125k Deposit: Buy now or wait

LetMeLoose

Greetings Boardies,

I have a dilemma for you, here is my current situation below:

Age: 30
Male
1 son (2)
Income: 55k ( possibly 65k w bonus etc )
Currently renting: 800pm

I am currently looking for 2/3 bed houses in North or West Dublin, my deposit is 125k. The max i intend to borrow is 125k so my budget is 250k max. Unfortunately the stock i have viewed has been sub-par or i have nearly got into a bidding war and was not willing to pay that high of a fee for properties which were worth nearly half the price only a few years ago.
Whilst i do not wish for a recession on society i can't help but get the feeling that this may be what is required to fix this mess because the government couldn't run a bath.

With so many unknowns right now Brexit looming, Germany nearly in recession etc, would it be best to wait a year or two before i pull the trigger. I would have no problems waiting but i am starting to get sick of paying 800e to rent a cramped apartment which is essentially "dead money ".

Is anyone else in a similar position, are you going to wait it out or pull the trigger soon?
Any advice is much appreciated.

Thanks,
Shay

DubCount

Everyone has a view on if/when the next property price fall will happen, and how big that fall might be. Nobody knows what will happen. Maybe Brexit will drive prices lower, maybe it will attract financial services jobs to Dublin and drive prices up. Maybe Germany will go into recession, and maybe it will start to show greater growth next year. Maybe Mr. Trump will sort out a trade deal with China, and maybe not. In the long run, there will be lots of ups and downs in the economy, and most of them have not even been thought of yet. A house to live in, is not like a typical investment. If you can afford to live somewhere you like and plan to stay there for a reasonable length of time - go for it - in 20 years time, Brexit and Trump will be distant memories and you will still be living somewhere you can afford and that you like. Good luck !!

hoganj

I agree 100% with DubCount.
If you are buying to live in it and not (flip it for profit) then you should be fine. Some points to note:
- If possible buy as if you are going to sell it (i.e. imagine if you had to sell it, would it be easy or difficult to shift)
- If buying a house get a full structural survey done, there can be hidden nasties about
- Do not fall in love with any particular house/flat, if the price bidding has gone too high, pull out
- Only buy what you can afford - the banks should enforce this anyway
- Do not let the clutter of any house/flat put you off buying a place, try to imagine a blank canvas

You've probably heard most of them before but these have served me well over the years.

the_syco

LetMeLoose wrote: »

Income: 55k ( possibly 65k w bonus etc )

During the last bust, did your company pay it's employees bonuses? How did your company do during the last recession?

My point is that should you wait until another recession happens, you may not get as much as you can get now, and you may not get paid as much as you do now.

Also, there may be less houses for sale, as the people selling can no longer get a mortgage to buy their next house.

Is there a reason why you're limiting yourself to North or West Dublin?

Heres Johnny

Are you buying on your own Shay? With a nice deposit like that and a nice salary I'd increase your budget if you want something nice. I'm in a 3 bed in Lucan and it would cost far more than the 250k you are budgeting. There are some cheaper areas in West and North Dublin though so you should get something but I think you're going to be left frustrated with what's available at that price level and where they are to be perfectly honest

Wesser

Did you just pick the figure of 125 k out if the sky or why is that the max you would borrow?

I would advise you to borrow 3. 5 times your income and get the best house that you can. Life is for livi g and enjoying now. You want somewhere nice for you and your son to live. Reach for the best that you can. Forget about what it should be it what it used to me. None of that matters. Just buy somethi ng nice for you and your son and if you are able to afford it and not trying to make money out of it and not use it as an investment then doesn't matter as long as you are happy in it.

https://touch.daft.ie/dublin/houses-for-sale/donnycarney/73-clanmaurice-road-donnycarney-dublin-2051409

What about this spot. Fantastic location . 10 mins to city centre . Nice gaff . Nice garden. Good neighbourhood. Near the airport and m50.

Idbatterim

at E800 a moth rent, its a tricky one. All I will say is, if its someone you will stay long term, buying might not be a bad option...

only time will tell. whats the quality of life like in the apartment?

€800 a month seems relatively reasonable, so there'd be no huge savings to be had by buying (ie; your mortgage will likely have similar repayments).

Personally, I'd consider upping the budget aswell, at least by another 50k, as it will open up a new layer of property you wouldn't have been looking at before. Keep in mind that there may well be a recession, again, though, and don't get yourself in too much trouble (although if you're bringing in 55-65k a year, a loan of 175k shouldn't be too bad on you).

There's also, of course, the other option of moving out of dublin and getting a bigger/nicer house elsewhere for the same money, but i'm sure you've already considered that route.

Brego888

Wesser wrote: »

Did you just pick the figure of 125 k out if the sky or why is that the max you would borrow?

I would advise you to borrow 3. 5 times your income and get the best house that you can. Life is for livi g and enjoying now. You want somewhere nice for you and your son to live. Reach for the best that you can. Forget about what it should be it what it used to me. None of that matters. Just buy somethi ng nice for you and your son and if you are able to afford it and not trying to make money out of it and not use it as an investment then doesn't matter as long as you are happy in it.

https://touch.daft.ie/dublin/houses-for-sale/donnycarney/73-clanmaurice-road-donnycarney-dublin-2051409

What about this spot. Fantastic location . 10 mins to city centre . Nice gaff . Nice garden. Good neighbourhood. Near the airport and m50.

F BER rating is a bit grim these days no?

Op, I'd echo what others have said.
Now is a perfectly fine time to buy IF you plan staying long term in the property or should the market go belly up you'd be happy to stay there if you had to.
It's not the right time if you are just planning a "first step on the ladder" purchase or planning to turn a profit.
If you find somewhere you like and it suits your needs go for it.
Equally you should really be applying for a bigger mortgage than 125. It doesn't mean you have to draw down the maximum amount but don't limit yourself as you've a good salary.

JJJackal

If the bank allowed you to borrow 3.5 times your salary (not including bonus) it would be circ. 192,500 which over 35 years at 3% interest rate would be about 740.84 per month - still a saving per month compared to rent (before other costs such as insurance, LPT...)

JJJackal

Brego888 wrote: »

F BER rating is a bit grim these days no?

Now is a perfectly fine time to buy IF you plan staying long term in the property or should the market go belly up you'd be happy to stay there if you had to.
It's not the right time if you are just planning a "first step on the ladder" purchase or planning to turn a profit.
If you find somewhere you like and it suits your needs go for it.
Equally you should really be applying for a bigger mortgage than 125. It doesn't mean you have to draw down the maximum amount but don't limit yourself as you've a good salary.

Interesting to know if its a good time to get the "first step on the ladder"?

Time will tell.

Brego888

JJJackal wrote: »

Interesting to know if its a good time to get the "first step on the ladder"?

Time will tell.

All opinion obviously but I think it would be a major mistake to buy somewhere with that in mind as the price rise seems to have slowed considerably and the property you think is a first wrung on the ladder could be the property you end up stuck with due to lost value.

RocketRaccoon

Wesser wrote: »

Did you just pick the figure of 125 k out if the sky or why is that the max you would borrow?

I would advise you to borrow 3. 5 times your income and get the best house that you can. Life is for livi g and enjoying now. You want somewhere nice for you and your son to live. Reach for the best that you can. Forget about what it should be it what it used to me. None of that matters. Just buy somethi ng nice for you and your son and if you are able to afford it and not trying to make money out of it and not use it as an investment then doesn't matter as long as you are happy in it.

https://touch.daft.ie/dublin/houses-for-sale/donnycarney/73-clanmaurice-road-donnycarney-dublin-2051409

What about this spot. Fantastic location . 10 mins to city centre . Nice gaff . Nice garden. Good neighbourhood. Near the airport and m50.

I'm sorry and I don't mean to derail the thread but 325k for THAT? Good lord, the country is gone mental again or more specifically, Dublin is gone mental again.

rosmoke

Because you most likely made some sacrifices to save that deposit, it's fair not to borrow 3.5 times your salary.
I'm waiting atm. I'd rather emigrate than pay stupid money for a poorly built house. So not exluding that either.

JJJackal

Brego888 wrote: »

All opinion obviously but I think it would be a major mistake to buy somewhere with that in mind as the price rise seems to have slowed considerably and the property you think is a first wrung on the ladder could be the property you end up stuck with due to lost value.

I agree with you than in Dublin at least it seems prices have leveled off - from the perspective of someone looking I would say they seem to be going down a bit

(don't think there are any facts/stats published yet to support this opinion - except DAFT for the million plus houses (which are not the ones I am referring too))

TheMilkyPirate

Wesser wrote: »

Did you just pick the figure of 125 k out if the sky or why is that the max you would borrow?

