As if further proof were needed of just how rotten things are for anyone looking to buy a home at present, one need only look at the latest report from Banking and Payments Federation Ireland (BPFI).
Its figures offer further proof that potential housebuyers are being squeezed out of the market with cash buyers still strong and so-called ‘non-household’ purchasers, such as private companies, charities and State institutions, increasingly competing with them for the few homes that are available.
At a time of record rents, first-time buyers are already struggling to earn enough to raise the deposit needed to buy a home. Now it seems they are having to up against non-household buyers who in many cases have more cash to splash.
According to BPFI, the non-household buyers’ role in housing market transactions has increased sharply since 2010, rising from 4 per cent of all market-based activity to 17 per cent last year. Such buyers are particularly strong in new builds, accounting for 22 per cent of all transactions in the category last year, versus just 7 per cent nine years ago.
Major behavioural change
Brokers Ireland said the latest BPFI figures reinforce what is already known from several other sources – that major behavioural change is being forced upon what should be the normal house buying public, particularly aspiring first-time buyers on average salaries.
“While some of the non-household buyers include charitable organisations and state institutions, nonetheless, the major takeaway is young people being squeezed out of the market, the lost generation,” said director of financial services Rachel McGovern.
She said the onus is on the Government to find innovative solutions to improve affordability for first-time buyers.
“We’re a small country and solutions should not be beyond us, whether that be measures to reduce the cost of building homes or other measures. The situation is urgent,” said Ms McGovern.
Needed to meet demand
There was little cheer elsewhere with Glenveagh Properties chief operating officer Stephen Garvey warning on Wednesday that developers may never reach the 35,000 unit a year threshold needed to meet demand in the market.
“Maybe we’re living in an era where housing will never outstrip demand,” Mr Garvey told reporters at a media briefing.
With reports earlier this week also indicating that a Government-backed mortgage scheme for first-time buyers has allegedly been put on hold because it has run out of funding, it all makes grim reading for anyone looking to buy a home.
The Government may say it is putting out all the stops to help kick-start the housing market, but there is little if any evidence to suggest any of their actions are working.
