Estate agent DNG predicts property prices in Dublin could rise by as much as 5 per cent when the current lockdown restrictions are eased.
In the first two weeks of January, DNG chief executive Keith Lowe said his agency registered more than triple the number of new potential buyers than it did in the same period last year.
He also noted that the number of viewing appointments conducted between January 3rd and 12th was 10 per cent ahead of the same period last year.
Viewings of for-sale properties were halted on January 13th as part of wider restrictions to halt the spread of Covid-19.
In its outlook for 2021, DNG said the longer the current restrictions remain in place, the greater the upward pressure on prices will be when they are eased and normal market activity resumes.
This was “ due to the lack of available stock in the market and high levels of demand, particularly from first-time buyers”.
The company cited several factors that were driving demand, including the strength of new mortgage approvals in the final quarter of 2020, the availability of a new tranche of mortgage-lending rule exemptions available to banks to offer to potential borrowers in 2021 and the extension of the enhanced help-to-buy scheme, all of which, it said, were fuelling demand.
In addition, it said there was a large cohort of would-be buyers who obtained loan approvals and availed of mortgage rule exemptions in the latter half of last year, who are still in the market and under pressure to buy before their loan offers expire.
On the supply side, DNG speculated that some vendors may delay the marketing of their homes until the current upsurge in virus cases eases and that may keep supply curtailed until late 2021 or 2022.
The combined impact of these effects will push house prices in the capital up by 5 per cent this year, it said, and by 3-5 per cent nationwide.
DNG’s internal house-price gauge, which measures price changes in the Dublin residential market, suggests the average price of a home in the capital increased by 1.2 per cent last year and stands at €442,555.
Official data from the Central Statistics Office (CSO) suggests house prices in Dublin fell on an annual basis by 0.9 per cent in November. While the CSO bases its price index on sale completions, DNG’s measure is based on a basket of properties being valued each quarter.
DNG’s report said that despite the Covid-19 pandemic and the uncertainty provided by Brexit, house prices remained remarkably resilient last year.
“At the start of this new year the strength of actual demand in the market is already very evident to us and our internal analysis proves this,” Mr Lowe said.
“In addition, there is an element of demand brought forward in the market, as many first-time buyers who have been unaffected by the pandemic have had the opportunity to save their deposit more quickly and are now in a position to secure loan approval and start their search for a home of their own,” he added.