It's 2005 again.. in Chapelizod..!

W123-80's

Evening all,

Figured I had to share this tale...
Myself and the queen are currently renting in Chapelizod, happy out, lovely area.

Noticed the development (linked below) a couple of times whilst out running. Unfinished, typical Celtic tiger effort.
Anyway, this week they appeared on daft/myhome as recievership sales.

We shot down for a look out of curiosity this morning.
Wow wee..!
Hard to believe, cars everywhere, people everywhere, couples like ourselves in particular. All very normal I thought until I spoke with an autioneer... all 2 beds were sold that morning. With strong interest in the 1 beds.

Couple of things struck me as I walked away;

1. How can the auctioneer say places are sold - surely they are under offer?
2. Are these places really that well priced?? (Possibly for investors I suppose)
3. There is alot of people out there ready to buy.
4. Is the market in Dublin on the verge of a little spike as soon as prices hit a certain level?
5. Are Irish people unique in their obsession??
6. Today was like 2002-06 all over agian, it was a little unsettling to be honest.
7. Surely we are not that desperate to own bricks and morter that we will jump at the first floozy to drop her price...(so to speak...!)

Anyway, good luck to anyone who purchased.

http://www.myhome.ie/residential/brochure/chapelhill-chapelizod-dublin-20/2184684 (2 beds)

http://www.myhome.ie/residential/brochure/chapelhill-chapelizod-dublin-20/2184662 (1 beds)

Having re-read that, I realised I haven't given much opinion.
The apartments were in various states of finish, from show house to concrete floors. Neither 1 or 2 beds were anyway impressive in terms of layout or design. I don't think they are worth the asking price, which is why I was amazed that all the 2 beds sold this morning.

L1011

People are panicking about "losing out" on mortgage interest relief. Which isn't really worth a huge amount on a 105k (likely 90k max mortgage). Adding to that, the banks have increased lending slightly. This will fizzle out in January and the prices will probably drop by more than the interest relief saves.

Yes, the Irish seem unique in their utter obsession with owning a tiny plot of land - or no land at all in the case of an apartment. The UK comes close, but its still not the same; the rest of the world doesn't have the same primal urge to buy bricks.

As goes "sold" - whoever is selling them presumably has a price they would automatically accept at, so they would be 'sold' as such.

I'm buying at the moment but only because I can afford it, can afford even fairly significant loss of value, its likely to stay cheaper than renting even with a fairly painful property tax, and I got an executor sale. Wouldn't really recommend it as a good time to buy.

StillWaters

I think those apartments are well priced for the location and finish. I can see why they sold.

StillWaters

MYOB wrote: »

Yes, the Irish seem unique in their utter obsession with owning a tiny plot of land - or no land at all in the case of an apartment. The UK comes close, but its still not the same; the rest of the world doesn't have the same primal urge to buy bricks.

That's not true, a poster on this forum put up some really interesting stats which debunked this. I'll try to find them. It basically showed Ireland being average in home ownership, and lower than Germany iifc. I was very surprised as we are fed this obsession myth which isn't backed up by data.

Bigcheeze

StillWaters wrote: »

I think those apartments are well priced for the location and finish. I can see why they sold.

Also at 1,000 sq ft, the 2 beds are as big as most of the 3 bed semis built in the last 20 years .

Bigcheeze

StillWaters wrote: »

That's not true, a poster on this forum put up some really interesting stats which debunked this. I'll try to find them. It basically showed Ireland being average in home ownership, and lower than Germany iifc. I was very surprised as we are fed this obsession myth which isn't backed up by data.

Correct. Ownership here is 75% and falling. It's bang on the European average.

murphaph

1 beds offer rather good yields to investors at the moment in Dublin. Much better than during the boom. The clever investors got out while it was red hot and are buying back in now for buttons (relatively). Chapelizod is a nice area (river, park, close to city). Interesting story however, cheers OP.

murphaph

StillWaters wrote: »

That's not true, a poster on this forum put up some really interesting stats which debunked this. I'll try to find them. It basically showed Ireland being average in home ownership, and lower than Germany iifc. I was very surprised as we are fed this obsession myth which isn't backed up by data.

Deffo not lower than Germany. Ireland is around 80% home ownership. Germany is around 50%, but increasing year on year.

I think the likes of Austria have pretty high ownership rates, but the difference seems to be not ownership at any price. They'll rent if it is cheaper.

mikemac1

The archictect was having a laugh when he designed that block, it looks horrible

Way offtopic but a shame there are no roof gardens, lots of places have those nowadays, a nice touch.




