Single, first time buyer in Dublin – Christmas research has left more confused than anything.

[Macal18]

Hi, I am new, I'd appreciate advice on how to know you are ready to buy a home and If I am overlooking things (which is very likely). I guess I want to be as informed as possible before I start looking / investing my time into what I hear is a nightmarish process of buying a home in Dublin. I guess I want to prepare before I actually look and to not disappoint myself and loose all hope.

I am currently living at home with my parents (since covid), 32 y/o, however I really want to move out and be independent. I began putting aside savings since 2021, at the time I knew the housing market was hotting up (and by gosh its really has). Renting at current price levels doesn't make sense for me at this moment in time, given how close my parents house is to work and town (I am aware I am fortunate with regards to this).

I would love my own space that I can call my own in Dublin, but it's disheartening to see prices. I'd be very isolated living far away or outside of Dublin, or away from family and friends. I am working in a job that I love, and I am hoping by my 33rd birthday (this June) to be able to afford my own place, but I am not sure at this rate its possible. Over Christmas I started looking, but I feel overwhelmed and I am now left with more questions... which I know, 'go talk to a broker'.. I just want to get a barometer or if there's anyone else in a similar situation and if anyone has any advise, so I can position myself better?

Key details :

• Earn €60k per annum (increase to €64k end of Jan + 2% raise)
• Cash savings: €140k (projected to be €155k, June 26, majority in deposit a/c maturing May' 26)
• Savings rate: €2.1k / month
• Stocks / shares: €21k
• No Debt, have a credit card paid off in full, monthly.
• Based: Dublin

Budget :

• Mortgage: €280k* + Deposit: €100k = €380k?
• Home furnishing: €15k? - is that even enough?
• Legal / Stamp Duty: €10k - the only area I could get accurate costings.
• Emergency Fund: €30k - is this too little for a single person?

* See Question 2. below

Questions :

1. Calculating budget?
   • I have an idea with the figures above, but I don't feel confident. Is this a plausible budget or if I am missing something?
2. Mortgages for civil servants?
   • I read that certain providers (for example ICS) provide mortgages up to 3 points up the salary scale (in my case would be €70k), however at higher mortgage rates (4.23%APRC vs. 3.46%APRC with Avant <<30 year mortgage, which sounds appealing for me with, with certain repayments>>).
   • I wonder can you start with one company, providing a higher amount for the budget, stick with them for 3 or 6 months, and then switch to a better rate (for example from Avant)?
   • Would I get a mortgage exemption from other banks or lenders or am I too risky being single? My aim is to keep mortgage costs less than 35% of take home pay.
   • Any advice in general around mortgages and positioning myself on my best footing? Im trying to get a feel and sense of all this.
3. Government grants, don't seem to support me, am I missing something?
   • I am aware of the Help To Buy: €30K support to buy a new home, but it seems it is limited to those taking out a loan to value between 70% to 90% (which sounds very specific). Am I right In thinking that if I purchase a new home above €400k (€280k is max mortgage / 70% LTV) that I would not get any grant as it would be less than 70% LTV?
   • My rant: The issue is in Dublin there is no new homes below €400k available. Maybe it's just out of reach for me anyways, and I am destined to shabby chic than modern and new . I guess it just seems unfair that such a support is not available to me, but If I could afford a larger mortgage it would be available? Or have I mis-interpreted?
   • Am I missing any other supports, grants to help me to buy or get on the property ladder?
4. Above the list price:
   • This one I find difficult to get my brain around, but I have read that prices are going way above the actual asking price (for example a €380k home could in-fact sell for €400k or €450k or €500k?). This I find very hard to read and not very confidence inspiring. How do you plan what to look at when the asking prices are unreliable indicators? Any guidance around this?
5. What can I afford? / Where should I be looking?
   I would happily accept a good quality 1 or 2 bed apartment or house in Dublin, anything really. It's more about quality than quantity for me, a space that is nice, light-filled and in a good safe location. I'd prefer a 2 bed, but a 1 bed that is spacious enough to have a work from home office is grand. Preferably 60+ square meters. I'd be happy to buy something that needs cosmetic work done, once it's within the budget. I just worry I'd buy something uninformed, when its not worth what I have paid for it.

I guess over Christmas, hope has turned into confusion and uncertainty. I see a really informative community here, so thought to post something (If anything I am just venting).

