Ireland has had a vast history when it comes to development and economic boom. In the late 1990s and the 2000s, the country’s housing demand rose as many sectors, including the government, showed interest in construction and housing projects, such as bank credit, salary solid growth, and rapid house prices. However, the economic recession of 2008 saw a significant collapse in house demand and supply that lead to a restriction on mortgage loans and pricing rates. In recent years, the price has improved, and demand has also increased but at a slower pace as compared to the late 20th-century growth chart. The following are some of the factors that have influenced the demand and supply of housing and mortgage in Ireland: –
- Incomes and Employment. The income distribution has a significant impact on housing demand. The housing affordability problems for some in income distribution would be compounded if there was an unfair distribution of income and unemployment.
- Population growth. As the number of inhabitants increases in Ireland, the demand for housing also increases as many look for shelters to live in or spaces to set up businesses that feed the people.
- Mortgage Availability & Interest Rates. Presence of mortgage finances and cheap interest rates. Higher interest rates cause a decrease in housing demand as many people fear paying expensive mortgage loans, which may cause investors to lower their housing prices to meet the market demand.
- Innovation & Skills. Technology and education have played an important role in influencing the demand for housing. This is because of the provision of cheap skilled and manual labor. Moreover, technology innovation provides cheap housing material as creativity influences people to look for cheap alternatives to make housing more available.
- Consumer confidence. Sureness and assurance are essential in determining if people want or do not want to risk mortgage financing. The expectations for the housing market are particularly important because people will defer buying if people fear that home prices may be reduced or increase.
- Economic growth. The impact of economic growth on housing demand is significant. Because capital and labor are mobile in an open economy like Ireland, extensive development is highly variable. If growth is slow, jobs will grow at a rate below their potential, resulting in emigration and a drop in housing demand. High growth in Ireland translates to more jobs and higher household demand.
- The level and distribution of wealth. According to research, wealth distribution has an impact on housing demand in Ireland. Some factors that influence housing demand include increased investment and return on immovables, stocks, and other assets.