Housing market resilient in face of Covid-19

Housing market resilient in face of Covid-19

  • Asking price inflation up 1.2% nationally in August compared with Q2 2019
  • Dublin inflation up by 0.3%; rest of country up by 1.5%
  • Strong quarterly inflation recorded
  • Demand likely a combination of high interest from those with mortgage approval and shortage of stock

Annual house price inflation has risen by over 1% despite the impact of Covid-19, according to analysis from leading property website MyHome.ie and Davy.

Key findings:

Region Mix-adjusted asking price Annual % change (Q2 2019 -> August 2020) Quarterly % change (Q2 2020 -> August 2020
National €280,000 +1.2% +4.3%
Dublin €383,000 +0.3% +2.9%
Ex-Dublin €234,000 +1.5% +4.7%

Asking price inflation rose by 1.2% nationally compared with Q2 2019, by 0.3% in Dublin, and by 1.5% elsewhere around the country.

The rise in quarterly asking price inflation has been even more pronounced – by 4.3% nationally, 2.9% in Dublin and 4.7% elsewhere around the country.

This means the mix-adjusted asking price for new sales nationally is €280,000, while the price in Dublin is €383,000 and elsewhere around the country it is €234,000. Newly listed properties are seen as the most reliable indicator of future price movements.

Conall MacCoille, Chief Economist at Davy, said: “The MyHome data shows pricing has held up during the summer months; the negative 3% inflation rate seen in Q2 2020 now seems an aberration, driven by the small numbers of vendors prepared to put their homes on the market during the exceptionally uncertain period of the lockdown. Looking ahead we think prices will be broadly flat in 2020, or see marginal declines, but the impact of Covid-19 on the housing market could have a longer, slow burn impact than many appreciate.”

Angela Keegan, Managing Director of MyHome.ie, said the increase in asking prices was likely a combination of people who already have mortgage approval moving to secure properties, and a shortage of stock. “One of the many negative effects of Covid-19 has been the decrease in construction output, which has had significant ramifications for the property market. Anecdotally we are also seeing people who have mortgage approval acting fast to secure properties and this, added to the fact that stock levels are low, is driving asking prices upwards.”

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