Working from home driving house buyers out of suburbs
WORKING from home is driving many families and potential house buyers away from the popular urban areas, surveyors say.
More people are looking for larger properties in rural areas with good broadband, according to a study by the Society of Chartered Surveyors Ireland.
Its annual residential property review predicts that prices will rise by 4%, on average, this year.
Two out of three of the 800 members surveyed said they expected prices to rise. They forecast a 3% increase in the Dublin area and a 6% rise in Connacht and Ulster.
TJ Cronin, vice-president, said coronavirus was likely to significantly disrupt the market again and a lack of supply would be a key factor.
‘2020 was dominated by Covid-19 and this led to a stop-start-surge property market, which only began to taper towards the end of the year,’ he said.
He said: ‘Agents believe Covid-19 will once again dictate activity levels in 2021 and, given the recent introduction of new restrictions, it’s very possible we could see a repeat of the stop-startsurge pattern in 2021.’
He added that 62% of the chartered agents and auctioneers who are predicting prices will rise say it is because of the lack of supply, while 33% say economic performance and Covid-19 are the key drivers.
‘We can see that the transition to working from home has led to a reordering of priorities and is driving interest in larger properties in regional locations with good broadband and lots of amenities as well as holiday homes in secondary locations.’
The report added that the trend away from buying in urban areas is also reflected in the survey’s price projections, with agents in Dublin forecasting the lowest growth, and agents in Connacht/Ulster the highest.
‘While Covid-19 has badly affected certain sectors, it has enabled prospective buyers who work in areas which haven’t been hugely impacted, such as pharma, tech, financial and the public sector, to increase their savings,’ it said.
‘We’ve also seen a big inflow of Irish people returning from abroad, to Dublin in particular, and this has underpinned prices at the upper end of the market,’ he said.
‘In a situation where you have very limited supply – 83% of agents report having low levels of stock available in Q4 – the fear of missing out on a property will very often trump the fear of paying over the odds.’
Meanwhile, rent legislation was cited by surveyors as the main reason investors are leaving the rental market.
While figures from the Residential Tenancies Board show that rental prices have shown the lowest national annual growth rate since late 2012, agents believe the alleviation of supply – due to several thousand short-term lettings previously marketed at tourists coming on the market – is likely to be a one-off occurrence.
Just under 40% of respondents expect to see an increase in the number of buy-to-let (BTL) properties coming onto the market this year.
However, as many as 42% expect the number to remain the same and 19% are expecting to see a decrease.
The sale of BTL properties to owner-occupiers has been commonly cited by agents as a major reason for the continued lack of rental supply for people here.
When asked what the main reason was for BTL properties coming on the market, most agents said it was due to rent legislation which they claimed was too complex and too restrictive.
Other reasons they gave included some landlords coming out of negative equity and low returns.
The report also found that the market weathered the Covid-19 storm last year with the stop-start-surge of property activity.
However, while 77% of surveyor society’s agents expected property values to decrease in the first three months of last year, this fell to just 8% in the final three months of the year.
‘Lack of supply to push up prices’ ‘Fear of missing out adds to cost’