The latest figures from Daft.ie have found that after the initial shock of the April lockdown, house prices and rents have been resilient since then. Asking prices of properties rose by 2.3% month on month (mom) in July, leaving prices unchanged on an annual basis.
Dublin is outperforming, with asking prices up 1.2% year on year (yoy), defying the recent narrative of a move away from the cities hitting demand. Goodbody Stockbrokers say the relative resilience of prices is partly explained by the low level of stock (-22% yoy).
Rents also rose, for the third consecutive month, having fallen sharply in April. Given the increase in rental stock available, this is somewhat confusing, but may be partly explained by the rental pressure zones which make it impossible for landlords to raise rents if they reduce them. Rent-free periods may be offered instead.
On the housing policy front, the Irish Independent is reporting that the Minister for Housing is formulating a shared equity ownership scheme that may be announced in the coming months. This is something that Goodbody have speculated about previously as a solution that may be used to bridge a gap between the high rents, the loan to income rules and the cost of homebuilding in Ireland.
Based upon the reports, the proposal is akin to the UK's Help-toBuy scheme whereby the State takes a stake in the property which can then be bought out by the homeowner later.
According to Goodbody Stockbrokers, "The challenge for the government is to minimise the potential impact on house prices of a policy like this. To do this, the rules of the scheme will have to be tied together with the 3.5x loan-to-income rule with a price cap set such that it incentives builders to bring product at the appropriate price point for first time buyers."