House prices have risen slightly despite the COVID-19 pandemic, according to a new report.
The latest report from Davy and MyHome.ie finds that prices are up 1.2% on last year – with prices remaining relatively static in Dublin and rising 1.5% in the rest of the country.
Meanwhile prices are up 4.3% nationally compared to the second quarter of the year, when the country was in lockdown.
On Breakfast Briefing with Niall Colbert this morning, Conall MacCoille, Chief Economist at Davy, said the drop in prices during lockdown now looks like a “bit of an aberration.”
He said there are two key reason why prices have not dropped in line with falling GDP and rising unemployment.
“Really, in the minds of a lot of people, they think the COVID-19 outbreak is still going to be a temporary thing that won’t affect the economy in the long term, say two or three years from now,” he said.
“The other point is that, although the job cuts have been very serious for the people involved, they have been biased towards people in the retail sector and tourism – younger more low-paid workers.
“The people there are just less likely to be home buyers and the older, professional classes have not seen job cuts so far, although clearly there is a risk of that.”
Mr MacCoille said the number of people looking up property on MyHome.ie is up 40% or 50% on last year.
“There are a lot of people in the background ready to buy houses and that reflects the lack of supply we have seen over the last three, four or five years,” he said.
He said Ireland’s rising population means the country needs around 30,000 new housing units every year – with 21,000 brought to market last year and between 15,000 and 16,000 expected this year.
“In 2021, it is really just down to the virus,” he said. “Will we start to redundancies and job cuts that are maybe higher up the income distribution curve?
“As we move into 2021 will people start to perceive that we are going to have to live with the virus for a much longer period of time?
“If that is the case, I suppose our base case would be broadly flat prices again but, having said that, there is a real risk that we will see price cuts next year if the impact of the virus is more persistent than people currently appreciate.”