HSQ - Affordable Housing Offer -Help

H

how low?

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Hi Guys,

Looking for some advice. I recently got offered a 3 bed apartment in the HSQ scheme through DCCs affordable housing. Myself and my partner have a booking deposit down (refundable). I'd love to hear some thoughts. Here are the details.

It's as I said, a 3 bed, with parking, around 85sqm and has a fantastic view facing on to military road (east facing) i.e. So no where near the building site at the back.


The Good

The apartment itself we are delighted with. We've looked at a few, castleforbes, Docklands etc... This one honestly SEEMs to be of the highest satandard I've seen, and we've seen a lot of new and old. Doesn't appear to be any of the usual corners skipped.
**That is of course opinion and absolutely NOT fact***

That side of the city suits us and we're happy with the immediate area.

We can afford the repayments.

Now the Bad:

The price is 300,000
It is valued at 450,000
The management fees are a whopping €3,050 (Waiting on a break down of these)
The claw back clause/no rent out clause.
The development is years from being completed.


Does anyone have experience dealing with the DCC. Any impartial advice, tips. Obviously a massive decision for us. We were definitely going to go with it (thus booking deposit) but have since heard about the very UNaffordable management fees. Like even in the silly days of 2006, those fees would be questioned.

Especially interested in hearing from any of ye that have negoitated value reductions and/or actual price reductions. My understanding was that you couldn't negotiate the actual price (300,000) but maybe I'm wrong.

Thanks for your time.
 
One more thing, management fees. Has anyone had any positive experience in general getthing these costs down?
 
Hi how low
you say price is 300,000 for apartment and Management fees 3,000.
why dont you go and buy a house on the open market, dont get me wrong i bought an apartment through affordable houseing it cost me 168,000 for 2 bed which was good price and my management fees are 2,000 which we in apartment complexs think are a rip off. but 3,000 is just mad about time apartment owners got together and get some laws into place about these rip off fees sorry going on a rant. all the best what ever you do
Andy
 
Andy88 said:
Hi how low
you say price is 300,000 for apartment and Management fees 3,000.
why dont you go and buy a house on the open market, dont get me wrong i bought an apartment through affordable houseing it cost me 168,000 for 2 bed which was good price and my management fees are 2,000 which we in apartment complexs think are a rip off. but 3,000 is just mad about time apartment owners got together and get some laws into place about these rip off fees sorry going on a rant. all the best what ever you do
Andy
Click to expand...
Hi Howlow,

Personally I'd have to agree with what Andy above has stated. However you havent said who your getting the Mortgage with. Which of the banks are you getting the mortgage from, Is is an AH Mortgage as Im presuming??? Or is it a mortgage from DCC themselves??? Bein hones if its a case that you guys can afford to pay this much for a place through the AH scheme, then I really would maybe hold off and try to get a house off the open market, but throught the Shared Ownership scheme (This is basically where you apply to the council to be accepted onto their shared ownership scheme, hen you go and find a property upto a value of 275,000 i think, and the council effectively buys it). The Council then gives you a mortgage for say a 75% stake of the property, and you also pay rent back to the council on the other 25% of the property. I would hold off on getting an apartment and try and get a house.

Do you guys have any deposit saved etc etc that ye could try and go for a mortgage privately??? It seems a bit crazy paying that much for an apartment, when there are houses out therer for less. Recently theres been a 4 bed victorian house in the kilmainham area, just down the road, for around 250,000. Ok it might need doing up a bit inside, but im sure the 50,000 youd save in mortgage costs, would pay for a pretty damn good renovation of the inside.
 
Thanks guys.

Just to clarify, we have the deposit saved, 24,000 (8%), in the process of contacting lenders.
 
You are considering buying an apartment for 300K on the affordable housing scheme where the management fees are over 3K a year...in a development that won't be finished for years (if ever). How much can you borrow on the open market with that deposit saved?

See also http://www.askaboutmoney.com/showthread.php?t=110413

The managing agent can't be changed until the the developer hands over the common areas to the management company. You are also funding the management fees of the unsold units for the development. I know we approached our agent, and wouldn't take over directorship (in housing estate for various reasons) and they would allow up to change supplier for some items but the savings would not be passed onto the management company members, rather held in the sinking fund. e.g. we've seen no reduction in fees. If directorship can be taken over, when all units are built and sold, then the agent can usually be changed and fees revised down.

