't included.

From CSO site:

The RPPI is compiled using data on mortgage drawdowns provided on a monthly basis by 8 of the main Mortgage Lending Institutions under Section 13 of the Housing Act (2002). This data provides details on the characteristics of properties bought (such as building type and size) as well as the price paid. It is transactions based; meaning that prices are recorded only where a sale occurs. Not all residential property transactions are funded by a mortgage (i.e. they are cash based) and these transactions are excluded from the scope of the index.

gigino

Wait until interest rates increase, and the government increases property tax to a grand or two a year. There will be more austerity in future budgets too as the govt try to reduce the defecit. Then you'll see the real price falls, i.m.h.o. I reckon prices will fall another 40 to 50% from current levels.

Spiritofthekop

gigino wrote: »

Wait until interest rates increase, and the government increases property tax to a grand or two a year. There will be more austerity in future budgets too as the govt try to reduce the defecit. Then you'll see the real price falls, i.m.h.o. I reckon prices will fall another 40 to 50% from current levels.

And water chargers and bin charges increasing along with property tax and energy (gas, electricity) price increasing year on year...

Buying a house with a big'ish mortgage still seems like a massive gamble imho...unless you find a house with very good value for money!..which there still is very little off to be found.

daltonmd

gigino wrote: »

Wait until interest rates increase, and the government increases property tax to a grand or two a year. There will be more austerity in future budgets too as the govt try to reduce the defecit. Then you'll see the real price falls, i.m.h.o. I reckon prices will fall another 40 to 50% from current levels.

To carry on from this - Richie Boucher or BOI said in this article http://www.herald.ie/news/families-will-subsidise-struggling-homeowners-3025926.html

"Bank of Ireland boss Richie Boucher has admitted that the bank is weighing up whether it should increase the interest rates on all home loans to compensate for changes brought about by new personal insolvency rules."

No reason think that others won't follow suit. If I was taking out a mortgage today on a teaser rate, I would factor in a couple of % in the next couple of years.
Given that there will be an increased property charge, increased personal taxes, water charges, cuts in SW and PS wages in the coming years, I would also ask myself not if I can afford the mortgage repayments today - but can I afford them in 3 years time.

Zamboni

gigino wrote: »

Wait until interest rates increase, and the government increases property tax to a grand or two a year. There will be more austerity in future budgets too as the govt try to reduce the defecit. Then you'll see the real price falls, i.m.h.o. I reckon prices will fall another 40 to 50% from current levels.

Spiritofthekop wrote: »

And water chargers and bin charges increasing along with property tax and energy (gas, electricity) price increasing year on year...

daltonmd wrote: »

Given that there will be an increased property charge, increased personal taxes, water charges, cuts in SW and PS wages in the coming years, I would also ask myself not if I can afford the mortgage repayments today - but can I afford them in 3 years time.

Emmigration looks better every single day.

daltonmd

Zamboni wrote: »

Emmigration looks better every single day.

Now in fairness Zamboni, this government did say that they would reduce the dole queues and create jobs - they just didn't mention that they would not be in this country....

jmayo

StillWaters wrote: »

If houses are selling at 250k, and renting for 1k, that area has been fairly well insulated from the sharp decreases in value. So is unlikey to see a 17% drop.

Is it though ?
All ships rise on the tide and all ships lower on the tide.
The question is by how much.

Another thing that people never figure into their calculations is the cost of ownership of property.
If you are paying 12,000 a year in rent, that is it.

If you own the house you are not alone paying off your mortgage.
You are also now going to be hit with property tax, insurance costs, costs involved in any work that needs to be done on the house.
And that property tax is going to start increasing.
So it is just not rent/versus mortgage repayment in this equation.

daltonmd

jmayo wrote: »

Is it though ?
All ships rise on the tide and all ships lower on the tide.
The question is by how much.

Another thing that people never figure into their calculations is the cost of ownership of property.
If you are paying 12,000 a year in rent, that is it.

If you own the house you are not alone paying off your mortgage.
You are also now going to be hit with property tax, insurance costs, costs involved in any work that needs to be done on the house.
And that property tax is going to start increasing.
So it is just not rent/versus mortgage repayment in this equation.

Not only that, but in that mortgage repayment is - interest. In the first year alone the interest repayment on a 230k mortgage (using 250k property price in the example) is over 9k. When people use the mortgage V rent argument, this little detail is almost never brought up.

