Nearly half of potential homeowners have stated they won’t hold off on purchasing a property in anticipation of the European Central Bank’s (ECB) suggested cuts in interest rates. This is according to a study conducted by property website MyHome.ie, amidst existing worries about property availability.
The ECB has recently indicated its intention to lower interest rates for the first time in more than eight years, starting from its June meeting. After a historical series of 10 rate increases in the span of 15 months until September of the previous year, which brought the rates to a 25-year high, the bank is poised to reduce rates several times in the upcoming year or so.
Despite the promising reduction in mortgage interest rates, 45% of the participants in MyHome.ie’s poll have expressed no intention to postpone buying property. This could be attributed to the prevalent expectation of rising property prices in the forthcoming year. Additionally, approximately the same percentage of individuals reported that they had had to defer their home-buying plans due to the escalating cost of living crisis.
The survey, which had a response rate of over 2,000 people, revealed that approximately two-thirds of respondents had the necessary finances ready for a home purchase. However, only 20 percent believe that the current property market has sufficient options to suit their requirements.
General market conditions have become a cause of concern for 78 percent of the respondents. Only 5 percent believe that the government’s efforts to alleviate the property market are adequate. More than a third suggested that a government change may benefit the property market.
A meager 13 percent expect the upcoming year to be a suitable time for a property investment. The scarcity of homes has forced 78 percent of respondents to consider locations outside their preferred choices.
As for existing mortgage seekers, almost 60 percent are opting for a five-year fixed term, contradicting the general prediction of falling mortgage rates. Nearly 75 percent of potential homebuyers remain unwilling to consider a variable rate home loan despite the likelihood of continued rate cuts.
Joanne Geary, the managing director of MyHome.ie, expressed concern about the decidedly negative perception of the property market, even though consumer demand was strong. Few are confident in the coming year being a favourable time for purchase, and mass anxiety over market conditions is evident. However, almost two thirds of survey participants indicated they were prepared and equipped to purchase, with nearly half of these not willing to delay for a potential cut in interest rates.
Geary underlined the necessity of continued construction for enhancing the appeal of the property market. If the government could maintain steady activity in the construction industry, it would significantly uplift sentiments across the nation. However, the government’s promise to deliver the required number of new homes to resolve our supply problems is treated with scepticism. Years of construction inactivity after the Taoiseach Simon Harris’s commitment to build 250,000 homes by 2030, understandably leaves many doubting the feasibility of government promises.