would appreciate some opinions on buying a place v’s rent- im talking buying in Dublin c€200k… Am ina situation where ive gotta be out of rented accomodation by the summer… If i rent it will be a 1 bed in city-centre so say c €800 p/m to buy i guess mortgage would be cheaper… however… should i wait a bit?
By saying I guess mortgage would be cheaper suggests you haven’t really done enough research. 800p/m rent would be equivalent to the interest repayments currently on a 2.68% AIB variable rate mortgage of ~360k suggesting either you can rent a better place than you could buy at €200k, or that property has never been a better investment! Interest only on €200k at the above rate is €446 p/m.
If you take a view that interest rates will rise then, at the upper end, your interest only loan would cost you €830 p/m if mortgage rates were 5%. In reality mortgage interest rates would probably only have to be 4% before service charges and annual upkeep brought your monthly repayment to over €800p/m. Based on PTSB, it won’t be long before interest only is more than 4%.
Note that the above only talks about interest only, repayments on a capital+interest mortgage would be higher still and make the maths even worse when you can expect a ~10% fall in capital values over the next year.
Just keep renting, houses will keep getting more affordable for a while yet.
Exactly, like I said.
renting cheaper than buying
renting less riskier than buying
rents and purchase prices falling
I sold my house just before christmas and am currently renting in the D3/5 area. This is the area where I eventually hope to buy. There is a particular house that would suit my needs perfectly but here is how things have gone so far.
Viewed the house in Oct 09 when mine was not sold. Luke warm reception from estate agent. House was listed at 450k andwas told there was an offer of 430k.
Sold my house and sale went through really quickly. Was in rented accmmodation in mid December (lucky to sell I know)
Chrismas week I got a call from the EA saying sale had fallen through. Told him I had sold and he could not do enough to get me back for a viewing. Went for the fun and said I would think about it over the christmas.
First day back to work after christmas got a call from the EA saying he would put forward any offer in excess of 390K.
Today I got a call from the EA saying he would put forward any offer in excess of 370K.
Here is my thinking on the matter and justification for sitting tight till the end of the year.
Stamp duty may be abolished in the next budget if the propery tax is introduced.
House prices are expected to fall approx 10-15% ths year.
Is this sound thinking.
Will you be in a position to get finance for as much as you want if interest rates are 2% higher?
Will be sound for finance.
Then you really have nothing obvious to lose by waiting, provided you aren’t about to get a ten-year fixed mortgage… (See mortgagebroker’s thread and the responses to it…).
And you never know, you might be able to turn around earlier in the year and say to the EA - come back to me when you want to offer xxx, where xxx is what you think will be the price in six/nine months time and you are happy to pay - happy to pay without regrets if the price goes down for another two years!