Any thoughts / angles / advice appreciated.

 

[DannyBoyD]

There's a lot to digest in your questions & I may post again later.

But here's my first thoughts.

You appear to be in a very solid position, so well done on that.

Don't buy a 1 bed, min two beds.

Aim to rent out the second bedroom for 2 years. 28k tax free income & paid off your mortgage is not to be sneezed at

In my view house is better than apartment, houses can be extended, attic converted etc., you've very little scope with an apartment to add value.

Take all the donations of furniture / curtains etc., from your extended family. Scour the charity shops for crockery / pots & pans. Yes it will be horrible & none of it will match; you can dump it all back to the charity shop when you can afford to replace it.

Throw everything you have at buying - sell your shares, ramp up your savings.

As of today, Daft is showing me 369 houses, min 2 bed, under 400k in County Dublin.

 

[Sarah Ryan]

I know you have your heart set on Dublin but please do not set it in stone to have to buy there.

I bought my first apartment when I was 23, I moved from Bray to Finglas and I knew nobody, but it was probably one of the best moves I ever made, you will make new friends, and still keep your current ones!

You need 3 beds min, your own, your office and then your rental to bring in the spare cash, and that's going to be near impossible in Dublin.

Avoid an apartment like the plague, charity shops, cheap plastic cutlery sets, painting parties and all in one bed bags from Pennys will be your friends, but it will be so worth it.

Massive kudos for saving so much!

 

[ClubMan]

Emergency Fund: €30k - is this too little for a single person?
Mortgages for civil servants?

My gut feeling is that it might be far too much if you're a civil servant and the chances of losing your job are practically zero?

 

[PandPs]

Some great advice here already. Agree that 2-bedroom would give you the flexibility to use rent a room, which would be a massive boost to your income at a time when you’re still young and single and it won’t be too much of a burden. 3-bedroom sounds overkill TBH.

My advice would be to use the “open viewing” filter in the property apps and go visit every single house that has an open viewing and that even remotely matches what you’re after for several months before you’re in a position to make an offer. Make sure you’ve visited at least 20-30 houses before you’ve saved enough for a deposit - more if possible.

This will give you a solid grasp for what’s available at what price and what’s a good deal / bad deal. This will also show you that whenever you think you’ve found the one, another house comes along not long after that also fits the bill nicely. Removes a lot of the emotion from the process.

Use the property price register to see what houses actually sell for.

Every time you visit, always asks the agent who is the owner (family trading up, couple breaking up, etc), why the owner is selling, what price they’d actually accept and what bids have already been placed (even if you’re not interested. It will give you a good idea for what the market is like).

Last but not least, see if the house is likely to get underwater as climate change worsens. Most people still aren’t looking at this so the risk may not be priced in. Might as well get a place that won’t end up the sea if you don’t even have to pay a premium for the privilege.

 

[messyleo]

A two-bed definitely gives more flexibility, for example, even things like storage or a home office. You'd be surprised how handy the space comes in if you're seeing it as a long-term home

Don't agree with the anti-apartment sentiment, to be fair. Not all apartments are the same. Some apartments are really well-managed and great properties, well-insulated, and you can afford an apartment and there's more stock available, more to the point, in locations you would never get a house in.
I would take a two-bed apartment in a location I prefer over a two-bed house in a location I don't like as much, any time. Just make sure you've done your due diligence on the apartment. It's very different if you're definitely planning for kids. You don't really mention that here. If you aren't having children, apartments are absolutely perfect and low maintenance, low hassle in terms of home ownership, fixing bits and pieces and organizing bin collections and painting, etc. So don't necessarily be put off them. Just make sure it's a decent apartment.

 

[Brendan Burgess]

Renting at current price levels doesn't make sense for me at this moment in time, given how close my parents house is to work and town (I am aware I am fortunate with regards to this).

This is very difficult. You live in a nice house close to work and to get on the housing ladder you will need to buy a much less nice house much further away from work.

And you face the dilemma - if you wait another year, you will have more saved but if house prices continue rising, you will be able to buy less house. Of course, if house prices fall, you will be glad you waited.

 

[Brendan Burgess]

Emergency Fund: €30k - is this too little for a single person?

