Number of tech workers applying for mortgages down to ‘a trickle’ as uncertainty over the future bites
The number of tech workers applying for mortgages has fallen to a “trickle” since the start of the year, according to one of the country’s leading mortgage brokers.
Gerry Hiney of Park Financial Planning said that waves of job cuts in the industry have significantly reduced interest among high earners.
Speaking to the Sunday Independent, Mr Hiney said: “Three in every 10 loan applications that we processed in 2022 were from employees in multinational tech companies — and I’m being conservative with that number. Since job cuts began, the impact is very noticeable.”
He said many were couples, where both people were working in the tech industry.
“The average combined income of tech couples would have been a minimum of €200,000 so they had been qualifying for mortgages of €800,000. That’s a huge commitment when you are unsure of the future so they have hit the pause button and are waiting to see if the dust settles in the next three to six months.”
Since late last year, Google, Meta, Microsoft, Twitter, Dell, and Hewlett Packard have been among the multinationals to announce over 2,300 job losses, according to figures released by the Central Bank on March 5.
Amazon and Meta announced a further round of job cuts this month.
The total number of people working in the tech industry in Ireland still stands at over 160,000 people.
“When you look at the bigger picture, the job losses are among a very small minority so it’s not the job losses that have slowed demand — it’s the fear that there will be more. When we talk to them, their concern is ‘if I am not included in this wave, will I be part of the next?’” Mr Hiney said.
“Their confidence has definitely been shaken over the last couple of months but at the same time they are also hopeful that the worst of the redundancy announcements is over.”
He said lenders are now adopting a wait-and-see attitude with regard to employees but Bank of Ireland and Avant Money are requesting a letter from employers at Ireland’s top tech firms to confirm an employee will not be affected by the recent or future cutbacks.
“To be honest, very few companies are in the position to do that,” he said.
Asked if the fall in demand could impact house prices, Mr Hiney said: “If you take a significant cohort out of the market, coupled with rising interest rates and the rising cost of living it will have an effect, but I don’t see the prices dropping dramatically.”