First Timer Buyers

Of course it is, we all operate in the same economy and are driven by the same market variables.

To be honest it astonishes me to see the Irish attitude towards debt, and more worryingly long term debt. I've had friends from abroad suggest this is due to the fact that we never really had an economic boom as we have today and are therefore unaware of the consequences of a slowdown. Do people not realise that this is a 35 year mortgage and exposing yourself to that sort of debt commitment is a risky business at the best of times.

I suppose thats a bit rhetorical considering the amount of credit union loans out there that have been put towards home deposits, and people who have told me that there mortgage will be irrelevant in years to come due to inflation and future income increases. How naive can you get!!!!
 

Yes, [broken link removed]
 


How well has the second phase being selling? €229,000 is very good value for a 3bed in Ennis and even €245,000 is not bad. At the end of the day it is all about what your needs are at the time you buy. Three bed properties are renting for approx €800 a month in Ennis at the moment so your mortgage won't be much more than that at the moment... it is very easy to get nervous looking at house prices but it all depends on your personal circumstances...
 
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Frequent Poster



I aggree, the first two years of a mortgage are the hardest accustomising to payments purchasing furniture etc. If you feel comfortable with repayments then don't worry.
 
I was also a potential FTB in Dublin in the spring. Had deposit, SD fund, mortgage approval. Got outbid on a few properties so decided to take a break.

Thought more about the whole thing. Sure interest rates weren't expected (by most) back in Spring to go above about 3.5 or 4%. However this is only the forecast over the next year or so. As pointed out by others, a mortgage is over 25 to 35 years, and no one really knows what the mortgage rate in 2010-2015 will be. As well as that I don't see significant growth in wages over the next 10 years as globalisation pressures will force us to keep a lid on our wage growth. We may even have to start accepting wage cuts - like the Germans have done.

On top of all that, I'm currently single and in a new job which I only expect to stay in for a few years. So considering the high transaction costs, you would have to expect good capital appreciation over the next few years. I don't. I expect essentially stagnant prices in the FTB house market (appartment prices may fall more) over the next few years.

Finally I did the "rent is dead money" maths and realised that rents in Dublin are the equivalent of the interest repayments on a similar property if bought with a 25 year mortgage.

So yeah, I'm sitting on the bench. Though it's nothing to do with stamp duty. In hindsight I'm glad I got outbid on those houses I went for.

I would enter the market under a number of conditions
1) I have a good stable job, and should I be made redundant I still have a good chance of getting a similar job for similar pay
2) The cost of servicing a mortgage over 25 years is roughly equivalent to the cost of renting a similar property
3) My personal circumstances change (e.g. family) so that I think it makes sense to own a house and not be reliant on the whims of a landlord.

The problem is that the way the economy is developing in Ireland now, I think points 1 and 2 are mutually exclusive.
 
I'm another FTB that almost bought in the summer. I pulled out of a sale because I didn't think I was getting value for money and decided to stay renting for awhile longer, my mortage repayments would have been double the rent that I'm paying on a much larger detached house.
 
I'm a FTB who has just moved into my new apartment and I have to say, despite all the concerns about a 'crash' I don't think it's going to happen.

First off, the figures have to be looked at closely. The figures from the permanent tsb/ESRI house price index which were released yesterday have to be taken with a pinch of salt. They're the average so a property sold for €6million is going to seriously skew the average price given for a second hand property in Dublin. You also have to break them down by area. Septembers overall growth was 0.7pc but if you look at Dublin alone this was 1.7pc. This is the second highest this year with May recording the highest at 1.9pc. Commuter counties are still doing well but 'outside' Dublin recorded only 0.7pc, down from 1pc in September last year. Also, overall growth this year to date is over 10pc already, while it was only 9.5pc for all of 2005. So even if you bought at the end of 05 and we see a slowdown/minor slump, your property probably won't have lost any value. If you break down the figures for the past year it's easy to see that the prices are still going up. At a slower rate, yes, and they're taking longer to sell. But at the lower end of the market they ain't gettin any cheaper. It just gives FTBs more time to look around and get what suits them best.

Also, the mantra is still the same - location, location, location. There's been multiple threads on this site about places like Carrick on Shannon and Longford having scores of empty Section 23 properties. I think these areas - and people who have bought there - will have serious problems in the years to come because there simply aren't enough people to rent them. But if you buy in Dublin, Cork or Galway, or even any major regional town, then you should be ok. Of course it's all about research.

The other thing which I have never heard anyone mention when they draw comparisons with the great crash in London or Singapore is that the Irish have a completely different mentality to any other home owners or buyers. Laugh if you want but the famine and landlord system wasn't all that long ago and I think we're suffering the hangover from that. We have an inbuilt desire - which I have yet to see any other nationality - to own our own piece of land or bricks. We truly do measure each other on how much property we own and it's one of those things you ask people now - where did you go to college, what do you work at, do you rent or do you own? So if the 'crash' comes (and I honestly don't believe it ever will) then you will have opportunists jumping in straight away to get a second cheaper property which they can rent out. And yes, I would be one of those people.

And finally people - you're always gonna need a roof over your head! I can see why investors are worried about the rising interest rates but if you only own one place, crash or no crash, you're still gonna need that place to lie down at night.
 
You are wrong about the ESRI/PTSB index being a simple average. They go to great lengths to make sure that the index is not skewed in any way. The only drawback with the ESRI/PTSB index is that it relates to mortgages drawn down so there's a significant time-lag between a sale being agreed and that sale making it into the index. So the "September 2006" index actually relates to property deals done a few months before (most likely May/June 2006).

If you're up to the challenge - a detailed explanation of their methodology is provided here:
[broken link removed]

All of the other points you have made have been disproved many times in the sentiment thread:
http://www.askaboutmoney.com/showthread.php?t=31710&page=376
 
I myself am a potential first time buyer but by looking around at properties over the last 12 months have decided to wait and see.

My reasoning for this is that if there is no crash, that's fine....property prices will
continue to rise but at a slower rate, i'll also be saving in the meantime and the
worst case scenario is that I'll be paying more for a property in a year or so than I
will now or I won't be able to afford one at all. Either way, my circumstances will
not have changed much. I just won't be a homeowner.

On the other hand, if I enter the market now by buying a house I will be exposing
myself to a lot of unknown variables. Where will interest rates be in a few years
time? Will property keep going up, stagnate or go down? By buying a house now,
i'll be putting myself in a long-term situation where I have limited control over my circumstances.

I know you might say you can always sell the property if it gets too
expensive, but there could be thousands more thinking the same. It's difficult to
sell something that nobody wants. Especially when your talking in 100's of thousands.

Anyway, in short, I believe at the moment there is a lot more to lose (potentially)
than there is to gain by buying property in Ireland.
 
I think property is overvalued everywhere in Ireland regardless if its in Dublin or not! I come from a small town down the country and could not understand how property is so expensive there. All the big industries that were there have closed (due to high labour costs) and there is absolutely nothing there to justify the prices. I believe all these small towns will be hit when construction slows down as so many people are reliant on it and work on the construction sector.

aaa1 above just mentioned the TSB/ESRI index. Those figures are about 3/4 months old at least as they are based on when the mortgages are drawn down. A lot of these places prob went sale agreed in early summer when things were just starting to slow. I think the next index will be more interesting. I think the Q3 Daft report is out next week. That might be interesting.

Wrt buying a place in Dublin to rent, no investor in their right mind would buy an investment property now in Dublin as there is no yield. Your monthly mortgage would far outstrip any rental gains. The days of capital appreciation are over too.

You can say what you want about our inbuilt desire to own our own home but economics is economics and it doesnt base itself on sentiment. House prices far outstrip wages and that cannot happen for too much longer! House supplies too are at record highs and when supply > demand, price goes down!
 
Was nearly a FTB early this year, but didn't go ahead with the purchase for numerous reasons, one of which was the fact we would have had to take on a 35 yr mortgage to afford even a modest 3 bed semi in a village some distance from the city where we actually wanted to buy ( not Dublin but a regional city) , and another reason was that we wouldn't be able to afford to drop to one income in the future if we had children, as even at two incomes we would be pressed hard to service mortgage and be able to pay bills/feed ourselves, never mind have a life

Currently, we are not even looking at houses as we've decided to hold off and see if the bubble will finally burst. I don't think current prices reflect the actual "worth" of properties, some run down houses in appaling areas are asking huge sums, and if we were to tie ourselves into purchasing such a house, we'd most likely be stuck there unable to sell to trade up if/when prices come tumbling down and the steady stream of desperate FTBers who would buy such a property just to get onto the "ladder" ran out due to affordability issues with rising interest rates.

We'll continue to rent until it makes financial sense to buy - the house we rent is a 4 bed semi d in one of the nicest areas in the city we want to live in, it's a 5 minute journey to work/shops/every amenity, and the cost of renting this house is less than half the cost to service a mortgage on this house (we wouldn't quallify for such a large mortgage anyway on average wages in this locality). With job instability now an issue in Ireland, we'll certainly be holding off until prices reflect some sort of sanity, especially as some estate agents we know have admitted privately they are advising some of their friends with 2nd and 3rd properties rented out to sell up and bank profits now.

It just seems like madness to me that while mortgage rates were crippling in the 80s, people still managed to pay for just a 20/25 yr term on one income, whereas now the norm is two incomes over a 30/35 yr term for a house on some sprawling estate miles away from where you really want to be.
 
aaa1 said:
And finally people - you're always gonna need a roof over your head! I can see why investors are worried about the rising interest rates but if you only own one place, crash or no crash, you're still gonna need that place to lie down at night.
Click to expand...

I'm always gonna need to eat, should I start buying farms?
 

Think some regional towns have been driven by S23 and holiday homes ie driven by property speculation that has largely no local impact locally other than building the property. Its not a long term sustainable wealth creator on current scale. Like a massive grant to a specific location.

S23 reduces this year and IMO holiday home construction will fall dramatically as property prices stagnate. This could lead to massive problems in some towns.

From a region like above where vast numbers of locals work in construction with nothing locally to replace these jobs in a slowdown, the knock on effects in local economy could be huge. In the past farming was important contributor but incomes there in nominal terms are the same as years ago - in real terms probably more than halved.
 
in alot of small towns down the country, houses that cost 40k pounds in 96 cost more than 300k euros now.
a local town has more than 1000 east europeans staying ;total pop less than 5000
this i believe is replicated around the country.
and these immigrants are of course renting many houses as well as building them
of course they are also displacing many vulnerable irish workers such as shop assistants etc_pushing them on to welfare
if they is a downturn in construction ,thousands maybe up to200000 immigrants will leave and there will be an enormous amount of empty houses that cant be rented
no idea what the vested interests will do
but of couse the gov dont care about the ordinary joe soap
thats why they want to enslave everyone they possibly can to an exorbitant mortgage
i believe the cost of housing is used like a giant stealth tax on a necessity
great for gov and landlords
i suppose the landlords will still get big gov paid rents for unemployed and welfare people
maybe the gov could encourage rich foreigners to settle in ireland or asylum seekers who would give landlords a big fat gov rent cheque
no i think they cant wiggle out of this one and there is going to be a definite price correction
as a ftb i will not buy until there is a big correction
house prices in germany are less than half what they are here
 
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