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Eamonn Farrell/RollingNews.ie
# Housing Crisis
House completions likely to 'dry up' as homes on sale at lowest level since 2006
Daft.ie says that this is the first time since late 2006 that fewer than 20,000 homes have been on the market.
THERE ARE FEWER properties for sale in the country than at any point in the last 14 years, according to the latest house price report by Daft.ie.
The report published this morning warned that the Covid-19 crisis was “a threat to Ireland’s nascent housing market recovery” and that it could hurt the supply of new housing.
The report finds that the number of homes listed for sale has fallen dramatically in the past few weeks, with author Ronan Lyons stating that it has “changed the prospects for the Irish housing market entirely”.
Speaking yesterday to TheJournal.ie, David Browne of real estate firm Savills Ireland said that the number of housing transactions had “come down dramatically”. This is also reflected in the number of homes being listed on Daft.ie.
“The number of properties listed for sale in the final two weeks of March 2020 was 1,299, barely half the total seen in the same two weeks of 2019,” Lyons writes in the report.
“This is likely to continue as long as everyday life is suspended in Ireland, with consequences for the number of transactions that will take place in the second half of the year.”
Daft.ie says that the number of properties available to buy on the market nationwide was just under 19,900 in March, down almost 12% year-on-year and the first time since late 2006 that fewer than 20,000 homes have been on the market.
While the Covid-19 crisis represents a blow to the supply of housing, March was in fact the seventh month in a row that the stock of available housing had fallen. This consistent fall in supply can be observed in all parts of the country but is most dramatic in Dublin where availability has fallen over 20% in a year.
The report goes on to suggest that the crisis could have the knock-on effect of stalling of housing developments.
“As Ireland locks down for weeks and maybe months, it seems very likely that new housing completions will dry up. The full effect of this may only be realised, once demand picks back up… whenever that is,” it states
House prices
In terms of house prices, the Daft.ie report says that it is “still unclear at this point” to what extent prices are likely to fall as a result of the crisis.
An examination of the list price of houses on the site shows a decline in the price in the second half of March, but also that prices are still above January and February.
“At first glance, this may seem bizarre but this is on reflection less surprising. The first reaction in the sales segment of a housing market is not to cut prices but withdraw if possible,” the report states.
“Those going on the market in late March 2020 were, almost by definition, more confident about the future or perhaps less aware of just how serious the health and economic consequences were forecast to be.”
The quarterly report does note, however, that with the effect of Covid-19 on the economy not being felt until late March, nationwide housing prices rose by 2.2% in the first quarter of 2020 to reach an average of €256,338.
Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.
