Buy now or wait?

dawanda

Hi folks,

I been reading so many articles by experts and non-experts now, but I still can't really see through the jungle.

If you have the 10 % and would get mortgage, is it a good time to buy your first house atm? Or is it better to wait 3 years, 5 years, 10 years?

What 's your opinion on it?

mistress_gi

I am in the same boat so would be very interested in any feedback.

Steer55

If you have your deposit and need a home, go buy it, why wait five, seven or ten years.

whiskeyman

If you're looking for a home, buy when you can afford it.

Different if you're looking at an investment.

Captain Flaps

We've just bought. We were advised to wait 3-5 years by some people who reckon a crash is on the way, but at the end of the day we can afford to buy now and are keen to get out of the rental market, if I'm going to be paying crazy money I'd rather pump it into an asset. Also said crash may never come so why waste years hoping a house will get cheaper when you could just buy now?

Wesser

I think there is already 3threads this month with the same question

Browney7

dawanda wrote: »

Hi folks,

I been reading so many articles by experts and non-experts now, but I still can't really see through the jungle.

If you have the 10 % and would get mortgage, is it a good time to buy your first house atm? Or is it better to wait 3 years, 5 years, 10 years?

What 's your opinion on it?

Depends on your circumstances, age, career, family and travel aspirations and even could depend on what your current LL and rent levels are like.

DubCount

The only reason to delay a purchase is if you believe property prices (where you want to buy) are going to fall significantly, or you are unsure where you want to live in the long term (when you may want to move from where you buy).

If you can afford the mortgage, and have the deposit, and know where you want to live - go for it. 25 years from now prices will have gone up and down several times, and it wont matter as you live where you want to live. Ask your parents if they know the value of their home - I'll bet they neither know nor care - they have probably paid their mortgage and are happy where they live. Maybe they could have made a better investment 30 years ago - maybe not - but I'd bet they would change their decision.

dawanda

Wesser wrote: »

I think there is already 3threads this month with the same question

I've tried the search before posting. If you could link the threats, that would be great!

dawanda

Browney7 wrote: »

Depends on your circumstances, age, career, family and travel aspirations and even could depend on what your current LL and rent levels are like.

what's LL?
secure permanent full-time job, 40, single and no plans to extend the family, some traveling would be nice (not sure why it matters?), rent is higher than what I would pay in mortgage. I only moved here two years ago.

dawanda

DubCount wrote: »

The only reason to delay a purchase is if you believe property prices (where you want to buy) are going to fall significantly, or you are unsure where you want to live in the long term (when you may want to move from where you buy).

If you can afford the mortgage, and have the deposit, and know where you want to live - go for it. 25 years from now prices will have gone up and down several times, and it wont matter as you live where you want to live. Ask your parents if they know the value of their home - I'll bet they neither know nor care - they have probably paid their mortgage and are happy where they live. Maybe they could have made a better investment 30 years ago - maybe not - but I'd bet they would change their decision.

I can't ask my parents, since they don't own a house and don't live in Ireland.
How can I be absolutely sure that I will want to live in this one place for the rest of my life? I'm pretty confident in what I want for the next five years. But longer than that? I simply don't know.

spurshero

dawanda wrote: »

what's LL?
secure permanent full-time job, 40, single and no plans to extend the family, some traveling would be nice (not sure why it matters?), rent is higher than what I would pay in mortgage. I only moved here two years ago.

Landlord I presume

draiochtanois

This post has been deleted.

Diceicle

If you don't need to buy now don't buy now and wait for the next bust. You could be waiting an indeterminate amount of time though

DubCount

dawanda wrote: »

I can't ask my parents, since they don't own a house and don't live in Ireland.
How can I be absolutely sure that I will want to live in this one place for the rest of my life? I'm pretty confident in what I want for the next five years. But longer than that? I simply don't know.

Buying a home is a long term commitment. You never really know what you will be doing in 5, 10 or 20 years time. If you were only staying in an area for 1 year, then I'd say rent and buy when you know what you want. If you are pretty certain for the next 5 years, that should be enough time to buy, pay off a reasonable bit of your mortgage and make buying worthwhile. This is a risk decision that only you can figure out. Opinions on the future of house prices are not consistent - the longer your time horizon, the more buying is likely to be the best bet.

JimmyMW

dawanda wrote: »

Hi folks,

I been reading so many articles by experts and non-experts now, but I still can't really see through the jungle.

If you have the 10 % and would get mortgage, is it a good time to buy your first house atm? Or is it better to wait 3 years, 5 years, 10 years?

What 's your opinion on it?

Well it very much depends on your own situation, you say in other posts that you have a good permanent job, you have the deposit and can afford the mortgage.

In the last boom people in your situation bought houses at very high prices as starter homes and ended up getting stuck in them with negative equity and now have very unsuitable homes for their current situation, 1 & 2 bedroom apartments with several kids etc. These are the people who are suffering the most from the inflated prices of the last boom and you don't want to fall into this situation. The people who paid high prices for their forever home are not as bad and as a previous poster said in 30 years the value will have gone up and down several times. So if buying your forever home or at least one, which if you were to be stuck with it, would cater for your long term needs you could consider buying now.

