Mortgage Buyers Are Back, Edging Out Cash Buyers
The press is awash today with this story:
- The Independent – Cash buyers move out as families start trading up
- The Times – Proportion of property cash buyers declines in Q2
- The Herald – Cash buys down as experts predict 5pc jump in home prices
The Independent goes so far as to call this “The beginning of the end of the property crash“.
They are all reporting the latest SCSI report that found almost two-thirds of transactions in Q2 of 2014 were from mortgage buyers, while cash buyers who previously dominated the market have declined from 50% to just 35% from the previous three months.
Tell us something we don’t know…
It comes as no surprise to the estate agents handling hundreds of eager buyers each day. The first time buyer is out in force as the banks pump new lending into fresh green and previously debt free roots.
While it is great seeing the statistics on paper, the problem with reports is they are often out of date by the time they are compiled and published. We are 6 months into this revival in mortgage buyers, and only now and the press shouting about it.
Cash buyers priced out of mainstream market
The spectre of the dreaded cash buyer that many pundits and the media have been scaring us all with has really withered and died in the last 6 to 12 months.
Sure, cash buyers are still active but mainly in more niche areas: central Dublin apartments and small cheap houses, sites and anything outside of Dublin and the surrounding counties.
But inside the popular towns and cities of Leinster, the cash buyer has long been priced out by the new mortgage buyer. For your typically purchases that really matter to the average homeowner or first time buyer – 2 bed apartments, 3 to 4 bed houses – buyers are more often than not a mortgage purchaser, either a first time buyer or a trade-up whose home is being purchased by one.
Behind the times…
Despite the clear signs of improvement, and the evaporation of cash buyers, it’s not only the media that are out of date. Some industry heads are still behind in their understanding of the state of the market. The Indo quotes Mr Keith Lowe of DNG:
While we believe that the SCSI survey is certainly a good snapshot of what’s happening countrywide, we’re finding that cash buyers in the capital are still accounting for between 40pc and 50pc of purchases.”
From where we are standing, that is just not true anymore. But then, DNG don’t sell as many houses as we do…
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