Can you afford to buy a home in Ireland?

zAbbo · 16-06-2006 04:56PM

Could I afford to buy a home in Ireland - Yes
Could I afford to buy a home in Dublin - No (Not that I'd want to)

whizzbang · 16-06-2006 05:02PM

aniascor wrote:

At what point in the crash will you buy? When the prices have dropped 10%, 20%...50%? How long will you wait for? Or will you actually wait for a crash to come and go, and only buy when prices start rising again?
(EDIT - BTW, I am just asking this because I am curious. I've heard a lot of people say this, and I'm just wondering exactly how long they will wait?)

I'm planning about five years from the top of the market. Property markets seem to take about 4 to 5 years to deflate. I am not waiting for a particular percentage. As long as prices are going down I'll wait. When they go up steadily for a year or so, then I'l buy two. Thats the plan.

If they don't go down in the next 5 years or so then I'll emmigrate as the whole place will have clearly lost its mind

aniascor · 16-06-2006 05:13PM

whizzbang wrote:

When they go up steadily for a year or so, then I'l buy two. Thats the plan.

I think a lot of people will...and so the cycle will continue

whizzbang · 16-06-2006 05:15PM

aniascor wrote:

I think a lot of people will...and so the cycle will continue

excellent, that what I was hoping! sell the second house at the next peak and I'm laughing!

Red Kooga · 16-06-2006 07:24PM

Degsy wrote:

I bought my gaff three years ago through Dublin City Council Shared Ownership scheme.

Anyone got more info on this? Do you need to be making a certain minimum/maximum etc?

netwhizkid · 16-06-2006 07:39PM

I have to say that the cost of houses in this country are shocking and regulation must be introduced to curb the profits of Developers as well as drive through more houses to be built to ease the shortage. I am rather lucky as I will eventually end up inheriting my parents house, but this won't be for maybe another 50yrs (my parents are reasonably young and in good health). I dread the though of going out into the world as it were.

Flying the nest is getting tougher each day, I bought my first car a BMW 316 last week in London and when I get the papers for it all sorted and have it road legal here I can eventually get a job (for the first time) after 4 long boring summers since leaving school without a leaving or junior cert > poor me. I hope to eventually get some sort of job and work my way up. It is either that or go to England, America isn't worth it now as the dollar is worthless. Yet we live in a society where there are 128,000 Millionaires out of around 4million people. Haughey is gone, the sooner Bertie and co. leave now the better.

whizzbang · 17-06-2006 04:15AM

netwhizkid wrote:

as well as drive through more houses to be built to ease the shortage.

There isn't actually a shortage given the number of people in the country, roughly 40% of houses are being bought by investors, lots of whom are not renting them. There are tons of ot empty properties all over the country.

The real problems are 1) A national madness for buying houses and 2) super cheap credit.

Once popular opinion believes that property values can go down as well as up, prices will stop rising (due to interest rate increase making credit more expensive), investors will sell, market will tank.

Tar.Aldarion · 17-06-2006 04:20AM

Realistically I'll have to baga super rich, super hot(for me) me wife, live in the end of nowhere or move country before I could afford somewhere. We'll see how it turns out.

JimmySmith · 17-06-2006 09:50AM

netwhizkid wrote:

I am rather lucky as I will eventually end up inheriting my parents house, but this won't be for maybe another 50yrs (my parents are reasonably young and in good health).

I hope my kids dont assume they are getting a house when i die. I plan to sell up and live like a King when i retire. We earned it. The kids can go out and do it their way. We'll help them of course but they will still have to work for anything they get.

lomb · 17-06-2006 10:05AM

whizzbang wrote:

due to interest rate increase making credit more expensive), investors will sell, market will tank.

market for houses wont tank, market for apartments will, due to supply demand curve.
whizzbang what makes u think interest rates are going to rise significantly? what rate do u expect them to peak at within the forseeable future??
how do u explain that u can fix at 4.7% apr on a 10 term term, if rates are going to rise sharply? the european central bank are sheep. they talk the talk, but they wont walk the walk. 9/11 came along and they slashed rates to 2% within a year or so. they havent got the guts to put the ecb rate at 5% which is where it should be and so therefore the mortgage rates would be 6% including the bank margin for credit. the speculators who advance future contracts and pension funds that buy property know they are sheep and thats that...

