Banks lend more money to homebuyers now than in the days of the Celtic Tiger
According to a report released Tuesday, banks are lending more money to homebuyers than they were in preparation for the 2008 real estate crash, according to a report released Tuesday. But there are fewer homes available than ever.
Average asking prices for homes rose 9.7% nationwide last year, to â¬ 290,000, according to the latest assessment from real estate website, MyHome.ie and stock brokers Davy, including an âunusually strongâ increase of 1.2% âduring the normally calm period. winter months “.
The report shows that banks are increasing the amounts loaned to those they approve for mortgages, especially those who already own a property. In November, the average mortgage loan granted to anyone moving was a record â¬ 304,000, almost 12% more than a year earlier, according to MyHome.ie.
âThe average drawdown per engine was â¬ 284,800 in the third quarter of 2021, for the first time surpassing peak Celtic Tiger-era levels,â Davy’s chief economist Conall MacCoille said.
He said the summer had seen “a degree of panic in the housing market, with buyers bidding well above asking prices.”
âThe unfortunate message from this quarter’s MyHome report is that there are few signs of easing conditions.
âThere are only 11,300 homes for sale on MyHome, the lowest on record and down 21% from 2020, with the shortage of residential properties for sale most acute outside Dublin. The same is true in the rental market, âhe said.
MyHome.ie Managing Director Angela Keegan said it was “clear that we will be struggling with a dysfunctional market for some time to come.”
âOver the past 12 months, we have seen a huge and sustained demand for housing fueled by significantly increased savings among the cohort of potential buyers,â she said. âThis, coupled with record declines in supply, has led to the worst-case scenario for those looking to access the real estate ladder: significant price inflation and limited choice.
âAs we noted earlier this year, there is just too much money for too few homes.â
Mr MacCoille said the average mortgage approved by banks reached a “cyclical high” of â¬ 269,000 in November, an 8% increase from the same period in 2020. He said growth of wages – with a current wage increase of 5.4% – was a factor in the increase in mortgages, as lenders comply with rules imposed by the central bank.
Ms Keegan admitted that only the Central Bank’s rules had “somewhat” curbed house price inflation. The Central Bank calculates that its mortgage rules have kept house prices from rising 10 to 25 percent above existing levels.
In September, house prices had reached â¬ 330,375 nationally, seven times the â¬ 47,198 an average Irish worker earns, according to MyHome.ie, and higher than the average UK price.
Mr MacCoille said MyHome.ie and Davy may have to increase their forecast that house prices will rise 4.5% this year.
âThe latest MyHome report suggests that the foam in the housing market has continued over the last few months of last year and that early 2022 is expected to see further strong price inflation,â he said.
In Dublin, prices rose 7.4% last year to â¬ 380,000, including a 1.7% jump in the last quarter. Outside the capital, prices jumped 10.6% in 2021 to â¬ 245,000, gaining 1.1% in the last three months of the year.
The asking prices increased the fastest in the richest districts of the Republic. In south Dublin, sellers asked â¬ 694,000 for four-bedroom semi-detached houses last year, up 9% from 12 months earlier. In Galway City, prices rose 2.2% over the year to â¬ 285,000. In Cork City, they increased by 1.9% to reach â¬ 295,000. In the city of Limerick they increased by 7.7% to â¬ 210,000 while in Waterford they increased by 6.3% to â¬ 169,000.