Dublin is insanity- why did I come back?

Shelga

Went to a viewing of a nice enough 2 bedroom apartment in Clare Hall at the weekend. It was advertised for €190k and bidding as of lunchtime yesterday was €224k.

It's just so difficult to stay positive. I am on decent enough money but single- I feel I will never be able to even buy an apartment, much less settle down in a house with children, unless I give up on the idea of living in my home city.

I am in no way picky- that was only the first place I looked at and I would consider nearly all areas to live in. Ballymun and Finglas would be next on my list, I doubt I could afford Santry at this stage, which is where I was considering a couple of months ago.

Is it like this at every viewing? I knew it would go for more than the asking price but €224k for that place is madness.

Just needed to vent. Doesn't sound like there will be any improvement in the next 3-5 years- should I just resign myself to a house share until I'm 35? Why are these our options? Why were our parents able to buy 3 bed semi ds with relative ease 30 years ago? Why is society so much more fractured?

Ok I'm being dramatic- I'll just stop whingeing and keep up the search for a 40m2 one bed box in Ballymun.

pxdf9i5cmoavkz

Shelga wrote: »

should I just resign myself to a house share until I'm 35?

35 is an aggressive timeline to move out of house share. The average age for moving out of house share into your own shoe box is 47 years old here in Dublin.

In all seriousness. This is not the right time to be buying property. You will almost always find yourself outbid on property.

spaceHopper

It's Fxcked up. But I wouldn't wait, if you can afford it now do it, you will have longer to pay it back so can better afford it. The property market is rigged buy every political party. It won't improve.

The government want people to look at life long renting but would you trust the government to make that work? You'd be staking you old age security on it.

If you can put up with house sharing, why not buy a two or 3 bed and rent rooms out. Use the extra money to build up saving or pay down the mortgage

jimmycrackcorm

Shelga wrote:

Why were our parents able to buy 3 bed semi ds with relative ease 30 years ago? Why is society so much more fractured?

I'm older so I understand the reason as was for me that as women became more active in the workforce, people bought properties based on two incomes.

In my parents generation, there were generally only single income families competing to buy.

Now you are competing with dual income buyers which is why it is so difficult.

super_furry

Honestly my experience was to add 10% to 15% to asking prices to find what I could afford before even going to look.

bleary

They were able to buy because 30 years ago there was
Unemployment 17%
Emigration -more people leaving than arriving
Strict credit controls one income taken into account.
Lower lti
Shorter terms
30 years ago you wouldn't have been able to come back to Dublin if you left

It's tough buying.
Ten years ago you had the possibility of affordable housing as an option.

Clare hall would be a good rental. Look for somewhere that is not as easy a rental. Keep saving. hopefully government won't continue to meddle. Leave the lti limits alone and if building happens things might even out.

DubCount

OP. To afford a 200k home, you must have a deposit of at least 20k and an income over 50k. So congratulations for reaching that kind of position.

The market in Dublin is definitely still on the hot side, especially in the lower end of the market. There are a lot of first time buyers who have put together the required deposit and are desperately looking to move out of home or the even more insane rental market. I think a lot of agents are also listing houses below expected sale price to generate interest and start bidding wars.

Have you looked at moving out a bit, to say Swords, where 200k will still give you more to look at?

Shelga

Thanks for the replies. I knew things were grim but it’s only now I’m going to viewings that I’m understanding just how much above asking prices that places are going for.

Yes I’d definitely consider Swords. As I said, I’ve only been to one viewing and am already freaking out! I’m keeping all options open.

What would be an area that wouldn’t be so viable, rental-wise, where I might get more value for money?

Cuddlesworth

Shelga wrote: »

What would be an area that wouldn’t be so viable, rental-wise, where I might get more value for money?

There isn't much value for money in the greater Dublin region at the moment.

oceanman

If I were in your position I would seriously consider waiting this one out...houses and apartments are going up by crazy money week on week, which in turn is causing people to panic and over bid, pushing the price up and up, this as we all know cannot last and when prices start to tumble they will crash hard, that's when the smart people buy.

