From a market perspective, MyHome recorded an average 4.6% drop in property sales activity nationally (down 7.2% in Dublin and down as much as 17.8% in Wexford) for Q1 and is predicting the start of a buyers’ market. A greater reduction in sales activity seems inevitable for the next quarter and likely the one after that. Anecdotally, sales that were already in motion prior to the shutdown have some chance of going ahead, however, the rest of the market is effectively frozen (there are rumours of PRS activity but we will need to wait and see if these get over the line). Not all of this can be attributed to Covid-19, Brexit had already cooled the market in late 2019 so it is difficult to measure the true impact of the pandemic at this time.
Writing in the Irish Times this week, economist and managing director of Sherry FitzGerald Residential, Marian Finnegan, remarked that “projecting the total economic fallout and impact on the Irish housing market from the lockdown and the restrictive measures that will inevitably be in place immediately afterwards is incredibly challenging. Furthermore, the scale of the crisis is still unclear and remains dependent on the length restrictive measures are in place both at home and abroad. Inevitably though, the impact will be wide-ranging, with price performance, transaction activity and construction output all impacted in the short term to a greater or lesser extent”. She goes on to highlight the importance of policy support for the construction sector given that Ireland’s housing crisis has not gone away and has, in fact, deteriorated further during this period of shutdown. Sherry FitzGerald takes the view that the 21,000 new homes built in 2019 represented an estimated shortfall of 12,500 to 18,500 homes. The anticipated drop in output for 2020 will only compound this shortfall further. With second-hand home listings down 40% in March, year-on-year sales activity for 2020 is expected to reduce by at least 25%. Again, it is too early to call the true impact. The next month or two will be critical as construction resumes under the watchful eyes of the Government, the HSE and the general public. As an industry, we need to get these next steps right.
Director / Business Development
Lotus Investment Group