Day-wanna-wonga · 17-06-2006 11:01AM

Kaiser2000 wrote:

1. Being up to my neck in debt (something the banks have started to express concern over - the ever increasing debt we're all getting into) and living just to pay the mortgage, commuting/car costs and the loans you took out to furnish the place.

My mortgage is €1550 pm. Only €200 pm more than renting the same type of house in the same area.

2. Having to move so far out of Dublin (in my case) that commuting would be a 3/4 hour+ nightmare. So of course you need to buy a car then too as public transport is a joke beyond the capital or the major cities. Then there's the time WASTED in purely getting from A to B.

I live in Baldoyle - 20 mins drive from town by driving or Dart. But I rarely go into Dublin city.

3. You're so far away from your friends/family that you only see them at weekends (if that) and going out becomes a pain as you have to arrange somewhere to stay, book in somewhere, or take the car (there's no nitelinks/taxis to these housing estates in the middle of nowhere remember).

My friends are mostly local, and my parents are a 5 mins drive up the road.

4. You have to be on the road at 6AM and aren't home till maybe 7PM (see point 2). When you do finally get home, you're too exhausted to enjoy the 3-bed semi-D you were convinced you needed (which incidentially is identical to the other 50/500? in the estate!).

I work in Howth. It takes 10 mins against traffic to get to work. I'm self employed, so I go in around 11ish. I get home whenever I want, so I have tonnes of time to enjoy my spacious 4-bed semi.

5. Going to the shops becomes a major chore as you have to drive everywhere. Or you spend your weekends looking for parking in somewhere like Blanch SC because you just can't get anything in your local corner shop.

Superquinn (Sutton), Clare Hall SC, and Donaghmede SC are all 5 mins drive away. Why are you presuming people just shop at the weekends?

6. I'm 5 minutes walk from a station on the Maynooth line. 25 minutes from town.

Good for you. But as Homer says: "Public transport is for losers"

7. I'm 5 minutes drive from Blanch SC and I don't have to leave at 6AM to beat the traffic and get a parking spot.

Good for you. And what a beautiful SC it is too....

8. I can go out in town and get a nitelink home to my own bed for €4.50 (or whatever it is now) or a taxi for about €25 if I'm feeling flush with the money I HAVEN'T spent on my mortgage.

Same prices for me (about €22 for a cab into/out of town). But haven't you spent money on RENT that you will never get any come-back on??

9. I live in a big comfortable house in a quiet estate. I'm 30 mins drive from work and the same to my family's house.

Pity you don;t own that big comfortable house in a quiet estate.

I don't mean to be a smartass, but I only got on your case because it's a bit stupid sugggesting you have it totally sweet because you're paying rent for a house you don't even own in overcrowded D15, and you're suggesting that most homeowners live out in the sticks (not true at all), and are paying mortgages they can barely afford (also a stupid statement, since the bank will only loan you what you can afford to pay back comfortably). You also presume that everyone work in Dublin city centre - which again, is a stupid presumption. I'm all up for optimism, but it's as if you've convinced yourself that everyone who own a house is a sucker, and you have is sussed by paying some landlord's mortgage....from where I'm sitting, you're the sucker.