The flats look very well inside

+1 for Chapelizod being a lovely area and it's popular with renters.

Any owners will need a car and there is one Spar shop, three pubs, a pharmacy and not much else in the village.

The hill to Ballyfermot is a killer for cyclists and walkers
So steep

NIMAN

Jez, how ugly are they?

Looks like something I have stayed in on the Canary Islands on self catering holidays.

W123-80's

murphaph wrote: »

1 beds offer rather good yields to investors at the moment in Dublin. Much better than during the boom. The clever investors got out while it was red hot and are buying back in now for buttons (relatively). Chapelizod is a nice area (river, park, close to city). Interesting story however, cheers OP.

I'd agree with this. Having rented a couple of 1 beds over the years, the location of these certainly trumps alot of others.
As I mentioned earlier, it's a shame the developer didn't put any thought into the actual design though. Same old kitchen/living combo, with no storage aside from a small hall press.

fiacha

FYI.

Just over the wall into the Phoenix park. It's a valley with both sides of it looking straight into the top floors of those appartments.

That valley is used by gentlemen seeking other gentlemen, and the odd homeless camp. Take a walk into the woods there, and you'll see all the rubbish associated with those activities along the wall beside the appartments.

Should make for interesting viewing of a summers evening !

magicbastarder

it may be 2005 in terms of the interest shown, but what year in terms of price?

W123-80's

magicbastarder wrote: »

it may be 2005 in terms of the interest shown, but what year in terms of price?

Not 2005 in fairness.!

The showhome went for €200k, which in my opinion, is overpriced. Having said that, if the market is selling at that price, my opinion is not really relevant.

Callan57

Look lovely inside but the outside is downright ugly & all those steps

Bigcheeze

murphaph wrote: »

Deffo not lower than Germany. Ireland is around 80% home ownership. Germany is around 50%, but increasing year on year.

I think the likes of Austria have pretty high ownership rates, but the difference seems to be not ownership at any price. They'll rent if it is cheaper.

The actual data is on Page 6 of this report:

http://www.savills.co.uk/promotions/research.aspx?document=http://pdf.euro.savills.co.uk/residential-property-focus-uk/residential-property-focus-q3-2012.pdf?response=no

Germany is 56%. Ireland is 74%. EU average is 74%. Kind of debunks the myth that Ireland is somehow obsessed with owning property at any cost.

Austria and Germany are really the only two that are significantly lower than Ireland but at the moment in Ireland it seems to be popular to benchmark every aspect of life against Germany as some model of perfection.

L1011

What's the average age of first purchase across the EU? What's the most common type first purchased?

There is definitely no other country where its common for 20-somethings to mortgage themselves to the hilt to buy a shoebox.

NIMAN

fiacha wrote: »

FYI.


That valley is used by gentlemen seeking other gentlemen, and the odd homeless camp. Take a walk into the woods there, and you'll see all the rubbish associated with those activities along the wall beside the appartments.

Should make for interesting viewing of a summers evening !

What sort of rubbish do you see with this activity?:D

Diddler1977

Drive by these apts every day. I love the look of them from the outside. But I think you could have trouble getting in and out every day. It is a busy hill.

mgn

All sold except 1 1bed apartment today at 3pm

theteal

I know them, they're just on the left as you get to the bottom of the hill. I used to pass them a lot when driving to the missus's parents in Castleknock. They kind of intrigued me as the entrance was fenced off for years, I came to the conclusion that it had to be the closest ghost estate to Dublin city centre. They're not in a great location, still a decent 10 minute walk to nearest shop/pub and the traffic at rush hour can be bad getting to there from both sides. Generally I'd be a huge fan of Chapelizod but the benefit of the village-y feel is kind of wasted when you're isolated at the furthest extremity of the village

murphaph

Bigcheeze wrote: »

Germany is 56%. Ireland is 74%. EU average is 74%. Kind of debunks the myth that Ireland is somehow obsessed with owning property at any cost.

It doesn't debunk anything of the sort. It just states home ownership rates are similar with some other EU countries. Last I heard, Ireland's property collapse was one of, if not the worst in world history. Our continental cousins may in parts have similar ownership rates, but they haven't been paying 10x annual salaries for their properties, which are now worth just 40-50% of what they paid. The Germans love the idea of owning their own home too btw, they just won't pay whatever the asking price is for it if it makes no financial sense to do so.

