Confidence returns as buyers eye new homes
Despite falling prices, property market is showing signs of life
A NEW survey suggests that confidence is creeping back into the property market, with six in 10 potential house hunters hoping to a buy a home within two years.
The Daft.ie survey of consumer sentiment amongst 2,000 people shows that more than half believe that Irish property is now good value for money and more people now want to buy.
The poll found 63 per cent want to buy a house within two years, more than half of those wanted to buy a home within a year and 16 per cent want to buy one as soon as possible.
The potential house hunters also seemed more confident that the fall in house prices had slowed. They estimated that national property prices would fall by six per cent this year compared to the 11 per cent drop forecast in a similar survey last year.
Kieran Harte, marketing director of Daft.ie, said while the survey suggests that people expect prices to fall further this year there is greater confidence amongst buyers.
"Coupled with the final quarter of 2012's sales and the continued level of sale enquiries we are seeing through the site this year, all signs seem to lead to more genuine interest and confidence in the sales market," he said.
"Even though the survey shows that people are not expecting prices to rise any time soon, there is definitely more intent to purchase than what we saw 12 months ago. It will be interesting to see the impact of ending mortgage interest relief and the introduction of the property tax has on prices in the coming six months."
He said the expectation that prices will fall by six per cent this year is not borne out by "what we're seeing on the ground". House prices fell by eight per cent last year, but in the last two quarters of 2012 the fall had slowed to less than one per cent.
In contrast with the heady days of the boom, those polled expected to spend an average of just over three times their income on a property. On average, they expected to pay €229,000 for a house.
The survey found that the availability of mortgage credit was again considered the most important factor affecting house prices this year, while the need for a deposit was also a greater factor in putting people off buying.
"The price people are expecting to pay for their house in relation to their income dropped this year. The average price-to-income ratio is now 3.4, down from 3.8 last year. This may be a result of further price falls, but interestingly, we saw a significant rise in people needing to save for a deposit as a deterring factor in purchasing. This could therefore be a result of banks or borrowers being more cautious."
The 2013 Daft.ie Consumer Sentiment Survey is the property portal's second online poll. More than 2,000 people were surveyed online through Facebook, forums and news portals. Almost a third of respondents lived in Dublin and the rest across the country. The vast majority were living at home with their parents, while over a third owned their own homes.
The survey measures consumers' perceptions of the state of the property market both nationally and locally.