Affordable Housing, Share Ownership, Decision Time - Thoughts

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BrightonRoad

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Affordable Housing, Share Ownership, Decision Time - Thoughts
I put down a deposit of €3,000 and this will start the ball rolling. I’m getting the property will Dublin City Council. I have being given the apartment for €258,000 down from €272,000 at a current market valuation.
My main concerns are:
None of the apartments are owned yet but the developer through a management company is renting them out, there are about 200 of them. The developer has not sold any of them yet.
House’s/Apartments are dropping in the current market so the properties could be 20% cheaper this time next year.
Yes or no, will I go for it and what would your thoughts be?

 
So your getting a 5% discount from DCC, you could prob haggle more off a private non affordable apartment the way the property market is.

I wouldn't bother with it, I'd buy private instead.
 
I would definitely buy privately. A little bit of patience could save you a lot of hassle. The Council are wildly optimistic with their valuations. Sounds like the developer can't sell them on the open market at that price, doesn't that tell you all you need to know. Avoid like the plague or you'll live to regret it, don't get caught up in the excitment of the being offered your own home. Patience is key.
 

If I went privately I would have to stump up 10% or even more for the deposit instead of the 3% required. Perhaps the Developer is willing and has the ability to hang on until next year and could potentially sell them off at a adhoc bases. There is no point flooding the market with apartments right now!

I will phone the council today and ask why only 5% decrease!

I do want my own place and sick and tired of renting but I will take time and be patient if this can be pointed out as a bad deal

I can get my deposit back up until I sign the contract
 
Have you asked the developer if he would accept the same price for a direct sale?
What is the difference between affordable price and what similar apts in the area are on daft/myhome are going for? If there wasn't much difference I'd be inclinded to ring and see if they'd accept less on the private sales - you might be closer to affording private purchase than you think. Personally I wouldn't buy on AH unless it represented about 100k price reduction in my area of choice. I would hold out otherwise.

If 200 apts are unsold/rented you will be living in a complex with few owner occupiers by the sounds of things - harder to solve problems, often more problems with noise etc, less interest in getting to know neighbours etc..

Only real benefit I can see in affordable housing now is that you are protected from negative equity to a certain extent, and as you said banks are willing to lend more with smaller deposits on AH purchases.
 
The difference is that I get it for €258,000 and apparently the market value is €272,000. The apartment complex is divided up into 7 or 8 blocks and Affordable Housing is made up of apartments in 2 or 3 blocks. I would suspect that the private develop would not entertain anyone going directly as this might upset the apple cart with DCC. The area is Dublin 12 and there are only 2 apartments for sale on daft under 250,000 in the area that varies in price depending on the quality of the property so this can be very subjective.
The complex seems to be relatively full up as there are many foreign number plates and cars for that matter in the underground car park
I would have to put down all the flooring and fit out the place with utilities etc so this adds another perhaps 10,000 to the cost of the place.
I just assumed that there would be a bigger discount which could protect me from negative equity. I phoned my contact in DCC and she won’t be answering any questions until they send out details of the apartment and management company for the attention of my solicitor, I can’t seriously look at this with only a 5% discount and the present market being what it is! I could easily kit out the place for the difference!
 
Sorry to hear it's such a small discount. For me there would be no question - I wouldn't buy it. Chances are that someone selling privately will accept less than what they have advertised for. Also, with so much speculation re prices you might well get it cheaper in a few months privately anyway. You will be tied to clawback and not able to rent out if you go ahead - not worth it for that discount. Also the clawback would eat up any cash injected to renovate.

With such a small difference if you hold out it sounds like you will be able to get something similar yourself again. Disappointing, but sounds to me like the wisest move.

I've turned down a lot of properties myself so I know how hard it is - I've been right every time IMO. Finally buying AH, but clawback of 28% - still a bit inflated perhaps but I've done my sums and I think it's the right move for me. So I'm not against affordable housing, but I think your deal doesn't sound great.

Good luck with the decision.
 
Thanks Cheerus,

I'll wait and see what documentation that they send out to me in regards to Clawback and anything else and keep everyone posted and I'm sure there are a lot of people in my situation.

I would definitely rent one of the rooms eventually to help with the mortgage payments once my better half has her folks stay over one or twice.

If I can get them down from €258,000 to something like €240,000 I would be in a better position considering the drop in house prices around Ireland. If I paid rent privately for the next 2 years I would pay minimum €24,000 and if I rented out one of rooms I would receive at least €12,000 over 2 years excluding factors such as helping out with the bills.

I would also benefit with Mortgage relief and having something more permanent than renting out! At the moment considering all factors I'm 80% sure I will go ahead with it but I still need to be cautious

 
Hi Brighton Road,
I'm also buying from DCC; a ground floor 2-bed for €255....DCC have valued it at €375k. 3 beds in the same complex are on myhome.ie and Sherry Fitz for 357k, 2 beds are on for 350k....as soon as I rang and mentioned the words "independent vlaution" I was told don't worry.....we're currently valuing all the affordable develoments in DCC as the valuations are out of date".

Do you know how old their valuation is....mine was June but sure the bottom has fallen out of the property market since then so it's a bit of an optimistic valuation I feel.

Get back onto DCC straight away.....I was told I could go ahead or hang on and if I wasn't happy with their valuation I could pursue the route of independent valuation. They did say they had 27 developments to re-value and it could take a while, so they're either lying to me saying their re-valuing everything....or they're hoping to throw you off the scent.
Best of luck, let me know how it goes for you
FTB1975
 
Hi FTB1975,
I’m surprised you’re buying a ground floor for €255k as I thought they were €250k. It will be a long drawn out process as they still need to send out all the documentation with the specifics that I would need before I start telling them that something is overpriced etc. Why would they say to me the current valuation was €272k when they have told you that its €350k. I have no idea how old their valuation was but they were very cagey when I asked about it. There is a big difference what you were told and what I was told. Perhaps they gave me the new valuation which they have yet to tell you?
 

Hey,
We're in different developments in DCC, mine is in Dublin 3...was just using my situation as an example, not that it should matter which development we're both in cos you'd imagine "re-valuing 27 developments" would mean yours would be included in the 27 as it's part of DCC. From what I was told I can still get an independent valuation if I'm not happy with what DCC come back with. It seemed to me, based on the response from DCC, that we're more than entitled to get an independent valuation soit might be worth bearing in mind.
 
I'll keep you up to date on any developments on my side, I assume that you know about http://www.valuations.ie. I will make sure I get plenty of advice before I move forward but fingers crossed everything goes ok. I keep thinking about the general state of the current economic climate as prices could drop. Its all doom and gloom where every you go. Buying now seems like the last thing anyone should do.

http://sites.google.com/a/irishhometrut ... a-property
http://sites.google.com/a/irishhometrut ... le-housing
 
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