Covid-19 crisis likely to make home-buying more exclusive – survey
While some see home-buying as a priority, others are more financially constrained
As part of its November consumer sentiment survey, KBC asked a number of supplementary questions regarding the impact of Covid-19 on housing demand. Photograph: Tim Ireland/PA Wire
The Covid-19 crisis has made home-ownership more of a priority for some people but financially more difficult for others, a survey by KBC Bank Ireland has indicated.
As part of its November consumer sentiment survey, the lender asked a number of supplementary questions regarding the impact of Covid-19 on housing demand.
More than a fifth of people (21 per cent) said the pandemic had increased the importance of living space for them, as opposed to 14 per cent who said it had not. The remainder were unchanged or did not know.
KBC said the finding was significant and was likely to boost demand for homes.
Living conditions were more likely to have increased in importance for those on higher incomes, KBC found, suggesting they had suffered less of a hit than those on lower incomes.
Living conditions were also more important for people living in Dublin, possibly reflecting smaller living spaces.
Conversely 21 per cent of people said the pandemic had decreased their savings capacity or the money they could put towards house purchase – more than the 18 per cent who said the opposite.
While this runs contrary to reports on the sharp rise in deposits and related commentary on potential implications for property prices, it likely reflects the uneven nature of the impacts of the pandemic across the income distribution, KBC said.
“The survey results that hint at a clear split in the circumstances of the potential pool of Irish home-buyers may go a little way towards explaining the contrast between a sharp drop in housing transactions and a comparatively resilient trend in property prices,” KBC Bank Ireland economist Austin Hughes said. He noted that other factors, such as the impact of restrictions on the home-buying process, have also clearly been a key influence.
The survey also suggested that the pandemic had increased the willingness of 16 per cent of Irish consumers to live further from work. This tallies with the increase in remote working. On the flip side, a larger cohort (21 per cent) said they were less willing to live further from work.
“ The pandemic markedly reduced the willingness of those on lower incomes to live further from work,” Mr Hughes said. “ This result likely reflects both variations in the capacity to work from home and significant curbs on public transport,” he said.
The survey indicated that 27 per cent of consumers think that Covid-19 has increased prices for the sort of property they would be interested in buying whereas 15 per cent think prices have eased.
“Across all age and income groups, significantly more consumers feel price pressures had increased rather than declined since the pandemic,” Mr Hughes said.
“ This may reflect a greater focus on particular elements of a property (eg inside and outside space, orientation, local amenities) that have translated into more concentrated demand for a narrower range of properties,” he added.
In the same vein, 28 per cent of prospective renters felt rents for the sort of property they wanted had increased since the pandemic, he said.