Affordable housing a good idea? (Wyckham Point, Dundrum)

Hi all
Just a quick question I’d be keen to get your thoughts on… I will potentially be offered a 3-bed apartment soon in Wyckham Point in Dundrum through the affordable housing scheme. Price €350k. I have read the thread on this particular development and agree with all comments, am just wondering does the affordable housing price makes it a sensible purchase in your opinions?

For those of you who are not familiar with scheme, say I buy for €350k, county council place a market value on it of €550 (which they no doubt will if not higher, this developer has yet to slash prices!). If I sell within 10 years for anything between the 350 and 550 I get the 350 and give difference back to county council. I would only experience negative equity if price falls below the €350k. I would envisage staying there for 5-6 years, then hopefully being able to afford a house.

I’m thinking it may be one of the few purchases that could possibly make sense in the current market. I would be worried about the development not selling out, maintenance fees etc but will look into all these things as soon as I’m given the opportunity. Let me know your thoughts anyway, good or bad.

Bertiebasher is the Dundrum Destroyer , can you amend the thread title to mention the D word…and search for his many posts .

What sort of salary multiple are you borrowing to get a 350k “affordable house”? I’m flabbergasted to be honest.

Yeh I’ve read some of BB’s posts on Dundrum. Myself and other half buying apartment, we were approved for 400k but that was 6 months ago so I’m sure we wouldn’t get the same approval now. I know 350k is so far off affordable!

I suppose when county council set these prices Wychkam Point 3-beds were priced at 600k plus so they feel they’re giving you a good deal!

You do know that some county councils are left with a bit of a glut of these social affordable scheme initiative… whatever… things at present !

anyway, this is the one I was thinking of in particular

Be Judicious Calm and Rational Bertiebasher, do you hear :slight_smile:

I’m going to lie back and get some popcorn and wait for BB to arrive :slight_smile:
When i read the opening post i thought it was a wind up.

Can someone else change the title so Bertie Basher does arrive please. Am glad to give you all some entertainment with the possible purchase of my first home :wink:

I told him to be nice, I hope he systematically revisits his predictions seeing as they are supposed to come to pass by about august !

Then theres that Potemkin Village down in Sandyford with the cladding thrown over the empty shell :open_mouth:

Well, if its at all possible to redeem myself in pinsters eyes I was offered an affordable housing apartment in Beacon also, which i refused!

I don’t get it.

You buy the place for 350K and if you sell, you get your 350K back.

Whats the point? (Says this with a John Cleese accent in Life Of Brian!)

So in the meantime, you pay interest on the 350K. Lets say at 5% pa, thats 1458 per month. Can you not just rent one of these places for around this amount??

Or am I missing something obvious here…

You’re not missing anything, when the scheme was introduced it was during the boom, so if you received a 30% discount on market value, you’d get to keep 70% of any gain made on disposal. Is owning a home without the possibility of making a profit on the future sale against pinsters ethics?! Do you mean to say unless prices are increasing renting is the only option?

I’ll tell you what’s unethical – participating in a scam to bail out developers. You expect the taxpayer to insure you against negative equity when frankly, that money should be spent on helping homeless people get their lives together.

Go and pay €350k if you think you’re getting such a great deal from the gubberment and have fun with the affordable homes paperwork and your management company.

You can rent with no downside risk

350k for 30 years @ 5% (repayment) is €1878 a month before FTB interest relief …which only applies in the first 7 years anyway , after that no relief.

Not true. There is no taxpayer subvention. The council would pay €350k or less to the developer for the unit (council usually charges their purchase price plus a few thousand). Taxpayer only loses out if council cant shift the affordable housing they’ve bought.

Well, the point is, you state above that you intend to sell in circa 6 years.

Therefore in 6 years time after you have sold, you will bank the amount of Capital sum you have payed off your 350K mortgage (assuming you dont have an interest only mortgage).

This is the same as saving a few hundred euro every month for 6 years ie you will be in exactly the same position.

The downside of buying is that there is a possibility of negative equity.

Not at all, if you intend to live there for a very long time. I just think it doesn’t make sense considering your 6 year plan and the current market.

