TO BUY OR NOT TO BUY

S

sarachbell

Guest
Dear All
I have recently come into an amount of money (60 K) and am fairly assured of a healthy income over the next number of years. I am approaching 30 and renting a property for a ludicrously low sum with four others. I have mortgage approval for up to 500 K. It would be possible for me to remain renting in so far as I am not married nor do I have children. Other than a desire to set down some roots and enjoy the luxury of a moocher free sitting room, there's no urgent necessity to purchase. Like most of the Irish I really do want to live in a house that I own and get very scared my comments I've recently heard such as "this is the last generation in this Country that will own their own houses". I would welcome views on whether I should
1. Invest the money and bide my time in the hope that the property market will come down around my ears.
2. Get on the ladder

I'd really welcome any advice. I've been looking at a house nearby and have to make a decision soon.

p.s. anecdotal evidence isn't the best but has anyone else noticed how few houses close to Dublin city are making their guides....and how much longer they're being left on the market?
 
buy

I'm not an expert, but I have bought and sold a couple of times in the last few years. To answer your last point first - yes, I have seen a definite slowdown in the areas I'm looking at. I've been sale agreed on a house since last October, it's in a 'good' part of Dublin 9 but didn't make its guide price, probably because of the amount of work it needs. Due to various delays we haven't closed the sale yet and I've continued to keep an eye on the area. There has been no significant rise in prices since then, many of the houses I viewed last autumn are still on the market and in at least one case, the price has dropped. Now I know this can depend on many things, including the owner's demands, but all I can tell you is that anecdotal evidence. But I'm talking about a slowdown, not a drop in prices!!! So to answer your first point, my instinct would still be to tell you to buy. You can always rent a room - even bring your flatmates with you!!! But there is nothing like owning your own place. You'll benefit from being a ftb and you have a good deposit to get you started. I'm sure there are other investments that would prove as useful on paper, but I'd go for the house all the time. And, if you've been renting for a while you'll have an idea of where you want to live.
 
"p.s. anecdotal evidence isn't the best but has anyone else noticed how few houses close to Dublin city are making their guides....and how much longer they're being left on the market? "

The above depends on what areas you are talking about. I'm looking to buy in Dublin 12 and from chasing houses in this area for the last 4 months I can tell you that prices there are rocketing. Any house in half decent condition is going for an average of 30k over the guide price (I'm looking in the 250 - 350k range), and the majority are closing within 2-3 weeks of going on the market. As is to be expected, houses that require major work go slower as the potential market for such jobs is smaller.
 
stamp

I'd say those Dublin 12 houses are rocketing up because of the stamp duty changes for ftbs. I'm talking about houses in the next bracket up - up to 381,000 - and people seem reluctant to go over that price and pay a higher stamp again.
 
Thanks speirbhean.
Congatulations on the (almost) purchse. Sounds great. I get very nervous though when I hear talk of houses not shifting since August and guide prices dropping. I presume you're fairly confident though at this stage. Are you talking about a significant downward adjustment on the place you mention?
It would kill me to think that I bought a place for E 350 K and it ended up being worth E 250 in eighteen months. I should have said that although I have Mortgage Approval for E 500 that's more the la la lending approach the banks. There's no way I could afford that and the budget is around about E380 K.
p.s. thought that all of Dublin 9 was "good" :)
 
It would kill me to think that I bought a place for E 350 K and it ended up being worth E 250 in eighteen months.
Click to expand...
Such a scenario is extremely unlikely - even the most bearish commentators are only predicting a possible drop of 20%, i.e. from €350k to €280k, and the chances of those extreme views coming true are tiny. You have to measure the risk of a drop in prices against the risk of ongoing price rises and how they would impact you.
 
In Dublin 12 the prices of houses above the 317.5k bracket are also rocketing up towards the 6% stamp duty bracket of 381k, due to the fact that between 317.5k and 381k the stamp duty has also been reduced to 3%.

One example: 49 Comeragh Road, Drimnagh with Mason - guide price of excess 330k. Went for 381k with 4 parties still in the bidding at that stage.

I don't know about other areas, but that is one area which is skyrocketing at the moment.
 
Dublin 9

Whilst there will always be the odd exception I can report Dublin 9 is VERY STRONG. A couple recently iin Mobhi Road made 75k over the guide (private treaty!) and 175 OVER THE GUIDE.

Meanwhile Ballymun Road made 140k over the guide - none of these were auctions.

Macker2
 
drop and stabilise

Don't worry - the drop I was talking about was nothing so dramatic. In one case a house was on the web for E390, and it's now back on for 378 - they've obviously just dropped it to get people in the door, and will try and bid it back up again. In our own case the new house went for a couple of grand under the asking price but again that was more about the filthy condition of the interior.
Re: Dublin 9 - it's great to hear all the good reports!!! But why trust my judgement... I sold a house in Dublin 12 3 years ago...darnation! :)
 
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