Image by bill barber (back Sunday) via Flickr
Over the last few months there has been a lot of "doom and gloom" in the media about the Irish and global economies. There's also been a lot of talk about the prices of housing dropping.
Last week I went looking at houses and appartments to see how good (or bad) things really were.
I don't have a huge budget, as I'm single and I only started saving up for a house in the last few months.
So what is going on out there?
There are still quite a few new developments being built, though I gather from talking to an estate agent that a lot of them won't be completed as quickly as planned.
One development I was looking at last week originally carried a price tag of 230k, but that has been slashed to 175k!
Of course the flipside is that the mortgage market has changed quite a lot. Whereas my younger sister and her boyfriend were able to get a 100% mortgage (or close to it) about 18 months ago the most you can hope for now is 92%.
On a purchase price of 200k the maximum you can expect to get is 184k, which means you'll need to raise another 16k+ on your own.
While raising the 16k might not be impossible (depending on your circumstances) you'll need to factor in another few thousand euro to render a new house or flat habitable.
But is now the time to buy or not?
If I buy something now will the prices drop again by January?
What about negative equity?
The negative equity argument is a very interesting one.
At present I'm paying out nearly 10k a year in rent. While I do have a roof over my head that 10k is not doing anything for me ie. it's not paying off a mortgage or other loan, so it's basically "dead money".
If I were to buy a property for 200k now and it was to lose 20k in value over the next two years I wouldn't have made any real loss, as I'd have had to pay the 20k for somewhere to live regardless.
So what's on my todo list at present?
- Mortgage approval - if I can sort that out in the next few weeks I'll be in a stronger position should I find somewhere that I like. While the higher price houses may not be selling the lower priced ones are, so delaying the paperwork wouldn't be a good idea
- Shop around - I need to keep shopping around and see what's available in the area. Daft.ie's RSS and email alerts definitely help
- Price the extras - I need to work out how much extra it will cost to get a place ready to live in ie. white goods, flooring etc., Being able to budget accurately will save me headaches
- Reduce my credit card bills - it kind of links into the entire mortgage approval thing, though being perfectly honest my current CC bill is quite manageable (at least that's what I keep telling myself!)