The area of developers not paying their share of the management fee for unsold units is not regulated and means you are paying the difference. It also means that if the developer went into liquidation you could be left with a nightmare that some find themselves in. It has been documented on RTE news link on [broken link removed]. It's halfway through the 30 min clip.

Sorry to sound so negative, however, I know someone in a similar position who purchased via AH last year with similiar deposit and high management fees (€1600) and they would walk away now. The development is nearly finished but there are a lot of vacant units. It takes 3 months to renegotiate the price, especially over the summer when there are less DCC staff. The reduction has to be approved at the montly meeting.

Some questions for DCC or the estate agent?

What's the occupany rate?
% owner occupiers to rented?
Who is the management agent? Is it the developer?
Is the management company solvent - when were last accounts filed - see cro.ie

Best of luck whatever you decide.
 
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Sounds like a high price , have you had your valuation done independantly yet? thats always a good indication , your mortgage co will need this for your mortgage anyhow , it costs around €150.00.. it brought my apt down by 20k ( it was 20k overvalued ) so its a small price ..
 
Hi,
I don't want to sound too negative either but I second everything AKA has said about the managing agent. You will have no end of hassle in that regard if you opt for this property I reckon.

I was in a similar situation with an AH property in Belmayne...as soon as my solicitor saw what the management fees were (and they were a lot less than yours) for an essentially unfinished develoment he strongly advised me against it. He also advised with AH...stay away from a partially finished development in a property market that is on the way down.....the liklihood of empty units been divided out as social housing is high. I know a lot of developments, if not all, will have a mix of private/affordable/social but in a market where private purchases are on the way down, AH purchases are on the way down....there is still a need for social housing. So it's worth bearing in mind.

This all went on back in Sept last year for me....I took a drive up to see the apt in belmayne last weekend just for a nosey....it's in the same condition as it was the last time I paid a visit in late August.....nothing done...basically the 4 walls and cement floors. And that section of the development was like a ghost town!

If you are still keen on this apt...I would ask if different blocks have their own management company set up and their own appointed managing agent as they're completed. Some huge developments have a seperate agent for each block, as far as I know, presumably to avoid the situations AKA has posted. Another tip....buy Robert Grogans book on apartment living in Ireland...best €15 I've spent on my apt to date!! :)
 
Hi Guys,

Thanks for the help, it's appreciated. Just in case people reading this want more info. I found the following.

It appears working on the HSQ is continuing only on the existing builds. The Merriott Hotel have pulled out of the hotel build, I've been told it could take up to 5 years for a hotel to be there.
Starbucks have pulled out.
SuperQuinn however appear to be on schedule for taking up occupation.
Eircom is obviously in no great shapes but highly unlikely to break any contract agreements.
Only 4 out of 8 blocks are being occupied and a lot of them too rent2purchase guys.

These points seem to back up what you guys are saying i.e. In a falling market uncertainty over finsihing developments and or half finished developments appear to mean higher maintenace fees in addition to a lot of anxiety for the owner of an apartment.

A point worth making on those fees is that, an extra 3,000 a year on a mortgage would mean an extra 40,000 from the bank. That would mean a mortgage of 340,000 on a house and as property prices are going through the floor I'd imagine I could soon get a really good house for that soon if not now.

Guess which way I'm leaning.

P.S People make no apology for negativity. I'm interested in facts, negative or positive.
 
Hi
I just moved into HSQ so hands up 'I'm biased' but here are my thoughts for what they're worth:

Yes, the place is only half finished but that's really only going to be a problem if you plan on selling within the short / medium term. Anyone buying a property now when they're nose-diving will, unless they're mental, be planning on keeping it for the medium term at least.

HSQ as a building site is a little different from other developments in that most of the construction now is at the office buildings towards the back. You won't have any issues with trucks etc on access roads like you might on other construction sites as they have seperate access.