On the other hand, some people get a mortgage to ‘force’ them to pay off a capital sum. These people find it very hard to put aside 500 euro a month in savings but seem to have no problem with a mortgage.

I knew there was a high possibility the responses to my request for opinions would be negative but can’t say I expected to be accused of being unethical, you really are a tough crowd! I appreciate all your comments but please note I have not decided whether to go ahead with this plan, at least I’m considering the possibilty of not taking it, most people jump at the affordable housing offers.

And I do agree that the fact its an apartment, a place I’d hope not to have to stay in long term should be an important factor in my decision.

Just a rant here (not aimed at you, OP)

The more I think about it, the more this AH scheme stinks of subvention, brown envelopes, wasted taxpayers money etc etc.

Who does the valuing? Do the valuers ‘know’ the developers? Surely, if there was no AH scheme, prices would just drop to what people can afford without it? Why am I (a taxpayer) paying for someone elses NE?

Edit: Another one, Are the valuers basing their value on asking prices or selling prices?? (There could be 50 to 100K in the difference for these apts…)

My head hurts…

I just can’t get my head around €350k and “affordable”.

Thats affordable on perhaps an income of €100k.

Even on €70k thats nearly 50% of net pay taken by mortgage repayments.
Thats surely not the definition of affordable?

(To start with. All opinions expressed here are my own and I have no inside knoweldge. They are simply opinions and they do not constitute advise)

Their ads on daft at the moment for Wyckham P. → 3 bed for 2000.
You can get a 3 bed gaff for 1800 per month and a 4 bed for 2200.
There is no evidence that these places are renting for that much anyway.
I am in work so I don’t have my historical data. But I will say that very little is renting in the Dundrum area at the moment as the prices are too high and there is a very serious oversupply in properties for sale and for rent.

You need to drop up to Wychkam Point and have a look. The place is unsold. It has been for sale for months now and they just can’t sell. There are three reasons.

  1. Their prices are just not even close to realistic.
  2. The market is dead.
  3. Banks won’t lend to people who are buying apartments due to the massive oversupply.

Lets address 1) first. The 350 you mentioned for a 3 bed is in my opinon more than what they could sell a few for right now. If they wanted to get rid of them all I would say 260,000 would bring out enough ill informed buyers. I think they have gone down the affordable housing route cause they can’t sell anything. This place was supposed to be a very fancy development with a concierge etc. Affordable housing and concierge don’t mix. I think they are using the affordable housing to put a floor under the prices. I think they still have their prices sky high cause it helps a person like youself to commit 350,000 to a 3 bed apartment. In time they’ll drop below that and the person who bought as an afforable house will be a prisioner to the mortgage.
I would make my excuses to the affordable housing people and try again next round. Time is what you need here. You need to see how things develop. You are jumping in way too early.

Point 2) above has been discussed elsewhere. I have nothing consrtuctive to add at the moment.

Point 3) is a big one. BOS wants 20% deposit if you intend buying an apartment. In your case that is 70,000 Euro. All banks do not have this policy yet. But they will soon. This move alone has killed apartment buying in Ireland. That move has literaly halfed the price of all apartments. The sellers of apartments have not factored that in yet. Maybe that was the even that prompted Wychkam Point builders to go Affordable housing route. Once again you need to wait and see how all this pans out. In my opinion property in Ireland is going only one way. Apartments are absolutely shagged. And I think even the bears on here can’t get their heads around how low property will drop. I’ve said this before but a 2 bed in Wyckham Point will drop to 80,000. A 3 bed will probably drop to 100,000 when the fan stops spinning.
Of couse that is just my opinion.

If you are really determined to buy then I would visit the place and wander around some evening. When it is dark it will be easier to see which apartments have been sold. I would also but ad advert in daft to rent the apartment and start the price at what everybody else is asking. I would then drop 50 Euros every two days until I get a call. That price is not even what they are renting for. You need to keep dropping until you get 10 calls(different people) then you know there is good demand at that point. Obviously you won’t be able to make any prediction for 6 months off cause the market is changing so fast but there you go.

When working the numbers for buy versus rent, don’t forget to add the service charge into the equation.