Recession fears edge worries over housing costs among Irish households

Irish Times

4 days ago

The risk of recession has become Irish households' top concern for the first time in
Bank of Ireland's
quarterly savings and investment index.
The threat of tariffs and the impact of unrest in the Middle East mean it overtook worries about the
cost of housing
.
Investors, overall, have turned more cautious, the bank said with fewer people putting money aside. The bank's Savings and Investment Index dropped to 87 in the second three months of the year, down from 94 in the first quarter. –
There was actually an increase in the amount being invested compared to last quarter, the bank said, but over half of consumers believe stock markets will be lower in the next six months.
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Concern at the risk of a global recession has jumped following a series of Irish and international outlooks that have downgraded economic forecasts in recent weeks. Ranked the top concern by 21 per cent of respondents, up eight points on three months previously, it leapfrogged the cost of housing/rent and inflation as the issue foremost in consumers' minds for the first time since the option was included in the survey back in 2022.
Bank of Ireland said the issue features most prominently among those aged 30-59 (24 per cent) and among professional/managerial groups (27 per cent).
The cost of housing and/or rent continues to dominate concerns faced by younger age groups, with 28 per cent of those aged between 16 and 29. For another one in four of this group, inflation and the cost of living is their main worry.
Kevin Quinn, chief investment strategist at Bank of Ireland,
said it was the first time that recessionary fears had featured so highly in its quarterly surveys.
'With tariffs dominating public discourse up until quite recently and the Israel-Iran conflict now to the fore, it's little surprise that these concerns are prominent,' he said.
'It's also no surprise to see housing concerns and the cost of living remaining uppermost among younger age groups.'
After notching up investment gains of almost 50 per cent in global equities in 2023-24, Mr Quinn said, a global equity portfolio notched up losses of 15 per cent in the months up to early April 2025.
'This has clearly influenced how people viewed the prospects for investing. That we have seen a powerful recovery of most of the losses since then will take time to filter into people's attitudes,' he said.
The savings element of the index reading of 87 was nine points lower than the high it had hit in the first quarter. The main feature was a slide in the number of people saying they were actively saving at the moment, while the number of those who think they are saving enough was also lower.
'It appears we reached a peak for Quarter 4, 2024 and Quarter 1, 2025 surveys. After eight interest rate cuts from the European Central Bank, many savers may feel that the rewards on offer are likely to drop,' Mr Quinn said.
The investment element of the index also read 87, but that marked a more modest drop of five points.