House Market Weakening?

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Have gone sale agreed on a property in Lucan (3 bed ,mid terrace, 430k). I am starting to get nervous ;-( Starting to wondering whether to put the brakes on considering all the speculation ? Due to close start of August but have signed nothing yet. Will be stretched when start making the repayments. Anyone recommend waiting it out having got this far? (plan on living there, renting at the moment)
 
430k seems very high for a 3bed mid terrace. There must have been a lot of bidding. Can you give us the asking price maybe?
 
Why are you buying? Do you want the security of a place of your own, and the freedom to redecorate as you please? Are you happy to live there for five or more years? If yes to those, buy if you can afford it.

Alternatively, are you caught up in the mania to get on the "property ladder" (aka property tightrope) at any cost? Is this a starter home that you want to be certain you can move on from in two years? If yes to those, you could continue to rent, take the stamp duty and deposit and invest it along with the difference between rent and mortgage repayments. Then buy when you can say yes to the first set of questions.
 
redo said:
430k seems very high for a 3bed mid terrace. There must have been a lot of bidding. Can you give us the asking price maybe?
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Original asking price was 398k, got into bidding war with one other buyer (I beleive) and it went back and forth for a couple of weeks. It's close to the old village in Lucan (so not in the maze beside Liffey Valley)....was reading front page in Indo last night with disgust. I was planning on renting one room out, if Indo are to be believed, I'll struggle to rent one room in Dublin suburbs!
 

If you will be stretching now to make repayments how will you feel in two years if interest rates have gone up another 2% or so?

On a 100% €430k, 35 yr mortgage, if the base rate went up to about 5% and your interest rate was 6.25% then you would be repaying in the region of €2,500 a month (though in reality a little less because you'll have depreciated some of the capital).

If you cannot comfortably afford to buy, don't buy. The days of cheap credit are fast disappearing.
 

Negotiate up a 10% rent discount by shopping around and be willing to pay 6 - 12mths in advance. Stick your money in rabobank and preserve your capital via slowly averaging into their mutual fund offerings; gold, metals, real bonds, but mostly cash for next 6mths. Aim to grow your net worth by european M3. Forget about property for now. Stop reading the property sections and listening to well-meaning friends and family.

Educate yourself.

Understand what this means: http://www.bis.org/publ/arpdf/ar2006e4.pdf

Hang on.
 
I know how you feel. The property market is very depressing. Especially when you get involved in a bidding war. Because thats exactly what it is. WAR. You are determined to win it.

I think you should probably accept that you've missed the boat, pull out and see if the price comes down. You never know, the mysterious bidder may have gone elsewhere.

I would hate to see what effect half of a percent rise in interest rates would do to your already extended budget
 
33,000 hits on this thread and it aint open that long,maybe this is another indicator of increasing nervousness in the market,or maybe its because since brendan has been on radio more theres more people coming to this site. Anyone hear the long discussion on newstalk this morning with gurdiev,moore mc dowell and shane ross? more bearish senitment there today too.
 

This is a very hard one to call. I have stopped giving advice to people thinking of buying as I have had too many negative reactions to my negative thoughts on the whole property market. If you didn't catch it this morning listen to the re-run of the Dunphy show tonight where they had three people who have no vested interest in the property market (or so they claim) talk about where they think it will head. I would be very nervous about paying that amount of money. If you are very keen to buy why not offer 20 or 30k less. In that case that will soften the blow when the interest rate rises come along
 
cjh said:
What time is the programme repeated on Newstalk?
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10-12, the part was on after 8 this morning, can't remember when exactly, you may be able to get it on podcast though I have never done this.
 
sonar said:
Perhaps we've just had the final steep segment of our upward parabolic "japanese" phase.
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Why do I suspect that the outcome of this apparent period of “doubt” by buyers will end in prices not falling in any perceptable or meaningful way for buyers a la TSB index and/or stories from EA ‘Economists’. This will provide fuel to the “told you so” crowd; “prices haven’t fallen so they can’t” “you would have saved yourself X by buying in the Spring” etc.

I can see the Indo headlines now, “Estate agent predictions wrong, prices continue up”. We could then have strong price growth heading towards the end of the year.
 

I kinda thought this as the point of the DNG statement. In the statement they draw attention to the last "slowdown" in 2001. Then there was a slowdown in the market for about a 6 month period, buyers started sitting on the sidelines, then all of a sudden prices leap up again and potential buyers are left rueing the fact that they didn't jump in as soon as prices slowed.

This is preemptive of such a slowdown happening in the medium term, making people think that such a slowdown is really a good opportunity to buy rather than sell. The guff regarding 1 or 2 houses dropping in price is nonsense as has been pointed out, but does give the impression that maybe the slowdown has already happened and NOW NOW NOW is the time to buy.

Of course the situation is completely different to 2001. 2001 saw tax breaks reintroduced (Bacon) and interest rates falling (twin towers). Now tax breaks are ending (S23/50) and interest rates are climbing.
 
If houses have risen between 17% and 33% so far this year depending on who or what you are reading then static or dramatically slowed growth could still see houses well up by the end of the year.

However, I think the bearish sentiment will be starting to sink in around then. Going into 2007, with much higher interest rates and the prospect of continued rises, how could anyone buying now not envy their "crazy" friends who continued to rent? While their friends have buckets of disposable income each month they'll have less and less without even a paper gain in their house price to make them feel better.

Perhaps, like with my own house, they'll have a plumbing problem and be staggered by the cost of servicing it (4% inflation - yeah right!). How nice to be able to ring your landlord and demand that he absorbs the cost of repairs ...

No, I think we'll be moving from "anxiety" to "fear" in 2007. As investors see their mortgage costs double and find themselves unable to pass that on to the renter, I think that even a very skillfull REA will find it difficult to talk them out of selling.
 
Thanks for the replies - will check out Dunphy show and see what they are saying. It is somewhere I am happy to live and it beats the shoebox apartments in the city for 1/2 million....but not sure I could stick it for 5 years!! PS: Is it not too late to go renegotiating the sale? We have paid 6k deposit to EA.
 

Is the deposit refundable? There is a very realistic prospect of the house being worth a lot less in a few years time and probably very little prospect of it being worth more.
 
The possibility that the downturn in the American housing market, might tip deficit burdened Uncle Sam over the edge; is another factor that has to be considered. Some commentators are predicting a recession beginning as soon as early 2007, coupled with a serious slide in the dollar for added thrills. If the US economy does falter then all bets are off for the global economy. Ireland has its balls a’ dangling in the wind and we could catch more than our fair share of ‘collateral damage’.

I think buying in Ireland now is tantamount to playing blind mans bluff on the edge of the cliffs of Moher on a very dark night with a bottle of vodka warming your belly. But then again some people have different risk tolerances, ya pays your money ya takes your choice.
 
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