Average age of solo homebuyer rises to 42 as 'significant' price hikes loom
In Cork, pent-up demand and a shortage of supply have resulted in homes selling for 10% or more over their guide prices in the past year. Picture: Sasko Lazarov/Photocall Ireland
Homebuyers who have seen house prices surge during the pandemic now face a further, potentially "significant", rise due to the housing shortage, the Central Bank has warned.
In Cork, pent-up demand and a shortage of supply have resulted in homes selling for 10% or more over their guide prices in the past year, according to the incoming president of the Society of Chartered Surveyors Ireland, TJ Cronin.
In the year to April, the cost of houses and apartments rose 4.5% nationally, according to the latest Central Statistics Office (CSO) residential property price index.
Mr Cronin, a chartered surveyor and valuer with Irish & European, said the number of “well-prepared and funded” purchasers who have been unsuccessful in their efforts to buy during the last few months is “alarming”.
The Central Bank has warned the trend of rising house prices is set to continue due to both the disruption to new house building caused by the pandemic and the built-up savings of some households.
“With existing supply constraints, a high degree of pent-up demand and a recovery in the flow of mortgage credit, the conditions for significant upward momentum to house prices in the months ahead appear to exist,” it said.
The proportion of properties purchased jointly increased from 47% in 2010 to just over 62% in 2019https://t.co/jrnNYVg3A8 #CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings #PropertyPrices #HousePrices #IrishBusiness #BusinessStatistics pic.twitter.com/crvOZKqAiz
— Central Statistics Office Ireland (@CSOIreland) June 16, 2021
The Central Bank’s warning comes as a report from the CSO found property purchasers, including first-time buyers, previous owners and buyers-to-let, are now purchasing residential property significantly later in life.
The median age for a sole purchaser rose from 34 years to 42 years between 2010 and 2019, while for joint purchasers, it rose from 35 years to 38 years over the same period.
Responding to the CSO report, Joey Sheahan, head of credit at MyMortgages.ie, said: “The CBI [Central Bank of Ireland] lending rules undoubtedly have had a role to play here. So too has the increasing cost of rent in this country.
Rachel McGovern, director of financial services at Brokers Ireland, referred to a recent study from the ESRI which found homeownership by the age of 30 was 60% for those born in the 1960s, but only 32% for those born in the early 1980s.
“The demographic changes being wrought by the lack of homes at affordable prices are seismic and will reverberate through society for a long time to come,” she added.
Austin Hughes, chief economist at KBC bank, said a clear upward trend in Irish property prices is now evident since last autumn.
Mr Hughes said developments abroad could suggest property price inflation could have "further to run".
Dermot O’Leary, chief economist at Goodbody, highlighted CSO figures which show 21% of new homes sold last year were purchased by the public sector, which includes approved housing bodies and local authorities.
“The key point here is that the narrative that funds are buying up vast swathes of new housing is incorrect; the inability of the Government to ramp up its own building programme sufficiently is leading to a situation where it is competing for homes with the private sector,” he said.
Meanwhile, properties by the coast in Ireland are now 23% more expensive than they were before the pandemic, according to the Daft.ie Coastal Report 2021.
The shift in interest from cities to coastline is also being seen in website searches. Comparing February 2021 with the same month a year earlier, coastal area searches were up 45%, whereas searches for Dublin city were down 59%.
