Full Cash Purchase for apartment in Dublin

S

Salida

Guest
Hi

I am currently looking at buying an apartment in Dublin which has been drastically reduced in price by 60% since entering the market in 2008. It will be a full cash purchase with no mortgage or loans of any sort. I am a first time buyer and have saved the money over the last 15 years. This is NOT an invesment property that I plan to make money off. I am planning to live there within the next 1-2 years. I am Irish and currently residing abroad and have a good job but I would like to return home within the next 1-2 years.

My concern is, with the strong likelihood of the IMF moving in to assist us with our affairs over the coming weeks, I'm wondering if anybody would deem this a potentially bad idea? I understand that property price speculation is not allowed and this is not what I am looking for - I feel this purchase is a really good opportunity but I'm now a little wary of the recent economical developments and wondering what negative impacts it could have for me. As mentioned, there will be no loan/mortgage repayments of any sort. The property will be fully owned by me once purchased.

The deposit was put down a week ago and the contract signing stage is looming within the next few weeks. Any advice would be much appreciated.

Regards,
Salida
 
My advice is to avoid an appartment as there is more cost i.e. yearly management fees. There is more potential for noise problems from neighbours.

Unless the appartment is large and well built and in a good area I would seriously consider avoiding buying one.
 
If you're not living in the country yet, you don't know what areas will suit?
I would wait until you return, rent for say the first year and start your search then.
Also, you should have at least a 5-10 year horizon on any purchase.
 
Thanks very much for the response Aristotle. Unfortunately I can't afford a house, which yes I would prefer. This is the place I've decided to buy and I'm happy with that decision. My concerns were more in relation to the current economical developments and if I should have any concerns about purchasing in general given what's currently happening. I am happy with the apartment and the location.

Thanks
 
You should expect property taxes and water charges to be introduced which will be a cost to all property owners. Perhaps other costs may rise too, property insurance for example. Other than that the only thing you need to worry about is the property price dropping but at least you will never be in negative equity.

There isn't much else to worry about really from an IMF\economy aspect.
 
Cheers Tiger. I know the area well that I'm purchasing in. I have been living abroad for 12 years but I am home in Ireland once a year and I'm familiar with the most of the areas I have been looking to buy in. That's not the issue. My concern was more in relation to purchasing in general given current economical circumstances. Because I am purchasing without a loan, I don't need to worry about interest repayments so I am thinking now is a good time to purchase a property I like at a good price. However recent IMF developments are making me wary - just looking for some feedback from people on this aspect...in case there's something I'm missing....thanks again!
 
Much appreciated. Yes I had considered the additional costs you mentioned. Thanks again for your feedback.
 
Given you do not require a mortgage, your concerns regarding the IMF would be most relevant to the economic performance of the country in the coming years. The impact of this economic performance on the ability to buy and sell property and the price is open to speculation.

I would recommend that you do not get a 1 bed apartment as people will probably take a longer term view of property purchases in the coming years and these will be harder to sell.

What is critically important is that you are aware that you are buying in to the communal ownership of a development. The financial viability of the overall development will significantly impact the value of your investment but far more importantly the quality of life that you will have living there. Depending on whether it is a new or second hand apartment, look very carefully at the management company, sinking fund, number of empty units, bad debt etc. These factors probably are more important in your situation than the IMF.
 

Salida,

Good luck with this big step but I think you need to check out this website too, if you have not already done so...

www.thepropertypin.com
 
Salida

If your preference is for a house, then you should not buy an apartment.

If you have enough cash to buy an apartment outright, you have enough cash for a substantial deposit on a house, unless you won't have any income when you return to Ireland.

In general, it's not a good idea to make a decision now as your plans may change over the next two years.

If you are a first time buyer, you won't qualify for FTB benefits if you let the apartment within the first two years.

Don't buy something which does not suit your needs, just because it's a good bargain.
 
Brendan Burgess said:
Don't buy something which does not suit your needs, just because it's a good bargain.
Click to expand...

This is the key piece of advice.
It is not clear why you want to buy now, when you are not going to live in Ireland for 1-2 years.

If it is the case, that you are buying now because you think that property prices are at the lowest and will rise, this may be a bad idea.

The lunatic price that a developer thought he would get for the apartment in 2008, is completely irrelevant to the value now and in the future.

What are the negative things that might happen ....

If the ecomony in Ireland worsens in the next two years, the value of the apartment could fall, and you will loss money. Also, you might not get a job in Ireland when you want to come back.


I think it has also been mentioned that you should be very wary of 1 bedroom apartments especially small ones. They are considered so unsellable that some mortage providers wont touch them.
 
Thanks for this Brendan,

With regards to putting a deposit down on a house, I have been trying since the start of the year to secure a morgage but no lenders appear to be lending to overseas buyers. Their conditions are that I have to be paying tax in Ireland for 1 year before I can qualify for a mortgage (approx 12 lenders have been approached by different brokers on my behalf). The concern here is the problems I am likely to have securing work if I return home.

So yes I would prefer a house but given that I cannot secure a mortgage, I cannot afford it in an around a location I would like to live. I am happy with the 2 Bed apt I am looking at in regards to the quality and its location. The reason I am looking to buy now is to get a nice place at a good price that I can afford (I also understand that this 'good' price is open to interpratation as HuskerDu righlty mentions). So that when I do return home over the next 2 years I have a place to move into with no rent to pay. I guess that's the easiest way of putting it.

Completely agree on the 1 bedroom apartments. This is a nice 2 bedder.

Again, all this feedback is really helpful - thanks again.
Salida
 
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