Buying a house, as an investment, is a question of using metrics and opportunity costs of not choosing another asset class.
Buying a house, as a home, is a question of deciding what your timeframe is for living in it - 5/10/20/40 years - and how your circumstances will change throughout that period and whether the location will accommodate those changes. It also involves choosing a residence which will suit your needs - do you want to put your mark on a place or just move in and put your feet under the table? Plus a number of other factors.
Both the above scenarios are fine as long as the economic climate you are making the decision in is a stable one. What Ireland has had for years 1998 - 2007 is a bubble in the property market which made it an unstable market. Since 2007 the bubble has burst, and we continue to have an unstable market. Making any decision in an unstable market is difficult. The default answer is to “not buy”, as the re-adjustment looks set to continue for a while yet - so prices will continue to fall.
Personally, I would rent for another 6-12 months and let the current economic turmoil work its way through the system - at which point things may well be worse or there may be signs of stability coming into the market - both of which offer a new economic price point.
Alternatively, if none of the above appeals to you and you just want a number to hang your hat on, then offer 60% less than asking and smile politely saying you’ve just read a Morgan Kelly article but you don’t think it’s worth waiting for the 80% drop.
Specifically talking about Navan - I haven’t seen more clustered developement anywhere else in this country. The place is riddled with apartment blocks in various states of completion (or was 6 months ago).
Drops in Navan must be far greater than the national average. It really seems like the sort of place you could find largish apartments going for 50-60k.
Sometimes I think people on the pin, and I include myself in this, can sometimes get too tangled up in the financial considerations around owning a property.
But the question is ‘how low is too low’ and that is a straightforward financial question, and the answer in my view is that it depends on when you are making the bid. A bid that may be accepted in a year or two might very well be rejected as too low now. Thats why a lot of the responses you are getting are telling you to wait.
If your personal circumstances are such that you feel you have to bid now or in the near future, then how much you should bid depends on several other factors such as:
How many properties are on sale in the area
What is the general asking price of these properties (remember asking price is not selling price)
How long the house you are viewing/bidding has been on the market
And of course a whole host of other considerations including the obvious ones like location, condition of property and so on and so forth.
Of direct relevance is the fact that property prices are falling rapidly, so you can go ahead with a cheeky offer without feeling bad about it at all as you are simply pricing along the general market curve. In the current market conditions I’d say you could get away with an offer of as low as 50% or 60% of the peak price.
**I want to have a home of my own with my other half. **Okay go ahead … go and buy your self a home.
**i know prices are falling and i know things will get cheaper **Good everyone knows that
**i want to buy in the near future **Well then go ahead if thats what you want to do
**i can actually live a life and not have crippling mortgage repayments **fine as people have pointed out you may not have crippling mortgages payments but you will be looking at negative equity
**thank you for your less than helpful comment. **Every comment posted was helpful. It just wasnt what you wanted to hear if you cant say something useful dont bother logging on. If you dont like what you are hearing in response than YOU dont bother loggin on
**i know now isnt the best time to buy, **Okay then dont bother buying now.
if you really want to buy a home (personally I don’t at this moment since I think it is cheaper to rent and wait until house prices become more realistic)
1)find out how much you can comfortably pay back on a mortgage (keep in mind that these are troubled times and that you might lose your job in the near future, that interest rates will eventually start going upwards, etc).
2)do your calculations and come up with a maximum amount you are able to spend on a property (should be somewhere in the middle of your worst case scenario and your best case scenario)
3)take about 80-90% of that amount and consider that as your maximum budget to allow for unexpected costs during the life of your mortgage (if they don’t materialize you can consider yourself lucky and pay your mortgage back sooner)
4)make a checklist of all your requirements (area, property type, amount of bedrooms, etc)before you start looking
5)make a shortlist of what is out there that has everything you need (ref your checklist)
6)add up all asking prices and divide by the amount of properties to get the average asking price (remove the ones that are priced in lala-land before doing so) and compare this to your budget
if your budget is insufficient, rent and wait
if your budget is sufficient:
-offer about 15-20% below asking if asking price is below average
-offer about 15-20% below average if asking price is above average
give EA your contact details and tell him to give you a call whatever the outcome
don’t get desperate: there are enough properties out there that will suit your needs and it will continue to be a buyers market for quite some time
OP - it will depend on the EA as well. We’ve viewed a handful of properties in the past three moths, and have noticd one EA here who sticks , say, €20k onto properties that should be on (at TODAY’S prices) for less that €250k.
There are also huge discrepancies on how much different EA’s ask for the same property (see my example in the ‘Back to 2003 prices?’ thread).
We viewed a house on Monday last that had been on at €295k. It has dropped, on average, by around €5k a week and is now on at €250k. When I pointed out to the EA that this would make the price in June around €180k I was told that the ‘seller will not accept anything below the guide price’.
We looked and just left. This is what you’re dealing with. Continual denial by sellers, encouraged by EAs.