House for sale; prices are falling…. yet there are no buyers!
DUBLIN: House prices are expected to fall for the first time since mid-2020, according to new figures from property website Daft.
House prices have been 0.5% lower than a year ago since April, according to Daft.
The average price of a house listed in the country between March and June, as per Daft’s findings, was just under €310,000. This is slightly lower than the same period last year, with prices in Dublin falling by 0.6% in the last year.
Waterford, Cork, and Galway all saw price decreases. However, prices in Limerick are up to 1% higher.
In the first week of June, Daft saw more than 13,000 homes for sale. Despite a slight increase in the number of houses for sale, the prices have not risen because the demanders are staying out of the market.
The demand for houses did not decrease, however.
Until the middle of last year, a borrower with €300,000 over a 30-year term could get a 2% mortgage. This equates to a monthly repayment of less than €1,109.
With the increase in rates to 3.5%, repayments also increased. Mortgage rates are expected to cross the 5% mark soon.
To maintain the same monthly repayment of €1,109 as before, either the amount borrowed or the value of the property would need to fall by around 30%.
Although the demand for homes in the country is increasing on a daily basis, rising interest rates are forcing them to stay out of the market. When the demanders came to the realisation that the rise in interest rates up to five percent would bring the mortgage installments to an unaffordable level, they were forced to give up their dream of buying and wait.
At the same time, many are waiting to see if prices will fall significantly again in the coming months as interest rates rise dramatically.
Lending banks, on the other hand, became more concerned about potential buyers’ ability to repay their loans, reducing the size of loan disbursements.
The European Central Bank has issued a warning that interest rates may rise several times before October.
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