Property markets worldwide are showing signs of slowing in response to higher interest rates with some going into reverse already.
For others, who will be entering the property market for the first time, they too will likely be meeting vastly more expensive mortgage costs in the years ahead. A €300,000 home loan, which would have cost just over €1,100 a month to finance over 30 years at an interest rate of 2%, would cost €1,600 a month to finance if that rate moved to 5%, according to calculations by the price comparison website, bonkers.ie.
According to the Banking and Payments Federation, while the number of approvals last year exceeded 58,000 - an increase of over 9%, with values up 18% to almost €16 billion - approval volumes fell in the final months of the year, particularly for first time buyers. The easing of the Central Bank’s mortgage lending rules at the start of the year will also no doubt support prices.
"It is surprising to not at least see the usual seasonal price falls during the quiet winter months," Conall MacCoille said.
Summary: they can and do. Ireland is only starting to see rising rates be passed on to customers but it will be early 2024 when we have data from this initial impact. By the end of 2024 the Irish property market will officially be in a negative growth period.
Long story short: demand and supply are driving prices and if interest rates are rising, property prices could be stagnant or even fall but doesn’t help those needing a mortgage since with the rates are going they will pay more regardless?
We need another global financial crash to sort all this out 🙄, no doubt another is coming our way soon. We'll see how tolerant and welcoming people are then when the real tussle for resources happens in Ireland.
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