Kamili

House prices are only set to increase over the next 3 years - so how long should you wait?

I'm currently on the bench, waiting, but as I too am single and over my mid 30s I'm not going to get a 35 year mortgage. I've not been in the right place to buy until recently - and even then I'm worried my job could go kaput in the morning as it has for me in the past.

http://www.newstalk.com/New-report-predicts-house-prices-could-rise-by-20-over-next-two-years

Theres little or no security for people in this country I feel and I regret not leaving when some of my family and friends have in the past.

So I hear your pain OP!

accensi0n

Kamili wrote: »

House prices are only set to increase over the next 3 years - so how long should you wait?

4 years.

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pilly

Shelga wrote: »

Went to a viewing of a nice enough 2 bedroom apartment in Clare Hall at the weekend. It was advertised for €190k and bidding as of lunchtime yesterday was €224k.

It's just so difficult to stay positive. I am on decent enough money but single- I feel I will never be able to even buy an apartment, much less settle down in a house with children, unless I give up on the idea of living in my home city.

I am in no way picky- that was only the first place I looked at and I would consider nearly all areas to live in. Ballymun and Finglas would be next on my list, I doubt I could afford Santry at this stage, which is where I was considering a couple of months ago.

Is it like this at every viewing? I knew it would go for more than the asking price but €224k for that place is madness.

Just needed to vent. Doesn't sound like there will be any improvement in the next 3-5 years- should I just resign myself to a house share until I'm 35? Why are these our options? Why were our parents able to buy 3 bed semi ds with relative ease 30 years ago? Why is society so much more fractured?

Ok I'm being dramatic- I'll just stop whingeing and keep up the search for a 40m2 one bed box in Ballymun.

Yes, you are being over dramatic. What age are you now?

There's no point in looking back and saying why is it not like that anymore, it's just not. So deal with the reality.

If you're willing to live in Ballymun/Finglas there's plenty of places that you can afford.

You said yourself it's on the 1st place you looked at so you haven't made a huge effort now have you?

daheff

Amelie Shallow Saleswoman wrote: »

This is not the right time to be buying property. You will almost always find yourself outbid on property.

There is never an ideal time to buy property.


Back in the boom prices were going up by the day.Like now. But people could borrow whatever they wanted.

In the recession prices were dropping....because there were no buyers...because people could not get financing.


If you don't buy now (vs in 5 years time), think of how much you will pay in rent over that period. How much of that would be off your mortgage?

You might need to be more realistic in where you go to buy. You might need to search further away from where you ideally would like to live...but thats reality.


Its tough market...good times & bad. Don't pay more than you can afford and look at the long term picture rather than just now (ie dont buy a small sh1tty 1 bed in middle of nowhere wanting a family later on -you might not be able to sell it later).

Cuddlesworth

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Yep, pretty much just estate sales. Best option is to wait 20 years, for the baby boomers to start dropping off like flys and a serious population decline starts happening.

Wesser

Yes it is tough. But it is do - able. I'm in the same situation as you. I felt overwhelmed at the beginning too.
Very overwhelmed.
What did I do?
I worked really hard and got a Pay rise.
I saved like crazy.
I searched and searched and searched. Like maybe 70 - 100 properties.
Now today I'm unpacking my boxes.

You have to draw up a plan. Get sound financial advise. Draw up.a budget

In your situation I would consider east wall??

Wesser

Or else get dating!!!!!

Amelie Shallow Saleswoman

Amelie Shallow Saleswoman wrote: »

In all seriousness. This is not the right time to be buying property. You will almost always find yourself outbid on property.

I'm looking at buying at the moment with my partner. We'd probably be paying €1500 p/m rent, meaning every year we wait will cost is €18,000 in rent. 3 years of that is over €50,000.

How long would we have to wait to save €50k+ on current prices?

lawred2

Amelie Shallow Saleswoman wrote: »

35 is an aggressive timeline to move out of house share. The average age for moving out of house share into your own shoe box is 47 years old here in Dublin.

