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Undoubtedly, home ownership is something very many people in this country aspire to.
However, for younger first-time buyers, this goal is becoming harder to reach.
A report from the Banking and Payments Federation of Ireland (BPFI) released late last year shows that first-time buyers aged 30 or under halved between 2004 and 2020.
You get a cash customer coming up behind them and whatever they (the first-time buyer) bid, the cash customer will go another €5,000 or €10,000 on it
Brain McMahon of Brian McMahon & Daughters Estate Agents, Ennis, Co Clare, has been in the property business for 30 years. He has seen the squeeze on first-time buyers amplify of late.
“They’re trying to buy, they come in and they make an offer. You get a cash customer coming up behind them and whatever they (the first-time buyer) bid, the cash customer will go another €5,000 or €10,000 on it.
“It’s not easy for them to get on the market and they’re being pushed into cheaper properties and apartments, which might not be ideal for their needs, but whatever comes up now they will look at it.”
The mix of lack of supply, cost of materials, pandemic-led demand and high rents have created the “perfect storm” for first-time buyers, Brian says.
“The Help to Buy (HTB) scheme is a great help for young buyers, but again, supply. There’s none there. The developers are looking at the margins dwindling every day, the cost of materials rising and they’re slow to commit to starting a scheme.
COVID has crystallised all that too because we’ve had a lot of people coming back into the country from abroad, and we’ve dealt with a lot of these people
“We’re kind of left then with the secondhand stock. That has dwindled too. A lot of this, I’d say, is due to the downturn and the fact that really, between 2008/2009 and 2018/2019 there was nothing built. We kind of had 10 years of zero [building] and we can see it now.
“COVID has crystallised all that too because we’ve had a lot of people coming back into the country from abroad, and we’ve dealt with a lot of these people. We’ve had a migration wave down from the cities to the west and they’ve taken up whatever [stock] is there.
Any of them coming down from Dublin may have sold an expensive property there and they can blow the local buyer out of the water
“Both of those groups of people, generally speaking, are in a far stronger position than the local buyer. That has put more pressure on the market.
“They can go the distance on it because some of them come back from the Far East, the Middle East and America, and they’ve cash on hand. Any of them coming down from Dublin may have sold an expensive property there and they can blow the local buyer out of the water. So it’s very difficult for young people starting out.”
Demand
In three decades of working as an estate agent, Brian has never seen a more pressurised time in the housing market than now.
“Even if you go back to 2005 and 2006, yes the market was streaking ahead, but there was supply, there was any amount of supply for rental and for sale. I don’t think I’ve ever seen less stock and more demand.”
There’s a few houses listed on Daft, but in reality if you went ringing them they’re probably gone
Brian outlines a specific example that highlights the demand for rental properties: a two bedroom townhouse in Ennis they advertised to rent for €1,000 a month. It had 168 enquires in 36 hours.
“That’s the kind of level of demand you’re seeing, there’s zero to rent. There’s a few houses listed on Daft, but in reality if you went ringing them they’re probably gone.”
In terms of buying houses, coastal areas have seen huge demand, says Brian.
“We put a house on the market last year at €320,000 back on the coast. It finished at €550,000. The chap who bought it is now demolishing it and applying for a new house. He’s into a million quid for his view, which is very dramatic. It’s a beautiful view looking out across Doughmore Beach, close to Trump International in Doonbeg. You have that calibre of buyer.”
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