It is of significant concern that many people are ready and indeed anxious to move or buy a home, but unfortunately the demand for new housing is far from being met. Numerous current homeowners have had their hands tied and become stuck in their current dwellings because of a lack of options.
The results of a recent KBC Homebuyer survey estimated that over 80,000 potential buyers have the finances available for imminent purchase but, according to KBC Bank economist Austin Hughes they face up to four years delay. The study was conducted with a sample of about 2,000 interviewees and looked at reasons which explain the current bulge in the demand for houses. There were many of these but one of the most common factors was the wish to “put down roots.” Many would-be purchasers would like a house for life rather than a starter-type home and one of the consequences of the demand has been a double–digit increase in house prices.
The survey also discovered that people wanted to become homeowners for diverse reasons, including the wish to move away from renting, to facilitate the starting of a family and to move from cramped conditions. A lesser number felt that there is currently more money available and others were worried about escalating property costs.
KBC has estimated that up to 300,000 home purchasers are likely to be seeking to buy by the year 2020, but with the current rate of just 50,000 completions annually, most people will have a minimum two year delay in the process. Furthermore, Mr Hughes highlighted the fact that only 20,000 new homes were becoming available each year. He dubbed this phenomenon the “locked-in syndrome” as the housing market is clogged, and this is preventing people from moving home and restricting the number of house transactions.
Although many people would like to buy, they are prevented for numerous reasons including lack of funds for a deposit, inability to find the optimum size property or the fear of losing a preferentially funded tracker mortgage. Over 50 percent of the people surveyed have accepted that they will have to make a commitment upon the type, location and/or the size of the home they will eventually buy. The shortage of new homes is severe and would-be buyers have accepted that it will probably take them a lot more time to purchase a home than they had anticipated. Most of those surveyed thought that the seriousness of situation had been exacerbated since last year.
The demand for new homes has risen over the past year – indeed seventy per cent of respondents thought so. In addition, over a third felt that their purchase will possibly be finalised more than a year later than they hoped for.
Mr Hughes summed up by expressing his concern that the bottle neck in the house purchasing market shows little sign of abating and that the increasing demand will not be easily satisfied within the coming few years.