What Is The Sentiment Now About House Buying In Your Area of Northern Ireland

[ronaldo]

What's the average price to earnings in Derry?

I don't tend to believe the average salaries quoted in the media but know that new graduates start at my company on around £20,000. An example of a modern house in a good area at 4.5 times that salary would be 61 Glenvale Park. Of course, the multiple would be more like 4 for a person with a 10% deposit. This is for a 3-bedroom semi-detached, modern house. Of course, cheaper alternatives are available but I just wanted to show you whats available at that level of a multiple.

I'm working with our company quite a while now so my salary would be a good bit higher - as is the house I'm in the process of buying. However, I've got a 25% deposit and my mortgage multiple is closer to 3.2 times salary. This is for a 4-bedroom detached, modern house.

[2buyornot2buy]

The median wage in derry city is the second lowest in all of northern Ireland regions.

[ronaldo]

Do those of you that are staying out of the market have a target entry point at all?

For example, the 20 most quarterly recent changes in prices - starting from 2007 and ending at the mid-point of this year - are shown below. If these reports were available back then, some people may have been fooled back into the market in 2009 when the prices leveled off, or rose, for 9 months.

As I have just negotiated the price on my house, the next report will mean little to me - as it only goes up to September and I know I've got a discount on my house based on current prices. It's the subsequent reports that will be more relevant to where the value of my purchase is heading.

I know of people that bought that say that property prices don't matter as long as the house suits them and the mortgage is as affordable as renting. However, it obviously does matter because, if prices drop, your choices of products to remortgage to is limited but if prices were to rise, you'd be looking at hitting a 60% LTV sooner which would allow you access to the cheapest of mortgages.

If you get stuck on a SVR due to little or no equity when a mortgage deal ends, you could be stuck on, for example, Bank of Ireland's 4.49% SVR. If you are at 60% LTV, there are lifetime trackers currently available at 2.64%. This is a significant difference and represents almost £200 per month on an interest-only £125,000 mortgage.

-5%

-7%

-7%

-9%

-8%

-10%

2%

0%

0%

-2%

0%

-3%

-5%

-6%

-2%

-2%

-3%

-4%

-3%

[BelfastVI]

No... people don't say "prices can't go much lower" to me, because I always ask them to explain the economic reasons why prices cannot go much lower.

You said - 2 years ago people were saying house prices were near the bottom. Yet here we are 2 years later and the average house price has fallen by another £20-£30 thousand. I don't see anything to indicate that the same thing won't happen over the next 2 years.

What makes you think that the bottom of the market will last for only 8 weeks? History shows that the bottom of the market will last for several years.

Where is the data showing that house prices are near the bottom? Have the falls in average prices slowed and started to level off? Ignore opinions and hear say - the facts are that average house prices are continuing to fall by about one thousand pounds a month according to the governments own housing market report.

You are trying to rationalise your buying decision on here of all places.

We are definitely nearer the bottom of the housing market. But we are not there yet!

Most people were amazed at how high house prices went during the boom. They are currently amazed by how far house prices have fallen from the peak. They are going to be amazed again at how low prices go during the bust.

I have to agree with BB here. Only with hindsight will be be able to accurately predict the bottom of the market. And again he is correct that whilst the top of the market is repesented by a sharp peak in the chart the bottom will be a shallow, long slow 2 - 3 year process. I may be wrong on this and people jump back in once they see it has stopped falling (and there is a good argument for that) I tend to believe it will be the long slow bottom as other factors such as employment lag behind and drag back the wish to 'jump in'.

The bottom will also take place at different times in different places. America appears to be bottoming (careful of the election) and it could well be that prices level or even rise in NI whilst they start to fall in London.

There is some evidence that some areas have leveled off, particularly in new build and in and around Belfast. Although you would need to see sustained quarterly improvements to claim much from it. The secondary market of repos also act as a drag and will continue to do so.

Headmelter, who have posted on this form since 2006 has recently purchased stating he believes we are close to the bottom and the time is right to buy. He may be wrong, but I expect the circumstances were right for him to buy. He has not been the first of our bears to jump to the dark side and I suspect he will not be the last. I do take his decision to purchase as part of the evidence that sentiment, whether you agree with it or not has changed over the last few months.

I am quite sure your friends don't tell you they think prices cant go much lower. And I don't blame them. Your reply to them to explain the economic reasons why why prices cant go much lower will certainly stall the chit chat. However, I imagine you would have struggled to explain the economic reasons why prices should have continued to increase beyond, say £180k on 2006. I don't believe there was an economic defense beyond over supply of credit and no assessment of risk.