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House hunters have less spending power than a year ago – daftmortgages

By July 27, 2022No Comments

House hunters have €27,000 less spending power than a year ago, according to daftmortgages.ie.

The website analysed the buying plans of over 170,000 people preparing for a mortgage and it found that the typical mortgage seeker now has €11,000 (15%) less savings to put towards a deposit than mortgage seekers in the same position a year ago.

As a result, single first-time buyers and home movers have reduced their expectations for the amount they will spend on a home.

This is in the context of asking property prices increasing by €30,000 (9.5%) over the same period between the second quarter of 2021 and the same three months of this year.

In the case of first-time buyer couple mortgage seekers, the website found that they also have less savings than equivalent buyers a year ago but plan to borrow 6% more to make up the difference.

This will result in €59 higher monthly mortgage repayments, making their repayments €931 per month.

“It could be argued that the 15% reduced savings and therefore 9% reduced spending power for these house hunters may be a result of spending bouncing back as the Covid-19 pandemic restrictions lifted or could also be due to these customers feeling the pinch due to rising cost of living,” said Paul Monahan, General Manager at daftmortgages.ie.

How this trend among buyers will affect house prices remains to be seen as this will depend on supply and other factors.

These findings are based on Q2 2022 v Q2 2021 and come on the back of an analysis of over 170,000 people who submitted their buying plans in preparing for a mortgage on daftmortgages.ie.

81% of these customers are First Time Buyers, and 19% are Second Time Buyers.

A recent analysis by daftmortgages.ie, finds that house hunters have €304,000 on average to spend on a home; that’s €27,000 (6%) less spending power than a year ago.

The typical mortgage seeker also now has €11,000 (15%) less savings to put towards a deposit than mortgage seekers in the same position a year ago.

Single first-time buyers have €10,500 (19%) less savings for a deposit than this time last year.

As a result, single first-time buyers have had to reduce their expectations for the amount they will spend on a home by 7% to €215,000.

Similar to single first-time buyers, movers have also reduced the amount they plan to spend on their next home by 5%.

This is in the context of asking property prices increasing by €30,000 (9.5%) over the same period between Q2 2021 and Q2 2022.

The typical mortgage seeker now has €11,000 (15%) less savings to put towards a deposit than mortgage seekers in the same position a year ago.

In the case of first-time buyer couple mortgage seekers, they are particularly feeling the pinch with €15,000 (23%) less savings than equivalent buyers a year ago.

Their plan is to borrow 6% more on their mortgages to make up the difference.

This will result in a €59 increase in their monthly mortgage repayments making their repayments go from €872 to €931 per month.

First-time buyer couples will spend an extra €708 on their mortgage repayments per year.

Article Source: House hunters have less spending power than a year ago – daftmortgages – RTE

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