Property supply so low only half who want to buy can find a home

The survey found that more than half of those active in the housing market were first-time buyers. GETTY

Charlie Weston

Demand for housing is set to get even stronger as more first-time buyers enter the market.

This will put even more pressure on the market, where supply is so low only half of those who want to buy can find a property - and it will keep pushing up prices.

There are around 70,000 people ready to buy, according to the latest KBC Bank Homebuyer survey.

This includes people who are mortgage approved, others selling an existing property and those who have the cash to buy.

But only half the number of properties demanded are available for sale.

The KBC Homebuyer survey found there is an increasing number of first-time buyers among prospective purchasers.

Foreign investment warning: IDA chief Martin Shanahan. Photo: Steve Humphreys

New buyers have been boosted by a relaxation of the Central Bank's lending rules, and the introduction of the Government's Help-to-Buy tax rebate scheme.

The survey found that more than half of those active in the housing market were first-time buyers.

Read more: Prices must fall - but dream of owning a home is still achievable, insists Coveney

KBC Bank economist Austin Hughes said: "This hints at the prospect of strengthening the trend in demand in the coming years that might continue to outpace any prospective increase in new supply for a significant period."

Mr Hughes estimated around 160,000 first-time buyers were making plans to purchase.

Another 95,000 movers are seeking properties to buy, and 50,000 are investors.

He said pent-up demand was emerging as a huge factor in the property market.

"As housing transactions through the past seven years have fallen about 40,000 to 50,000 short on average of what might be considered healthy, it is not surprising that the survey finds evidence of a significant overhang of 'pent-up' home-buyer demand at present," Mr Hughes said.

A healthy Irish housing market should be seeing annual housing sales of around 80,000, twice the current rate, the survey indicates.

Unsatisfied demand is building, while large numbers are in a situation where there is a "mismatch" between their current accommodation and the housing they need.

This means the pressures at the moment on the housing market may be even greater than realised.

But the survey indicated there was no evidence of a buyer frenzy, the economist said.

This was despite the fact that half of those who wanted to buy responded that they expected they would not realise their aims over the next two years, said the survey, carried out for the bank by Ignite Research among a sample of 2,000 people.

Meanwhile, the IDA has warned of the impact the housing crisis will have on the drive to attract foreign direct investment (FDI) into Ireland, particularly in the wake of Brexit.

Read more: 10 things that could help boost supply and provide more affordable homes in Ireland

IDA chief executive Martin Shanahan said the availability of quality and affordable residential accommodation was a key competitiveness factor for foreign direct investment here.

"The availability of competitively priced 'ready to rent or buy' housing stock, across multiple ranges, is a strategic priority for FDI decision-makers," he said.

"IDA has to be able to demonstrate that housing solutions will be available in the time-frame that they are required, particularly in the context of Brexit."