CSO House Index – Strong Demand & Weak Supply Will Disadvantage Aspiring House Buyers

Thu Jan 21 2021

BROKERS IRELAND – PRESS RELEASE

Commenting on today’s CSO Residential Property Price Index for November, Brokers Ireland said the increasing demand for homes is evident in today’s figures which show a 10.2pc increase in home purchases month on month and a 6.1pc increase on November 2019.

Rachel McGovern, Director of Financial Services at Brokers Ireland, which represents 1,225 broker firms, said: “The turnaround in house prices from a slowing rate of decline to an overall index increase of 0.2pc, though small, may also be significant and may well indicate that those seeking homes and who have the resources may have decided there is no point in waiting any longer.” She said the only answer to what is still “a dysfunctional housing market” is the building of more homes.

“Unfortunately we’re not building anywhere near the number of homes we need and the Covid-19 pandemic restrictions are likely to mean an already inadequate supply of homes slowing further.  This will likely increase price pressures with increasing demand meeting a lessening supply.”  She said those on average incomes and fewer family resources will continue to be hardest hit, as a result.

With an overall median house price of €258,000 in the 12 months to November, a first-time buyer (FTB) would need a household income of  €66,342.85 based on the Central Bank income limit of 3.5 times income to be able to afford such a home, along with savings of €25,800  for a deposit.

Brokers Ireland has called for the 3.5 times income limit to be extended to 4.5 times with loan-to-value requirement set at 90pc for all, including second and subsequent buyers.

The organisation has consistently maintained that home ownership acquired at an affordable price is the best way to grow personal wealth over the longer term.

Ends

 


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