Despite a 30% increase in mortgage drawdowns, cash deals continue to account for half of all housing transactions according to property consultants Savills.
Although price growth has eased the total number of housing transactions continues to increase rapidly. And, despite new Central Bank rules which were designed to curtail lending, a significant amount of this activity derives from mortgage financed purchases which are up 29%.
Nonetheless cash deals continue to account for an astonishing 50% of all home purchases. According to Dr. John McCartney, Director of Research at Savills, this is due to the continued presence of investors in the market;
“Following the withdrawal of tax incentives last December many people expected investors to exit the residential market. However, we predicted that cash investors would remain active and this has proved to be the case. Their continued appetite for property reflects rent increases which have supported buy-to-let returns, and low deposit rates which are driving money into better yielding assets.”
Looking ahead McCartney said that cash will remain a big part of the residential story;
“Today’s Central Bank figures show that households have €93bn on deposit in the Irish banks. Given the differential between deposit rates and residential yields some of this money is surely going to find its way into buy-to-let investments.”