In all seriousness. This is not the right time to be buying property. You will almost always find yourself outbid on property.

so when will the right time be?

bigguns2

Just curious, approx how much would the repayments be on a mortage of 300,000 over 40 years?

bigguns2

bigguns2 wrote: »

Just curious, approx how much would the repayments be on a mortage of 300,000 over 40 years?

Well that depends on your interest rate. One thing that's sure though is over 40 years you'll pay massive amounts of interest as a proportion of the loan.

Have a look here: https://www.drcalculator.com/mortgage/ie/

At AIBs variable rate (3.15) the payments would be €1100
At BOIs variable rate (4.5) the payments would be €1350

Sleeper12

bleary wrote:

They were able to buy because 30 years ago there was Unemployment 17% Emigration -more people leaving than arriving Strict credit controls one income taken into account. Lower lti Shorter terms 30 years ago you wouldn't have been able to come back to Dublin if you left

You left out high interest rates 10% would have been cheap. I paid 19.5% during the currency crisis. Fortunately we devalued the punt by 10% and everything settled down

I don't know what the answer is with buying a home in Dublin. They are still due to increase in price for the next few years. Even when they level out I can't see them coming down unless Trump or Brexit throw up something mad.

Were looking at possibly 6 to 8 years before supply catches up with demand.

Idbatterim

Kamili wrote: »

House prices are only set to increase over the next 3 years - so how long should you wait?

I'm currently on the bench, waiting, but as I too am single and over my mid 30s I'm not going to get a 35 year mortgage. I've not been in the right place to buy until recently - and even then I'm worried my job could go kaput in the morning as it has for me in the past.

http://www.newstalk.com/New-report-predicts-house-prices-could-rise-by-20-over-next-two-years

Theres little or no security for people in this country I feel and I regret not leaving when some of my family and friends have in the past.

So I hear your pain OP!

Hang on one minute! you can say with certainty that they will increase over the next 3 years. If I had to be bet one way or the other, yes I would say its more likely they will be higher, but you can say nothing with absolute certainty!

Idbatterim

Javion Some Skit wrote: »

I'm looking at buying at the moment with my partner. We'd probably be paying €1500 p/m rent, meaning every year we wait will cost is €18,000 in rent. 3 years of that is over €50,000.

How long would we have to wait to save €50k+ on current prices?

ok, lets say you spend 18k on rent over 3 years. Then property prices increase by lets say 10% per year, compound. Then you also have to pay all extra interest back from the increased price *assuming of course that they do increase, although it does seem more likely to me than not, that they will over the short term...

you are talking about saving a large amount of money! unless prices A) collapse and you are actually in a position to buy if they do!

flaneur

We really need to get out of this notion that houses are for speculation. It's sucking a vast amount of money out of the economy that could be flowing around. When it's spent on property, it's typically going to service a large mortgage and that money's effectively going right out of the system as the banks are borrowing on the international markets.

Imagine how much nicer the place would be if 50% more disposable income were sloshing around in the real economy... Or, being invested in real businesses ...

super_furry

Wesser wrote: »

Or else get dating!!!!!

You might be saying it in jest but that’s a huge factor. Someone on a good wage of €50k a year can get a mortgage of €175k, and with a deposit of €25k, you’re looking at €200k properties. As a couple you can double that and suddenly there’s so much more open to you.

Idbatterim

Idbatterim wrote: »

ok, lets say you spend 18k on rent over 3 years. Then property prices increase by lets say 10% per year, compound. Then you also have to pay all extra interest back from the increased price *assuming of course that they do increase, although it does seem more likely to me than not, that they will over the short term...

you are talking about saving a large amount of money! unless prices A) collapse and you are actually in a position to buy if they do!

1) I'm talking about buying now, not waiting three years when prices have compounded themselves by 10% per year

2) It's €18k rent per year not over three years as stated. If renting cost €6k per year I'd probably never buy a house

The right time to buy is when you find a house you like and can afford. If those things line up then waiting is not a sensible or rational decision.

super_furry

Mortgage repayments on a €450k loan over 30 years will be just under €2k a month. You can’t rent a three-bedroom house for that in most areas in Dublin at this stage. It's mental that it's cheaper to have a mortgage than to rent.

super_furry

super_furry wrote: »

It's mental that it's cheaper to have a mortgage than to rent.