You absolutely do not need an emergency fund. Or put it another way, buying a house is an emergency. Use all your money, and if necessary, borrow from your family to get as much house as possible. As Clubman points out, you are unlikely to lose your job.

After you have bought your home, you can build up an emergency fund again.

In the mean-time, join the Civil Service Credit Union so if there is an emergency, you can borrow from them.

 

[Brendan Burgess]

One thing you should consider is buying a house jointly with a friend.

I would much prefer to share a three bed house with a friend within walking distance of work than live in a 2 bed apartment requiring two hours of commuting every day.

Of course, there are problems. But you can do an agreement to deal with these. For example, agree that by default, the house will be sold in 5 years. If it suits both of you, you can vary this agreement. You can sell earlier or defer it.

I know people who have done this and it's generally worked out very well.

 

[skrooge]

Emergency Fund: €30k - is this too little for a single person?

Maybe we should nuance the discussion on emergency funds a little bit.

I'd differentiate between a short term "insurance fund" when purchasing a property and a steady state "rainy day fund".

On the former, your public sector employment status gives you a certain job security so you're less likely to need to budget for an extended period of unemployment (though other factors such as long term illness would suggest looking into an income protection policy).

However, buying a home is a risky business. There's every chance you're new dream home was someone else's failed project. Property surveys only reveal so much. You'll learn a lot more about a property by living in it. With that in mind I'd be all for spending as little of your money and as much of the lenders on your home - to start with.

No point borrowing a small mortgage today if you have to go back in tomorrow and ask for a home improvement loan. And no guarantee they will say yes to the second loan either.

Hold your money back until you're there long enough to find and address all the problems that arise. Any excess savings can then go toward paying down the mortgage.

 

[Brendan Burgess]

With that in mind I'd be all for spending as little of your money and as much of the lenders on your home - to start with.

Agree fully that he should borrow as much as possible.

But he should also use all his cash to buy.

He should not keep a separate emergency fund.

He needs a Credit Union account in the event of emergencies.

 

[JamieB_]

When I was younger, my Dad told me to buy the first place I could afford to buy. "Get out of the rent trap", he used to say.
When I was 32 I had save up enough for a deposit and could get a mortgage on a 1 or 2 bed apartment.
People were telling me to avoid 1 beds, but really people rarely rent out their second bedroom in a 2 bed apartment. I know lots of people with 2 bed apartments and not one who rented out their spare room. One did for about 3 months and hated it.

I could only afford either a 1 bed in Dublin or a 2 bed further out.
I ended up going for the 1 bed. And was delighted with my decision. I lived in it for 8 years before I got married and had kids and needed something bigger (a house with a garden). We sold the apartment and bought a house. Used the equity and the savings i had put away from the mortgage being lower than rent over the years and bought a lovely 3 bed semi near the same area in Dublin that we were really happy with. If I had not bought that apartment when I did we would not have afforded such a nice house later. Well we might have, but we would be paying a much, much higher mortage.

Here is my advice for what its worth.
Buy a 1 bed if the location is good and you can afford it now.
Inflation and salary increases will make that mortgage seem smaller in just a few years.
Put away the difference you would have paid for rent or paying a mortgage on a bigger place every month.
Dont take donations of furniture that relatives and friends are getting rid of Trust me on that one, if nothing else.

Find somewhere close to your current life where you will enjoy living, and when its time to trade up you will hopefully be in a position of 1, significant money paid off the mortgage, 2 - increased the value of your property, 3 - Will have the buying power of a partner to add to yours, 4 - Have higher salaries than now, 5 - Savings because you arent paying rent, or paying for more property than you need at this point, 6 - Know better what you aspire to.

Avoid the trap of wanting more than you can afford and waiting to buy, while property prices run away from you as you pay ever increasing rent.
There is a reason its called the property ladder. Because despite some people wanting to say there is no such thing, its very hard to jump straight from renting to buying for most people, unless they have the buying power of a couple.

Good luck, and dont worry too much. Everyone finds their way. I know very few people who ever owned their own place at 30, so you are about the same as everyone else. I think you are in a great financial position right now and have done everything right. Be proud of that.

 

[Brendan Burgess]

I think that Jamie has hit it on the head here. Buy a smaller house/apartment where you want to live rather than a bigger house which requires a commute to your work or social life.

