Cash buyers on wane as banks back to lending
THE monthly tally of houses bought with cash has fallen dramatically as banks increase mortgage lending activity again.
September showed a rate of 33.9pc compared with 53.7pc the previous month, according to a leading estate agency network. The research department of Douglas Newman Good (DNG) said cash purchases, largely for transactions in Dublin, have run at around 53.7pc from January to September.
The agency has cited two key reasons -- first that a number of big deals that saw entire apartment blocks purchased with cash earlier in the year had skewed the cash transaction tally across the Dublin market. These deals petered out in September.
Secondly, and perhaps more significantly, the agency claims increasing numbers of properties are being bought with mortgage loans.
DNG CEO Keith Lowe says: "It's too early to say whether this is a temporary blip or whether the percentage of cash deals will continue to decline."
Cash buyers have featured strongly in the Dublin property market in particular through 2013, with purchases coming from a number of buyer types.
These include individuals who saw the property crash coming, sold up at the top of the market and banked the cash to buy again when homes got cheaper.
There is also a group of mature professionals who are first-time buyers after renting and saving significant amounts.
Others are wealthy foreign-based but Irish-born buyers who have emigrated and made money.
There is also a large cadre of foreign investors -- there is evidence that some larger homes and the entire blocks already mentioned are being bought as investments largely by US interests.
Meanwhile, estate agents are also dealing with smaller scale foreign-born buyers -- Chinese nationals in particular have been buying smaller apartments with high amounts of cash savings.