Market Trends:A finely matured Special Savings Incentive Account (SSIA) amounts to a sum of €20,000-€25,000: just the kind of money that could prompt a novice investor or would-be first-time buyer to pick up a few nice property brochures.
Couples with two SSIAs between them are in an even stronger position when it comes to entering the buy-to-let market, having ready-made deposit-sized lump sums with cash to spare for the fit-out.
But although many SSIA savers would have had a property purchase in mind when they first took out their accounts, a lot has changed since 2001-2002.
The "get rich quick" exuberance in the property market has evaporated in the face of rising interest rates and stalling capital appreciation, while potential first-time buyers may find that neither their €20,000 matured SSIA nor their incomes will go quite as far as it would have done five years ago.
SSIA spending plans have become more cautious, according to the recent IIB/Economic and Social Research Institute (ESRI) consumer sentiment survey on the housing market.
Only 4 per cent of SSIA holders said earlier this year that they would spend some or all of their money on buying an Irish property, down from 8 per cent in the same survey last year, when IIB Bank chief economist Austin Hughes was predicting that the €16 billion cash influx from SSIAs could add about 10 per cent to property prices.
Among those who did buy property last year less than one in 10 used their SSIA to fund the deposit, according to a survey of first-time buyers in the greater Dublin area conducted by Gunne Residential.
A third of the first-time buyers cited parental help as the main source of the deposit, while 35 per cent said their own personal savings provided the deposit.
But a mere 8 per cent said they used their SSIA to get on the ladder.
Declan Cassidy, managing director of Gunne Residential, says the number using SSIAs for deposits may appear low in the survey, which was conducted in February, because in some cases SSIA holders may have used a loan or borrowed from parents for their deposit last year with the intention of using their SSIA to repay those borrowings once their account matures.
After all, more than 500,000 of the 1.1 million SSIAs do not mature until the end of this month.
But Cassidy doesn't think that this cash injection into the economy will kick-start a fresh spurt of growth in the property market.
"There's been a levelling off and I don't believe that people with SSIAs are going to push prices up," he says.
Derek Brawn, head of research at Savills HOK, says that while the strong capital appreciation of the recent past has dissipated, rental yields are going in the right direction for investors thinking of getting in the game now.
"The people who should be buying now are investors, because of the rental yields. The demographics are huge, if you look at the net migration figures," says Brawn.
Although there are a lot of potential "one-off" investors out there, Brawn says, they will usually enter the buy-to-let market for a specific purpose: putting the property into a pension fund or buying it with the intention of passing it on to their children.
These potential investors don't need to rely on an SSIA cash injection: they can simply draw on the vast pools of equity they have tied up in their own properties.
With the interest rate cycle still on its way upwards and uncertainty about stamp duty hovering stubbornly around the market, many investors will be in the grip of the kind of "wait and see" attitude implied in the consumer sentiment housing survey.
But the currently high rate of inflation means that SSIA holders might be better off investing in property, even in the current uncertain environment, than leaving their money in deposit accounts, according to Brawn.
"Ironically it is when inflation is high that people shouldn't save because the rates they will get on deposit will largely be eroded by inflation."