Errr... huh?

If the mortgage was more expensive than the rent then the landlord would be losing money every month. I mean almost by definition should the rent not be higher than the mortgage on an equivalent property?

pilly

super_furry wrote: »

You might be saying it in jest but that’s a huge factor. Someone on a good wage of €50k a year can get a mortgage of €175k, and with a deposit of €25k, you’re looking at €200k properties. As a couple you can double that and suddenly there’s so much more open to you.

This is another thing people aren't taking into account when saying things were way better back in the day. I don't know anyone of my parents generation or older who bought a house as a single person, it was always a married couple.

Browney7

Javion Some Skit wrote: »

Errr... huh?

If the mortgage was more expensive than the rent then the landlord would be losing money every month. I mean almost by definition should the rent not be higher than the mortgage on an equivalent property?

I sense this is going to turn into a capital versus interest repayment debate yet again!

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Shelga

The place is now €234k... agent pitting us all against each other- maybe I’m done with Dublin.

Sleeper12

Javion Some Skit wrote: »

Errr... huh?

If the mortgage was more expensive than the rent then the landlord would be losing money every month. I mean almost by definition should the rent not be higher than the mortgage on an equivalent property?

No the landlord would be making a profit. Buying the property is the investment and the payments are separate to profit LL owns the property at the end of mortgage.

Sleeper12

Sleeper12 wrote: »

No the landlord would be making a profit. Buying the property is the investment and the payments are separate to profit LL owns the property at the end of mortgage.

Ok sure. But do landlords rent out properties for less than they're paying each month on that property? I doubt it, unless they have absolutely no choice.

The point I was trying to make anyway is I don't find it mental at all that mortgages are cheaper than rent. It seems fairly normal to me.

Shelga wrote: »

The place is now €234k... agent pitting us all against each other- maybe I’m done with Dublin.

I don't really know why you thought the process would be easy or you'd just buy (quite literally) the first place you laid eyes on.

Sleeper12

Javion Some Skit wrote:

Ok sure. But do landlords rent out properties for less than they're paying each month on that property? I doubt it, unless they have absolutely no choice.

In some cases yes. I see what you mean. In rare cases, when everything crashed inc rents in 2008. Some poor unfortunates, accidentally LL were renting out their homes, possibly living back in the parents house and having to top up the rent received each month to meet mortgage payments.

It wouldn't be the norm though. Point taken

commited

Considering it's only the first one you've looked at, you'll kiss a lot more frogs from my experience.
Keep your eye out for any new builds that fall into your affordability - no risk of bidding war, no maintenance costs for first few years (apart from std service charge!) and 5% of purchase price (max 20k) back from the gov.

Also banks are able to breach the 3.5x multiple for 20% of cases, so consider looking at spending a bit more to get into a 3 bed that would allow you to rent a couple of rooms and earn €14k/year tax free.

loyatemu

super_furry wrote: »

As a couple you can double that and suddenly there’s so much more open to you.

no you can't, no bank will lend you double the combined incomes. And if you have kids they start knocking huge amounts off your limit.

as for the whole 30 years ago thing - I think the main factor is an increase in households, without an equivalent increase in buildings. There are far more single people owning property now (less people per home), and the population has nearly doubled since the 70s - it's supply and demand ultimately. The main price increases occurred between about 1992 and 2002 - if you bought before that you're golden.

We really need more apartments; people in the 20s/early 30s should be buying apartments and then trading up; whilst older people should be able to trade down to serviced apartments later in life. Unfortunately the crappy quality of most Irish apartments and the huge hit they took in value during the crash has really put people off buying them and developers are reluctant to build them as a result.

loyatemu

loyatemu wrote: »

no you can't, no bank will lend you double the combined incomes. And if you have kids they start knocking huge amounts off your limit.

