Buy now or sit tight?

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Thanks for your replies
Certainly a lot of food for thought. I am in the U.K at present and where I live houses are about £5000 cheaper than they were 3 years ago and taking much longer to sell despite what the market says.
I am moving back to Ireland soon and am considering renting(not 100% sure yet).
I read a report on housing in Portugal where prices have droped for example a house reduced its price from 320,000 euro to 175,000 euro as it was on the market for 2 years. The seller did however point out that he bought the house 10 years ago for less than 50,000 so in real terms he's quids in.
I have a friend in Dublin who bought a 1 bed appartment by guinness brewery about 9 years ago for £40,000 it is not work around 300,000 euro. So once supply meets demand as is predicted to happen in 2009(I could be wrong) and investors start to unload due to rent competion etc he could easily undercut someone who for example bought a similar property for closer to the current market value(just like in portugal), as a lot of people have bought similar properties at hughly different prices over the past decade this could well undermine market value should people start to unload investments( for some its simply paper money)

My other concern is that as 75,000 units a year for the past 10 years have been released onto the irish housing market with no sign of a slow down and the Irish population have shown no real increase over this period surely the market is kept up by imergrants in low paid jobs renting "investment properties". so can they afford the increase in rents to cover the increased purchase prices or has this reached as high as it can go?

A lot to consider I think. Can houses prices drop as they have in portugal?while I hope yes, I fear not, but I hope I will be able to get better value for my money if I hold out a year or two.
 
ncs said:
Umm... There are already instances of houses dropping in asking price in the past few months, never mind 5 years time?
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where in Dublin has a house that one person bought then sold for a loss ?
 
The property supplement of the Irish Times's property supplement was so thick two weeks ago that the Polish shop assistant thought I was purchasing two newspapers.
 
Its not a simple case of a person buying a house then selling it for a loss.

for example a person buys a house last year for 300,000 euro they put it up for sale on the advise of the E.A. this year for 420,000 .....it does not sell so do they hang on or drop the asking price. someone else could have bought next door 5 years eariler for 150,000 now in the extreme case that they decided to sell for 299,999 they have still doubles their money,(before anyone has a go I said extreme) however sold for less (all be it 1 euro) than their neighbour bought for. Such is the complexity of a housing market with such rapid fiancial growth.

Second phases have been selling for upto 30% more than the previous year, inflation is running at around 3% so why the massive increase? Supply vs demand? A person buying in the second phase willl have upto 600 euro a month more to pay a month, thats 600 euro straight to the bank, not the economy per sae, they go out less, this will affect the service industry etc etc and on it goes.
It cannot and will not last forever, New industry will look at potential employment costs (and look else where), affecting employment, but not to worry we'll all have houses worth a mint??????

Will it crash/ slow/stall or continue? not even god knows but long term one has to look at all the variables, they paint a very complex picture. The only true beneficiaries may well be the bank, builders and politicians...

sorry went on a bit of a rant..
 
dodo said:
This is not Japan or London for that matter, it is Dublin I am talking about
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Thats the spirit, the laws of supply and demand were repealed in Ireland when we gained independence so we are fine.
 
also, and perhaps most importantly, there has been a hugh glut of investment property coming on the market for the start of the new property season since Sept 1st (hence the IT supplement culled a rain-forest to produce).

potential reasons:
- very low rental yield (1-2%)
- rising interest rates
- slowing of price increases (perhaps as low as inflation levels)
- only 15% of houses sold at auction in back month (always a sign)

investors see Summer 06 as being the peak of the market. As an investor there is no more money to be made, and the yield is pitiful, so they get out at the top.

of course the buyers are not stupid, and have now adopted a wait and see attitude.

a colleague told me only yesterday that he'd sell for 540-550, on his hse with an AMV of 570.

I must say that for the first time in 6 or 7 years that instead of my normal answer of 'right now is the best time to buy', I think i'd join the waitnsee brigade.

The market has changed a great deal over the summer.
 
demoivre said:
I take it that you can't answer dodos question then ?
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For a start, i do not have access to people personal finance, so i can not state for definite

But I would say that anybody who has release equity to buy an investment property in 2005 (may be even as far as 2004) or 2006, and who has already sold has lost money when considering all costs.
Interest alone on €300k over 30 year at 4% is €1000 per month...That's almost the rental income for a 3-bed semi D, just in interest.

On the speculation side, i would say that the one selling in the ST/MT will even loose out more..
I am of the opinion that mid-2006 has been the highest point in house prices in Ireland..(as a side note: and may be the world as the house price increase in Ireland is not an isolated case - Worldwide property market has risen in the past few years).

This is my view point - I am not trying to convince anybody that i am correct - Simply expressing my opinion.
 
Have to agree with Bacchus, especially in the higher end of the market, second hand houses are nor selling at anywhere near what seemed like the standard 10% premium above the initial asking price. Auction rooms or not doing the business, 58 houses last week up for auction 5 sold at auction 8 sold afterwards very good indicator.

House in Dalkey origional AMV 1.8ml now guiding 1.4ml the writing is on the wall for those who want to see it. The market has topped out. The cycle has turned but Irish homeowners are alergic to bad news from the property market.

As stated the only people who can actually cash in on this uber wealth are those trading down or splitting the country. Good luck to those leaving the state as IMO they are leaving the best dry patch in the bath, but for those trading down the "children of the emergency" I am delighted . They had to suffer the 60%+ taxes the high teens interest rates the college fees for their kids to watch then emigrate ( how painful as a parent to have to watch that) " We need to tighten our belts" political leadership I could not be happier for them. but knowing that generation they will leave this money to their kids.
 
This is a clone of the long running thread in the Great Financial Debates.

Locked.
 
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