CSO House Prices – Rising Interest Rates Not Big Factor Since Many Buyers Alread ‘Locked-Out'

18 September 2023

CSO House Prices – Rising Interest Rates Not Big Factor Since Many Buyers Alread ‘Locked-Out'

Commenting on today’s CSO Residential Property Price Index for July, IPAV, the Institute of Professional Auctioneers & Valuers, said the drop in four of the five Dublin areas and an increase of 3.8pc outside Dublin is about as anticipated, given that we know the heat of 12 months ago has left the market.

Pat Davitt, IPAV’s Chief Executive, said:  “Rapidly rising interest rates are having only minimal effect so far on house prices, and that is largely because those on average wages, who would have been the typical buyer traditionally, have already been locked out of the market.

“With the exception of the Help-to-Buy and the first Home scheme such prospective buyers have found themselves chasing an ever shifting target, from over-zealous mortgage rules initially and now high interest rates and diminishing lending competition.”

He said the entry of the Credit Union movement to the mortgage market was welcome.

“The Government is aware, clearly, that the current housing plan needs to be updated, given the large numbers of people now locked out of the market.”

And he said it would be important that next month’s Budget contains “meaningful and impactful” measures.

He said home ownership needs to be promoted with a whole new policy emphasis, given the “seismic” demographic changes underway.

“The Taoiseach acknowledged earlier this year that 250,000 new homes are needed. We need a whole suite of new measures to achieve that level of building along with tackling the major impediments, and indeed the massive tax take on new homes,” he said.