November 2016 Mortgage Monitor

Over the past months, speculation has been rife in the Irish property market with regards to further government intervention in the market. That speculation has come to the fore in the last few weeks with the Central Bank altering its loan to value measures.

Central Bank chiefs Philip Lane and Sharon Donnery announce changes to the bank’s residential mortgage lending requirements. Photograph: Reuters/Clodagh Kilcoyne

Central Bank chiefs Philip Lane and Sharon Donnery announce changes to the bank’s residential mortgage lending requirements. Photograph: Reuters/Clodagh Kilcoyne

Ignite have been tracking sentiment in the Irish property market since 2014, and over the next few weeks we will be delivering a series of reports that look at the attitudes of Irish people in the property market towards the recent rule changes. But before we do this, we must look at sentiment in the market based off our most recent Mortgage Monitor survey that we conducted in November of 1,000 people.

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A lot has changed since the start of the year in the property market, and this is reflected in the shift in our segments since the start of the year. We have seen an increase of those in the market rise from 14% to 17%. This is partially down to seasonality, however we can still see a flow within the market. 

Volume & Prices Increasing

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The pressure being put on our property market is highlighted in the Banking & Payments Federations monthly report. Year on year we have had an increase in not only the volume of mortgage drawdowns, but also the value of those drawdowns. As we have seen from our previous reports sentiment among the population is driving prices upward.

At a total level, we can see that the price of property to increase in their county by 15% over the coming year which has increased from 13% at the start of the year. This has been a consistent trend across this year and previous years, and is no doubt driving prices up in the market.

When we look at renters, we can see a similar story – a 14% increase in rents is expected at a total level over the next 12 months.  Since we began tracking sentiment towards rents, we have seen a spike in expected increases in the Rest of Leinster region, which highlights the pent-up demand moving from Dublin to the commuter regions.

With prices demand and rent all continuing to rise, what impact is this having on various segments of the population? In our next series of reports we will delve deeper into this.