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Property prices hold firm despite challenge from pandemic

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Austin Hughes
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Property prices have held firm despite the impact of Covid-19, according to a new report published today exclusively in the Sunday Independent.

Research by the Institute of Professional Auctioneers and Valuers (IPAV) shows that for the first six months of the year, prices fell nationally by as little as -0.7pc, reducing the average price to €262,312.

However, in some rural areas, where demand has increased because of people's changing lifestyles during lockdown, price have seen a slight rise.

"House prices are still very strong and very resilient even with Covid-19. All the things that people thought would happen in lockdown, haven't happened," said IPAV chief executive Pat Davitt .

In the early stages of the pandemic there were fears the bottom would fall out of the property sector, with some experts forecasting prices could drop by as much as 20pc.

IPAV's biannual report shows there was a fall-off in the supply of both new and second-hand homes to market during lockdown, which meant that more households were competing for fewer available homes.

"The freeze in the market has been much more concentrated on [buying and selling] activity," said Austin Hughes, chief economist with KBC Bank. "There had been no panic selling as in the last downturn."

In 64 of the sectors analysed prices increased, while for the 55 market segments that showed price falls, many were less than 2pc.

Figures published by the Central Statistics Office last week showed that in June, new dwelling completions had bounced back to 94pc of their June 2019 levels, offsetting fears that social distancing regulations on building sites would impact on productivity levels. However, said Mr Davitt, new home completions will still fall short of the 25,000 projected before the Covid-19 pandemic.

In Dublin, prices for two-bedroom apartments fell in all areas analysed except Dublin 14.

In the market for three and four-bed houses, prices decreased, flatlined or showed marginal increases.

"The rationale is simple," said Mr Davitt.

"There has been a recent correction in the Dublin market by about 20pc and there are approximately 300,000 too few properties, so it would appear at this juncture that there is only one way for prices to go."

The IPAV findings also support anecdotal reports from estate agents that buyers are increasingly looking to rural areas to buy as the pressures of commuting, lack of space and access to the countryside move higher up the list of purchasers' priorities.

The study shows that house prices across counties Cork, Westmeath, Louth and Laois have all increased.

Irish buyers are increasingly seeing Ireland as a 'safer' place to buy a second home, said Mr Davitt.

"This new wave of purchasers has certainly impacted the price of properties outside our cities."

However, Mr Hughes cautioned: "The critical issue is: when do you get back to a normal level of activity in terms of production of new homes and mortgage activity? That is still some way away."

The Residential Property Price Barometer is compiled from 'real time' sales achieved in 41 market sectors nationwide, and provides data for the three most popular types of home: two-bed apartments, and three-bedroom and four-bedroom houses.

Sunday Independent

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