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Report shows more mortgages being issued

Tuesday, August 26 10:40:39

Cash purchases of homes amounted to about 35pc of transactions in the second quarter of this year, indicating that more people are getting mortgages.

That's according to a new housing report published by the Society of Chartered Surveyors Ireland today.

The finding, which was made in the SCSI's first Housing Market Report, would indicate that the level of cash transactions is beginning to moderate, as data previously published by the Society had put the figure for Q1 at about 50pc.

According to the report, the pace of sales activity levels in the property market (sales enquiries, sales agreed and sales completed) increased in the second quarter of the year.

Ninety per cent of respondents believe average national house prices will be higher in 12 months time, one in three believing they will rise by 5pc. An even higher figure, 97pc believe Dublin house prices will rise over the same period, one in four saying they will be 10pc higher.

First time buyers accounted for 44pc of transactions, while movers accounted for 29pc. The reports suggests this moderate improvement in housing mobility may be due to some properties lifting out of negative equity and the availability of products which allow people to move and retain their tracker mortgages. About 22pc of units were purchased as Buy to Let or investment properties.

Simon Stokes, Chair of the Residential Property group of the SCSI said that the increased sales activity levels identified in the report and the re-emergence of investors suggested an improvement in confidence in the property market. However he warned that the lack of supply, especially in Dublin remained a key issue.

"Ninety per cent of respondents in Dublin believe there is a greater demand for housing than supply and 70pc believe that demand will continue to outstrip supply in Dublin in 12 months' time. We urgently need more homes to be built and the Society recently called for a number of measures to increase the supply of new homes including a Builders Finance Fund to help small builders access development finance, a 2 year reduction in VAT on new homes to 5pc and a reduction in development contributions," he said.

"These measures would go some way to alleviating the supply restrictions in the market and the worrying pace of property price increases. However the situation in the west and mid west is very different with 60pc and 80pc respectively believing that supply is greater than demand and that is an issue which also needs to be addressed."

"The report suggests that there has been an improvement in confidence from investors in the property market, which has been supported by improved yields and finance availability. This should help improve the quality of rental stock but we still need to see more housing being built to improve supply levels and moderate the pace of rent increases," said Mr Stokes.

For more visit: www.businessworld.ie