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The Housing Market – What’s Next?

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The housing crisis in Ireland is something about which we have spoken at length in the past. Between the mortgage rules and rising cost of rent excluding many from the market and the increasing cost of buying in general, this area has become quite the minefield in recent terms for anyone who wasn’t lucky enough to secure their house before prices began to climb. This week, it was announced that house prices in certain areas had dropped slightly for the first time in an age. The fact that this led to a giant exhale of relief is quite telling of the current market, as such a small event sparks a small level of hope for those currently saving to meet the lending rules. It seems from recent reports that prospective buyers have grown tired of being excluded from the narrative.

It was reported this week following a Sunday Independent opinion poll that almost three quarters of people currently saving for a mortgage believe the Central Banks mortgage lending rules to be incredibly unfair. This is a marked rise of 19% from last year’s findings and shows an atmosphere of dissatisfaction with the status quo in the housing market. It was also found that as few as 5% of those saving feel that the lending rules are fair. The study also found that more people are now saving for a mortgage than last year. Almost half of those surveyed stated that they didn’t feel the banks are doing enough to assist people in gaining a mortgage.

There was also a fairly strong belief revealed through this study that the housing market may be headed for another crash in the coming years with over half of those currently saving believing that this will be the future for the Irish housing market. This believe naturally creates discord among savers about whether or not now is a good time to buy, with 43% believing that now is the right time to buy, and 39% believing that now is not the right time to purchase a house. As you can see there is not much between the two camps given their utterly opposing views. Perhaps this discord is the reason why there has been a slight drop off in house sales this year, with the CRO (Central Statistics Office) reporting that there has been a drop of almost 5% in the first half of this year outside of the Dublin area.

While nothing is certain, particularly during these uncertain times as Brexit continues to loom large above us, there are certainly signs of a downturn in the housing market in the next couple of years as many people struggle to get a foothold on the property ladder.

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Blowing Up the Housing Bubble

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The housing ladder has remained a hot topic of conversation since the economic downturn and subsequent changing of the rules for applying for a mortgage. The conversation doesn’t seem to be going anywhere as the concern of Ireland falling into the housing bubble trap increases as more and more prospective buyers find themselves unable to pay increasing asking prices.

This week it was reported that these increasing house prices do not look likely to slow down in the coming years. Goodbody Stockbrokers have stated in their latest economic report that the average price of a house is set to continue to rise by up to 10% this year followed by another 8% in 2018 meaning an additional 18% cost increase on houses which have already increased massively in price in the previous three years.

The report states that:

“Mortgage approvals, even excluding cash purchases, are in excess of the amount of new supply expected to come to the market, thus house price inflation is expected to remain strong over the forecast period. […]“While supply remains low, demand appears to be running ahead of expectations”.

Existing housing demand is said to be 30,000 per year, and it is reported that it will take another number of years in order for the number or houses built to match up to tahis demand. This lack of balance between supply and demand is what has encouraged this somewhat bleak forecast from Goodbody Stockbrokers, who have also stated that they expect there will be €13.5billion in new mortgage lending in the coming years.

An additional issue with supply and demand is that there are far more prospective homeowners being approved for mortgages than there are houses available, which continues to push prices higher. A recent infographic shows the increasing prices as they continue to grow. Mortgage approvals are being boosted by the Government’s popular help-to-buy scheme but many of those approved will find themselves without a home to buy.

Should you have any queries on home ownership, or any other financial or business matters, please don’t hesitate to contact us here at EcovisDCA, where we will as always be happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY