BY JOHN ELLIS, FINANCIAL ADVISOR
In a recent survey conducted by leading property website MyHome.ie, the concerns of potential homebuyers have once again come to the fore.
The survey, which gathered responses from more 2,000 people in late October 2023, revealed a growing unease among those seeking to enter the property market, citing rising interest rates and lack of suitable properties as the key factors behind there decline in confidence.
The survey findings indicate that 67% of those surveyed are apprehensive about how rising interest rates may affect their ability to purchase a home. This marks a significant 20% increase compared to a similar survey conducted in March of this year.
The increase in borrowing costs has led to a significant shift in the preferences of homebuyers, with 58% now seeking mortgage terms lasting over five years. In addition, a striking 75% of those surveyed are actively seeking fixed-rate mortgages, while only 5% are considering tracker mortgages.
Despite the continued strong demand in the property market, the scarcity of available properties remains a significant concern for prospective buyers. Only a quarter (24%) of respondents believe that there is an adequate supply of suitable homes on the market. This divide between demand and supply has created a challenging environment for those looking to secure their dream home.
Sentiment in the property market is notably low, with just 14% of respondents indicating that they believe that 2024 will be a favourable time to purchase a property. This pessimism is compounded by the fact that 75% of respondents expressed general worry about the state of the property market.
Joanne Geary, the Managing Director of MyHome.ie, emphasised that interest rate hikes and the ongoing supply problems were the primary drivers of these negative sentiments. She pointed out that the sustained increase in interest rates had created a sense of uncertainty among potential homebuyers and the inadequate supply of properties in Ireland exacerbates the situation, leading to increased competition and rising property prices.
Ms Geary also noted that the concerns expressed in the survey have shifted over time. In the earlier survey conducted in March, energy prices were the primary concern among potential buyers. Now, attention has shifted towards the impact of rising interest rates and the housing supply crisis.
Addressing the issue of energy, the survey revealed that nearly three-quarters (73%) of respondents plan to power their homes with renewable energy sources due to the escalating costs of conventional energy. However, among those who intend to renovate or build their homes, a similar percentage (74%) have faced setbacks due to the ongoing cost of living crisis.
The majority of those survey (87%) believe that the government should do more to support the property sector, with only 11% of respondents expressing satisfaction with the housing measures introduced in Budget 2024 last month.
To address the challenges faced by potential homebuyers and the property market as a whole, Geary recommended the introduction of more affordable green initiatives. She noted that while many respondents plan to use renewable energy sources, but remain dissatisfied with the government’s response to this issue.
To recap, rising interest rates, the limited supply of available homes, and dissatisfaction with Government measures have combined to create a challenging environment for those looking to enter the property market.
While the demand for property remains high, the sentiment has been dampened by these pressing issues. As the property market continues to evolve, it is clear that measures to address these concerns are needed to restore confidence and vitality to the housing sector.
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