What can buyers and sellers expect?

TWO years into a falling market, house prices had begun to rise this year, according to a report published by estate agents REA during the week. The length of time taken for a property to sell had reduced from nine to eight weeks, and there was more activity in the market.

Then Covid-19 struck, and activity froze.

The effect was immediate. Dublin estate agent Owen Reilly reports that in one recent 24-hour period he saw 11 sales fall through. “But one property has just gone sale agreed for €1.3m too so it’s not all bad.”

Other agents report varying impacts.

“We have agreed a number of sales over the past few weeks across all price points, with competitive bidding, and bidding continues on many properties,” says Rowena Quinn, managing partner of Hunters. “We have had a few sales fall through, but by and large these were sales with legal or title ‘issues’, so I would have expected a number not to proceed in any event. There have also been a couple of casualties due to job uncertainty. I expect to see very few new launches in the coming weeks.”

In Co Cork, properties that have gone sale agreed are holding firm, says Maeve McCarthy, of Charles McCarthy estate agents. “No sales have fallen through as yet, though a couple of buyers are trying to chip off prices. There’s been no new business though — launches that were to come to market are holding off.”

Not surprisingly, says Austin Hughes, chief economist with KBC Bank, there has been “a temporary sharp change in the flow of transactions, in the flow of new entrants to the property market on both sides”. “[Covid-19] is very severe and very sharp in its impact on the economy but ultimately short-lived. We are still in circumstances where the underlying demand/ supply balance and the underlying health of the economy are positives for the property market.”

Owen Reilly comments: “In terms of prices,

I’m conscious that it’s going to impact negatively on the market but to what extent depends on how long this goes on for and how much damage is done to the economy. It’s too early to say.”

While Rowena Quinn expects things to slow down over the next few weeks, she thinks the market will lift quite quickly as a result of government assistance “as it is not a financial crash”. As for property values, she reports that stock is tight and that she expects lack of supply to remain the key issue.

“Those with mortgage approval wishing to buy a family home will do so. If prices do dip, they will rise again. Those people are not going to be selling that home in the next year or two.”