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Industry research suggests that sales prices in the housing market recovered strongly as much of the economy continued to reopen between July and September.
However, the 5.1 percent average annual increase recorded in third-quarter figures in a report from the myhome.ie website may have been another “aberration” caused by the impact of Covid-19, the report authors said. .
The third-quarter sales price “spike” in the report, which was produced in conjunction with brokerage firm Davy, was more pronounced outside of Dublin than in the capital, where the year-on-year increase was 2.5 percent, barely half the registered rate. elsewhere.
Myhome.ie, which is owned by the company that publishes The Irish Times, said that despite the economic crisis caused by Covid-19, the website recorded its highest traffic month in July.
The report’s authors suggested that the economic recession has had a “limited effect” on demand for home purchases. This is because most of the sectors that are impacted, such as retail and hospitality, traditionally have higher rent levels and are less important in driving buying activity.
Stock levels fall
“Our latest consumer confidence survey in August showed that 71 percent of prospective buyers expected to buy in the next year,” said Angela Keegan, CEO of Myhome.
“This shows that buyers appear to have been largely unaffected by the economic impact of Covid-19. On the supply side, meanwhile, inventory levels are down 25 percent compared to this time last year. This combination has led to higher sales prices. “
Conall MacCoille, Davy’s chief economist, previously said that a fall in sales prices of nearly 3 percent recorded during the second quarter hit by the lockdown was an “aberration” caused directly by the effects of the pandemic.
“The same is probably true for the more than 5 percent recorded in the third quarter. The truth is probably near the middle of these two readings, ”he said.
He said the reason for the third-quarter increase in annual figures lies in the fact that July to September is normally a weak period for prices in the housing market, capturing the end of the summer season. With some stifled demand caused by lockdown constraints and the subsequent “spike” in third-quarter activity, the annual performance was flattered compared to last year’s normal weak period.
“Asking for price inflation will probably recede in the fourth quarter,” he said.
Approval bounce
There was a quarterly spike in mortgage approvals after the close in the third quarter to 670 million euros, but this was still down by about a third in the same period last year. MacCoille estimated that transaction volumes in the period were down by about 37 percent, which is only slightly better than the 40 percent decline between April and June.
Average mortgage approval in the quarter was € 247,000 per application, representing a year-on-year increase of 4%. MacCoille said this may be because the weaker and lower-income applicants were removed from the system, as many people in that cohort may have been excluded because they were receiving pandemic unemployment payments.
Statistics from Myhome showed that sales prices rose annually in 19 counties in the third quarter, including Dublin and most of the West Coast, fell in five counties, including Monaghan with a drop of 8.3%, and held steady. in Meath and Kildare. .
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