CASH IS king – it’s rarely been more true than now. With shares a-tumble and mortgage lending frozen , those with cash can take their pick of properties. To give a significant example - a three-bed in desirable Shankill, Co Dublin can be had for €450,000 – cash only.
The vendors were stung when a previous ‘Sale Agreed’ at €500,000 turned to straw as the confident bidder was refused a mortgage on affordable terms. Though half a million is still the official price, the agents have let it be known the vendors will ‘entertain’ a cut of €50,000 , but only if it’s a serious offer – i.e., not subject to mortgage approval
It’s a common scenario throughout the country. Purchasers are looking to de-code such terms as “Asking Price”, meaning “Open to Negotiation”
What all of this comes down to is that those with cash are in a very good position indeed. For would-be buyers , apart from dedicated Lotto playing, it may mean an early enactment of an insurance policy, as holding on for a few more years will not appreciably improve its value .
Similarly with savings, which are currently losing value at about 4-5 per cent per year. Pensions have taken a hammering, as have bank shares. BOI, for instance, has lost thirds of value in the past year and AIB shares are halved.
Most so-called blue chips on Irish and British stock exchanges are also severely dented, in may cases worth less than in 2002. Not so with property, which in spite of drops has not gone below those levels. Which brings us back to the opening mantra . .
If you have cash, prepare to spend it now – on a compact apartment or two in a city or a modest house in a good letting area.
Any of those will see you more financially secure, long term, than most of the much touted alternatives of recent years.
