The cost of living crisis affects housing market sentiment, but demand remains high

The rising cost of living is having a “major effect” on the markets for buying, renovating and renting homes, according to the latest report from MyHome.ie.

Almost half of more than 2,800 people surveyed by the real estate website said the rising cost of living had affected their ability to buy property.

Demand is proving to be a critical factor that shows no signs of slowing down, according to the report.

In July, brochure views increased by over 40% on MyHome.ie compared to the same month in previous years.

More than two-thirds of respondents said they had the finances in place to buy a home in the coming year. However, not everyone who is ready thinks they will get a property in that time frame.

According to the report, 54% of those who are ready to buy a property believe they will be able to do so within the next year.

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Tenant sentiment was described as particularly negative, with 63% saying rising costs had affected their ability to rent a property.

Three-quarters of renters surveyed also admitted they had to look beyond their first choice of location to find a rental property due to pricing issues.

Even though interest rates have recently increased, they are still relatively low and it remains to be seen to what extent these increases will be passed on by banks.

The cost of living crisis has also slowed home renovations, with 45 per cent saying spiraling costs have affected their ability to renovate or carry out other building work in their home.

However, the number of people who believe house prices will continue to rise over the next year fell in August.

Three in 10 people expect house prices to rise over the next 12 months, compared to nearly 60% who felt this in April.

“The rising cost of living is having a significant negative impact on consumer confidence, but we know demand is still very robust despite these financial pressures,” said Joanne Geary, Managing Director of MyHome.ie.

“Even though interest rates have recently increased, they are still relatively low and it remains to be seen how these increases will be passed on to banks,” she added.

However, the ECB is now expected to raise lending rates twice by the end of the year, which will put further financial pressure on holders of tracker and variable mortgages.

Due to the “lack of value, uncertainty and choice” in the rental market, Ms Geary noted a trend that those in a position to buy property are now doing so earlier than expected.
otherwise they would have expected.

“In many cases, it might simply be cheaper to buy than to rent if the stock was available for purchase,” she concluded.