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About four in 10 Irish people are concerned by the growing cost of buying and renting homes, according to a survey released on Wednesday.
The Bank of Ireland Economic Pulse, which measures business and consumer sentiment, shows that 38 per cent of people are concerned by rising house prices, while 43 per cent worry about the cost of renting. It notes that 72 per cent of people expect rents to rise in 2018 and that about 40 per cent expect house prices to rise by more than 5 per cent.
Loretta O’Sullivan, Bank of Ireland’s group chief economist, pointed out that prices and rents have borne the brunt of the mismatch between housing supply and demand, and would do so again in 2018. Although the supply of new homes is increasing, it is expected to stay well below demand for some time to come, according to the survey.
The overall Bank of Ireland Economic Pulse for December, which surveys 1,000 homes and 2,000 businesses, was down 1.5 on November and 3.5 below December 2016’s reading. This indicates that sentiment is weakening. “After an action-packed year of economic and political events at home and overseas, the economic pulse has ended 2017 on a softer note than it started it,” Ms O’Sullivan said.
The business pulse came in at 87.5 for December, 1.6 down on November and 5.7 behind its reading a year ago.
Ms O’Sullivan explained that this month’s survey took place in the middle of talks on Brexit and the Irish Border, which she suggested could have had an impact on the responses.
Although the consumer pulse eased to 94.7 in December from 95.9 in November, it was more than five points ahead of this time last year.
“The economy is growing, jobs are being created, incomes are increasing and the unemployment rate has fallen further,” Ms O’Sullivan said. “All of these factors are supporting household confidence.”