New Housing Market Report shows the level of cash purchasers is about 35%
Nine out of ten property professionals expect that average national house prices will be higher in 12 months’
Investors account for over 20% of purchases
Tuesday 26th August 2014. A new housing report published by the Society of Chartered Surveyors Ireland, has found that cash purchases accounted for about 35% of transactions in the second quarter of the year.
The finding, which was made in the SCSI’s first Housing Market Report, would indicate that the level of cash transactions is beginning to moderate, as data previously published by the Society had put the figure for Q1 at about 50%.
The SCSI, which is the professional representative body for estate agents and construction professionals, said the new finding would suggest that mortgage availability has improved.
According to the report, which is based on a survey of property professionals across the country, the pace of sales activity levels in the property market (sales enquiries, sales agreed and sales completed) increased in the second quarter of the year.
Ninety per cent of respondents believe average national house prices will be higher in 12 months time, one in three believing they will rise by 5%. An even higher figure, 97% believe Dublin house prices will rise over the same period, one in four saying they will be 10% higher.
First time buyers accounted for 44% of transactions, while movers accounted for 29%. The reports suggests this moderate improvement in housing mobility may be due to some properties lifting out of negative equity and the availability of products which allow people to move and retain their tracker mortgages. About 22% of units were purchased as Buy to Let or investment properties.
Simon Stokes, Chair of the Residential Property group of the SCSI said that the increased sales activity levels identified in the report and the re-emergence of investors suggested an improvement in confidence in the property market. However he warned that the lack of supply, especially in Dublin remained a key issue.
“Ninety per cent of respondents in Dublin believe there is a greater demand for housing than supply and 70% believe that demand will continue to outstrip supply in Dublin in 12 months’ time. We urgently need more homes to be built and the Society recently called for a number of measures to increase the supply of new homes including a Builders Finance Fund to help small builders access development finance, a 2 year reduction in VAT on new homes to 5% and a reduction in development contributions.
“These measures would go some way to alleviating the supply restrictions in the market and the worrying pace of property price increases. However the situation in the west and mid west is very different with 60% and 80% respectively believing that supply is greater than demand and that is an issue which also needs to be addressed.
“The report suggests that there has been an improvement in confidence from investors in the property market, which has been supported by improved yields and finance availability. This should help improve the quality of rental stock but we still need to see more housing being built to improve supply levels and moderate the pace of rent increases”.
The report found that problematic reports and surveys accounted for almost a third of failed property transactions, while bank and legal delays accounted for a similar number.
Full details of the Housing Market Report can be found at SCSI Housing Market Report Q2
Note to Editor
The SCSI Housing Market Report is based on the Central Bank of Ireland & SCSI Survey of Property Professionals. Participants of the survey include surveyors and estate agents, as well as those with a more indirect involvement in the industry such as economists, market analysts and academics.
The SCSI Housing Market Report is a snapshot of respondents’ expectations formed at a given point in time, and as such can provide only limited inferences about future property price dynamics based on current trends. It is also a new survey and therefore due caution must be exercised when interpreting the results given the low response rates for some questions particularly until the dataset is further developed over the coming quarters