The average value of second-hand homes in Ireland remained broadly stable in the second quarter of 2020, according to Sherry FitzGerald.
In the opening six months of the year, nationally there was a small 0.1% rise in prices. This compares to growth of 0.6% in the corresponding period last year.
In Dublin, prices were also unchanged in the quarter, recording a negligible 0.02% fall in the six months period to the end of June. This compares to a negligible increase of 0.1% in the same period in 2019.
House prices outside Dublin were static in the quarter, but up 0.3% in the year to date. In the regional centres of Cork, Galway and Limerick, prices grew by 0.4%, 0.6% and 0.2% respectively so far this year.
Furthermore, since the easing of lockdown restrictions and the re-instatement of physical viewings on June 8th, activity levels have been brisk and sentiment very positive among buyers.
To attain a greater understanding of sentiment, Sherry FitzGerald issued a survey to over 10,000 potential purchasers, with a very high response rate of 16%. When queried as to their view of the market, the majority, over 60%, said that their sentiment was unaffected by Covid-19, but notably 20% of respondents said they were now even more committed to buying.
The respondents were young, 62% under 40 years of age with a high proportion of first-time buyers. Notably, 80% of respondents were seeking a house or apartment of less than €500,000 in value. Interestingly, 67% of respondents have been actively looking for a property for less than 6 months.
Since the implementation of the lockdown, there has been a significant drop in both the current stock of properties for sale and in the quantum of properties that will be constructed this year.
The latest analysis of stock available for sale reveals that there was a total of just 18,100 second-hand properties available for sale in the first week of June 2020. This represented a 22% decline or over 5,000 less properties available than there were in Summer 2019. Overall, this volume of properties for sale represented just 1% of the total private housing stock. While in Dublin, there was only 0.7% of the total private housing stock advertised for sale, down 29% on Summer 2019.
This significant fall in supply is a direct result of the sharp decline in properties being brought to the market. Across March, April and May there was a reduction year-on-year of over 10,000, or 69% in the volume of second-hand properties brought to market. April and May usually represent two of the busiest months of the year for new listings.
In reviewing transaction activity, owner occupiers, in particular first-time buyers, remain the dominant players in the market. Owner occupiers made up 81% of all purchasers who bought through Sherry FitzGerald in H1 2020, with first-time buyers accounting for 54% of owner occupiers.
Sherry FitzGerald say another persistent trend is the continued withdrawal of investors from the market. Approximately 32% of all vendors selling with Sherry FitzGerald in the first half of 2020 were selling investment properties. Comparatively, just 12% of all purchasers were investors. If this proportion were to hold until the end of the year it would represent the lowest proportion of investors entering the market since 2012.
This trend is further evidenced by the latest tenancy data from the Residential Tenancy Board which reveals a loss of over 7,500 private rented tenancies between Q1 2019 and Q1 2020. Over 4,000 private landlords left the market in that same period.
Looking ahead, Managing Director at Sherry FitzGerald, Marian Finnegan said, "Covid-19 represents a once in a lifetime shock to the economy. Yet despite the severity of this economic shock, the housing market has proved to be resilient both in terms of prices and buyer sentiment. This resilience reflects the underlying strength of demand for housing and the shortage of available properties. We started 2020 with a housing crisis and unfortunately that has only worsened."
She added, "The combination of reduced construction activity, a loss of second-hand stock coming to the market and the continued exodus of investors from the residential lettings market all serve to further damage market stock levels. It is therefore imperative that policy measures to support viability and affordability of the market are implemented promptly by the new Government to allow activity levels return to normal."