Have you ever felt as if the kids will never leave home? Well, your fears could be justified, according to a new report from Savills Ireland, which finds that property downsizing has declined sharply due to adult children staying longer in the family nest.
The property consultants say that trading down to a smaller home – as a proportion of Savills housing sales – has declined from 13.4 per cent in 2014 to 5.3 per cent in 2016.
According to recent census figures, one quarter of married couples in the Republic are now living with adult children aged 20 and over.
“The proportion of older people living alone has fallen as their grown-up children stay longer at home. This trend is particularly evident in less affluent areas where family money may not be available to help young adults on to the housing ladder”, said Dr John McCartney, director of research at Savills Ireland.
As house price inflation picks up, Savills suggest that the expected opportunity cost of trading a valuable asset for a less valuable one has increased. Mr McCartney believes this is making potential downsizers reluctant to trade down their properties.
Rising market
“Owners of more valuable assets obviously stand to benefit more from a rising market, so it should be no surprise that some potential traders-down are opting to hold on rather than sell.”
Another significant obstacle for people seeking to downsize is the lack of quality stock, according to the report. Where suitable stock exists, the agent finds demand is strong.
"For suitable designed mid to high-end apartment schemes in the right village locations, the demand from traders-down remains strong...we should see the quality of trade-down stock ramp up significantly over the next 12 months," said David Browne, director of new homes at Savills Ireland.
The average price gap between traders-down selling and buying back into the market is €345,129, according to the report.