I'd say Ireland could be fairly compared to Hong Kong or Japan where people also bought at almost any price.

riclad

i presume people buy there ,cos its close to city, in a good area.since those units are not very high ,small buildings , maintenance costs will be low.
IT seems a good price to me considering you have your own parking space.

Idbatterim

dont see anything wrong with those prices, mortgage would probably be half of what the rent it, also rents have increased over the past few months, at least in my area they have D.14. If people are looking to buy now and are looking at low price properties, i.e not end of world if prices dropped 10% as they would have spent that on rent anyway. Different if you talking 400-500k property though, as that could be 40-50k and rent would only likely be 1300-1500 per month on this value property...

syklops

I persoanlly think they look nice from the outside, but I dont like the steps. I think most people would start using the sliding door to drop the shopping in, and soon the frontdoor would become redundent.

The look of the houses remind me a lot of the houses on the way into Swords, is it Boroimhe? Nice sort of integrated and cosy houses but I always remember thinking any time I saw them was that there was zero hope of any kind of improvement or modification - short of removing the steps and putting in a lift. You see people with your standard, some would say boring, 3-bed semi, but you see lots of people adding conservatories and extensions, turning garages in to labs and extra storage.

gurramok

Why would a couple settling down buy a 2bed apt after all that has happened?(space issues primarily in Irish apts)

I suspect the buyers might have been cash rich investors. Comments like "strong interest in the 1 beds" supports that view. What was the age profile of the buyers OP? Keep an eye on the type of people who will move in, watch out for alot of renters.

magicbastarder

gurramok wrote: »

Why would a couple settling down buy a 2bed apt after all that has happened?(space issues primarily in Irish apts)

as pointed out above, the 2 beds are 1,000 sq ft. that's as big as a lot of 3 bed semis built in the country over the last decade.

ballooba

W123-80's wrote: »

All very normal I thought until I spoke with an autioneer... all 2 beds were sold that morning. With strong interest in the 1 beds.

Sold is a term that is used very loosely by real estate agents.

gurramok

magicbastarder wrote: »

as pointed out above, the 2 beds are 1,000 sq ft. that's as big as a lot of 3 bed semis built in the country over the last decade.

Are 2beds sufficient for a couple settling down? Ya know, they are going to have kids.

W123-80's

gurramok wrote: »

Why would a couple settling down buy a 2bed apt after all that has happened?(space issues primarily in Irish apts)

I suspect the buyers might have been cash rich investors. Comments like "strong interest in the 1 beds" supports that view. What was the age profile of the buyers OP? Keep an eye on the type of people who will move in, watch out for alot of renters.

Alot of the crowd seemed to be of a similar demographic to my GF & I. 20's/30's age group. Couples, single people etc.
Having said that there could have been a pile of investors there also and I wouldn't have picked them out.

From an investors perspective they are definately a good buy, particularily the 1 beds.

From a couple starting out perspective, in my opinion, you could spend your hard earned money better. No garden, no private space, no storage.

frfintanstack

MYOB wrote: »

People are panicking about "losing out" on mortgage interest relief. Which isn't really worth a huge amount on a 105k (likely 90k max mortgage). Adding to that, the banks have increased lending slightly. This will fizzle out in January and the prices will probably drop by more than the interest relief saves.

Yes, the Irish seem unique in their utter obsession with owning a tiny plot of land - or no land at all in the case of an apartment. The UK comes close, but its still not the same; the rest of the world doesn't have the same primal urge to buy bricks.

As goes "sold" - whoever is selling them presumably has a price they would automatically accept at, so they would be 'sold' as such.

I'm buying at the moment but only because I can afford it, can afford even fairly significant loss of value, its likely to stay cheaper than renting even with a fairly painful property tax, and I got an executor sale. Wouldn't really recommend it as a good time to buy.

Slags off Irish peoples obsession with property buying....while buying property himself.

Good work

You rationalised it well.

Im sure the people signing up for these apartments are saying something like:

MYOB wrote: »

I'm buying at the moment but only because I can afford it, can afford even fairly significant loss of value, its likely to stay cheaper than renting even with a fairly painful property tax.

riclad

IF you are spending 10 k on rent ,and a mortgage is 12k per year ,i think its rational to consider buying a home.
IF we had proper banking regulation it would never have
developed into a crisis.
i think in the long term some people prefer to buy ,especially couples who are having kids.
There,s many single people who rent ,or family,s who live in council homes.
if i was buying an apartment i,d prefer to buy in a
development with 30 units, than say a block
with 500 units.

