Overseas resident looking to get on to 'property ladder'

C

corkgirl

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I have been looking for some time at purchasing property in cork and am still a bit undecided.
We have been living overseas for 5 years now, not sure when we will be returning home, but we know at some point we will. We have gotten some brochures from estate agents at home and the idea of spending 300K on a 500sq.ft. Shoe box seems frankly, insane. What we both actually want is to buy a site and build our own home. What we've seen in the way of sites, we would be looking at paying up to 190-200K. I would really like people’s opinions on the matter - which financially is the better option. Are we better off in buying one of the said shoe boxes just to get us on the property ladder? and try and rent it out in the interim or do we bite the bullet, buy a site, pray for planning, deal with the repayments and build within the five year time frame? What is the situation with banks in Ireland lending to non-residence for sites. I’ve read other threads on people buying houses to rent out – would it be the same 25% down for a site? What’s the situation with stamp duty for sites? Would you have to pay on the value of the house you’ve applied for planning for or do you pay it on the price of the site and then pay for SD on the house when you build? Do you think is actually feasible to do this from overseas? Another question, while I’m here (if you don’t mind) we have an apartment here, which we have build up quiet a bit of equity, would banks at home use that equity on an overseas property as collateral on a purchase at home?
Sorry for the long-windedness, just getting a bit frustrated with the whole situation. Hope you shed some light on the matter. Thanks.
 
Why do you want to get on the property ladder when you don't even know when you will need the place to live in as your principle private residence?

By buying now, you will effectively be classed as an investor and be taxed as such (stamp duty, rental income etc.).

I would be inclined to wait until you are a bit clearer on when you will actually need the property to live in, and, when you know what it is you will be doing when you return to Ireland (i.e. how much you will be earning and whether or not you will have a secure job-this should drive what you buy).
 
We've been listening for so long about the imminent crash in prices we have put things off. But they just keep going up! It will be a couple of years before we are home, but I can’t envisage it being much more than that. And I know when we do get home we will need some where to live?

When we first applied for planning permission (that was subsiquently turned down) the asking price on a half acre was 70K - its now nearer to 200K - what will it be in another few years?
 
corkgirl said:
And I know when we do get home we will need some where to live?
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There is always the option of renting-even in the short-term.

corkgirl said:
When we first applied for planning permission (that was subsiquently turned down) the asking price on a half acre was 70K - its now nearer to 200K - what will it be in another few years?
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Who knows? It doesn't necessarily change the fact that if you can't afford it, you shouldn't buy it now.
 
its not that we can't afford it, we can - I suppose the big question is one that no one can seem to answer - they dont really have a cristal ball! Will the price of sites keep rising at the same rates that houses will?
 
I sympathise CorkGirl, having been in the same boat for the past three years. It is a nightmare trying to move things on 'long-distance'. The 'General Information' page at this link which gives a lot of useful background on site, finance, tax status etc. I found them helpful.

[broken link removed]
 
Ah 'the property ladder'. I thought we had eliminated that phrase. To quote wiki "Without high wage inflation, the cost of a mortgage remains the same over the years. This results in no property ladder as there are no factors to erode the debt."
Either way I think that if you are buying a home to live in then go ahead, but if you are thinking prices will continue to rise over the time you are abroad then you are gambling. Just my tuppence worth.
 
The "property ladder" is a marketing concept borrowed from the US. It implies that you must buy something - anything at all - to get on at least the first "rung" then move on up when you can afford it. The concept promotes turnover of property. It's not that long ago that people bought a house for life.
 
Not quite so simple! I sold the family home in Dublin (inherited from late mother) just over 2 years ago. I had 3.5 years to go before retirement from my health service post which I must stay in up to age 60 or lose my small but crucial pension. The idea was to maximise the inheritance by (a) paying off mortgage on PPR early to save the interest and (b) invest the remainder at the higher interest-rates available here in the UK. However the value of property here (the market is practically stagnant!) is moving in the opposite direction to continuing 'booming' Irish house-prices.

I had not read CorkGirl's post to mean they were specuvestors; it sounded like a family or couple who had lived abroad for reasons of work or relationship for a number of years and now wanted to return home. Hasn't the term "property ladder" passed into common usage as a result of that daft t.v. programme?
 
I pushed 'send' before making the crucial point - that I thought CorkGirl's concern is that if they don't buy now they won't be able to afford a home in Ireland in a few years time.
 
Just to point out (to the OP) that for Stamp Duty purposes, you will no longer be classed as a First Time Buyer, as you will have already owned a property abroad.
 
Marie said:
I pushed 'send' before making the crucial point - that I thought CorkGirl's concern is that if they don't buy now they won't be able to afford a home in Ireland in a few years time.
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Only if you believe that property prices will never actually drop, I suppose.
 
I have read some of the posts.

1. House prices still rising because supply < demand;
2. Supply constrained by planners (dont ask me why)
3. Interest rates are rising.
4. 1 will change in 2009 in any event
5. 3 may bring tears faster than you think
6. Virtually everywhere (excl Spain / UK) is better value.
7. Whats wrong with renting? (You are definitely 'Irish' now if you spurn renting)

Reagrds
 
WizardDr said:
2. Supply constrained by planners (dont ask me why)
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IME, supply is not constrained by Planners. What developers sometimes complain about is that poorly planned sub-standard estates are rejected or asked to be improved upon by the Planners by way of Further Information.

Furthermore they take issue with the fact that neighbours etc. have the right to object to their schemes and bring them to An Bord Pleanala.

The next time you read that Supply is constrained by Planners - it would be a good idea to see who is the person saying it.
(I'm not picking on you - just trying to clarify a widely heard statement)
 
Well Superman the facts are:

Ireland has had the lowest number of houses per 1000 of population for a record number of years.

Not nearly the lowest, but so far below everybody that we needed to do what happens in the US

There housing supply DOUBLED in a 2 year period. You tell me how our supply reacted?

Blame the developers? I suggest that we needed to have high rise developments here years ago (and by the way Herbert Park apartments are the most dense and the prices are ever higher) and this complete lack of foresight and even late acceptance is reflected in the farcical berating by the Housing Minister of everrbody else in the process ..except CITY HALL.


I suggest the planners are guilty of misreading the figures for 15 years.

My source is the European Housing Statistics. And the density level is touted by international sellers of Irish Mortgage backed bonds and securitisations in their documentation. So the capital markets know of this continuing absurdity for many years.
 
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