Commenting on the most recent CSO House Price Index, Brokers Ireland said this, the third monthly drop in a row, this time at -0.6 percent, indicates that prices are certainly showing that excess has left the market.
Rachel McGovern, Director of Financial Services at the organisation which represents 1,225 broker firms said there are clearly a number of factors behind this trend, most of all increasing interest rates “with no signal of abatement.”
“First of all, activity is strong. While there was a year-on-year increase of 5.4 percent in the number of purchases, there was a very sizeable 23 percent month-on-month increase. But the CSO figures which have a 44 day lag period would have recorded transactions that happened or were in train before many of the current interest rate increases.
“On the other hand the fact that latest Commencement figures, something all dwellings in construction are required to submit, jumped from 1,997 in February 2023 to 3,244 in March, augurs well, it’s a positive indication that supply may be in a better position than what previous months would have suggested.
“If this continues, clearly it will have a positive impact in keeping prices stable at least,” Ms McGovern stated.
She noted that increasing interest rates are the real worry for many aspiring home buyers.
“This is impacting most severely on those on average wages, many of whom would previously have qualified for a mortgage but simply cannot afford the much higher repayments or indeed can no longer meet the tightening criteria imposed by banks,” she added.
Brokers Ireland says home ownership, once achieved at an affordable price, is the best way in which to grow personal wealth over time.
CSO figures show the proportion of properties jointly purchased in the period 2010 to 2021 increased from 47pc to 60.3pc and the median age for sole purchasers rose from 34 to 41 years.
