Ireland's Housing Market Comes to Grinding Halt from Coronavirus Outbreak

Ireland property portal Daft.ie's newly released Property Sales Report says the number of homes listed for sale in Ireland has fallen dramatically, in the wake of the Covid-19 pandemic and the restrictions of everyday life. There were just under 1,300 properties posted for sale nationwide between March 15 and March 28, 2020, half the total for the same two-week period a year earlier.

The report also outlines trends in list prices for housing over the entire January-March period. With Covid-19 not affecting day-to-day life until the final two weeks of March, there was little sign of any price effect. Nationwide, housing prices rose by 2.2% in the first quarter of 2020 to reach an average of €256,338. However, having fallen in both the third and fourth quarters of 2019, the average price nationally in the first quarter of 2020 was 1.7% lower than the same time a year ago.

In Dublin, prices fell by 2.6% in the year to March 2020, as did prices in Galway city, while prices were also lower in year-on-year terms in Cork city, by 0.7%. In Limerick city, prices were 0.9% higher while in Waterford city, prices were largely unchanged on a year ago (down 0.1%). Outside the cities, prices have fallen in Leinster by 2.2% and in Munster by 1%, but are 1.6% higher in Connacht-Ulster.

The number of properties available to buy on the market nationwide was just under 19,900 in March December, down almost 12% year-on-year and the first time since late 2006 that fewer than 20,000 homes have been on the market. Following nearly a year and a half of improving availability, this marks the seventh consecutive month where stock on the market has fallen. The fall in availability is seen in all parts of the country, but is most pronounced in Dublin, where availability has fallen over 20% in a year.

Commenting on the report, its author Ronan Lyons, economist at Trinity College Dublin, said, "Just three months ago, I wrote of there being a relatively good balance in sales segment, for the first time in a long time, even if the rental and social housing sectors remained broken. The last few weeks have changed the prospects for the Irish housing market entirely, with the Covid-19 pandemic reaching Ireland and completely disrupting everyday life for weeks and possibly months to come. There is, as of now, very little evidence of this affecting prices of property for sale but that is unsurprising. In such uncertain times, the first reaction will be through quantities, not prices, with both buyers and sellers holding off until the future becomes a little clearer.

"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. 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. The scale of the fall in prices is still unclear at this point. Ultimately, the effect on the property market will depend on a number of factors, including the extent of disruption, the speed of recovery and the impact on numbers employed, average incomes and whether Ireland's business model - acting as a base for North American firms to access the European market - is in any way affected in the long run."

Commenting on the report, its author Ronan Lyons, economist at Trinity College Dublin, also commented, "Just three months ago, I wrote of there being a relatively good balance in sales segment, for the first time in a long time, even if the rental and social housing sectors remained broken. The last few weeks have changed the prospects for the Irish housing market entirely, with the Covid-19 pandemic reaching Ireland and completely disrupting everyday life for weeks and possibly months to come. There is, as of now, very little evidence of this affecting prices of property for sale but that is unsurprising. In such uncertain times, the first reaction will be through quantities, not prices, with both buyers and sellers holding off until the future becomes a little clearer.

"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. 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. The scale of the fall in prices is still unclear at this point. Ultimately, the effect on the property market will depend on a number of factors, including the extent of disruption, the speed of recovery and the impact on numbers employed, average incomes and whether Ireland's business model - acting as a base for North American firms to access the European market - is in any way affected in the long run."

Average list price and year-on-year change - major cities, 2020 Q1

• Dublin City: €372,579 - down 2.6%
• Cork City: €278,993 - down 0.7%
• Galway City: €290,812 - down 2.6%
• Limerick City: €201,778 - up 0.9%
• Waterford City: €182,092 - up 0.2%