ShadowHearth

In all fairness those mortgage loans are alot of bull**** in the fog... They will talk about low %%%, but in the end no matter what %%% you will take you will be paying twice the amount borrowed.

I know a few people who only now calculated how much will they pay for their houses.

One lad bough house for 220k with 100% mortgage so now he has to pay back 650k

The other one bough a crapy house for 420k and now he will be paying out 1mil for it. It madness! How the **** banks can justify such figures?! It's better of going to loan shark! Atleast he will kiss you before fecking you...

I was really looking forward of buying a house last year, but after 2 failures I decided to look in to it this year. To be honest I am not so enthusiastic this time. Prices in our area still quite high. 1 bed aparent a are advertised for 100k eu... Seriuosly?! It's a small town and such prices are quite stupid. Alot of houses are gathering up in 150k region, but even so I find it quite overpriced.

Sorry for rant lol, but so far buying a house for me was just alot of stress and waste of money. I was such a pro buying camper last year, but now it really changed... Feck I would even better buy myself an old jag xkr just for summer times and be happier then instead of going in to dept with evenpre taxes coming with mortgage repayments.

jmayo

daltonmd wrote: »

Not only that, but in that mortgage repayment is - interest. In the first year alone the interest repayment on a 230k mortgage (using 250k property price in the example) is over 9k. When people use the mortgage V rent argument, this little detail is almost never brought up.

Sorry I was only looking at the upfront annual costs not the overall cost over the years which as you and others have pointed out ends up much higher than the amount paid for the house.

That is why when someone said on another thread about upping the offer by another 5k to suit seller I baulked at the idea.
That may be just 5k today, but over the life of the mortgage that probably equates to nearer 15k.
And that is 15k more you the buyer would be paying back.

daltonmd

jmayo wrote: »

Sorry I was only looking at the upfront annual costs not the overall cost over the years which as you and others have pointed out ends up much higher than the amount paid for the house.

That is why when someone said on another thread about upping the offer by another 5k to suit seller I baulked at the idea.
That may be just 5k today, but over the life of the mortgage that probably equates to nearer 15k.
And that is 15k more you the buyer would be paying back.

Absolutely and there's no argument from me there - but the fact is that even without those valid points people simply see rent paid V monthly mortgage payments, they never actually analyse what is included in the mortgage payment.
Your rent is your rent, full stop. Your mortgage is your loan, your interest payment and then on top of that the extra costs of home ownership.

pawnacide

When all's said and done the Irish like to own their own properties. We don't have a rental culture like in France and Germany. This is probably, as I have seen some argue,in part for historical reasons and the treatment meted out by colonial Landlords.

A major factor however is the lack of rights for tenants and the attitudes of landlords towards their rented properties. Tenants cannot assume their homes will remain theirs in the long term. Indeed a lot of tenants don't even refer to their place of residency as their home and reserve that term for where their parents live.

All that aside I really don't see any problem with people buying a house. Too often buyers are castigated on these threads for engaging with agents and sellers. There is a natural course most negotiations take .. agent sets price .. buyer makes offer .. seller reduces a bit .. buyer and seller eventually meet at some middle ground.

This business of making really low offers and then saying I'll withdraw in two weeks doesn't work and as far as I can see these offers are notional ideas and not backed by any market research.

If you have a reason for a really low offer tell the agent what it is and I don't mean 'coz some guy on boards told me to'. Find similar properties, they only have to be similar in terms of location, square footage and finish, at the low price and ask why this property is so high. Tell the agent you can't justify paying such a high price to yourself.

daltonmd

pawnacide wrote: »

When all's said and done the Irish like to own their own properties. We don't have a rental culture like in France and Germany. This is probably, as I have seen some argue,in part for historical reasons and the treatment meted out by colonial Landlords.

That's pretty much old thinking. The rental market has changed due to the downturn. Renting is no longer viewed as a student market stop gap. The reason that landlords meted out bad treatment on the past was because they could, they had the pick of tenants, they had queues when they advertised, That has now changed for the most part.

pawnacide wrote: »

A major factor however is the lack of rights for tenants and the attitudes of landlords towards their rented properties. Tenants cannot assume their homes will remain theirs in the long term. Indeed a lot of tenants don't even refer to their place of residency as their home and reserve that term for where their parents live.

I would argue that point. I rent and it is my home because I pay market rent and I live here.

pawnacide wrote: »

All that aside I really don't see any problem with people buying a house. Too often buyers are castigated on these threads for engaging with agents and sellers. There is a natural course most negotiations take .. agent sets price .. buyer makes offer .. seller reduces a bit .. buyer and seller eventually meet at some middle ground.

