The average price gap between traders-down selling and buying back into the market is €345,129, according to a new report from property consultants, Savills Ireland.
However, despite the sizeable surplus that can be unlocked from downsizing, trading-down has fallen sharply as a proportion of Savills housing sales – from 13.4% in 2014 to 5.3% in 2016.
Savills believe there are a number of reasons for this. A recent census confirmed there is an increase in couples living with adult children which implies adult children are staying longer in the family home. Indeed, it is estimated that one quarter of married couples in Ireland are now living with adult children aged 20+.
Furthermore, rising property prices also making sellers reluctant to downsize. The average price gap between traders-down selling and re-purchasing is €345,129.
According to Savills, the final and perhaps most obvious reason for the declining trend in downsizing is that the quality of trade-down stock has not been sufficiently attractive to entice traders-down out of their existing homes.
Director of Research at Savills Ireland, Dr. John McCartney said, "House price inflation has been picking-up since the Autumn of 2015 and this is expected to continue because of rapid population growth, lagging supply and recent Government measures such as Help-to-Buy and easier mortgage lending rules."
He added, "Owners of more valuable assets obviously stand to benefit more from a rising market, so it should be no surprise that some potential traders-down are opting to hold on rather than sell."
Source: www.businessworld.ie
