New survey measures impact of the coronavirus on buyers and renters

New survey measures impact of the coronavirus on buyers and renters

Realli, Ireland’s new property portal, has released a survey assessing how the coronavirus pandemic is affecting home buyer and renter sentiment in Ireland.

It is the first in a series of surveys aimed at gauging consumer behaviour and was carried out between 20-25 March, garnering 983 responses from prospective buyers and renters. The majority of respondents were aged between 30 and 34.

Despite the obvious uncertainy the survey found significant optimism in buyer sentiment. Just over a third of people said they will buy if they find the right house for them. Around 70% of people think house prices will drop as a result of the Covid-19 so they might be waiting to snap up a bargain.

The report said decisions would be delayed.

“It's only natural that some people looking to buy homes, especially first-time buyers, are deciding to delay their decisions until there is more clarity on the market with 48.3% of house-hunters surveyed taking a more cautions wait and see approach.

“There is a strong possibility that there will be pent up demand for homes fueled by higher savings, once the crisis is over, which current projections suggest might take up to two quarters. As the recovery has taken hold over the last number of years and the economy has grown people have been saving, and they will continue actively house hunting and ready to purchase once the market stabalises.

“Furthermore, unlike the 2008/09 collapse, mortage availability is likely to be maintained. Banks are also much better capitalised than 12 years ago. This suggests that once the shutdown passes, a healthy credit market could allow demand to recover fairly quickly, putting a brake on any house price falls,” said the report.

The survey showed that 65% of people are primarily concerned about the instability in the economy and hte knock-on impact on the banking sector. Some 23% are primarily concerned about their ability to pay the mortgage if the virus results in a loss of income.

It also indicates that more than 90% of people believe the Government should legislate pausing mortage payments for up to six months while the country comes to terms with the crisis.

However, there is a clear split between buyer sentiment and the situation facing renters.

Three-quarters of those survyed who rent said they have nowhere else to go if they can't pay rent due to Covid-19. Around half of people said they pay more than €1,000 a month in rent with a further 37% paying between €600 and €1,000. Just over a third of people would no longer be able to pay their rent after just one mont of unemployment.

Realli say there is some positive news in the rental market however, as landlords who hasd been letting their city centre apartments on a short term basis to tourists have put them on the market for rental as tourism has ground to a halt, significantly increasing much needed supply to the rental market.

Realli plan to re-run the survey in April to see how much buyer perception changes.

In response to the findings Realli recommends that the Government accelerates measures which will provide more clarity including introducing support for current homeowners and those trying to buy homes.

While some Goverment departments are to be commended for acting rapidly to address people's concerns, Realli said more decisives measures are needed.

Realli proposes:

- Expanding the Rent to Buy scheme to all homes for sale. As the economy settles they believe this will stimulate demand.

- Legislate for mortage payment holiday of three to six months to help households in financial difficulty to weather the storm.

- Cut mortgage interest rates once mortage payments resume throughthe Central Bank to help all homeowners.

- Accelerate home building through the Land Development Agency.

KEY SURVEY FINDINGS

- 12.7% of people are not concerned about the impact of the instablity in the economy on mortage applications

- More than 40% of people are paying more than €1,000 in rent

- 48.3% of prospective homebuyers taking a cautious ‘sit and wait approach’ before committing to buying a new home.

- The survey findings suggest government should legislate pausing mortgage payments for up to six months while the country comes to terms with the crisis.

- A third of people need €1,500 per month to pay the bills.

-60% cannot work from home.

- Nearly 60% believe employers should help with rent and utility bills if they have they have to work from home.

-Survey shows there is a clear split with situation facing renters, with 71.6% of people saying they have nowhere to go if they can’t pay their rent due to Covid-19.

- In response to the Realli survey findings the following are priority initiatives that Realli recommends:

- Expanding the Help-to-Buy scheme to stimulate demand in the market and provide first-time buyers much needed relief.

- Legislate for mortgage payment holiday to help households in financial difficulty.

- Cut mortgage interest rates for both established home owners and first time buyers.

- Accelerate homebuilding through the Land Development Agency,

building social and affordable housing for long term stability.