There is no problem at all with buying a property, the problem is when people cannot afford the property that they buy, Historically, when you bought property the value went up while the cost of servicing the mortgage went down (due to rising income,rising property prices and falling interest rates) this has now changed. Incomes are falling, the cost of home ownership is rising and the cost of owning is rising. When these people realise that they can no longer afford to service their mortgages then the taxpayer is on the line.

pawnacide wrote: »

This business of making really low offers and then saying I'll withdraw in two weeks doesn't work and as far as I can see these offers are notional ideas and not backed by any market research.

It may not work now, but it will in due course.

pawnacide wrote: »

If you have a reason for a really low offer tell the agent what it is and I don't mean 'coz some guy on boards told me to'. Find similar properties, they only have to be similar in terms of location, square footage and finish, at the low price and ask why this property is so high. Tell the agent you can't justify paying such a high price to yourself.

Price is only one factor, it;s cost of servicing, income, rising taxes and so on.

pawnacide

daltonmd wrote: »

Price is only one factor, it;s cost of servicing, income, rising taxes and so on.

minus the cost of renting. Mortgage repayments over 25/30 years are more or less on a par with rental rates for similar properties in this area at least. I get your point about income, taxes etc but this isn't going to improve over the next 10 years. Thats 60 - 120k in rental payments, depending on location, if you were to wait that long.

CiaranC

pawnacide wrote: »

When all's said and done the Irish like to own their own properties. We don't have a rental culture like in France and Germany

We do now my friend.

strandroad

pawnacide wrote: »

minus the cost of renting. Mortgage repayments over 25/30 years are more or less on a par with rental rates for similar properties in this area at least. I get your point about income, taxes etc but this isn't going to improve over the next 10 years. Thats 60 - 120k in rental payments, depending on location, if you were to wait that long.

The difference on a house in Dublin has already been €240k or so, will be more - now add interest over the life of the mortgage.
I agree with you that I would like to own a house to retire to, but there's no need to rush yet.

daltonmd

pawnacide wrote: »

minus the cost of renting. Mortgage repayments over 25/30 years are more or less on a par with rental rates for similar properties in this area at least. I get your point about income, taxes etc but this isn't going to improve over the next 10 years. Thats 60 - 120k in rental payments, depending on location, if you were to wait that long.

As I said in another post - a mortgage of 230k has an interest payment of over 9k in the first year.

Your example is really only valid (at a stretch for the purpose of agreeing with home ownership at this time) if we, like the states, had 30 year fixed interest rates - we don't.

I also think that using an example of 10 years is a stretching for people who want to buy now.

I would look 3 years down the line. 1k in rental per month. 36k rental.

Now let's look at buying a property for 250k now.

Interest alone is over 36k in 3 years (check out amortization calculators for 230k @4%).

Simply put, if the property market simply stays still for the next 3 years then people who rent lose NOTHING.


They would in all reality gain from not buying, they won't have maintenance costs or the household charge or indeed a property tax to contend with, I mean in all honesty, no matter how positive you are about the property market can you see it increasing in the next 3 years?

And if someone decides in 3 years that they should buy at today's rate (assuming no more falls and I really don't buy that) then they will not have wasted one cent in DEAD RENT - because they would have paid the same and more in interest and other costs of home ownership.

Edit to add - In 3 years however we will have a better insight into how we are - are we still in a downturn or heading into growth? Stability is what we could hope for.

pawnacide

surely by that logic, there's never a good time to buy unless you actually want to own your own home before you die ?

daltonmd

pawnacide wrote: »

surely by that logic, there's never a good time to buy unless you actually want to own your own home before you die ?

you must of missed where I wrote "I would look 3 years down the line"


Historically, when people bought property they did so because they could afford the repayments, these were almost always less than the rental amounts.

Historically, first time buyers stayed in that first home for 7 years (pre-boom), historically they could trade up easily, indeed making money on their property to enable them to so so,

Historically, the cost of servicing the mortgage decreased, what with interest rate falls, rising income, high employment levels, stable employment, rising income- all this is gone. There is no argument for buying for the next 3 years or so against renting.

The cost of ownership should not stifle you as the years profress - it should ease.

Property is just bricks and mortar - this is the way it's viewed in other countries - it should pay to buy not cost you - after all that's the reason people chose to do it - remember the "rent is dead money " mantra?

