Average age of solo homebuyer rises to 42 as 'significant' price hikes loom

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”.

Estate agents all round the country are seeing first-hand the effects of the chronic shortage of property. The current situation isn’t sustainable." 

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 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.

Trying to save the necessary deposit becomes increasingly difficult the more money you have to shell out on rent on a monthly basis.” 

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.

Clear upward trend

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.

There has to be a better way in which the Government can utilise the resources of the private sector to achieve its housing supply targets.” 

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%.

x

More in this section

Lunchtime News

Newsletter

Keep up with stories of the day with our lunchtime news wrap and important breaking news alerts.

Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited