In early 2013, AIB joined forces with the ESRI to generate the Housing Sentiment Indicator for the Republic of Ireland. The Indicator is a measure of the perception consumers have in relation to the Irish housing market as well as their house price expectations. The Indicator, which is run on a three month rolling average, is based on a survey of at least 800 people across Ireland per month.

 

The survey to date was generated from answers to three key questions:
 

  • Is it a good time to buy?

  • What is the level of risk buying today?

  • Is it a good time to sell?

 

Latest update:

Here are the main points from this quarter:

  • Index is 147, up from 144 in Q3, 2016

  • Those who think it is a good time to sell – 45%

  • Those who think it is a good time to buy – 40%

  • Average expected price changes in next year:

            o Dublin – 5.6%

            o Border / Midlands / West – 3.1%

            o Rest of Country – 4.3%


Market risks:

  • Future income & affordability – 55%

  • Changes in house prices – 16%

  • Increasing interest rates – 13%

  • Changes in family circumstances – 13%

 

Main reasons for not buying:

  • Affordability concerns 54%

  • Cannot get a mortgage 30%

  • Income concerns 8%

  • In negative equity 8%

 

What the experts think:

 

Oliver Mangan, Chief Economist, AIB

“While the Irish labour market continues to register strong employment growth, wage growth remains modest. Therefore, the combination of rising house prices and subdued wage growth means affordability remains an important headwind for prospective buyers, most notably in Dublin where house prices are much higher. This is reflected in affordability concerns being cited as the main reason for not buying in the survey.”

 

Daniel Foley, ESRI

“The improvement in the housing index this quarter appears to be driven by heightened short and long term price expectations for homes. In particular prices are expected to rise the most in the capital. Developments in the housing market over the quarter broadly mirror these expectations as annual residential property prices continue to rise. The results also indicate that sentiment towards buying and selling seems to have improved, consistent with an increase in the volume of transactions in the final quarter of the year.”

 

The information contained is a snapshot of sentiment in the market from the point of view of consumers and should not be taken as a recommendation.

 

 

Quarterly AIB/ESRI Housing Market Index Infograph page:

 

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