Buying a house - how big to go?

[Sarenco]

I'm looking at blackrock/sandymount/monkstown area

I think the OP will struggle to find a decent 3-bed house for €500k in these areas that doesn't require a lot of work.

A 2-bed apartment/townhouse/cottage (in "walk-in" condition) seems more realistic to me at this price point.

 

[NoRegretsCoyote]

Banks don’t do bridging finance anymore so some people get cast back into the nightmare that is the rental market.

I think this is your best argument. Getting a second mortgage can be an issue too if your circumstances have changed.

Otherwise moving home in Ireland is just not expensive compared to many places where you can lose a double digit percentage on EA fees and stamp duty.

Being under- or over-housed has costs too. 5% over ten years can be far better value than staying put in a house that doesn't suit you.

Otherwise I'm not taking a position on house prices. I think that the Central Bank rules have taken the volatility out of the Irish market though. So timing of first purchase just isn't going to haunt or flatter the OP.

My best friend bought his first house in 2006, and I did in 2012 and today there is still a big difference in our net wealth as a result. But I feel that property just isn't a rollercoaster anymore.

 

[Brendan Burgess]

Hi Coyote

It's not just the 5% for solicitors and legal fees.

If all houses were ready to move into, that might apply.

But houses inevitably require work and/or decoration and often your old furniture won't do.

But it's also the risk of moving.

1) You can sell your own house first and then find that prices leap ahead before you buy a new one.
2) You can buy your new house before selling you old house and then find that prices fall before you sell it.

I wonder if the 5% applies to trading up from one apartment to another? Where it might be easier to buy and sell quickly.

Brendan

 

[NoRegretsCoyote]

But it's also the risk of moving.

1) You can sell your own house first and then find that prices leap ahead before you buy a new one.
2) You can buy your new house before selling you old house and then find that prices fall before you sell it.

True, but I think the days of big market price swings are over.

I wonder if the 5% applies to trading up from one apartment to another? Where it might be easier to buy and sell quickly.

Apartments are a bit more homogeneous and easier to price and sell, correct.

A friend of mine bought and sold in Belgium recently and lost north of 15% in notary costs, estate agent fees, and stamp duty. He doesn't plan to move for another 20 years.

The costs in Ireland aren't trivial but are pretty small in comparison.

 

[SPC100]

You have saving power of 2500+800 rent = 3300 per month

You can get tax relief on contributions of up to 20k per year to pension (20% of income), that will 'cost' about 10k/850 per month from your after tax income.

Mortgage 1500
Pension 850
Unused saving power 950

So basically you can max your tax relieved pension contributions, and easily pay the 350k mortgage, and have another 1k per month to either buy more house/pay more mortgage, pay down existing mortgage faster, invest, save as cash.

 

[SPC100]

Some other small notes based on my life experiences.

Living in an area you really like (by renting or in a cheaper accomodation), makes it easier for you to explore the area (e.g. daily/weekly walk), and figure out which houses/estates are really appealing to you for the future bigger more expensive house.

Buying a home that will work as a forever home ASAP, makes a lot of sense.

If you are not yet coupled, and plan to couple up, your forever home, may not be their forever home. It is much nicer to chooes a forever home together.

 

[confused12]

I think the OP will struggle to find a decent 3-bed house for €500k in these areas that doesn't require a lot of work.

A 2-bed apartment/townhouse/cottage (in "walk-in" condition) seems more realistic to me at this price point.

Having spent the last couple of days looking on 'Daft' (the irony is not lost), I'm starting to learn that lesson. 2 beds might be more realistic, or 2 bed with a very pokey office

You have saving power of 2500+800 rent = 3300 per month

You can get tax relief on contributions of up to 20k per year to pension (20% of income), that will 'cost' about 10k/850 per month from your after tax income.

Mortgage 1500
Pension 850
Unused saving power 950

So basically you can max your tax relieved pension contributions, and easily pay the 350k mortgage, and have another 1k per month to either buy more house/pay more mortgage, pay down existing mortgage faster, invest, save as cash.

Makes sense. That's a headache I'll deal with down the line. The last 850 would be cash IMO

 

[mtk]

Hi confused ,
I reckon an advantage of a house over apartment is no management company charge . I believe these can be a few grand depending on what's on offer.

There are definitely modern two beds houses under 500 k in blackrock. I saw one go sale agree at 450k the other day .

Mod : Not sure if allowed post link ( no connection ) ? although i guess you will have seen this in your myhome.ie and daft search

 

[Brendan Burgess]

Not sure if allowed post link ( no connection ) ?

Hi mtk

No problem in posting a link.

If it were posted out of context by a new user, we would be suspicious.

Brendan

 

[Marine1]

you wont get much in the way of a house for that kind of money in those locations, personally id be more inclined to get a nice apartment, they do exist, i lived in one in blackrock for nearly 8 years and loved it.

Cant post links for some reason but see below.

Location of this cant be beat really but low ber

7 De Vesci house

Or this as a new option atho location isnt as ideal

Amberley Court Stillorgan park

 

[mtk]

This is one I had in mind .... €475k actually

 

[presidenttttt]

The costs in Ireland aren't trivial but are pretty small in comparison.

It is not often we get to say that on these boards on these topics in Ireland, but this is true. My experience of taxes and fees when moving property in Europe is eyewatering compared to here, and they can hit the buyer not just the seller.

Turning back to the thread.

OP I am possibly just a few years ahead of you on your journey in life. Skip the apartment. I liked one posters step 1, step2, and step 3 of the ladder analogy. Step 2 seems sensible. Plan on someone renting a room if you want, but probably not two- you have obviously worked hard to get to where you are and there is no point doing that only to have people living in your ear, unless you really love that idea, even your mates can make a house feel claustrophobic. When it is your space, paid for with your own money, renting one room should give you huge breathing space with mortgage and avoid feeling you cant have a scratch in your own home

I would think long and hard about what you mean by your desire to travel. To what extent? Is it a passion to see nice places? Or a realistic career and life option for you? Is the thirst likely to be satisfied by a few nice long-haul holidays? If you do meet someone what age would you want kids and would you want them close to family from day 1 i.e how big is the travel window? If the travel point you reference is simply more holidays, or jet setting as part of work but based in Dublin, then I would buy the best possible house in the best possible area that you can afford if your job is secure. If you really aren't sure about Ireland then leaving some breathing space will help with any periods of limbo and cost associated with international moves.

 

[jpd]

Hi confused ,
I reckon an advantage of a house over apartment is no management company charge . I believe these can be a few grand depending on what's on offer

The disadvantage is that YOU are responsible for all maintenance and repairs