House hunters rush to buy homes ahead of interest rate cuts amid waning confidence in the market, report shows

“Taoiseach Simon Harris has pledged to build 250,000 homes by 2030, but after a decade of insufficient construction activity, it is perhaps understandable that people are wary of the Government’s promise to deliver the amount of new homes we need to properly address our supply issues,” said Ms Geary.

Many house hunters are prepared to sign mortgage agreements before interest rate reductions are implemented as homebuyers are not confident that conditions in the residential property market will improve next year.

A consumer sentiment survey by property website MyHome.ie suggested some homebuyers may be rushing to secure agreements as demand continues to outpace chronically low housing supply.

The European Central Bank (ECB) is expected to make at least one interest rate cut before it breaks for the summer in August, but Joanne Geary, managing director of MyHome.ie said “very few people believe that the next year will be a good time to buy”, even with these reductions.

The report also showed some consumers are more financially prepared to buy a home than others.

Nearly half of the respondents said that the cost-of-living crisis has forced them to postpone a housing purchase, however they may become priced out of the market. The majority of respondents said they believe the price of homes will increase in the next year.

Meanwhile, a separate report by MyHome.ie published last month showed houses were being sold for 4.6% over the original asking price in early 2024, compared to just 1% a year ago.

The chief economist at Bank of Ireland, Conall MacCoille, forecasted Irish house prices will rise again by close to 4% this year.

“There has been no let-up in demand, and with the supply situation still difficult it is not too surprising that house price inflation has regained momentum,” he said.

While stock struggles to meet demand, housing commencements in the first two months of 2024 were up 72% on the same period in 2023.

In the latest report by the property website, which included responses from 2,223 people from April to May, Ms Geary said “if the Government can facilitate a decent period of uninterrupted construction activity, this would make a huge difference around the country and sentiment would likely improve as a result.” 

Housing failures are set to be at the front of voters minds as a general election looms before the March 2025 deadline.

“Taoiseach Simon Harris has pledged to build 250,000 homes by 2030, but after a decade of insufficient construction activity, it is perhaps understandable that people are wary of the Government’s promise to deliver the amount of new homes we need to properly address our supply issues,” said Ms Geary.