Brokers predicting gloom to continue for housing in 2009
A majority of mortgage brokers expect the market to remain weak next year, with job loss fears and expectations of further falls in house prices dampening demand.
Four out of five brokers said activity had weakened in the past three months with a majority expecting further declines in the first three months of next year, according to the KBC Homeloans/Irish Mortgage Advisers' Federation survey.
Mortgage brokers blame worries about job security and the general economic outlook for the housing market doldrums.
Also impacting sentiment is the expectation that house prices will fall further, and tighter credit conditions being imposed by lenders.
Paul Short, president of the Irish Mortgage Advisers' Federation, said: "The broker survey confirms that activity levels in the Irish mortgage market are continuing to weaken as 2008 draws to a close.
"It also highlights the lack of confidence in the market at present as fears about the outlook for the Irish economy and the jobs insecurity increase."
Recovery
Mr Short added that there was little expectation of an early recovery in the market. "However, some brokers are seeing a slight improvement as lower house prices, the fall in interest rates and recent Budget support for first-time buyers should boost some market segments."
KBC Bank economist Austin Hughes said the survey results accurately reflected current concerns about the mortgage market and broader Irish economy.
"Clearly, the fear of job loss is deterring people from making major long-term spending commitments such as house purchase."
The survey shows that first-time buyers are the strongest part of the market. New buyers are benefiting from a price war for their business with AIB, Halifax and Bank of Ireland competing hard. Lower interest rates are also a boost for first-time buyers.
This segment of the market is also set to benefit from increased mortgage-interest tax relief from next month.
Mr Hughes said that there were some small positive signs that might help the market as next year progressed.
Budget 2009 was viewed as disappointing. But the collapse in interest rates and energy costs will help by putting more spending power into people's pockets.
- Charlie Weston Personal Finance Editor
