While demand from potential home buyers is on the rise, supply is a problem in several areas, especially Dublin, according to the latest Residential Property Outlook Report, published by AIB.
It found that nearly three quarters (74pc) of potential buyers surveyed want to buy within the next six months while 18pc want to buy within the next 12 months but that the biggest issue that people have is the lack of suitable housing.
The majority of first-time buyers, at 79pc, are currently living in rented accommodation, while 16pc are living with a relative.
It found that, while there is clear demand from first-time buyers, the survey also notes that demand from people wishing to trade-up is also on the increase with some 25pc of potential house-purchasers in Cork wanting to trade up while the comparative figure for Dublin is 23pc.
With house prices in many areas outside of Dublin at six year lows, investors are also keen to buy according to the survey.
In Limerick, for example, 16pc of the respondents indicated that they were investors while this rose to 19pc in Galway, falling to 11pc in Cork and 9pc in Dublin 45pc of house-hunters are looking for two/three bed houses.
The AIB Residential Property Outlook report, carried out in partnership with Property Industry Ireland (PII) and Sherry Fitzgerald New Homes, is the seventh in a series of Outlook Reports that the bank has commissioned to investigate the opportunities and challenges facing key sectors in the Irish economy.
AIB’s Head of Business Banking, Ken Burke, said that AIB recognises it has an important role to play in supporting this vital sector and its future growth potential.
“Our Residential Property Outlook report highlights some of the key challenges currently impacting the sector. AIB launched a €350 million New Homes development fund in February 2014 to support the construction and supply of new homes in key urban areas. We are already seeing good take-up and we have deployed three specialist new business teams in Dublin, Cork and Galway to support this demand.”
Director of Property Industry Ireland (PII), Peter Stafford said: “We believe this report is timely and PII is pleased to be partnering with AIB and Sherry Fitzgerald New Homes in the preparation of this Residential Property Sector Outlook report. Members of PII, including developers and contractors, planners, architects, estate agents and asset managers, are clear on the issues which are holding back supply: availability of developer and equity finance, a lack of suitable sites on which to develop, and blockages in the planning system. If we can reduce costs and remedy delays in the pre-construction stages of development, especially in planning, a greater number of properties can be brought onto the market.”
Head of Capital Markets and New Homes at Sherry Fitzgerald, Ivan Gaine said: “We are delighted to be associated with AIB and PII and in collaborating with other industry stakeholders in the preparation of the Outlook report. This publication coupled with ‘Construction 2020’ demonstrates the great curiosity within the housing and construction industry but also shows the huge need for urgency and proactivity across all sectors within the residential market. A national strategy covering the private, affordable, social, student, retirement markets is absolutely critical to the country. Funding is no longer an issue but a need for active collaboration and communication is required from all.”