Also worth considering, is your job reliant on a prosperous local economic situation? If so waiting for a significant drop in house prices to justify waiting may not an option for you, as you might not be in a position to get a mortgage at that point due to layoffs and wage cuts or an undesirable career from a lenders perspective. I know I was certainly not in a position to get a mortgage in the last recession despite having a large deposit, basically due to the uncertainty of my job and the industry.

In short, we have had one of the biggest booms and the longest and deepest recession in the very near past, learn from the mistakes of others during this time and if you can see this move as being a positive for you in a boom or recession then I would go for it.

dawanda

draiochtanois wrote: »

This post has been deleted.

So sorry, but numbers are not my speciality, I have no idea what this means *blush*

deletthis

dawanda wrote: »

So sorry, but numbers are not my speciality, I have no idea what this means *blush*

Essentially you need to work out whether you would potentially save more by waiting and buying a cheaper house, even when you factor in the rent you'll pay in the mean time.

The above example shows there's little to nothing in it, even with a 20% fall.

Personally I'd love the satisfaction of paying into my own investment rather than someone elses through rent. But only you know your personal situation.

Best advice? Spend a few hundred quid on a good financial advisor.

dawanda

deletthis wrote: »

Essentially you need to work out whether you would potentially save more by waiting and buying a cheaper house, even when you factor in the rent you'll pay in the mean time.

The above example shows there's little to nothing in it, even with a 20% fall.

Personally I'd love the satisfaction of paying into my own investment rather than someone elses through rent. But only you know your personal situation.

Best advice? Spend a few hundred quid on a good financial advisor.

Say I pay 1500 in rent now vs buying a house for 230000 now. From what I understand, buying in this case would be the better deal. Wouldn't it?

Can you suggest a financial advisor?

thanks so much

elainers

dawanda wrote: »

Browney7 wrote: »

Depends on your circumstances, age, career, family and travel aspirations and even could depend on what your current LL and rent levels are like.

what's LL?
secure permanent full-time job, 40, single and no plans to extend the family, some traveling would be nice (not sure why it matters?), rent is higher than what I would pay in mortgage. I only moved here two years ago.

I would be inclined to think about your age - to the best of my knowledge, most banks only give a mortgage term up to the age you reach 65. So if you're 40, you'll be offered a term of 25 years. If you're 45, it will be 20 years. The shorter the term, the higher your monthly repayment is. The banks check repayment capacity of that amount. If you wait a few years for a drop, it's probably an idea to consider if you'll still be able to afford the monthly repayment. 

As an example, 180k borrowed over 25 years on a 1 year fixed with KBC = €844. It's €989 on the same rate over 20 years (I just really quickly pulled this from Bonkers as an example).

cruizer101

Diceicle wrote: »

If you don't need to buy now don't buy now and wait for the next bust. You could be waiting an indeterminate amount of time though

Easier said than done, credit isn't readily available in a crash.

Personally if I was 40 like OP is I'd be looking to get a property, even now they can probably only get 27 year mortgage.

Nobody knows when next drop in prices will be.

If they were similar position but mid 20's I'd probably say hang on.

GingerLily

cruizer101 wrote: »

Easier said than done, credit isn't readily available in a crash.

Personally if I was 40 like OP is I'd be looking to get a property, even now they can probably only get 27 year mortgage.

Nobody knows when next drop in prices will be.

If they were similar position but mid 20's I'd probably say hang on.

A lot of people here seem to be ignorant of this fact, if the banks aren't lending, your not getting credit, and banks don't typically lend when there's a crash - which is half the reason the prices have fallen in the first place.

If you can buy outright, then yes maybe wait, but if you need mortgage and the house is a good long term investment, then buy when you can.

If the OP is looking for someone to tell them its the right decision they will never do anything.

dawanda

elainers wrote: »

I would be inclined to think about your age - to the best of my knowledge, most banks only give a mortgage term up to the age you reach 65. So if you're 40, you'll be offered a term of 25 years. If you're 45, it will be 20 years. The shorter the term, the higher your monthly repayment is. The banks check repayment capacity of that amount. If you wait a few years for a drop, it's probably an idea to consider if you'll still be able to afford the monthly repayment. 

As an example, 180k borrowed over 25 years on a 1 year fixed with KBC = €844. It's €989 on the same rate over 20 years (I just really quickly pulled this from Bonkers as an example).

That rate would still be lower than or the same of what I would spend in rent rn.
(I live in Wicklow now, but would move to Wexford, if that's an option).
One thing that worries me though is the possibility that the monthly repayment rate might explode. I would, e.g., struggle to pay 1500 Euros a month. And from what I understand that could happen even if the initial payment is around 1000 Euros.

Captain Flaps

dawanda wrote: »

I would, e.g., struggle to pay 1500 Euros a month. And from what I understand that could happen even if the initial payment is around 1000 Euros.

