Shift in sentiment as house prices expected to decrease

Cianan Brennan Housebuyers are confident prices will begin to fall next year, with many believing the market has reached a tipping point.

Shift in sentiment as house prices expected to decrease

Housebuyers are confident prices will begin to fall next year, with many believing the market has reached a tipping point.

While prices for both rentals and sales remain at an all-time high, recent data indicates that a plateau has been reached, thanks in part to Central Bank restrictions on mortgage amounts.

In the first six months of 2019, for example, twice as many price drops were recorded in the Dublin area compared with increases.

Now, a study suggests that a growing cohort of people expect prices to decrease further over the next year.

The survey, carried out by sales site MyHome.ie, shows that nearly twice as many respondents expect asking prices to fall in the next 12 months, compared with those asked last year.

The study shows what it terms a “significant shift” in sentiment, with increasing numbers of people believing the market has reached a tipping point.

A quarter of respondents said they believe prices are set to fall, compared with 15% 12 months ago, while 30% of the 2,200 people surveyed said that they expect asking prices to stall, another significant increase on the 20% who gave this response in the previous survey.

Aside from house prices, another noteworthy theme of the MyHome.ie survey was the increasing prevalence of environmental concerns among buyers.

More than three quarters of respondents said they would consider retrofitting a property in order to boost its energy rating, while 92% stated a building energy rating (BER), the standard measuring the cost of efficiently heating a home, is an important consideration when buying a property.

The Government was last week forced into a climbdown regarding a grant supplied by the Sustainable Energy Authority of Ireland, the funding of which had run dry despite ongoing applications from people seeking to retrofit their homes.

Angela Keegan, managing director of MyHome.ie, described the rise in such environmental concerns as “hugely significant”.

She added that trust in the economy is important, given the uncertainty regarding Brexit.

“We are seeing that trust in the overall economy in light of Brexit and other external pressures is nearly as much of a factor when it comes to stimulating the housing market as obvious factors like mortgage finance and stock,” said Ms Keegan.

“This will be a growing concern as we approach the Brexit deadline in October.”

In terms of lack of supply in the housing market, respondents to the survey showed themselves to be broadly in favour of relaxing building height regulations.

Half of those asked said they would favour increasing the maximum height to which buildings can be constructed from its current default of six storeys, while 65% said they believed such an increase should apply only to specified locations.

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