With the rising prices in the Ireland housing market continuing on their steep journey up, buyers in the market are slowly being priced out.
That is, they simply cannot afford to purchase homes anymore and are becoming less and less driven to continue their search.
With unrealistic prices seen all around the board and most steeply in the Dublin area, where housing demand is the highest, buyers are beginning to call off their hunt for homes.
What about the future?
How long will these buyers that choose to wait, be waiting, until they can comfortably afford their dream home?
With housing prices being upwards of 11.4 times more than the typical buyer’s disposable income in 2017, with an expected increase to be reported in 2018, it is likely it will be years before homebuyers are able to comfortably afford homes in the Dublin market.
It is likely that they will begin to look in the neighboring areas where prices are less competitive and there is less demand.
If, and when, housing price inflation regulates, it is possible there will be an influx to the Dublin market as the homes will become more affordable for the residents of Ireland.
Currently, Goodbody has forecasted the housing price inflation which is currently estimated at 8.5% to decrease to 6.2% for 2019. Possibly the beginning of the stabilization of inflation for the Irish housing market.
As the development of units are on the rise as the completion of a project to form 765 units was recently finished in February of 2018, a strong expansion for a single month, the supply and demand gap could perhaps begin to close.
For now, however, there remains a severe gap as roughly 10,000 units were completed in the most recent year to date, with a demand of over 35,000 units.
The need for the development of new units is severe and felt around the country.
Until the supply catches up to the heavy demand, inflation will remain an issue, being the reason many Irish residences cannot afford to purchase new homes.
As an increase in buyers to begin looking at surrounding countries is also expected, perhaps the Dublin area will be able to catch a break. Though not likely.
Living in a city is important to many people, and many people are willing to pay the extra amount to do so.
With the gap being noted as increasingly hard for the builders to close as the stock market for sale and rent are hitting record lows, prices are stuck going up.
Eventually, over the course of years, it is predicted the development of homes in Ireland will balance out to their current high demand, and inflation will be seen to go down. This is likely to take the means of some buyers choosing to live outside of the Dublin area as well as the willingness for some to spend above budget on their desired homes.
It is likely the gap will begin its slow journey close, and the housing market will, eventually, stabilize.
