ALMOST TWO-THIRDS of prospective renters have said that the current rise in the cost-of-living has affected their ability to rent a home, according to a new survey.
The survey of 2,861 people, carried out property website MyHome.ie, suggests that the cost-of-living crisis is having a significant effect on the homebuying, home renovation and rental markets.
Of those surveyed, almost half (49%) of homebuyers said the rise in the cost-of-living has affected their ability to buy a property, while 63% of prospective renters said the current crunch has affected their ability to rent.
45% said their ability to renovate or do other building works to their home has also been affected by rising costs.
Robust demand is a critical factor with regard to sentiment around the property market at present, with a large cohort of respondents financed and ready to buy.
Two-thirds (67%) of respondents said they have finances in place to buy a property in the next year, and over half (54%) said they are confident about their ability to buy within that timeframe.
The survey also suggests that the impact of property price inflation and the rising cost-of-living may have tempered people’s expectations on price hikes in the next year.
Three-in-ten respondents expect property prices to go up over the next 12 months, compared with six-in-ten (59%) who believed the same in April of this year.
Meanwhile, 63% of prospective homebuyers and 75% of renters said they have had to look beyond their top location choice because of price concerns.
85% of respondents believe the Government could do more to help the property sector.
Earlier this month, the CSO said its Residential Property Price Index (RPPI) had reached the value of 163.6 points, the same record level last seen at the peak of the Celtic Tiger boom in April 2007.
It follows a 14.1% price increase over the past year, with prices in Dublin rising by 11.8% and prices outside Dublin up by an average of 16.0%.
“The rise in the cost of living is having a significantly negative impact on consumer sentiment, yet we know that demand is still very robust despite these financial pressures,” Joanne Geary, managing director of MyHome.ie, said.
She said the website saw a surge in brochure views in July up by over 40% on the previous year. “We can see from our metrics that buyer demand is remaining remarkably strong,” she said.
Even though interest rates have recently risen, they are still relatively low and it remains to be seen how much of these increases will be passed on by the banks.Given employment levels are at an all-time high, the demand dynamic in the market remains very buoyant in spite of cost of living increases.
Meanwhile, a report by Daft.ie published earlier this month found that rents in the second quarter of this year climbed to an average of 12.6% higher than the same period of 2021.
The spike is the biggest increase recorded by Daft since it began carrying out its reports in 2006 and it came as the availability of rental homes dropped to an all-time low.
The average market rent across Ireland between April and June was €1,618 per month, an increase of 3.3% on the first three months of the year and more than double the low of €765 per month seen in late 2011.
Geary said that overwhelming negative sentiment about the rental market was having a knock-on effect across the entire property market.
“Renters are under huge pressure and, anecdotally, we know that many of those who are in a position to leave the rental market and buy are pressing ahead perhaps sooner than they otherwise would have, given the lack of value, uncertainty and choice in the rental market at present.
“In many cases, it simply could be cheaper to buy than rent if the stock was available to buy.”
The MyHome.ie survey of 2,861 people was carried out between 12 August and 19 August.
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