[/end rant]

whizzbang · 17-06-2006 11:03AM

lomb wrote:

market for houses wont tank, market for apartments will, due to supply demand curve.
whizzbang what makes u think interest rates are going to rise significantly? what rate do u expect them to peak at within the forseeable future??
how do u explain that u can fix at 4.7% apr on a 10 term term, if rates are going to rise sharply? the european central bank are sheep. they talk the talk, but they wont walk the walk. 9/11 came along and they slashed rates to 2% within a year or so. they havent got the guts to put the ecb rate at 5% which is where it should be and so therefore the mortgage rates would be 6% including the bank margin for credit. the speculators who advance future contracts and pension funds that buy property know they are sheep and thats that...

granted appartments will be worst hit, there are so many going up now it isn't even funny anymore.

we don't need a huge rate hite to cause damage, .75% rise and the amount an average mortgage seeker can expect to get drops by €100,000 as we all saw in last Sundays Sunday Business Post.

Rates as 3.5% would destroy the Irish housing market, we don't need to go anywhere near the 5% you suggest the ECB are too chicken to go to.

I'm not sure why banks are offering those low rates, perhaps there is little interest in it as people are all so streched that they just go for the lowest rate even if it is variable?

whizzbang · 17-06-2006 11:09AM

Day-wanna-wonga wrote:

My mortgage is €1550 pm. Only €200 pm more than renting the same type of house in the same area.

When did you buy? Could you afford to buy your house today?

Also, I wouldn't trust the banks to make sure you don't take more than you can afford, they love it when you are in perpetual debt. Also they are susceptible to greed just like the rest of us!

ronbyrne2005 · 17-06-2006 11:11AM

Day-wanna-wonga wrote:

My mortgage is €1550 pm. Only €200 pm more than renting the same type of house in the same area.

I live in Baldoyle - 20 mins drive from town by driving or Dart. But I rarely go into Dublin city.

My friends are mostly local, and my parents are a 5 mins drive up the road.

I work in Howth. It takes 10 mins against traffic to get to work. I'm self employed, so I go in around 11ish. I get home whenever I want, so I have tonnes of time to enjoy my spacious 4-bed semi.

Superquinn (Sutton), Clare Hall SC, and Donaghmede SC are all 5 mins drive away. Why are you presuming people just shop at the weekends?

Good for you. But as Homer says: "Public transport is for losers"

Good for you.

Same prices for me (about €22 for a cab into/out of town). But haven't you spent money on RENT that you will never get any come-back on??

Pity you don;t own that big comfortable house in a quiet estate.

I don't mean to be a smartass, but I only got on your case because it's a bit stupid sugggesting you have it totally sweet because you're paying rent for a house you don't even own in overcrowded D15, and you're suggesting that most homeowners live out in the sticks (not true at all), and are paying mortgages they can barely afford (also a stupid statement, since the bank will only loan you what you can afford to pay back comfortably). You also presume that everyone work in Dublin city centre - which again, is a stupid presumption. I'm all up for optimism, but it's as if you've convinced yourself that everyone who own a house is a sucker, and you have is sussed by paying some landlord's mortgage....from where I'm sitting, you're the sucker.

[/end rant]

try buying in baldoyle NOW and your mortgage would be twice the rent or more. your an individual case,in aggregate the majority of young buyers cant afford to buy a house now anywhere in dublin that isnt a former council estate.

TheBigLebowski · 17-06-2006 11:25AM

whizzbang wrote:

roughly 40% of houses are being bought by investors

I seriously doubt this. Got a source? Didn't think so...
Maybe in an apartment block next to a university, but certainly not nationally.

whizzbang · 17-06-2006 11:57AM

TheBigLebowski wrote:

I seriously doubt this. Got a source? Didn't think so...
Maybe in an apartment block next to a university, but certainly not nationally.

I was quoting from a "Gunne Report" that was out a year ago that is now mysteriously not on their web site. Instead lets go with the "there are 104,000" empty properties argument, this figure comes form the ESRI you can download the report here. PDF report, those figures are from 2002, and given that we have built about 250,000 properties since then CSO link so I reckon there are still quite a few empty ones, even allowing for immigration. I actually think this increase in house humbers would allow each immigrant to have their own house!

so you see, lot and lots of houses that could very easily go on sale!

not to mention the 80,000 that are being build this year!

