TWO out of three first-time buyers surveyed are planning to buy a house by the end of the year, as speculation mounts that AIB could hike interest rates as early as this week.
Research from EBS indicates that despite the keen interest in purchasing houses from first-time buyers more than three-quarters are worried about job security.
This comes as AIB signals it is close to making an announcement that it would increase rates on standard variable rate home loans by as much as 0.5%. This would mean an extra €65 a month to repayments on a typical €250,000 home loan over 25 years.
The EBS research found that, of the first-time buyers looking to purchase, three in 10 are actively looking for their first home with most of the balance saying that they will be looking to buy before the year is out.
The survey also revealed that the average amount that prospective first-time buyers expect to spend on their new home is €260,000.
It has been projected that by the end of 2009 the net repayment for a first-time buyer, based on an average mortgage of €165,000, fell by €513 per month or 43% since July 2008.
Potential buyers are also shopping around for their mortgage, with people having contacted more than three different lenders on average.
Close to a third of respondents said that they were looking for a bigger house than they had originally planned or saying they were now looking in an area that previously would have been too expensive for them.
Men are more likely to be worried about job security, with 63% of men surveyed saying they were concerned against 42% of women.
Director of membership business at EBS Dara Deering said: "Ensuring first time buyers have confidence in the housing market and access to affordable, responsible finance are key issues that will contribute to our domestic economic recovery. It is good to see in this research that such a large portion of first-time buyers do believe that now is a good time to purchase, and this demonstrates their acknowledgement that the market will level out, with such steep declines in first-time buyer house prices most likely to be a thing of the past."
The research also found that those actively looking now are more likely to be male, Dublin-based, middle class and aged between 30 to 40 years. Also those who do not feel now is a good time to buy said that they were concerned that prices might fall further and for their own job security.
Chief executive of the Irish Brokers Association, Ciaran Phelan, said: "The good news is that the once unaffordable areas are now far more affordable and it should be noted that these areas will be the first to recover when the economy strengthens. It is important to always remind yourself there are three rules when it comes to purchasing property that should never be ignored and they are location, location and location."
a d v e r t i s e m e n t
This appeared in the printed version of the Irish Examiner Tuesday, March 09, 2010
