Property & Mortgages

House prices likely to hold firm in 2021 as people returning from abroad fuel demand

Mark Keenan



Many home hunters enquired about properties this year that were advertised as 'for sale' online but had already been sold.
Gallery 1
Many home hunters enquired about properties this year that were advertised as 'for sale' online but had already been sold.

Perhaps the ‘ghost estates’ are back. But this time the ghastly apparitions are disturbing us because they are all sold, rather than lingering and unsellable. They’re leaving a slew of annoying online sprites in their wake, too.

At year’s end, many home hunters who called up to enquire about properties advertised online were increasingly told: “Em, actually, that one is sale agreed. Oh and that one, too.”

Some estate agencies are now in the professionally embarrassing position of having hardly anything left to sell. Many are looking into bare stock cupboards and scratching their heads as an extraordinary year draws to a close.

An uneasiness about informing the public they are ‘homeless’ might mean they have been slow to take down ads for homes that are already gone.

Who would have expected back in March that a global pandemic, which has shut down so much of Ireland’s economy for almost a year, would actually bring about rising rather than falling property prices in many areas? Almost no areas are experiencing falling prices right now.

The estate agencies themselves had not even considered the unexpected inflationary consequences of an extended bout of Covid-19 on Ireland’s property market. Indeed, when Covid broke out, many economic commentators took a lead from stockbroker predictions and stated that prices would tank.

Supply was curtailed as construction was impacted. Viewings on properties that were for sale had to be postponed as sellers grew fearful of people traipsing through their home in a pandemic.

Home hunters panicked that banks might withdraw mortgage approval. Driven by this fear, they rushed around to try and buy in a smaller pool of available properties. Homes began to sell quicker. Competition drove up prices. Estate agents’ cupboards were cleared.

While on-site viewings were limited, agencies instead optimised online video and walk-through technology along with online-accompanied sessions. It worked.

Technology also allowed Ireland to work at home, with far better results than expected. The new possibilities, along with Covid-19, changed hearts and minds on existing lifestyle choices. As lockdown hit, those who had moved to Dublin or Cork years ago for employment reasons decamped back to their home counties.

With their eyes opened to the reality of working remotely, they dipped their toes into a new lifestyle closer to their families, closer to environmental amenities and minus frustrating hours wasted in traffic. On top of internal returnees came those arriving home from abroad (the highest in 13 years).

In short, Covid-19 caused increased demand for homes outside the big cities.

With more vendors expected to return to the market when the virus is vanquished, we could reasonably expect a counteracting period of deflation. However, a continued stream of returning buyers from abroad and an unchanged eagerness to make lifestyle choices should counterbalance that in 2021.

Right now, the estate agent’s biggest worry is how to fill that empty cupboard.

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