The more people who enter the property market without doing their sums, well then to me it's people down the line who will get into trouble.
Just my opinion of course...

daltonmd

Duplicate

StillWaters

You are assuming rent stays static over the course of a mortgage. That is highly unlikely. And will rise in line with inflation at least.

daltonmd

StillWaters wrote: »

You are assuming rent stays static over the course of a mortgage. That is highly unlikely. And will rise in line with inflation at least.

Actually if you read my posts I am not assuming anything of the kind - I haven't looked more than 3 years from now.

I agree that at the end of the term of a mortgage that you own a property - the issue is getting there and how much this will actually cost you in the long run.

Renting for another 3 years, getting a property a a lower price, having a better indication of where interest rates are (with the banks more so than the ECB) having more stability in your job, when the austerity cuts have ended and we are hopefully (although I am not convinced yet) coming through this phase - I simply would not buy unless I could be sure of my future - each to their own of course. But I wager that a lot pf people buying now, much like those who bought in 2008/09/10 and 2011 are struggling and in situations that they could not imagine 12 months ago.

Again, just my 2cents....

The_Conductor

Not sure if this has been posted yet:

http://www.irishtimes.com/newspaper/breaking/2012/0228/breaking24.html?via=mr

Irish price falls in the month of January were the largest falls ever recorded- falling 4.1% in certain areas of Dublin in January alone (with total falls in Dublin over the past 12 months of just under 22%). The national price fall in the month of January was 1.9% and nationally prices have 18% in the past 12 months.

With the falls apparently accelerating- we've got a hell of a time ahead of us........

pawnacide

daltonmd wrote: »

Historically, when people bought property they did so because they could afford the repayments, these were almost always less than the rental amounts.

Historically, first time buyers stayed in that first home for 7 years (pre-boom), historically they could trade up easily, indeed making money on their property to enable them to so so,

Historically, the cost of servicing the mortgage decreased, what with interest rate falls, rising income, high employment levels, stable employment, rising income- all this is gone. There is no argument for buying for the next 3 years or so against renting.

By Historically I assume you don't mean the 40's 50's 60's 70's 80' and half of the 90's

I think perhaps we agree more than you realize. People should be buying houses coz they want a home and not as a speculative head long dive into the ethereal world of property investment. I agree houses should be sensibly priced and buyers should not over extend themselves. This idea that there was easy money to be made through 'property investment' is what got us here in the first place. There are still those out there waiting for the next big deal, some will make money .. some won't, I don't really care if they do or not. But I get a tad annoyed at all this talk on boards about rising this, falling that when people are asking for genuine advise on buying what they are comfortable with. If you like a house .. try and buy it for your price.

Rabidlamb

smccarrick wrote: »

Not sure if this has been posted yet:

http://www.irishtimes.com/newspaper/breaking/2012/0228/breaking24.html?via=mr

Irish price falls in the month of January were the largest falls ever recorded- falling 4.1% in certain areas of Dublin in January alone (with total falls in Dublin over the past 12 months of just under 22%). The national price fall in the month of January was 1.9% and nationally prices have 18% in the past 12 months.

With the falls apparently accelerating- we've got a hell of a time ahead of us........

Well this wont do at all.
The government may need to resort to Hypnotoad Advertising with flashy slogans

Buy Property Now
Never Been a Better Time to Buy

The_Conductor

Rabidlamb wrote: »

Well this wont do at all.
The government may need to resort to Hypnotoad Advertising with flashy slogans

Hynotoad- lol, got to love it.

No matter how you dress it up- the fundamentals for the Irish property market (and the Irish economy in general) are pretty appalling for the foreseeable future.

The big positive legacy of the boom that we have is a good road network- which is a hell of a lot more than we had in the past- and it is an asset we can leverage into the future. We also unfortunately have tens of thousands of properties in the arse-ends of no-where, without any services/facilities/amenities- where no-one wants live- alongside severe lack of property in places where people do in actual fact want to live- and we don't have two red pennies to rub against one another- irrespective of what wonderful plans anyone comes up with........

Buy-buy-buy? Lol...... As long as I can feed and cloth my two children and keep my creditors away from the door- thats as good as its going to get for a long long time to come..........

Ritchi

daltonmd wrote: »

As I said in another post - a mortgage of 230k has an interest payment of over 9k in the first year.

