Monday 17 December 2018

Desperate house hunters are forced to compromise to put down roots

Stock picture
Stock picture
Gareth Morgan

Gareth Morgan

Families are being forced to lower their expectations in a housing market driven by need rather than choice, a survey has revealed.

The KBC Homebuyer Sentiment Survey found many people are in accommodation that no longer meets their needs and plan to buy - even if they face major problems in finding the right home.

The survey highlights the continuing strength of housing demand and underscores the scale of difficulties facing prospective homebuyers. KBC says that buying a new home is now something to be "endured rather than enjoyed".

The report shows that 60pc of prospective homebuyers are finding it harder to find a suitable home than a year ago.

This means homebuyers are willing to make significant compromises about the type, size and location of the home that they buy.

The survey, published twice a year, suggests that a range of personal factors rather than the economy are driving very strong homebuyer demand.

First-time buyers are still the most important market segment (47pc), but an increasing number of people are now planning to move (36pc).

There are even a sizeable minority - 17pc of those surveyed - who are planning to buy an investment property.

The surge in demand principally reflects the fact that large numbers of people are now in accommodation that no longer meets their needs.

More than a quarter (26pc) of those surveyed say they have reached a stage in life where they "need to buy", perhaps because their family is growing or because of work.

Austin Hughes, chief economist at KBC Bank Ireland, analysed the research and said: "The results of the fifth KBC Homebuyer Survey show that demand for residential housing remains strong and highlight the difficulty facing prospective homebuyers."

Mr Hughes added that there is a housing supply deficit, and some 85,000 potential home buyers in a position to buy immediately.

So there is an effective backlog of unsatisfied demand equivalent to about a year and a half worth of transactions at present.

"For most homebuyers, the process of buying a new home is endured rather than enjoyed," said Mr Hughes.

"The survey results find that reasons for buying a home are primarily personal and reflect 'micro' circumstances rather than the 'macro' economy.

"People want to buy their first home, to move to somewhere more suitable for because their family has grown or, to a notably lesser extent, to build up a nest egg through an investment in property."

KBC Bank's director of products, Fergal O'Riagain, said: "Buying a home is one of the most significant commitments that anyone will make in their life.

"As these survey results demonstrate, it is a challenging environment for prospective homebuyers at present."

Irish Independent

Editor's Choice

Also in Irish News