Day-wanna-wonga · 17-06-2006 11:58AM

whizzbang wrote:

When did you buy? Could you afford to buy your house today?

Also, I wouldn't trust the banks to make sure you don't take more than you can afford, they love it when you are in perpetual debt. Also they are susceptible to greed just like the rest of us!

I bought in Aug 2004, moved-in in Nov 2004. Yes, I could still afford to buy a house today, but luckily I don't have to: I bought for €381,000 in 2004, and a house on my road (without the extension I have!) just went for €620,000 last week. I'm actually shocked, as I'm only here 18 months. That's a ridiculous rise, and I'm not bullsh*tting either - another one is currently up for €670,000 (http://www.propertyteam.ie/ - house in Turnberry, Baldoyle).

I believe the bank did only loan me what I could pay back, as I'm a sole trader, so they disected all my accounts, P&L, and I even had to show them copies of the contracts I have with other companies, etc. It was a drawn-out pain in the ass.
I *could* afford a mortgage now, but I'm not sure I'd want to be in debt for that much - I could pay it back, but I'd begrudge it - my mortgage would be almost double what it is now, and that extra amount currently covers 2 car loans I have. I worked out that since I'm paying back €1550 pm for 30 years, I'll end up paying back €558,000 - even though I only borrowd €348,000 (I had the dep & stamp duty saved). What an insane amount of interest!!!

And BTW, I wasn't getting on the case of "Kaiser2000" to be a smug f*cker - I was just highlighting the one-sided outlook of his "renting is way better - all you home owners are suckers" attitude.

_Kaiser_ · 17-06-2006 12:10PM

Day-wanna-wonga wrote:

My mortgage is €1550 pm. Only €200 pm more than renting the same type of house in the same area.

I pay significantly less than that myself.

I live in Baldoyle - 20 mins drive from town by driving or Dart. But I rarely go into Dublin city.

I don't go into town much either (partially because my friends now live mainly outside Dublin), but my point was that if I want to it's very easy to do.

My friends are mostly local, and my parents are a 5 mins drive up the road.

See above

I work in Howth. It takes 10 mins against traffic to get to work. I'm self employed, so I go in around 11ish. I get home whenever I want, so I have tonnes of time to enjoy my spacious 4-bed semi.

I work in Navan, but I see the endless line of traffic coming up daily, and it's usually almost at a standstill by the time it gets to the M50. I've a friend who lives in Virginia and he's on the road by 6am at the latest - and that's just to get to Blanch before 9.

Superquinn (Sutton), Clare Hall SC, and Donaghmede SC are all 5 mins drive away. Why are you presuming people just shop at the weekends?

Well because I have to totally avoid the area anytime after 12 noon unless I want to sit in traffic on the approach roads to Blanch SC.
And the last time I went shopping there mid-afternoon on Saturday, we gave up after 45 mins of firstly getting in to a car park, not finding a space, and then getting back out again.

Good for you. But as Homer says: "Public transport is for losers"

I agree that it's woefully bad, and I love my car

, but I also recognize that ultimately it's the way forward if the problems with it ever do get resloved.

Same prices for me (about €22 for a cab into/out of town). But haven't you spent money on RENT that you will never get any come-back on??

See that's the difference.. to me I'm getting the use of a house, the convenience of being close to work, shops, family and town, and I'm not paying a fortune for it either so to me it's not a waste of money.

It's only really here in Ireland that the attitude that you've somehow failed unless you own a house exists and where people like yourself "look down" on those who choose NOT to be in stupid levels of debt for a house/apartment that just isn't worth the price being asked - in fact your next comment proves my point nicely:

Pity you don;t own that big comfortable house in a quiet estate.

:rolleyes:

I don't mean to be a smartass, but I only got on your case because it's a bit stupid sugggesting you have it totally sweet because you're paying rent for a house you don't even own in overcrowded D15, and you're suggesting that most homeowners live out in the sticks (not true at all), and are paying mortgages they can barely afford (also a stupid statement, since the bank will only loan you what you can afford to pay back comfortably).

