While there’s little doubt the economy has suffered enormously as a result of the Covid-19 pandemic, the residential property market has demonstrated “remarkable resilience”, notwithstanding the significant disruption caused by the lockdown.
That’s the key, and somewhat surprising finding of Sherry FitzGerald’s latest Irish Residential Market Review.
According to it, both property values and buyer sentiment appear, so far, to be largely unscathed by the crisis. All of which would appear to be good news for estate agents and for those looking to put their homes up for sale over the coming months.
But while the market may appear to have held up under the unprecedented challenge presented by the coronavirus with just a 0.3 per cent slippage in prices recorded in the 12-month period to the second quarter of 2020, the report’s authors temper their view with an acknowledgement that this “steadiness” has been reinforced by the reduction of properties coming for sale during lockdown, and the temporary cessation of new home building in the same period.
In the case of second-hand properties, Sherry FitzGerald’s latest analysis of the stock available for sale shows that a total of just 18,100 properties were available for sale in the first week of June 2020. This represented a 22 per cent decline, or over 5,000 fewer properties available than there were in summer 2019.
Challenges
The decline was, unsurprisingly, most pronounced in the depths of the Covid-19 lockdown. Across March, and the traditionally-busy months of April and May there was a reduction year-on-year of over 10,000, or 69 per cent in the volume of second-hand properties brought to market. And although a return to more normal levels of new listings was noted in June, volumes remained 19 per cent down year-on-year.
But while the Covid-19 pandemic continues to cause particular uncertainty for vendors, buyer sentiment remains strong with 82 per cent of those who responded to an online survey conducted by Sherry FitzGerald in June saying they were “just as committed” or “more committed” to purchasing a property. The report notes that this commitment held across all age groups, locations, purchaser profiles, current accommodation circumstances and price ranges for the survey’s respondents.
When asked to list the challenges faced in purchasing a property, 55 per cent of respondents reported difficulty in securing a property in their preferred location, while 36 per cent said there was a lack of suitable stock in their price range. Other challenges provided varied by the type of buyer, with younger respondents more likely to list accessing mortgage or finance as a challenge.
Despite the adverse impact of Covid-19 on the labour market, and the high numbers in receipt of income support from the Government, just 3 per cent of respondents listed uncertainty about their or their partner’s job security as a challenge. Sherry FitzGerald said it is possible that this sentiment will change however if there is a second wave of the coronavirus later in the year.
