Three years before our housing market functions properly
Ireland's housing market will not be properly functioning again until 2018, according to one of the country's leading housing associations.
The stark warning comes after it emerged some 8,000 prospective house hunters are in a race against time to buy homes as their mortgage approvals expire.
New figures show that 7,692 mortgages were approved between October 1 and the end of December last year, with an increase in the number of people applying for mortgages due to changes in the eligibility requirements.
However, borrowers are now facing a 'use it or lose it' scenario as most mortgage approvals lapse after a period of six months, at which point they will have to reapply for mortgage approval and be subject to the new Central Bank rules and come up with a 20pc deposit.
Now some industry experts are warning of a spike in house prices as the rush to buy adds to the existing problems in the housing market, including lack of supply, particularity in cities and the Dublin commuter belt.
The Respond housing association said it would take up to three years for the market to return to normal.
"I've been speaking to local authority people in the last couple of weeks. There's no construction going on. There are no live sites in a lot of those places," the association's chief operations officer Ned Brennan told the Irish Independent.
"The difficulty is loan approvals will have lapsed and people will have to reapply and come in under the new rules. The Dublin rental market is way oversubscribed and that is indicative of the rest of the market."
He added: "Really, we won't see a properly functioning housing market for another three years."
Estate agents reported an increase in people rushing to get mortgage approval before the new requirements were unveiled. They are also expecting an increase in house prices in 2015 - though not at the same levels as experienced last year.
"The minute Patrick Honohan announced there would be reforms, we saw a lot of people coming into our mortgage side, looking to get mortgages up to date," estate agent Brian Dempsey said.
"That was the start of it and then we saw people wanting to progress that and wanting to buy right away."
However, he said, house values were coming back to "a level that made sense" and more houses will continue to come onto the market in 2015.
"Our numbers show 42pc more houses came on the market in September 2014 than September 2013 in the Dublin area. We expect to see more of the same this year."
The latest test of the property market comes as the Irish Independent revealed the average age of a first-time and has risen to 35 - five years older than a decade ago.
A 2005 study by the ESRI established the average age of a first-time buyer was 30. By 2013, Bank of Ireland compiled data which indicated the average age had jumped to 33.
Now Dr John McCarthy, head of research with Savills Ireland, said affordability issues are pushing the age profile up again.
"The most obvious reason is that as house prices have increased, buyers have simply had to save for longer to assemble their deposits. Since the beginning of 2013, house prices in Dublin have risen by a cumulative 41pc and, at the same time, average earnings are still falling."