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Majority of potential homebuyers believe next year will be a good time to buy property

Over a third of respondents believe prices will drop by over 10% in the next 12 months.

Image: Leah Farrell/Rollingnews

A VAST MAJORITY of prospective homebuyers are still planning on purchasing a property in the next year despite the interruption to the market as a result of Covid-19, according to a recent survey. 

Six out of ten respondents said they believed next year would be a good time to buy property, with over a third (37%) believing prices will drop by over 10% in the next 12 months.

The survey of 1,981 people, carried out property website MyHome.ie, suggests that 68% of prospective buyers are still planning on buying a new property in the next year.

The proportion of people who believe the Government could do more to help the property sector during Covid-19 was relatively high at 69%. 

Recent analysis by the Economic and Social Research Institute (ERSI) estimates that house prices in Ireland could fall by as much as 12% due to the Covid-19 crisis over the coming 18 months – although the extent of the collapse in the market is not yet fully clear. 

The research suggests that if the economy faces a “sluggish” recovering in the months ahead, house prices could fall by 12% by the end of 2021. 

If Ireland enjoys a v-shaped recovery from the crisis – a rapid decline and a bounce back – house prices could return to the level they are now by the end of next year. 

‘Construction is crucial’ 

When asked what factors would encourage them to buy a property now, 35% of respondents said more available housing stock, 33% said more overall confidence in the economy, and 33% also said an easing of mortgage lending rules.

Due to the ongoing restrictions, half of the respondents (51%) believe online viewings and virtual tours are effective ways to view a property, with 59% of respondents believing it will lead to more online processes in general to minimise unnecessary contact.

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“Even though Covid-19 has essentially frozen the market, this survey shows that prospective buyers are still confident about their ability to purchase in the coming year, possibly driven by an expectation of falling prices,” said Managing Director of MyHome.ie, Angela Keegan. 

Keegan said it was “crucial” that construction is allowed to continue without interruption, “as it is clear that supply issues are still a significant concern for people”.

The same ESRI report published last month also suggests that supply may be crucial in determining how steep the drop in house prices is – noting the impact of the pandemic on both the construction industry and on private investment. 

It warns that given the fact that Ireland already faces a major shortage of houses, the impacting on construction may “put additional upward pressure on house prices when the domestic economy recovers exacerbating the affordability issues”. 

Phase One of re-opening the country began last month and saw many construction workers returning to work on a phased basis.

About the author:

Adam Daly

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