Duckjob

riclad wrote: »

IF you are spending 10 k on rent ,and a mortgage is 12k per year ,i think its rational to consider buying a home.

I've always thought comparing the monthly mortgage payment today vs monthly rent payment today (while completely ignoring big picture figures such as the cost of the mortgage) is a spectacularly IRRATIONAL way of evaluating the single largest purchase most will make in their lives.

stevedublin

Duckjob wrote: »

I've always thought comparing the monthly mortgage payment today vs monthly rent payment today (while completely ignoring big picture figures such as the cost of the mortgage) is a spectacularly IRRATIONAL way of evaluating the single largest purchase most will make in their lives.

What do you consider "the cost of the mortgage" if it is not the amount you have to pay back?

Duckjob

stevedublin wrote: »

What do you consider "the cost of the mortgage" if it is not the amount you have to pay back?

I mean Total cost of the mortgage. Like, for example, how borrowing €300,000 over 30 years could mean a total re-payment of €550,000-€600,000 over that term.

Looking at monthly repayment in isolation is financial myopia. Of course, that means it gets pushed all the time by EAs, banker, policitians, and all other sorts of vested interests who thrive on peoples financial myopia.

mdebets

riclad wrote: »

IF you are spending 10 k on rent ,and a mortgage is 12k per year ,i think its rational to consider buying a home.

You are aware, that a mortgage of 12k costs you a lot more per year than 12k?
You have e.g:
Management fees
Household Tax
House insurance
small repairs
money to be put aside for larger repairs in a few years time

Plus the costs associated with not being able to move fairly quickly in case
you loose your job and get a new one at the other side of the country
your new neighbours are anti-social
you need a bigger house, because you get children

magicbastarder

Duckjob wrote: »

I mean Total cost of the mortgage. Like, for example, how borrowing €300,000 over 30 years could mean a total re-payment of €550,000-€600,000 over that term.

this is immaterial if you're comparing rents to mortgages. as you'll spend more on rent. and have no assets at the end.

rent is generally subject to inflation. you'll meet people who are paying maybe a few hundred per month on a mortgage which is about 20 years old, where a renter will be paying maybe €1200 after twenty years.
what would you have advised the renter had they been in a position to buy 20 years ago?

Duckjob

magicbastarder wrote: »

this is immaterial if you're comparing rents to mortgages. as you'll spend more on rent. and have no assets at the end.

rent is generally subject to inflation. you'll meet people who are paying maybe a few hundred per month on a mortgage which is about 20 years old, where a renter will be paying maybe €1200 after twenty years.
what would you have advised the renter had they been in a position to buy 20 years ago?

Not immaterial at all. You're doing the classic diversion of deducing that if somebody doesnt buy now, that means they're going to rent the rest of the lives.

As for what I would advise a renter to do 20 years ago, that's real "if my auntie had b****cks stuff....". If I had a crystal ball, I'd just play the lotto numbers and retire instead...

stevedublin

Duckjob wrote: »

Not immaterial at all. You're doing the classic diversion of deducing that if somebody doesnt buy now, that means they're going to rent the rest of the lives.

So what do you think people should do, rent or buy?

whatnext

Looking at these properties purely as numbers it stacks up very well.

If you are a cash buyer and many were according to what I heard on the radio its even better.

Conservative estimate as follows
Rent - 1000 x 11 months = 11000
Management fee (for the development no lifts or internal issues) say 1000
Insurance, PRTB, letting agent, household charge etc 1200

Net cash return = 8800 pa.

Property price 200,000
Acquisition costs 5000
Net Cost = 205000.

8800 / 205000 = 4.3% return.

That's just a very basic calculation. the real yield is probably closer to 6.3%

That stacks up very favourable to most bank rates.

Slightly harder to make is stack up with a mortgage, from an investment perspective, but it can be done, with a return. NB capital repayments are not a cost in financial terms.

magicbastarder

mdebets wrote: »

You are aware, that a mortgage of 12k costs you a lot more per year than 12k?
You have e.g:
Management fees
Household Tax
House insurance
small repairs
money to be put aside for larger repairs in a few years time

Plus the costs associated with not being able to move fairly quickly in case
you loose your job and get a new one at the other side of the country
your new neighbours are anti-social
you need a bigger house, because you get children

management fees aside (speaking generally, not just in the case of apartments), household tax, contents insurance, and small repairs will not make up a 2k difference.
plus, your rent will go up (or down) with inflation (or deflation). your mortgage will go up (and down) with interest. which do you think will have the biggest cumulative effect, in say 10 years time?

i recently bought. partly because i'm into gardening, and it's an unusual landlord who would let you have free rein with a garden. i'm happy to admit that a lot of other reasons are because of ireland's weak tenancy laws, which are not financial.

with management fees, these are obviously a major factor to take into consideration in the rent vs. debate on apartments.