Rates fluctuate but not by that much. You're paying the mortgage as a percentage of the money you borrowed, not the house's current market value.

GingerLily

Borrowing €210k@3% 25 years ~ 1k a month

Interest rates would need to increase to 7% for payments to go up to 1.5k a month.

jon1981

The prices might slow down out around the commuter belts or as supply really kicks in you'll see the larger developments sales start to slow down as buyers have more choice.

I think the desirable locations won't suffer. During the last crash, every location suffered, I'm not so sure it would be the same during the next slow down.

cruizer101

The mortgage I'm looking at getting is bit under 300k over 30years @2.85% fixed for 4 years which gives repayment of ~1200. I stress tested it to 5.5% and that would be a repayment of 1600.

Chances of it even going to 5.5 are pretty slim, but that gives you an idea of what it could rise to.
If rate changes really worry you there are 10 year fixed options available from 2 banks at the moment.

Wesser

https://touch.boards.ie/thread/2057885058/1/#post107338966

Samuel T. Cogley

OP ask yourself, if there is a crash will I defiantly, categorically still be in employment, will houses in the area I'm looking in be for sale, and can I predict exactly when this crash will happen? If you can answer yes to all three questions then you should do the maths on whether it's better to wait or not. If the answer is no to one or more then you might as well make the jump now.

Mooooo

GingerLily wrote: »

Borrowing €210k@3% 25 years ~ 1k a month

Interest rates would need to increase to 7% for payments to go up to 1.5k a month.

Over 25 years it could very well happen that interest rates could go that way. No mortgage is fixed for the term, in Ireland anyway, so you would want to budget or at least have a poa if interest rates rise

Eric Cartman

My issue with buying now is that the selection is so poor and the quality of finish is questionable on some sites. rather than these new estates being banged up on any field they can find near a town, I'd rather wait till the 'crisis' is being resolved and more development companies have a better selection than just 3 and 4 bed semi's on tiny plots.

gargargar

cruizer101 wrote: »

Easier said than done, credit isn't readily available in a crash.

This is hugely important. A crash is great if you are sitting on a few hundred grand.

ConnyMcDavid

Wait for 4 years.

Captain Flaps

Eric Cartman wrote: »

My issue with buying now is that the selection is so poor and the quality of finish is questionable on some sites. rather than these new estates being banged up on any field they can find near a town, I'd rather wait till the 'crisis' is being resolved and more development companies have a better selection than just 3 and 4 bed semi's on tiny plots.

Yeah, I got lucky with a 3 bed ex-council terraced in a nice part of Rathfarnham, I could have got a semi outside the M50 but the size wouldn't have been much of a boost and the quality much lower.

Graham

Eric Cartman wrote: »

My issue with buying now is that the selection is so poor and the quality of finish is questionable on some sites. rather than these new estates being banged up on any field they can find near a town, I'd rather wait till the 'crisis' is being resolved and more development companies have a better selection than just 3 and 4 bed semi's on tiny plots.

If your waiting for plots near most towns to get larger, I'd find a comfortable chair as you could be waiting some time.

Do some research on local authorities guidelines for housing densities.

Eric Cartman

Graham wrote: »

If your waiting for plots near most towns to get larger, I'd find a comfortable chair as you could be waiting some time.

Do some research on local authorities guidelines for housing densities.

Personally im waiting to see how planning applications go near some towns and see how its going to sprawl so I know which roads / infrastructure is likely to get an upgrade and purchase an acre along one of these new extensions to the town.

sbsquarepants

I personally don't see prices falling until there's a huge upswing in building. The population is growing rapidly, mortgage rules are very tight and even with that prices are rising. Rent (if you're renting) is plain crazy. I see no benefit in waiting if you're in a position to buy now.

Edit: Only copped you're 40. I'd defo buy now if I was you.

KBD85

Captain Flaps wrote: »

We've just bought. We were advised to wait 3-5 years by some people who reckon a crash is on the way, but at the end of the day we can afford to buy now and are keen to get out of the rental market, if I'm going to be paying crazy money I'd rather pump it into an asset. Also said crash may never come so why waste years hoping a house will get cheaper when you could just buy now?

What reasons did these people give for a crash coming in the next 3 to 5 years?

Captain Flaps

KBD85 wrote: »

What reasons did these people give for a crash coming in the next 3 to 5 years?

Because prices are not far off 2007 boom levels and people are assuming that we're following the same pattern as before, which we're not. Irresponsible lending inflated prices last time, this time it's demand surplus which is a much harder thing to control.

PhoenixParker

In terms of the previous boom were probably at 2000.

Lack of supply, sky rocketing rents, for a few years. Building kicking off, borrowing somewhat constrained, huge demand. Supply was meeting demand by about 2003 when the market wobbled and rent prices fell. Speculation and investment took over to drive the bubble then.

If supply & borrowing had been controlled then things might have come good but the next 4 years did the damage.

If you're stable in terms of location and work, buy a home to live in and get on with your life.