What about all these 100% mortgages, ever increasing credit card debt, loans etc that everyone takes out? The banks and such are throwing money at people as they can't lose either way. They're getting interest now, and they'll get your home if you can't afford the repayments when (not if) the market crashes.

You also presume that everyone work in Dublin city centre - which again, is a stupid presumption.

Not everyone works in Dublin city centre, but a lot do work in Dublin and because of the way public transport works, all roads lead to O'Connell Street (or surrounding streets).
As for driving, unless they're lying to us about the tailbacks on the M50 every morning, there are a LOT of people who need to get through Dublin every day.

I'm all up for optimism, but it's as if you've convinced yourself that everyone who own a house is a sucker, and you have is sussed by paying some landlord's mortgage....from where I'm sitting, you're the sucker.

See my point about looking down your nose at people.

[/end rant]

me too

whizzbang · 17-06-2006 12:13PM

Day-wanna-wonga wrote:

I bought in Aug 2004, moved-in in Nov 2004. Yes, I could still afford to buy a house today, but luckily I don't have to: I bought for €381,000 in 2004, and a house on my road (without the extension I have!) just went for €620,000 last week. I'm actually shocked, as I'm only here 18 months. That's a ridiculous rise, and I'm not bullsh*tting either - another one is currently up for €670,000 (http://www.propertyteam.ie/ - house in Turnberry, Baldoyle).

I believe the bank did only loan me what I could pay back, as I'm a sole trader, so they disected all my accounts, P&L, and I even had to show them copies of the contracts I have with other companies, etc. It was a drawn-out pain in the ass.
I *could* afford a mortgage now, but I'm not sure I'd want to be in debt for that much - I could pay it back, but I'd begrudge it - my mortgage would be almost double what it is now, and that extra amount currently covers 2 car loans I have. I worked out that since I'm paying back €1550 pm for 30 years, I'll end up paying back €558,000 - even though I only borrowd €348,000 (I had the dep & stamp duty saved). What an insane amount of interest!!!
.

wow, that is an increase, the whole market has totally lost it. Thats a good point about being a sole trader, I would say banks would look into your case more carefully. But are you sure they would give you a loan to buy your house today if it was going for over 600k?!

Yep, interest is a pain. i'm hoping to get a 25 year mortgage when the time comes. Have a play with this and see what a ripp long term mortgages are!

Mortgage calculator
or this one Mortgage calculator2 (more fancy)

gamer · 17-06-2006 04:10PM

local council,will sell you house for 180k,cost price in dublin if you go on social housing list,ie single person income under 40/50k ,in full time employment.the government gets about 70k tax from every new house sold.INCOME LIMIT is double for a couple, i wonder do you need to be married to be a couple?in terms of this legislation.there should be a 30 percent cgt tax on land that gos up in value,due to rezoning,with this money used for building low cost housing.

lomb · 17-06-2006 05:39PM

whizzbang wrote:

Yep, interest is a pain. i'm hoping to get a 25 year mortgage when the time comes. Have a play with this and see what a ripp long term mortgages are!

money now is worth alot more than money in 25 or 30 years. hence paying bank interest over 30 years can be a good thing if u invest the difference wisely/buy another proeprty u otherwise wouldnt have bought/avoid borrwing at higher rates for unsecured debt.thats why 30 can make sense. thats why funnyily enough interest only makes sense (as long as prices grow greater than interest rate %

lomb · 17-06-2006 05:43PM

whizzbang wrote:

Rates as 3.5% would destroy the Irish housing market, we don't need to go anywhere near the 5% you suggest the ECB are too chicken to go to.

