Analysis shows that cash is king in the Irish housing market

Analysis shows that cash is king in the Irish housing market

As the housing market in Ireland is heating up again, we examined the trends in cash purchases of housing from 2010 till 2016. There is a significant jump in non-mortgaged home purchases going from €347 million in 2010 to approximately €6 billion in 2016. This represents an increase of more than 1,600% over that period.

Housing sales 2010-2016: cash vs. mortgages

To see an interactive version of this graph, click on the image above

The proportion of cash transactions for housing in Ireland peaked in 2013 and has been on a downward trajectory since then. However, it is still 44 percentage points higher than where it was in 2010.

Cash sales as a percentage of housing transactions has increased massively since 2010, and recently declined slightly.

To see an interactive version of this graph, click on the image above

There can be significant externalities created by an influx of cash within the property sector. It can lead to an increase in home prices and displace the median income
home buyers out of the property market, leading to an increased affordability gap. It should be noted that although cash sales have been a feature of the Irish housing market, recently the proportion of institutional and international investors has increased. Finding data on investments by international property players such as Blackstone within the Irish real estate market would require further research. It is well understood that credit cannot compete with cash. As long as the housing market in Ireland is dominated by cash buyers, whole classes of renters are likely to be priced out of their dream of owning a home.