Lack of Housing Supply for First Time Buyers

coupleIn the property world the question on everybody’s lips is: “Are we at the bottom of the cycle in terms of value?”  Loman Dempsey of Raymond Potterton & Co. Estate Agents in Navan is of the opinion that we are “bouncing along the bottom at the moment”.

“The average price of a second hand 3 Bedroom Semi-Detached Home in Navan and Trim has fallen below €200,000 and there is good activity in the market at this level despite all the doom and gloom.  The cost of a mortgage for the average first time buyer couple has fallen to 13% of their net income according to the EBS/DKM Affordability Index (Nov 2009).  This quarterly index measures the extent of after tax income required to meet first year mortgage repayments for an average first time buyer working couple based on average earnings and a 90% mortgage”.

“In 2006 the average first time buyer couple would have spent 26.4% of their net monthly income in mortgage repayments for a new home”.

“I feel improved affordability is transferring into a pick up in business.  Through our Building Society Agency with EBS Building Society the number of mortgage applications has grown considerably over the past three months compared with the first three months of this year.  July was a particularly busy month for us with over double the level of applications we received in February of this year”.

“The increase in the number of applications would indicate to us that First Time Buyers are preparing to re-enter the market.  We have also noticed a scarcity of good quality 3 and 4 Bedroom Homes in certain areas.  Though it may still be a buyers market I think some first time buyers will be surprised at the lack of supply”.

“It is impossible to predict either the top or the bottom of the market and as property is a medium to long term investment for homebuyers it would be wise to be active in the market at the moment as it can be quite difficult to source the property most suited to you.  Like all markets when the property market hits the bottom there is generally a little bounce”

“At the moment everybody wants to buy at the bottom of the cycle but I would contend that purchasers should also take into consideration other factors such as the location of the property which in 60-70% of cases limits a buyer’s market.  With a scarcity of homes now appearing in the first time buyer bracket it could be more important than ever to get out there and tie down the home of your dreams.  Be aware that if you see something you like you can always make an offer… you would never know your luck!” concludes Mr Dempsey

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