Your example is really only valid (at a stretch for the purpose of agreeing with home ownership at this time) if we, like the states, had 30 year fixed interest rates - we don't.

I also think that using an example of 10 years is a stretching for people who want to buy now.

I would look 3 years down the line. 1k in rental per month. 36k rental.

Now let's look at buying a property for 250k now.

Interest alone is over 36k in 3 years (check out amortization calculators for 230k @4%).

Simply put, if the property market simply stays still for the next 3 years then people who rent lose NOTHING.


They would in all reality gain from not buying, they won't have maintenance costs or the household charge or indeed a property tax to contend with, I mean in all honesty, no matter how positive you are about the property market can you see it increasing in the next 3 years?

And if someone decides in 3 years that they should buy at today's rate (assuming no more falls and I really don't buy that) then they will not have wasted one cent in DEAD RENT - because they would have paid the same and more in interest and other costs of home ownership.

Edit to add - In 3 years however we will have a better insight into how we are - are we still in a downturn or heading into growth? Stability is what we could hope for.

The difference is that the quality of the place you have for 1k rent and 250k mortgage is different, in my sitation anyway. I currently pay 1k a month for a one bed house, and for that amount in mortgage in a similar area I can have a three bed house.

It's not all about the money, it's also about the quality of life.

daltonmd

pawnacide wrote: »

By Historically I assume you don't mean the 40's 50's 60's 70's 80' and half of the 90's

I mean pre-boom.

pawnacide wrote: »

I think perhaps we agree more than you realize. People should be buying houses coz they want a home and not as a speculative head long dive into the ethereal world of property investment. I agree houses should be sensibly priced and buyers should not over extend themselves.

It doesn't have to be X or Y- it can be both, why can't people buy a reasonably priced home that they can afford and make a little money while doing so?

Again I refer back to pre - boom, people bought a house that they could afford, stayed in it a couple of years, paid some of the mortgage off, had little increases in their incomes and were able to expand, trade up, whatever you want to call it.

pawnacide wrote: »

This idea that there was easy money to be made through 'property investment' is what got us here in the first place. There are still those out there waiting for the next big deal, some will make money .. some won't, I don't really care if they do or not.

Agree with most of this - except the last part - I really would prefer if people did know what they were doing, I also care if they don't make money, because it;s the losses that the taxpayer are on the hook for!

pawnacide wrote: »

But I get a tad annoyed at all this talk on boards about rising this, falling that when people are asking for genuine advise on buying what they are comfortable with. If you like a house .. try and buy it for your price.

And to be honest I get a tad annoyed when I see this try and buy it for your price..

This is the most important, biggest financial decision of a persons life. It's the one thing that you shouldn't gamble with - it can ruin your future, indeed as people have found, it can destroy your life if you get this decision wrong.

Ritchi wrote: »

The difference is that the quality of the place you have for 1k rent and 250k mortgage is different, in my sitation anyway. I currently pay 1k a month for a one bed house, and for that amount in mortgage in a similar area I can have a three bed house.
It's not all about the money, it's also about the quality of life.

The difference is about choice. Yours is to rent a one bed house, others would buy the house. Your quality of life is not the same as mine, it's individual.

happyman81

pawnacide wrote: »

djimi wrote: »

Of course its a bad time to buy when in all likelyhood you will get the same house in 1-2 years for quite a bit cheaper than it is now. Noone absolutely needs to buy a house; rent for now, keep saving, bigger deposit + smaller mortgage = win win!

minus monthly rental payments

Sure renting is dead money.

Or so I kept hearing over the last decade.

kennyb3

Ritchi wrote: »

The difference is that the quality of the place you have for 1k rent and 250k mortgage is different, in my sitation anyway. I currently pay 1k a month for a one bed house, and for that amount in mortgage in a similar area I can have a three bed house.

It's not all about the money, it's also about the quality of life.

So you cant win on the basis of calculations so you make it about something subjective like quality of life.

I think you need to look again at your rent. I pay 1.1k for a 3 bed house in a nice area of NCD (malahide). I reckon thats pretty much in line with the cost of a mortgage of a 3 bed house in the area (the house mortagage may actually work out more but again that depends on each individuals level of deposit)

Ritchi

kennyb3 wrote: »

So you cant win on the basis of calculations so you make it about something subjective like quality of life.

I think you need to look again at your rent. I pay 1.1k for a 3 bed house in a nice area of NCD (malahide). I reckon thats pretty much in line with the cost of a mortgage of a 3 bed house in the area (the house mortagage may actually work out more but again that depends on each individuals level of deposit)

I meant to say 1 bed appartment.

