A bad time to invest, say most would-be buyers

DEMAND for housing continues to soar with 85,000 prospective homeowners ready to buy – with most accepting that they won’t get the home they want. The KBC Homebuyer Survey for autumn 2018 has found that demand for houses continues to go up and up, with many people willing to make major compromises to get on the property ladder.

The survey found that 60% of prospective home buyers are finding it harder to find a suitable home than a year ago, with would-be householders saying they are willing to compromise significantly on location, size and type of home.

The survey found that most would-be homeowners think it is not a good time to buy. More than half of those surveyed cited personal reasons for needing their own home, with one in four saying they had reached a point in their life where they need to buy.

The research shows a desire for people to find a long-term home, with as few as one in seven saying that they plan to move once more within the next five years. Some 17% of those surveyed said they were purchasing a property for investment purposes, with the lack of supply continuing to inflate property prices.

By 2020, Ireland’s housing supply is expected to reach 27,000 units per year, some way off estimated demand of 35,000 units.

Austin Hughes, chief economist with KBC Bank Ireland, analysed the research and said the backlog was caused by people seeking to buy a family home rather than those seeking to buy investment property.

‘The results of the fifth KBC Homebuyer Survey show that demand for residential housing remains strong and highlights the difficulty facing prospective home buyers,’ he said. ‘With a housing supply deficit, and some 85,000 prospective home buyers in a position to buy immediately, there is an effective backlog of unsatisfied demand equivalent to about a year and a half worth of transactions at present, indicating that for most home buyers, the process of buying a new home is endured rather than enjoyed.

‘The survey results find that reasons for buying a home are primarily personal and reflect “micro” circumstances rather than the “macro” economy – people want to buy their first home, to move to somewhere more suitable for because their family has grown or, to a notably lesser extent, to build up a nest egg through investment in property.’

The average price of a home has now hit almost €300,000, official figures released earlier this month revealed.

Some 4,100 domestic property transactions were recorded during July, up from 3,543 in May and 3,349 in June. But as prices rise, the rate at which they are going up is gradually slowing down, albeit from a very high level.

Nationally, property prices were up 10.4% in the 12 months to July. The equivalent figures for June and May were 11.9% and 12.4%.

But despite a sharp slow-down in more expensive areas, houses in the mid-west region were up by 24% in the past year, as the region plays ‘catch-up’ with the rest of the country. In Dublin, price rises have slowed to 7.2%, split between house prices up by 6.5% and apartments up by 11%.