I would advise you to borrow 3. 5 times your income and get the best house that you can. Life is for livi g and enjoying now. You want somewhere nice for you and your son to live. Reach for the best that you can. Forget about what it should be it what it used to me. None of that matters. Just buy somethi ng nice for you and your son and if you are able to afford it and not trying to make money out of it and not use it as an investment then doesn't matter as long as you are happy in it.

https://touch.daft.ie/dublin/houses-for-sale/donnycarney/73-clanmaurice-road-donnycarney-dublin-2051409

What about this spot. Fantastic location . 10 mins to city centre . Nice gaff . Nice garden. Good neighbourhood. Near the airport and m50.

You talk about buying a lovely house and somewhere nice for you and your son and then you put that shack up for 325,000. I am so so glad I wasn't born in Dublin.

Cryptopagan

LetMeLoose wrote: »

Whilst i do not wish for a recession on society i can't help but get the feeling that this may be what is required to fix this mess because the government couldn't run a bath.

With so many unknowns right now Brexit looming, Germany nearly in recession etc, would it be best to wait a year or two before i pull the trigger. I would have no problems waiting but i am starting to get sick of paying 800e to rent a cramped apartment which is essentially "dead money ".

A recession doesn't fix anything: if it did, we wouldn't have a housing issue, as we only emerged from a severe, prolonged one a few years ago.


Nobody can tell you if it's right to wait; if you could accurately predict the Irish property market, German economy, or what the impact of Brexit will be like 1 or 2 years hence, then your forecasting skills would be making you very wealthy anyhow, and you wouldn't need to worry about housing.


What I wouldn't be swayed by are comments like "Dublin is gone mad again." Lending rules are restrictive compared to the early 2000s, supply is very restricted, and there is no evidence that we are witnessing a repeat of the Tiger-era bubble.

RocketRaccoon

Cryptopagan wrote: »

A recession doesn't fix anything: if it did, we wouldn't have a housing issue, as we only emerged from a severe, prolonged one a few years ago.


Nobody can tell you if it's right to wait; if you could accurately predict the Irish property market, German economy, or what the impact of Brexit will be like 1 or 2 years hence, then your forecasting skills would be making you very wealthy anyhow, and you wouldn't need to worry about housing.


What I wouldn't be swayed by are comments like "Dublin is gone mad again." Lending rules are restrictive compared to the early 2000s, supply is very restricted, and there is no evidence that we are witnessing a repeat of the Tiger-era bubble.

I'm sorry but anyone even considering paying 325k for that house posted is absolutely mental.

Cryptopagan

RocketRaccoon wrote: »

I'm sorry but anyone even considering paying 325k for that house posted is absolutely mental.

Well, without getting hung up on what is just an asking price for one property, it's a 10 minute walk to a Dart station, and properties near Dart stations are especially highly sought after. Of course, for the same money you can buy something almost palatial in, say, Cavan, but unfortunately, it will be in Cavan.

RocketRaccoon

Cryptopagan wrote: »

Well, without getting hung up on what is just an asking price for one property, it's a 10 minute walk to a Dart station, and properties near Dart stations are especially highly sought after. Of course, for the same money you can buy something almost palatial in, say, Cavan, but unfortunately, it will be in Cavan.

I'd rather live in Cavan and commute than pay that money for that particular house, but that's just me.

I'm sure someone will buy it and be very happy to be so close to the dart.

stargazer 68

I live on several major bus routes and 15 minutes walk to the dart and 2 shopping centres in North Dublin. Bought ours last year - 320K. 3 bed semi in a cul de sac - garage and 90 ft back garden so no anything bigger is not only in Cavan!

Cryptopagan

Dovies wrote: »

I live on several major bus routes and 15 minutes walk to the dart and 2 shopping centres in North Dublin. Bought ours last year - 320K. 3 bed semi in a cul de sac - garage and 90 ft back garden so no anything bigger is not only in Cavan!

You did well:). But my point is not really about this particular property. Some people talk about prices in Dublin being "mad", as if we are back to a Celtic Tiger-style bubble, one which will inevitably crash, but I don't think I've seen any real evidence to back that up, other than "houses in Dublin are very expensive".

rosmoke

Dublin: in 2013 houses in my estate were 80k, now they're selling with 220k. There's plenty of evidence housing prices have gone mental again if you look.
Look at rents.

C3PO

If you are secure in your current €800pm rental, I think I would hold off for 12 months and see what happens. I think it is unlikely that prices will continue to rise at their current rate and there is very little value to be had in Dublin currently!

JJJackal

rosmoke wrote: »

Dublin: in 2013 houses in my estate were 80k, now they're selling with 220k. There's plenty of evidence housing prices have gone mental again if you look.
Look at rents.

In 2013, houses were underpriced. I suspect you couldn't physically build the exact house in your estate that was sold for 80k for 80k today or indeed in 2013 (not including the site cost). A house is worth at a minimum how much it would cost to build it.

I am not sure comparing 2013 where few houses were sold at extremely low values with the vendors under extraordinary duress with no one able to afford them with almost 15% unemployment to today really reflects the current housing market (or bubble territory).

Nobodysrobots

Why is 2012-2013 looked upon as the years when Irish house prices were 'correct'? Compared to now where they're 'overvalued' and 'peak bubble', etc. ? Because they were lower and you would have been able to afford a bigger house in a nicer area?

A year (2013) when the country was recovering from spending the last 4 years suffering the effects of the worst recession in our history (unemployment, emigration, ghost estates, IMF/ECB bailout, NAMA, etc) is not a good reference point to base house prices on.

beejee

Rent at 800 versus mortgage repayment of basically the same means it's neither here nor there in terms of financial advantage.

Quality of life is a different story, how much happier would you be in one situation versus the other? Magnitudes, or just "a bit better"?

Timing is everything in life. It's not what you bet, it's when you bet that matters.

Property prices are parabolic, there's no such thing as" level" or consistent. Therefore, if the ceiling has been reached (rents eating entire salaries), and there's no such thing as "level", then that leaves only one direction to go.

It is predictable. Due to our overexposure, an economic shock will blast this country. Droves of fair-weather migrants will be gone before the dust settles, lots of Irish people will leave too, property prices will stubbornly stay inflated for a couple years before the capitulation to reality, harder to get a mortgage, great opportunity for those who plan ahead, apocalyptic for those who didn't.

If you have little to gain right now, be cool and wait. If you save 50% overall in exchange for 4 years rent, say, plus the huge advantage of opportunity cost... Be patient and smart

JJJackal

beejee wrote: »

If you have little to gain right now, be cool and wait. If you save 50% overall in exchange for 4 years rent, say, plus the huge advantage of opportunity cost... Be patient and smart

If the OP was paying back a 125,000 mortgage at 820 euro per month over 16 years at 3% interest, after 4 years, he would have about 25000 principle paid off. He would have security of accommodation. House prices don't typically go up and down by 50% every 10 years - again no one can predict what will happen

Mad_maxx

Nobodysrobots wrote: »

Why is 2012-2013 looked upon as the years when Irish house prices were 'correct'? Compared to now where they're 'overvalued' and 'peak bubble', etc. ? Because they were lower and you would have been able to afford a bigger house in a nicer area?

A year (2013) when the country was recovering from spending the last 4 years suffering the effects of the worst recession in our history (unemployment, emigration, ghost estates, IMF/ECB bailout, NAMA, etc) is not a good reference point to base house prices on.

Houses in Dublin were cheaper than in Belfast in 2012, they seriously overshot the bottom

Rents are undoubtedly crazy now but house prices are no higher than any other wealthy Western capital, Berlin does not count as it's an outlier even in Germany

beejee

Mad_maxx wrote: »

Houses in Dublin were cheaper than in Belfast in 2012, they seriously overshot the bottom

Rents are undoubtedly crazy now but house prices are no higher than any other wealthy Western capital, Berlin does not count as it's an outlier even in Germany

Are you saying its all perfectly normal and sustainable, or are you only saying "look at them guys"?

Instead of assuming that Ireland is somehow grand because many, many other cities are creaking at the seams too, perhaps it means the "problem", and it's resultant solution, will be far, far worse.

We'll see.

rosmoke

JJJackal wrote: »

In 2013, houses were underpriced. I suspect you couldn't physically build the exact house in your estate that was sold for 80k for 80k today or indeed in 2013 (not including the site cost). A house is worth at a minimum how much it would cost to build it.

I am not sure comparing 2013 where few houses were sold at extremely low values with the vendors under extraordinary duress with no one able to afford them with almost 15% unemployment to today really reflects the current housing market (or bubble territory).

I wouldn't say underpriced, they were and still are overpriced in my point of view. You could literally buy a modular home from Austria with a higher BER rating for 50k shipped over, but good luck doing that with planning permissions and local needs as an individual, and if you're a developer and wanna build a housing estate happy days, no more local needs issues.

Looking at 2013 it reflects the current housing market as we are at the end of an economic cycle. So it would be fair to say a normal price would be somewhere in the middle. At least more normal than current prices.