Duckjob

stevedublin wrote: »

So what do you think people should do, rent or buy?

Dont think there's one right answer - depends on your own circumstances and where you believe the market is going to go say, over the next 12-18 months.

mdebets

magicbastarder wrote: »

management fees aside (speaking generally, not just in the case of apartments), household tax, contents insurance, and small repairs will not make up a 2k difference.

If you do it properly it will.
Alone for repair, it's normally suggested to set aside 1-3% of the value of the house (so that you have enough set aside, when some high cost repairs need to be done in a few years time). Having seen many houses built in the last few years in Ireland, it might be even more, based on some poor quality.

Theboinkmaster

riclad wrote: »

IF you are spending 10 k on rent ,and a mortgage is 12k per year ,i think its rational to consider buying a home.

What about if your home is depreciating €20k per year :cool:

Idbatterim

What about if your home is depreciating €20k per year

this is exactly why it depends on how reasonable the asking price is now and where etc it is located, this is coming from someone who was very very critical of the rip off boom prices, do you think the 1 bed apartments under discussion, asking 105, will only sell for 85k next year? I reckon absolute worst case scenario, is that they lose roughly what would have been paid in rent, i.e. 750-850 per month. More than likely Id say they will be same price, if not marginally higher...

also there are advantages to no lift, i.e. cheaper management fees. Also I would EXPECT that there shouldnt be any repair costs for quite a few years...

BostonB

The more important issue is not the price, but the location, and is it the right kinda properly to buy.

IMO, a one bed apartment is very limited, if you want to share, live with someone, have kids, etc. Apartments make the most sense in large cities/town centers etc. Which is why their value has been decimated out in the suburbs and rural towns. The market also depends on employment, and being able to get loans/mortgages. Considering the worst of austerity is yet to come, and the survival of the euro and even the banks is far from certain. If you are going to be stuck somewhere, its going to have to tick all your accommodation needs, for the life of the mortgage. Begin able to rent it out is far from certain as is rents staying where they are. Considering the glut of properties in Nama and general economic situation, or RA continuing at its current levels.

Bascially be sure you're buying it for the right reasons. Buying it because its cheaper to rent seems a very shortsighted view point. No point it being cheaper, and it being the wrong property for you in 5yrs time.

StillWaters

mdebets wrote: »

If you do it properly it will.
Alone for repair, it's normally suggested to set aside 1-3% of the value of the house (so that you have enough set aside, when some high cost repairs need to be done in a few years time). Having seen many houses built in the last few years in Ireland, it might be even more, based on some poor quality.

There is no way it costs anywhere near 3% to maintain a house. Sure you can spend it upgrading fixtures and fittings, but you shouldn't have to spend more than €1k a year on actual maintenance, considerably less if you are handy yourself, and willing to paint, clear gutters, unblock drains etc.

mdebets

StillWaters wrote: »

There is no way it costs anywhere near 3% to maintain a house. Sure you can spend it upgrading fixtures and fittings, but you shouldn't have to spend more than €1k a year on actual maintenance, considerably less if you are handy yourself, and willing to paint, clear gutters, unblock drains etc.

The 1-3% are not just the yearly maintenance, but also the money to be put aside for the big maintenance jobs a few years down the line.

mdebets

Idbatterim wrote: »

Also I would EXPECT that there shouldnt be any repair costs for quite a few years...

I wouldn't bet on this. They were a receivership sale and not all of them were finished.
So you can expect that the builder might have skipped on quality material and used cheap ones instead. They might also have been open to the environment for some while. So the buy might see hefty repairs much earlier then expected.

StillWaters

mdebets wrote: »

The 1-3% are not just the yearly maintenance, but also the money to be put aside for the big maintenance jobs a few years down the line.

I've included that in the 1k figure, a well maintained house shouldn't need any big jobs. Roofs, windows etc should last the length of the mortgage. Insulation is the only thing I can think would need upgrading every so often, but you get the pay back for that in any case.

BostonB

StillWaters wrote: »

I've included that in the 1k figure, a well maintained house shouldn't need any big jobs. Roofs, windows etc should last the length of the mortgage....

Which parallel universe is this, I want to buy a house there. :cool: