This is my first time posting after many hours spent reading the pin.
Apologies if this kind of query is getting a bit tiresome, but, I’d be interested to hear views on what people think would be a reasonable offer for this property? These houses can be rented at the moment for 1500 a month.
The asking price has dropped a few times in the last 6 months or so from 470K, I think. I feel it is very competitvely priced at the moment, considering other asking prices in the area.
We (wife and I) were given approval in principle last year for 270K - not sure if this is still on offer but will find out next week - and have about 90K in savings.
We expect to be offered a 3-bed apartment for 350K under AH but really don’t fancy an apartment, especially with all the AH conditions.
Should we give AH a miss in the hope that something like this will fall to our level?
If you can hold out for a year - do. These will fall to the €350k bracket within that timeframe. Personally I think they’ll settle at about €225k-€250k in a few years.
I hadn’t come across this Rental Ratio idea before. Is the idea that the rental ratio should settle somewhere between a multiple of 10 - 16 based on some Irish historical data? I’d say it’s a long time since one of these sold for 350K.
I’d be happy to wait and continue renting but the expected AH offer is the other factor. I’d hate to turn that down if the 3-bed semi is never going to be possible for us. Equally I’d be none too happy if I pay 350K affordable and that turns out to be the market price in a year or two!
The 10-16 should read 10-14 [my mistake] if you take the article as gospel. But, that’s the USA where they have property tax. We don’t, for now.
Personally, I believe that a bid of less than €350k will secure a house in this estate or equivalent within 12 months. What place then your AH offer ??
Be patient, prices will NOT rise in the coming 12 months, they’ll fall further.
There will be plenty more AH housing offered over the next couple of years, priced well below what theyre asking today. Theres around 30,000 unsold apartments in Dublin, which theyll have to offload at reduced prices.
Just looking at international comparisons, theres no way that a 2 bed apartment in Dublin is worth 350k. Sit tight.
It’s a 3-bed apartment, but I take your general point.
At the moment our Council allow you one refusal and if you don’t take the second offer they remove you from the list. This policy might change at some future point I guess but that’s the situation at the moment.
Anyone out there with a model for arriving at a value for this house (other than the Rental Ratio - thanks Proximo)?
I seem to recall someone (Grumpy?) calculating a current value for a house comparing mortgage cost to long-term rental cost. I’m not just being lazy; I haven’t got a good brain for these things (failed lower-level Maths in the Leaving!).
In Dublin, good areas and good property:
House €100k per bed
Apartment €75k per bed, so your 3-bed AH apartment should cost around €225k.
These figures will look generous in 18 months’ time.
Asking €350k for an AH apartment is an insult to you and the taxpayer.
Got our updated approval-in-principle this week and can get substantially more now than we could last year. A result of the Government guarantee? Went to a different branch office but I doubt that makes any difference. Our circumstances haven’t changed.
Anyway, got our papers back to the Council to keep our name on the list but we have more or less decided we will pass in the AH offer, whenever it comes.
We will sit tight and keep an eye on prices in the hope we can afford a house on our own.
Generally a property can deliver a “return” of about 8% long term. If you buy for €100k it will pull in €8k of rent a year out of which you pay mortgage decoration repairs etc.
Sometimes under 8% sometimes over 8% but we spent a long time around 2-3% in peak bubble times.
The same money in a deposit account will return 6% ( less Dirt Tax ) or around 5% after Dirt is taken away.
In other words if you make more money on deposit with the same €100k is DEFFO too expensive .
You look at rental prices for that specific area and calculate the real value of a house by ratio !!!
That assumes everyone is an investor. A homeowner cant have voids, so that immediatley increases the breakeven by 1/12. That 16 ratio should actually be about 24 at current interest rates if home ownership/rental is cost neutral over 30 years. US ratios are different. Property taxes etc.
There is a premium for being able to customise the gaff and not have to wait for the landlord to repair the washing machine , yes. Nevertheless the homeowner ( mortgage owner) and investor are COMPETING for the same gaff are they not ??
So as a homeowner make it 7% ’ return’ not 8% . Happy Grumpy ???
