A new survey from property website MyHome.ie shows that rising interest rates on mortgages, along with supply worries, are “spooking the property” market, according to the site’s Communications editor.
The survey shows a significant hike in the number of people expensing concern on the impact of increasing interest rates – and that negative sentiment about the property market is rising.
Two-thirds of respondents (67%) from the survey of 2,520 people conducted in late October 2023 by MyHome.ie said they are worried that interest rate hikes will affect their ability to buy.
This figure rose by 20% – a full fifth – compared to when respondents were asked the same question in March of this year – while only a quarter (24%) believe there is enough supply on the property market to enable them to secure a dwelling.
Three-quarters (74%) of those surveyed who were planning to renovate or build said they had seen their plans affected because of cost of living crisis, while 75% of people were worried about the state of the property market in general.
87% believe the Government could do more to help the property sector, while just 11% were satisfied with the housing measures introduced in Budget 2024, MyHome reported.
“Interest rate hikes appear to have spooked those looking to secure a mortgage, with over half (58%) now looking to secure a mortgage term of over five years. Moreover, 75% will look to secure a fixed mortgage, and just 5% are seeking a tracker mortgage,” Communications Editor, James Rogers, wrote.
“Meanwhile, even though demand remains strong, the market’s ongoing supply problems are a major concern. Six in ten respondents have finance secured to purchase a home, yet just a quarter (24%) believe there is enough stock on the market for them to secure a suitable property.”
Joanne Geary, Managing Director of MyHome.ie, said: “The results of our March survey showed that energy price concerns dominated property market sentiment. Now, the focus has turned to interest rates and our ongoing supply problems.
“Given the sustained upward trajectory of interest rates, it is not surprising to see sentiment worsen, especially considering there is simply not enough supply in Ireland to satisfy demand. In short, there are too many prospective buyers battling over too few properties which are steadily costing more to finance. It’s not a reality that lends itself to positive sentiment.”
She added: “From what we see from the latest CSO residential property price index, the continued slowdown in property price growth, most notably in Dublin, reflects this dampening customer sentiment. We welcome the recent extensions and changes to the Help to Buy and First Home schemes, as well as the grant available for vacant, derelict homes and for those looking to retrofit. These will hopefully assist some buyers in the market, albeit the main issue is still the lack of supply coming through.”