Sunday 15 September 2019

Daniel McConnell: Happy to be homeowners though we are part of negative equity generation

Daniel McConnell's leap onto the property ladder was fraught with dilemmas like when and where to buy as prices continued to fall

About 18 months ago, I was standing in the middle of a massive media scrum on the plinth in Leinster House as Enda Kenny addressed us, moments after he defeated Richard Bruton for the leadership of Fine Gael.



My phone rang.

"The offer has been accepted, the house is yours," I was told.

"Holy shit," I yelled loudly in disbelief, drawing a few disgruntled stares from those around me, politicians and media colleagues alike. I couldn't believe it as I thought our offer, which was significantly below the then asking price, would be rejected. But after a bit of haggling and a threat to withdraw the offer -- the deal was done.

Our search was over. We would now have a place to call home. We bought our house for about 60 per cent less than what houses on our road were selling for at the peak in 2006 and 2007.

For over three years, the thought of becoming homeowners had weighed heavily on us. Like thousands of other people our age, we were concerned about the state of the country, the never-ending fall in house prices and the fear of not being given a mortgage.

We kept asking ourselves the same questions. Is it the right time to buy a house? Has the market hit the bottom yet? Will the banks red-card us like they had so many others we had heard of?

Certainly, the massive over-inflation in prices, particularly in Dublin during 2006, meant buying where we wanted to live wasn't an option. At the time we were renters living close to the city centre. For us, living in town was good, we never bought into the idea that renting was dead money. It suited our needs and we weren't willing to buy into the madness that was the property binge, despite massive peer pressure to do so.

It wasn't until the second half of 2008, when the country went into a tailspin, that we stepped up our search for a home. All the time, prices were falling. All the time, the country was sinking deeper into depression. And while such falls in house prices meant hardship and real pain for many mainly older homeowners, in our case it meant opportunity.

Having been approved for a mortgage, we knew our level and not having any strong preference for an area, we cast our net far and wide. We looked at places in Blackrock, Ranelagh, Terenure, Rathmines, Sandymount on the southside and Drumcondra, Phibsboro, Marino, Howth, Clontarf, on the northside. The falling house prices meant homes that only two or three years previously would have been well beyond us, were now up for consideration.

Then in late 2009, we came across this house in Glasnevin. It was in a raw state but that suited. It would give us a blank canvas with which we could start again.

We again asked ourselves: is it the right time? Are we mad buying with prices still falling?

But we had our minds made up. We were ready. We had done our time renting and we wanted to buy a home for the next 20 to 30 years. Given prices had fallen by over 50 per cent in some areas by that stage, we felt there couldn't be much more to go. We were not looking to flip the house in three years as an investment. We were looking for a home.

But then we hit a roadblock. Our mortgage approval had expired and when we went back asking did it still apply, we were refused even for the amount of our rent per month. We were stunned. We had no personal debt, we had two salaries which were not in immediate danger and we had a deposit.

After being mortgage-approved by a second bank, and just before we signed the deal, our original bank came back and asked us to reconsider dealing with them.

I wanted nothing to do with them. However, they asked us to meet them, ensured us things were different and absolutely we would be offered a mortgage.

I can only surmise that the withdrawal had more to do with the bank's wider problems than our own failings. We decided to accept their offer in good faith and went with them. Since then the bank has been a pleasure to deal with and been brilliant to us.

Given the house was a probate sale, we waited several months to close. Indeed, it was only as the country fell victim to the German-led Troika Anschluss in November 2010, that we took ownership of our new home. The contrast could not have been starker. The country was going into bankruptcy and here we were taking one of the most exciting and dramatic steps anyone takes during their lives.

On the one hand you are seeing your country humiliated internationally but yet personally we were thrilled.

With six months' work needed on the house, it wasn't until June of last year that we moved in. Prices have continued to fall in certain areas. A small number of houses in a similar condition to ours on our road are up for sale for prices below what ours waspriced at, and for what it sold.

Officially you could say, given how much we paid and what we put into the house by way of rennovations, given the continued fall in prices we are now part of the negative equity generation. If we were to sell now we would take a hit. Not a huge one but a loss nonetheless.

We certainly hope that the bottom is here, or near at least.

But the time was right for us to buy. We have no regrets, we are happy and have been lucky.

Sunday Independent

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