 

[misemoi]

I will add as well, living near your existing community might be more valuable than additional space. Some people are very happy to move to a new area and throw themselves into a community, make local friends and get involved in sports or volunteering etc but it takes work and not every community is as strong in those areas as others. If you moved out further, would you find yourself still staying at your parents after nights out etc?

A home office is nice, but one thing I see in my workplace is the younger folk are happier to be in office than in their close by apartments. They enjoy the social side of it and make good use of things like gyms, events etc. And if you live alone, a home office can be cleverly set up in your living space and easily hid away when not needed.

I love the advice given above about going to lots of viewings etc and doing on the ground research. I found when we were purchasing this was the best thing we did, traipsing around every chance we got and we soon had a good idea of what we were really after, that all the shiny elongated pics on Daft or MyHome would never have shown us. And the conversations with good estate agents at the viewings were helpful, while we were a potential sales opportunity they know the markets well and in the end offered us very good advice. Even ear wigging on other people's views of the property showed us some things we hadn't even considered, good or bad.

Apt v house, I would prefer a house for smaller or no mgt fee (this can be huge, and never ends), ability to upgrade eg insulation, solar panels, access to open space and as you have no-one above you, less noise issues. Duplex houses are often v good value from what I can see.

 

[CharlieMac]

Avoid the trap of wanting more than you can afford and waiting to buy, while property prices run away from you as you pay ever increasing rent.

I am currently living at home with my parents (since covid), 32 y/o,

Cash savings: €140k (projected to be €155k, June 26,

I don't think the OP is paying rent to anyone right now along with having minimal expenses is why they are saving about 30k a year.
Maybe stick it out for a few more years? OP could have substantially more in savings and afford something like a 2-3 bed terrace house that gives more options for work at home and/or rent a room and that's still a manageable commute to work?

This might sound like disheartening advice if they really want to move out but it could be a faster and cheaper way to a home far more satisfactory than a 1 bed apartment.

Apt v house, I would prefer a house for smaller or no mgt fee (this can be huge, and never ends),

Yes. I'm paying €3,300 per year management fees on a 2 bed apartment. This is after a 20% discount for early payment. There's nowhere to put a bike. You are more likely to encounter antisocial issues in an apartment complex compared with having a standalone home with own door access.

There are trade offs no matter which way you look at this and not everyone will have the same good or bad experiences.

 

[Sarah Ryan]

Yes. I'm paying €3,300 per year management fees on a 2 bed apartment. This is after a 20% discount for early payment. There's nowhere to put a bike. You are more likely to encounter antisocial issues in an apartment complex compared with having a standalone home with own door access.

This, this one million percent.

After two apartments, same problem in both, I just can't recommend them.

Buy the biggest house you can afford so you can stay in it for the longest time.

The days of wheeling and dealing in property are gone, too costly and stressful try get it as right as possible first time trust me.

 

[CharlieMac]

Having taken on way too much mortgage debt during the Celtic Tiger years I am loathe to advise anyone to sign up for a crushing monthly mortgage that leaves you with no scope to have a life.

But maybe the OP could leverage their current beneficial arrangement for around 3 more years and have close to another 100k (250k total) to put toward something more livable and a mortgage that isn't huge.

 

[Sarenco]

I think folks can have a bit of a blind spot about management fees.

I lived in apartments for years and the annual management fee was lower than the combined cost of house insurance, refuse disposal and gardening/maintenance that I currently bear.

And that ignores the fact that an element of the management fee was going to a sinking fund for long-term repairs, etc.

 

[JamieB_]

Well said Sarenco. I know people living in apartments who pay anything from €750pa to €3000 pa for management charges.
It is a good idea to add up the value of everything they get in their management fee and then see if that is worth it against what you would have to pay for all those services, and some of those services you wouldnt even want anyway.
I think anything around €1000 to €1500 is a good amount to be shooting for. That should cover common areas, insurance (you only then need contents insurance), refuse etc. Any higher than that and it likely includes pools, gyms, concierge etc. All well and good if you actually want those services, but if you dont you are over paying, so I would be knocking those places off my list.

 

[Brendan Burgess]

I think folks can have a bit of a blind spot about management fees.

It's probably because we hear only the horror stories. Dysfunctional management companies using managing agents who charge a lot and don't show accounts. And then there are owners who don't pay their fees.

But I imagine most work out fairly well and are fair value.