You're right, they'll lend you 3.5 times your combined incomes.

pilly

Shelga wrote: »

The place is now €234k... agent pitting us all against each other- maybe I’m done with Dublin.

You're giving up far too easy. Don't be ridiculous now, it's one property. People have already given you lovely examples of houses within your price range, have you even looked at them?

super_furry

loyatemu wrote: »

no you can't, no bank will lend you double the combined incomes. And if you have kids they start knocking huge amounts off your limit.

They'll lend you 3.5 times the combined incomes. If you're earning 50k on your own, they'll lend you €175k. If you and your partner and both earning 50k, they'll lend you €350k.

pilly

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Well you're going further back than my parents generation because I know both of them worked.

loyatemu

Javion Some Skit wrote: »

You're right, they'll lend you 3.5 times your combined incomes.

back in the day it was 3.5 or 4 times the higher earner, plus 1 times the lower earner. But it seems this has changed (not sure this is a good idea tbh)

super_furry wrote: »

They'll lend you 3.5 times the combined incomes. If you're earning 50k on your own, they'll lend you €175k. If you and your partner and both earning 50k, they'll lend you €350k.

yes, I was wrong there, seems crazy but I just checked AIB's calculator and it's correct. Still won't buy you much which illustrates how mad the market is.

GingerLily

loyatemu wrote: »

back in the day it was 3.5 or 4 times the higher earner, plus 1 times the lower earner. But it seems this has changed (not sure this is a good idea tbh)



yes, I was wrong there, seems crazy but I just checked AIB's calculator and it's correct. Still won't buy you much which illustrates how mad the market is.

Where have you been that you don't know this? It's literally in the news all the time!

Shelga

Giving up far too easily by accepting that I could have afforded 190k but not 234k? Should I be panicking completely and chucking out a bid I know I can’t afford?

I absolutely did not think it would be easy. I’m saying that this is my first foray into the horrible world of buying, and I’m realising that €45k over the asking price is the new norm. I expected €20-30k over asking.

I’m fully prepared to view as many properties as I need to and in every area in the greater Dublin area. My only red line is I won’t buy a 1 bed as you’re giving yourself no flexibility whatsoever.

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Ohmeha

flaneur wrote: »

We really need to get out of this notion that houses are for speculation. It's sucking a vast amount of money out of the economy that could be flowing around. When it's spent on property, it's typically going to service a large mortgage and that money's effectively going right out of the system as the banks are borrowing on the international markets.

Imagine how much nicer the place would be if 50% more disposable income were sloshing around in the real economy... Or, being invested in real businesses ...

This is exactly what happened between 2003-2007 and all the exclusive blame for the bubble bursting was on the excess credit lent by Banks and Lehman Brothers etc - as you rightly point out a huge factor in the collapse of the economy following these insanely stupid years was too much money was diverted from real productive economic growth sectors into the black hole abyss of Ireland's unsustainable dysfunctional property market and into Landlords pockets.

Apparently 'this time is different' '2007 was just a blip' according to the Government, NAMA, Central Bank and all the vested interests because they think they have been really clever this time rigging the market by restricting supply to boost housing & rental prices back to what they deem was always totally normal and safe for the economy in 2007.

Shelga

My budget is 220k. I thought €30k was enough wiggle room at that level. I was wrong.

BrokenArrows

Javion Some Skit wrote: »

Errr... huh?

If the mortgage was more expensive than the rent then the landlord would be losing money every month. I mean almost by definition should the rent not be higher than the mortgage on an equivalent property?

In a reasonable society the rent should be cheaper than owning.
When rent is more than the mortgage the landlord is basically getting a free ride.

If we want to get out of the situation where owning a property is a MUST HAVE then rent has to be lower than a mortgage repayment.

In the current scenario can you imagine reaching pension age and still having to pay the market rate on rent because you could never afford to buy? A lot of people barely make rent at the moment and you think they will make rent on a private pension never mind the state pension!
Then you still get turfed out every few years because the landlord decides to sell or renovate.

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