i disagree, we are buying a commerical unit, and funnily enough commercial loans are priced WAY above residential . first u have to pay .35-.5% arrangement fee of the loan amount, then u have to pay a bank solicitor in addition to ur own a few grand, then they cripple u at anything between 4.5% and 5.3% depending on how strong a borrower u are.4.5 is only for people borrowing 40% of the property value. expect to pay 5% in normal commercial loans from front line banks like bank of ireland. thats 1 full percent above residential.

and whats happened at these rates to commercial ? 20% increases year on year.
i think its more than interest rates, its general business/ confidence in the general economy thats leading to an explosion in prices.

incidentally property developers are paying this commercial rates and theyve no lack of confidence! did u know irish nationwide made 75% of profits last year from commercial lending for commercial property. its the highest margin secured lending any institution does.

moral is property (probably apartments)will only level or decline when supply exceeds demand, and as no new houses are being built in dublin then demand will always outstrip supply for houses with gardens and anyway thats 4 years away. so BUY BUY BUY!

whizzbang · 18-06-2006 06:26AM

lomb wrote:

moral is property (probably apartments)will only level or decline when supply exceeds demand, and as no new houses are being built in dublin then demand will always outstrip supply for houses with gardens and anyway thats 4 years away. so BUY BUY BUY!

I honestly don't have a clue about commercial property so I'll leave that be, as for residential property I think the market is being maintained by investors who are only in it for capital appreciation. As rates go up the next 1% banks are going to reduce the amount of money they loan FTB. This will reduce the spending power of FTB and I believe bring a halt to the bottom end of the markets growth. When this happens investors will sell, and then it all unravels.

18-06-2006 06:37AM

Anyone know what County Kerry land is going for near the coast, but not near a city? Two bedroom cottage? Maybe a fixer-upper but with a view of the ocean?

homah_7ft · 18-06-2006 02:20PM

Yes

InFront · 18-06-2006 02:43PM

I agree that buying property in Dublin is crazy. My parents bought a house in Dundrum in 1991, spent about 70 grand on it, and now it has exploded in value. Even though they were not well off then and now earn more money and have good savings, they couldnt afford to buy it again!

But its not all bad, recently my brother and his wife got so fed up with not being able to afford property in Dublin, moved to a village in Galway. They bought a large five bedroom house with a really large back yard (needs renovation but still comfortable) for... 2 hundred and twenty Euro. My brothers job allows them to move anywhere so they are lucky... I really cannot understand how other people who stay here are affording such extreme mortgages.

whizzbang · 18-06-2006 03:56PM

InFront wrote:

I really cannot understand how other people who stay here are affording such extreme mortgages.

three words "Lie to buy"

the most popular means are

1. Move all yoru debt to the Credit Union so the banks can't see them
2. Ask your boss to give you two months pay in one months payslip, makes it look like you got a raise!
3. Get loan from credit union or some other non bank source and tell the bank its your savings!

easy! Ask you mortgage broker for more informaiton on how to "Maximise your mortgage potential!"

Seriously, all these things have been suggested to friends of mine by mortage brokers.

Heyes · 18-06-2006 04:50PM

Moving into own place next July cant wait

romperstomper · 18-06-2006 04:55PM

just bought a place in dublin.
5 years of saving for myself and my partner.
people who moan about property prices must be in some sort of needing instant gratification fantasy land. 5 years ago it property was expensive so we just saved. in 5 years time property will still be expensive. so if you want a place, guess what? start saving. there is no reason why someone on 30K pa cannot save 20% of their gross income. hell, 2 full whack ssias are enough of a deposit for most starter homes

A Dub in Glasgo · 18-06-2006 06:23PM

I cannot 'afford' to buy in Dublin and have even have 50% of the standard of living as I have in Glasgow. I have a 4 bedroom detached house with garage, ensuite and a large back garden for the kids to play in which will be paid off by the time I am 48. It is a 3 minute walk from a train station and the train takes 16 minutes into Glasgow city centre. I left Dublin when a good 3 bed semi cost IR£40k and I have totally missed the boat!

Property prices in Dublin are absolutely insane :eek:

Can you afford to buy a home in Ireland?

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