The usual questions seem to float around Dublin every time I am out and about: is there life on Mars? Does my bum look big in this? Why hasn’t he called? Lately all these questions have been shoved aside in favour of “am I mad buying a house?”

It is obvious to the simplest of beings that property values have dropped significantly over the last year to 18 months. Is this a trend set to continue? If so until when? No one really knows.

The subject of house prices pervades every atmosphere in Ireland; the pub, the LUAS on a Monday morning, the DAIL bar… to mention just a few. It compounds my suspicion that Irish people are still obsessed by property. This is deeply rooted in the Irish psyche, which many believe is born out of 800 years of English occupation.

Irish people know they want to buy property, however consumer confidence is so fragile, that people are wary of making such a big financial commitment which is a natural reaction. This is further exacerbated by the availability of credit, uneasiness about their job plus a suspicion that house prices are still falling.

I strongly believe amidst all this uncertainty that 2009 is still a good time to buy.

Whilst so many potential purchasers have held off for the last 18 months, I suspect come February/March there will be increased demand for property, as eager house hunters search for their perfect property at the right price.

I might add that for the 1st time in over 5 years, it really is cheaper to buy than to rent. “Dead money” is a phrase I’m sure you’ve heard before, and shall hear over and over again over the coming months. Take an example of a young couple renting a 2 bed property in Dublin; average rent is c. €1,200. If they buy an apartment instead? Typical prices are NOW around €280,000, borrowing €257,600 will only cost € 850 per month.

Buying a pair of trousers is a short term objective- to impress Saturday Night revellers… buying a home is a long term objective, and many first time buyers fail to appreciate this. Property appreciates over longer periods of time. A friends house has dropped in value by €100,000 and is now only worth €750,000. He did however buy it for €12,000 in the mid ‘80’s…. case in point.

Also, to take another analogy; AIB shares have dropped by over 95% in value. Do you think we would ever see a house bought for € 300,000 drop to € 15,000. If this happens, I will buy a tent in LIDL for €39.95 and set up home somewhere in the Phoenix Park because the economy will have totally and utterly collapsed.

Moral of the story is that property is a long term investment, and you won’t lose out in the long run by buying one.

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This post is brought you to by Keith Sheeran. Keith has over a decade of experience in financial services, he has primarily worked in mortgages specifically. You can contact Keith by calling our general line on 01 679 0990 or emailing him keith(dot)sheeran(at)mortgagebrokers(dot)ie