First time Buyer- jump in now or wait!

The Irish Property Bubble (2006) Sell, Buy or Rent?
1

Hi all,

I am new to this site and i would greatly appreciate some help. Im really eagre to buy a place. I can go up to c€225k for a 1 bed or €259k for a 2 bed place. Im looking on the Northside and it is essential that the place is close to the city centre. (not necessarily within walking distance but on a good bus route). Can anyone recommend a safe area to look at, if I do buy a 1 bed i would like it to keep its value within reason. Ive also registered for the city centre affordable housing scheme. (not sure whether this is a good route to go down though). I have been considering the new Strand development. But im not too sure on the area. I notice though that there are quite a few new developments around that area. I need to move out from where i am in January so i may need to rent for a while. My question is should i buy a place or rent for the time being in the hope that property prices fall. Also any recommendations on areas/developments? Your advise is much appreciated.

2

The golden rule - buy when prices are rising - sell when prices are falling.

Prices are falling.

3

If dead set on buying, have someone put you in a stright-jacket or otherwise restrain you, à la heroin junkie going cold-turkey.
Do not now, and probably not for at least another 6 months.
You’ll thank us.

4

Thanks for the advise guys, renting for the near future seems to be the best option i guess! I just feel that it is money going down the drain, but on the flipside, buying seems like an investment going down the drain!

5

{nods sagely}

6

That’s way too much. I’d wait until we see prices fall another 30% before I start sniffing about.

7

If rent works out cheaper than buying then the answer is to continue renting for the time being.

As regards buying you have to think long term in the current market i.e. over 10 years.
I don’t know your circumstances, what age you are or what your goals in life are, so I can’t say if a one bed or two bed apartment is right for you or not. Do you like the flexibility of renting or would you prefer to establish yourself in a location for the long term?

Set out goals you want to achieve in your life, write them down.
Then you have to figure out what practical steps your need to achieve these goals.
Does buying a one bed or two bed help achieve or hinder these goals?

Whether you decide to buy or rent you have to review the costs of that decision (mortgage/rent, service charges, maintenance, transport, employment, insurance, food etc)
If you have never budgeted before then print out this useful document from MABS to guide you.

mabs.ie/publications/Self_He … 0DIARY.pdf [adobe acrobat required]

Everybody has their own time preference for buying/renting house, some have a higher time preference that others and are willing to pay more, those with a lower time preference are prepared to wait until they see value in the market.

If you decide to wait you must also work out a savings plan, the bigger your deposit the more choice you have?
Also age plays a part in this, banks are becoming more conservative in their lending criteria and once you reach 40 years, they will not be as inclined to give out a loan, so you would have to work out an alternative investment strategy to raise the funds to buy a house.

But whatever you do don’t be pressured into buying a place, just for the sake of it. The days of the boom when you had to listen to the infamous bubble mantra “I need to make something of my life, and get on the ladder” are gone.

https://www.cartoonstock.com/newscartoons/cartoonists/ksm/lowres/ksmn24l.jpg

8

Don’t fall for the over-simplistic “rent is dead money” line that helped sustain the property bubble.
Any interest you pay on a mortgage is just as much “dead money”, as is some of the capital on the mortgage if the property loses value.

Take the money you have left over after paying the rent and stick it in a 6% savings account for year. That’s a better investment than property at the moment.