First-time buyers prefer three-bedroom homes as market is still rising steadily
Over 90% of buyers wanted three bedrooms or more, while just 5.35% wanted a two-bed.
Housing market activity in Cork has been rising steadily over the past three years, in both the new homes and existing homes sector, according to Central Statistic figures used in a recent presentation to the region’s builders at a Munster CIF summit, along with ‘insider’ market research on what buyers want.
Sales in Cork back in 2020 tipped just over 6,000 transactions, went over 7,000 in 2021, and were just shy of 8,000 by 2022, and by the end of the first half of 2023 were at the approximate half-way mark looking on track to at least meet the 2022 figure, while typically across those surveyed years new homes (vs resales) make up about 25% of sales.
New homes estate agent Elizabeth Hegarty of Savills told the CIF Summit last week that the Savills database of intending buyers was 75% first-time buyers and said that they had registered 800 would-be FTBs since the start of 2023.
Of that number, 90% had a preference for a semi-detached or detached house, and over 90% wanted three bedrooms or more, while just 5.35% wanted a two-bed.
And, just 2.37% had expressed a preference for an apartment, Ms Hegarty said, but she added the caveat that the database might have been skewed as most home-hunter knew there was little or no stock of new apartments to purchase in the region and thus didn’t register an interest.
The importance of recent government initiatives and incentives to the new homes market was starkly illustrate at the CIF gathering also, with Savills showing a table where a typical FTB purchaser on a five-year fixed rate mortgage, with 10% deposit could have notional repayments of €2,000 per month.
If a buyer took advantage of the Help to Buy scheme and bought a property on a slightly discounted green rate mortgage, monthly repayments could drop to €1,700 per month.
Then, if a similar buyer used a green rate mortgage, and added the First Homes Scheme (FHS/shared equity) which is steadily getting its own ‘purchase’ amongst buyers, they could reduce their repayments still further, to c €1,350 per month.
On the supply side, residential stock to buy has dropped in the Cork market since the start of 2020, from 3,000 units to c 2,000 by the end of August 2023, said Ms Hegarty, against a still-growing projected Cork city and county total population forecast of 625,000 persons by 2028, and with the country’s population tipping over 5 million this year according to the CSO for the first time since the Famine period.
Head of one of Ireland’s largest home building firms, the publicly-listed Glenveagh Properties, Stephen Garvey this month has signalled “a very positive long-term demand outlook for the Irish residential housing market.”
“Strong private demand is underpinned by a robust economic environment, a fast-growing population and supportive demand-side initiatives from the Government,” Garvey said while posting quite positive remarks about the trajectory of the Irish house market, noting progress in reforming the planning system even as the new Planning Bill is awaited.
Mr Garvey said he believed the government was getting a grip on the housing crisis, with builders linking with diverse agencies on delivery, and able take advantage of initiatives such as the Croí Cónaithe programme, established this year to support the building of apartments for sale to private buyers, worth up to €144,000 in individual cases.
“New opportunities are emerging to partner with multiple State agencies as part of the Government’s recent supply-side housing initiatives,” declared Mr Garvey, noting that Glenveagh Properties alone had planning granted this year for up to 4,000 homes, albeit with 700 of that number under appeal.
