Should we buy a city apartment for now or a house in a commuter town for the future?

I’m looking to a buy a house and can’t decide what type of house my partner and I should go for. Right now, we work in Dublin and would love to stay close to work and close to the nightlife and friends. With that in mind, we were thinking of buying a small apartment in Dublin. However, we aren’t sure if that is the better long-term move for us as we plan to grow our family in the next three to five years.

Would you recommend buying an apartment and selling for a bigger home in a commuter town in that short time? I’m also worried about rising costs in commuter towns. Would it be better to make the move to a commuter town now? I’m also concerned about using my first-time buyer status now and then not having that in a few years for a larger property. Would appreciate your advice on this.

It’s often said that the three most important considerations to take into account when buying a house are location, location, location. Not just in terms of “good” versus “bad” but, more importantly, in terms of whether or not it suits your circumstances. If you commute, you look at public transport and road options. If you work from home, broadband availability needs to be considered. If you have children, proximity to schools is important, and so on. The other issue, as you’re realising now, is that we have different stages in our lives and what’s ideal today might not be in 10 or 15 years.

You’re at the “moving-on stage”; you’ve been renting, saving for your deposit, enjoying the urban lifestyle close to your work, friends and social life. While your purchase will look like a compromise, I wouldn’t rush off yet to buy a cardigan and slippers.

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As well as the urban versus commuter debate, you have the new versus second-hand debate which I think is the bigger consideration. Most new homes qualify for the Help to Buy (HTB) and First Home schemes – two significant incentives for qualifying first-time buyers, and I presume you fall into this category. Simply put, the HTB scheme gives a refund of the income tax and deposit interest retention tax (Dirt) you have paid in Ireland for the four years before you apply, up to a maximum of €30,000. This is a cash payment to you and many use this as the deposit amount. The First Home Scheme is a shared-equity scheme which essentially bridges a gap between your deposit and mortgage and the price of the new home up to a maximum of 30 per cent of the price.

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Both of these schemes can only be availed of once and are available for new homes. While it probably won’t apply to you, the First Home Scheme is available for buyers of houses or apartments being rented where the tenants have received a notice of termination from the landlord who is looking to sell the property.

While there is no right or wrong decision, we see first-time buyers who will only buy in a second-hand estate and others who will only look at new builds. Second-hand houses offer certainty that the estate is complete, they are more mature with settled families and are usually located closer to town or village centres. New-builds are generally more energy efficient and there are better mortgage rates for better Ber ratings, and the aforementioned financial aid incentives are available.

The urban versus commuter debate has the obvious pros and cons, which you’ve referenced. I’m not quite sure what you mean by “rising costs in commuter towns”. Maybe you’re referring to increasing house prices, but don’t forget they’re increasing everywhere. I wouldn’t recommend the “buy the apartment now and sell on in a few years” option. Not because it’s not a good idea, but you don’t have a guarantee of constantly increasing prices. House prices can go down as well as up and this could have the potential to torpedo your well-laid plans.

My approach would be to make the medium- to long-term decision now. If you opt for the commuter location, you will have the loss of the urban lifestyle, but perhaps less than you think. Commuter towns have pubs and restaurants, too. And there is constantly improving public transport in and out of Dublin. Once you’ve made the decision, you’ll settle quickly into the new routine. Perhaps you have family you’d like to consider being closer to. Once your own family starts to expand, you’ll need to think about what supports you’ll need, and this usually comes from them.

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A few final tips. Whichever option you choose you’ll need to have your preparations made. You’ll need your loan approval in place and remember, this usually has a shelf life of six months and is not always easy to extend. I think you should look at putting life assurance in place now, just to be sure a last-minute problem doesn’t arise. Problems with life cover can significantly delay or cause a purchase to collapse altogether. Finally, you should also look at arranging your solicitor now. While these all may seem obvious, we have had cases of buyers just not being sufficiently organised who have lost out to those who are. I wish you good luck and best wishes on buying your first home.

Ed Carey is an estate agent and member of the Society of Chartered Surveyors Ireland

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