The Central Bank lending regulations are finally having an effect on property sales values. This is most evident in Dublin where the average house price is €334,500, far greater than €220,000, the amount up to which first-time buyers are able to borrow up to a limit of 90pc.
In my view, if the new lending rules are not revisited to allow second-time buyers to move up the housing ladder, we are going to see a continuation of the logjam that is keeping affordable housing off the market.
For example, our Real Estate Alliance Average House Price survey saw €15,000 wiped off the value of the average three-bed semi in South County Dublin in the last three months as the new deposit rules stifle the higher end of the market - meaning that people are not leaving first-time housing to trade up.
Increasing rental values in the capital and its suburbs are seeing many potential homebuyers stuck in a Catch-22 trap whereby saving is diminished, making them unable to ever get to the levels of deposits they will need to get on the property ladder.
The new regulations, introduced to prevent a repeat of the credit-fuelled boom, are not reflective of a person's ability to repay, but more on whether they can come up with a large down payment. The new regulations have also had an indirect effect whereby confidence levels have been diminished dramatically, with mortgage-approved buyers holding back.
There is reasonable activity at lower levels, but the problem is that there is little stock available at those levels.
We are seeing that buyers are more discerning and are looking at more houses before they are making offers. For example, recently one three-bed with a guide price of €290,000 attracted over 20 viewers in the first 10 days on the market. We received one bid. A year ago, we would have received many more offers from different viewers.
We are seeing viewers take more time over what to buy, with many indicating that they are going to wait to see how the market goes over the coming months before they take the plunge.
The longer-term knock-on effect will see developers hold off on getting new housing schemes off the ground until they can have more confidence in the market and the levels at which they will be able to sell the end product. This continues to hit where it is most important - getting supply levels up to a sustainable level.
We believe that the Central Bank regulations, in light of the increased rental levels, need to be looked at again before house values potentially start to slide and potential buyers slide off the market forever.
Barry McDonald of REA McDonald, Lucan, is director of Real Estate Alliance