We've looked for places to rent, but we've actually got a good deal, considering it's size and that it's in Rathmines. We now want to live in a house. To get a 3 bed house, moving out a bit, is at the very minimum 1200, and that's for somewhere we wouldn't really fancy living. In the same area we can buy a house for about 250k, which is about 765 on current rates including FTB interest relief. If we went for a house about 300k, it's 917 per month on a variable rate. So we could actually save more money per month(depending on what all the other extras come to), as well as being in a place where we're much happier.

I do realise if we waited a few years, our mortgage repayments would be lower, and we'd probably end u ppaying off the mortgage at the same time as we would if we bought now, but sometimes that's not all that matters.

daltonmd

Ritchi wrote: »

I meant to say 1 bed appartment.

We've looked for places to rent, but we've actually got a good deal, considering it's size and that it's in Rathmines. We now want to live in a house. To get a 3 bed house, moving out a bit, is at the very minimum 1200, and that's for somewhere we wouldn't really fancy living. In the same area we can buy a house for about 250k, which is about 765 on current rates including FTB interest relief. If we went for a house about 300k, it's 917 per month on a variable rate. So we could actually save more money per month(depending on what all the other extras come to), as well as being in a place where we're much happier.

I do realise if we waited a few years, our mortgage repayments would be lower, and we'd probably end u ppaying off the mortgage at the same time as we would if we bought now, but sometimes that's not all that matters.

Cheapest 225k (presuming 25k deposit) variable inc Mortgage interest relief is 830pm.
Cheapest 270k (30k deposit) variable inc mortgage interest relief is 995pm.

http://www.mortgages.ie/index.cfm/spKey/first_time_buyers.mortgage_payments_calculator.html?mode=basic&go=go&buyer_type=First+Time+Buyer&house_price=300000&product=-1&amt=270000&lender=-1&status=Married&comparison=loc&term=30&x=29&y=5


I have to say here though that you are making the classic mistake - you are looking at the lowest monthly amount, are you thinking of one year down the line at all, would you seriously take out a variable rate mortgage?

Staying with the 270k mortgage for this example. See the interest relief monthly payment chart below.

http://www.mortgages.ie/index.cfm/spKey/first_time_buyers.tax_relief_calculator.html?mode=basic&buyer_type=First%20Time%20Buyer&term=30&amt=270000&status=Married&interest_rate=3.38&buyers=1&go=go

Before the relief the repayment is 1194.41, if the bank increase interest rates by 1% the repayment is €1,326.66, so your 995pm could be 1100pm.
2% it increases to 1489pm.

Before you think that this won't happen look at the difference between the variable and the 3 year fixed, if you look for fixed in a year then I reckon you will pay dearly for it.

There is a difference between paying for a better quality of life (not my words) and not being able to afford your mortgage.

Stating that "money" isn't the only reason is valid. ads long as you always have the money - if you don't then you owe it to yourself and your family to make informed financial decisions, something which a lot of people have proved to be completely incapable of doing.

Refusing to look a little down the line, refusing to stress their payments, refusing to look at what would happen if one or both lost their jobs.got sick etc, it's buy a house that "appears" cheap and the repayments "appear" cheaper than renting and hope and pray that everything works out and that nothing goes wrong...

gigino

smccarrick wrote: »

No matter how you dress it up- the fundamentals for the Irish property market (and the Irish economy in general) are pretty appalling for the foreseeable future.

The big positive legacy of the boom that we have is a good road network- which is a hell of a lot more than we had in the past- and it is an asset we can leverage into the future.

agreed

smccarrick wrote: »

We also unfortunately have tens of thousands of properties in the arse-ends of no-where, without any services/facilities/amenities- where no-one wants live- alongside severe lack of property in places where people do in actual fact want to live

A big part of the problem, which is seldom mentioned , is the abandoned policy of decentralisation. About 10 years ago the government promised that tens of thousands of civil servants would be decentralised so they can be beside their families and enjoy a better quality of life ( outdoor sports + pursuits, less time stuck in big city traffic etc). The government promised there would be 7 new gateway cities around the country, and these would double in size etc. No wonder developers went crazy building accomodation for all these new people who were coming. The decentralisation policy is slowly abandoned over the years...
There is still an imbalance between too many people stuck in the traffic of Dublin / too high property prices in Dublin compared to the rest of the country.