- Just under half of all house purchases in 2014 were cash transactions
- Over 20,000 houses bought for cash in 2014
- House sales up 51% nationally and a massive 85% in Dublin in January
Friday 27th February 2015.
Just under half of all homes purchased in Ireland last year – 20,365 in total – were bought for cash. Property website MyHome.ie said this means that on average 55 houses a day were being bought for cash throughout 2014.
Angela Keegan, MD of MyHome.ie said this level of cash transactions – 48% – was not sustainable in the long term.
“The Property Price Register shows that 42,484 houses were sold last year. According to the Banking and Payments Federation Ireland 22,119 mortgages to the value of €3.9bn were drawn down during the year. This means the remainder, 20,365 were bought for cash. While it was thought the number of cash buyers was declining, this shows there is still a lot of cash out there and a lot of it is finding its way into property.”
“This will be a concern for first time buyers who often find themselves competing and losing out to cash buyers. The new lending rules introduced by the Central Bank will also be a factor here. While they will probably be viewed in time as a prudent move, for people currently looking to buy a home they will be viewed as another hurdle to overcome as they restrict the amount first time buyers can borrow. While we would like to see the overall level of transactions rise to close to 80,000 a year we would also like to see the proportion of cash buyers fall” Ms Keegan said.
2015 early trends
An analysis of the Property Price Register for January shows the level of transactions is up significantly compared to the same month last year. Nationally 2,904 house sales have been recorded to date, up 51% on the 1,924 recorded in Jan 2014.
In Dublin there were 1,117 sales up a massive 85% on last year while in Cork there were 292 sales up 39%. Angela Keegan said it was likely the increase in sales was in response to the new lending rules.
“It looks as if the increase in the level of sales is directly attributable to a rush by buyers to complete their house purchase before the new lending rules came into force. There may well also be an element of vendor panic as sellers look to wrap up sales even if it means taking a lower price; the price falls we saw in the CSO figures earlier this week would support that view. However we will have a better idea of the medium to long term impact of the rules by the end of March” Ms Keegan concluded.
For more information
Contact Kieran Garry
01/6650455 or 087/2368366