My partner and I are contemplating purchasing a house but are uncertain which style of property would best suit our needs. Currently, we are employed in Dublin and appreciate the convenience of being near our workplace, our friends and the vibrant nightlife. Consequently, we had been contemplating acquiring a modest Dublin apartment. Nonetheless, our doubts revolve around the long-term validity of this decision, especially when considering our family expansion plans within the forthcoming three to five years.
Could you advise us if buying an apartment now and later selling it to purchase a larger house in a commuting area is a practical approach? I have concerns about the escalating prices in such areas. Might it be a wiser decision to move to a commuter town straightaway? I also worry about using my first-time buyer status now, risking not having it in later years for a bigger property acquisition. We’d be grateful for your counsel on this issue.
A popular adage states that the most significant factors while purchasing a house are location, location, location. It’s not merely about distinguishing between “superior” and “inferior” locales, but significantly, if the area suits your personal circumstances. Proximity to public transport and roads is critical for commuting, while broadband access is essential for remote workers. For parents, the closeness to schools is a vital factor. Another aspect to acknowledge is that our lives progress through different phases, and today’s ideal situation may not remain so in a decade or two.
You’re transitioning; you’ve been leasing, accumulating your deposit, and relishing the city life located near your work, your social circle, and your recreational activities. It may seem that your purchase will be a concession, but I wouldn’t have you rush immediately into purchasing those cardigans and slippers.
In addition to the discourse surrounding city or suburbs, there is the question of buying a brand new property or opting for a previously-owned one, which in my opinion holds greater weight. If you are a prospective homeowner for the first time, you’re likely eligible for the Help to Buy (HTB) and First Home initiatives, a pair of substantial perks. The HTB program essentially reimburses the income tax and deposit interest retention tax (Dirt) you’ve paid over the last four years here in Ireland, up to a cap of €30,000. This windfall often serves as the down payment for many. The First Home scheme, on the other hand, is a shared-equity measure that primarily addresses the difference between your deposit, mortgage, and your new house’s asking price (up to 30% of the cost).
Bear in mind, each of these benefits can only be tapped once and are exclusively offered for fresh properties. Although it may not apply to you, the First Home plan can be employed by those who intend to purchase a currently-let residential property, given that the tenants have been informed of the termination by a landlord keen on selling.
There is no universally correct or incorrect choice, as we’ve observed first-time purchasers who exclusively prefer pre-loved houses or new builds. Houses with prior histories provide assurances about the completion of the locality, generally have well-established neighbours, and typically are closer to central hubs of towns or villages. Newly constructed houses, alternatively, tend to be more sustainable in terms of energy, they attract impressive mortgage rates for superior Ber ratings, plus the aforementioned monetary incentives apply.
The urban-suburban contention has its clear benefits and drawbacks, which have been pointed out by you. I’m not totally clear on what you’re implying by “skyrocketing fees in suburban locations”. It potentially points to booming real estate costs, but remember these are soaring everywhere. I would discourage going through with the “purchase the flat now and resell in several years’ time” strategy. This isn’t due to its lack of merit, but because there’s no surety of an incessant surge in the value of property. Residential property rates are susceptible to both escalation and devaluation, which could potentially wreck your carefully planned projection.
My recommendation would be to think ahead while making this decision. Choosing a suburban location might feel like giving up the cosmopolitan lifestyle, but the contrast may not be as stark as anticipated. Suburbs too boast of pubs and eateries, complemented by continually developing transportation links to and from Dublin. Once the relocation decision is made, it won’t be long before you adjust to this new pattern of life. Perhaps you have relatives that you’d love to live closer to. As your family grows, the need for support intensifies and generally, this comfort can only be provided by them.
Here is some advice to consider. Regardless of your choice, make sure you’re well-prepared. Get your loan agreement sorted, bearing in mind that they typically last for six months and extending them may not always be straightforward. It would be prudent to secure a life insurance policy now, to avert any unforeseen issues later. Hitches with life insurance can substantially slow down the purchasing process or even result in its complete breakdown. Lastly, arrange for a solicitor immediately. Even though all of these points might appear self-evident, we’ve seen instances where unprepared buyers have missed out to their more organised counterparts. I wish you every success and happiness in purchasing your first property.
Ed Carey is a real estate professional and a member of the Society of Chartered Surveyors in Ireland.