Boris Johnson has recently been elected Prime Minister and uncertainties surrounding Brexit are back on the minds of Irish people. The likelihood of there being a no-deal Brexit is strong and the Irish housing market needs to be ready for the consequences. Also, the uncertainty surrounding whether the help-to-buy scheme will be continued or not will have a strong effect on the housing market. The Irish housing market for the rest of this year will depend strongly on the outcomes of the two events listed above.
Lisney published a report recently focusing on the upward trend in the Cork house and construction sectors. Lisney cited Brexit and help-to-buy scheme as two possibilities that may negatively affect the Cork market. Lisney investigated 41 new home schemes being constructed in the Cork area which totals 2,640 units. The help-to-buy scheme is what’s keeping first time buyers able to purchase a home and if this is taken away the number of people seeking homes will decrease. New home sales contribute to approximately 15% of sales in Cork over the last couple of quarters and 25% of that statistic is first time buyers which would qualify for the help-to-buy scheme.
First time buyers are very active in Cork and make up 29% of its market. Also, according to CSO, 52% of the people in Cork are trading up or down and remain very active. Central Bank limits on applying for mortgages is still continuing to affect the market. 78% of the homes sold in the 2Q in Cork fall under the sub €300,000 group. In addition, sales representing figures over €500,000 on represent 5% of sales in Cork county. Lisney added, “overwhelming demand in the rental market are on track to increase the overall supply.” This is reassuring for Cork as they have become one of the fastest growing cities in Ireland and the infrastructure to support that growth is being built.
When a large chunk of the economy is having trouble acquiring homes, long term effects will become more drastic. Homelessness numbers are still rising in Ireland and having programs such as the help-to-buy scheme can provide a helping hand. I do agree that there are many flaws to the scheme and adapting a new version of it would be ideal. There have been some rumors that the help-to-buy scheme is going to be renewed, but the first-time homebuyers in Ireland are going to have to wait and see.