Cost-of-living crisis makes it harder to afford to move, say homebuyers

The impact of the cost-of-living crisis has started to bleed into the housing market by reducing consumer sentiment a new survey has found.

Prospective renters and buyers say price rises are hampering their ability to afford to buy or rent new homes, according to consumer research conducted for property website Myhome.ie.

The research included a survey of close to 2,900 prospective homebuyers and renters for MyHome, which is owned by The Irish Times media group. The report’s authors found that the rise in the cost of living is “having a significant effect on property market sentiment”.

MyHome’s research found that almost half of prospective homebuyers surveyed said rises in the cost living had affected their ability to buy, while the same was true of almost two-thirds of prospective new renters. Two-thirds of those surveyed said they had finance in place to allow them to buy over the next year, but only 54 per cent were confident they would be able to buy in that period.

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Joanne Geary, MyHome’s managing director, said that despite the “significant negative impact” on property market sentiment, demand for new homes remains strong. She said brochure views on the company’s website were up 40 per cent in July compared to last year, although the economy was more heavily affected by the pandemic 12 months ago.

MyHome’s research also suggested that prospective homebuyers now increasingly believe that the cost-of-living crisis could weigh on house price rises. Just three in 10 of those surveyed believe house prices will rise over the next 12 months, compared to almost 60 per cent just four months ago.

Meanwhile, a separate economic report from Bank of Ireland reached a different conclusion on sentiment around house prices. The bank’s “economic pulse” sentiment-measuring report for August found that 68 per cent of those it surveyed expect house prices to rise.

While MyHome found that the proportion expecting house price rises had halved since April, Bank of Ireland’s research claimed the number is increasing; up from 63 per cent in July. The bank said Dublin households kept their expectations over house price rises “largely in check” in August.

“Households in the rest of Leinster, Munster and Connacht/Ulster were more upbeat this month about future house-price gains,” said the bank report’s authors. The research said expectations for rent increases were higher in all four regions with just over 70 per cent of those surveyed expected rents to continue to rise.