SHERRY FitzGerald, one of Ireland’s largest estate agents, has reported that despite the profound economic impact presented by Covid-19, property values in the Irish second-hand homes market remained robust, with prices even noting a moderate increase over the course of 2020.
The average value of second-hand homes in Ireland increased by 0.6% in the fourth quarter of 2020, bringing total growth for the calendar year to 1.2%, exceeding the growth of 0.2% recorded for 2019.
In Dublin, prices increased by 0.4% in the final quarter, denoting the strongest quarterly growth in two and a half years.
Outside of Dublin, growth was marginally firmer, with average values increasing 0.8% in quarter four.
As such, average national values, excluding Dublin, rose 2.1% for the year in its entirety. Growth was strongest in the year in West and Midlands regions equalling 3.5% and 2.5% respectively. There was widespread stability in prices across the country, with no region recording a fall in values in the year.
According to Marian Finnegan, Managing Director, Sherry FitzGerald: “Throughout 2020, Irish property values displayed remarkable levels of resilience and stability.
“Despite the enormous global economic and social upheaval experienced in 2020, average property values noted a moderate increase in the year. Indeed, since the outbreak of Covid-19 within Ireland in March, property values have increased by more than 1%.
“Along with robust buyer demand, this resilience has been primarily a product of decreasing supply levels. This year has seen a reduction in approximately 15,000 units for sale across the new and second-hand market.”
In terms of transaction activity, quarter three saw an uptick in sales volumes following the greater re-opening of the economy, nevertheless levels remained subdued.
Excluding block sales and new homes acquired for social housing, there were approximately 29,100 recorded house sales on the Property Price Register (PPR) over the first nine months of the year.
Due to the time lag in adding properties to the PPR, quarter three data is the most accurate data available. Overall, the 29,100 sales represented a 25% decrease on the corresponding period in 2019, this decrease was consistent across both new and second-hand home sectors.
In Dublin, approximately 8,600 sales transacted, signifying a 31% drop in volumes year-on-year. Cork, Galway, and Limerick also noted decreases of between 22% and 23%.
Looking to the final quarter of the year, despite the imposition of Level 5 restrictions for a six-week period, it appears that sales activity continued to recover strongly and appears to be on course to return to more normalised levels of transaction output.
The disruption to sales resulted in some changes in the composition of buyers.
In total, 80% of all purchasers who bought second-hand homes through Sherry FitzGerald were owner occupiers, the largest proportion in eight years, with first-time buyers accounting for 54% of all owner occupiers.
This increased prevalence in owner occupiers in the market was primarily due to a proportionally steeper fall-off in investor demand. Overall, just 13% of purchasers were investors, the lowest level recorded since 2013.
On the vendor side, investors represented 30% of vendors and as such 2020 saw the gap between investors entering and exiting the market widen further.
In conclusion, Ms Finnegan said: “For many, the year-end will bring great relief rather than triumph and we can now look forward to 2021 with some degree of comfort.
“There is no silver bullet to solve the housing crisis, but we are beginning to see some progress. The Government announcement around a Shared Equity Scheme is very welcome.
“This scheme has the potential to assist in the delivery of 3,000–5,000 additional new homes annually. The recent enhancement of the Help-to-Buy scheme is also beneficial.
“However, if I had one wish for housing in 2021, it is that all stakeholders would listen to alternative perspectives and work together to develop much more collaborative solutions to deliver affordable homes for all our people.”