The scaffolding is coming down on the Brunel building (curved glass) at a rate of about one floor per week at the moment and there's no sign of any new buildings being started. Even if they do, they won't be blocking your view of the city.

Yes the fees are high but they are based on the sq footage of each apt so they're pretty fair. It's not just a lump sum for the development divided out by the number of owners as it is in some other developments. It's also worth remembering that its a high spec development with landscaping, 24/7 patrolling security etc. My fees are 2,500 (smaller apt) but i know plenty of people paying around 2,000 in other developments and getting nothing much for it.

Rhatigans have been great, sorting out a few glitches I had. While I know it's only been a few months I've had some contact with them and couldn't fault them. Can't comment on the management agents one way or the other.

Good luck with your decision either way and feel free to PM me if you need any other info.
Cheers
 
Hi
I just moved into HSQ so hands up 'I'm biased' but here are my thoughts for what they're worth:

Yes, the place is only half finished but that's really only going to be a problem if you plan on selling within the short / medium term. Anyone buying a property now when they're nose-diving will, unless they're mental, be planning on keeping it for the medium term at least.

This doesn't hold up. If you accept that property prices are nose-diving then there is no excuse for paying or committing to pay over the odds for the property now. As you will get it cheaper in the future.


HSQ as a building site is a little different from other developments in that most of the construction now is at the office buildings towards the back. You won't have any issues with trucks etc on access roads like you might on other construction sites as they have seperate access.

My concern isn't that there'll be trucks, my concern is that there wont be trucks. As I said the Merriott hotel has pulled out and the hotel build has stopped. It adds a lot of uncertainty.

The scaffolding is coming down on the Brunel building (curved glass) at a rate of about one floor per week at the moment and there's no sign of any new buildings being started. Even if they do, they won't be blocking your view of the city.

That site that is east facing is owned by the same guys that did Spencer Dock. If HSQ is a success, in 10-15 years there will be a high rise buildings here.

Yes the fees are high but they are based on the sq footage of each apt so they're pretty fair. It's not just a lump sum for the development divided out by the number of owners as it is in some other developments. It's also worth remembering that its a high spec development with landscaping, 24/7 patrolling security etc. My fees are 2,500 (smaller apt) but i know plenty of people paying around 2,000 in other developments and getting nothing much for it.

I think you're crazy to pay that kind of money. For other 3 bed apartments in more extablished area of Dublin people are paying as little as 1800. 3,050 a year is simply mental whatever way you cut it.

Rhatigans have been great, sorting out a few glitches I had. While I know it's only been a few months I've had some contact with them and couldn't fault them. Can't comment on the management agents one way or the other.

For that kind of money I'd want a daily massage in addition to no problems.


Good luck with your decision either way and feel free to PM me if you need any other info.

Thanks for your help. I've made my decision As you may have guessed I've declined the offer. My reasons are


I believe 300,000 for a 3 bed apartment in this development to be over-priced.
I believe the management fees to be close to criminal.
The affordable housing restrictions are also too much for me.


On a seperate issue I'm sorry but I think the HSQ rent2purchase scheme is a complete rip off. The reasons for my opinion are:


-Rent seems to be 50% or so above market rates in the area.
-The scheme is unfinished and there is uncertainty about its future.
-Perhaps the most important point is that you're commiting (if you decide to buy) to pay a market rate that's fixed at least 25% or so above the current
market rats. Also prices are still falling and there is no reason to suggest they will stop falling any time soon.
-Commiting to pay crazy management fees, again well above the market rate, if you decide to buy.


I would advise people to think hard before commiting to this scheme. It appears to me that this scheme should be renamed 'StayofExecution4Rhatigan' - then again I suppose it's not as catchy.
 
Hi Guys, I've decided to buy a two-bed apt at HSQ under the affordable housing scheme for e269, 000. I concede that the management fee is steep but given the falling interest rates my total monthly repayments are still almost on par with the rent I would pay for a similar two-bed in the same complex. I'm still concerned though as to how the developers plan to shift the reamining units in the current climate
 
OMG Management fees 3000 per year X 30 year loan = 90,000 Eurooooooo down the drain. You are going to end up paying almost 400,00 or more by the end of it.
 
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