The number of homes available for sale at the beginning of August fell to its lowest level in 14 years as the property market stalled in the face of the coronavirus.
According to property website Daft.ie, there were just 19,538 properties for sale nationwide on August 1st, down 22 per cent year-on-year.
This was the lowest August total recorded since 2006.
In contrast, availability in the rental market has increased, with 41 per cent more properties for rent nationally, and 92 per cent more in Dublin.
In Dublin, availability was almost double what it was a year ago – with nearly 3,000 homes on the rental market on August 1st compared to fewer than 1,600 in August 2019, Daft.ie said.
The increase in rental supply is said to be linked to landlords withdrawing their rentals from short-term listing sites such as Airbnb and offering them on Daft.ie instead.
The website’s latest monthly report on the State’s housing market indicates headline property prices in July were unchanged from a year ago, while rents were up by 1.2 per cent.
Average rent
The figures show that the average listed sale price nationwide in July was €259,733, while the average monthly listed rent was €1,412.
The average listed sale price in Dublin was €379,000, while the average monthly listed rent in the capital was €2,030.
In Dublin, rents were only marginally up year-on-year (by 0.2 per cent), and in Connacht-Ulster they are 0.6 per cent lower.
In Leinster and Munster, however, rents have risen by close to 3 per cent in the past 12 months, it said.
"Some people might view the resilience of Dublin sale prices as something of a puzzle, if everyone is suddenly enabled to work from wherever," said Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie report.
“However, arguably the greater puzzle is the resilience of Dublin rents. Rents in the capital fell by 2.5 per cent in April, from their March level, but instead of falling further in the months since have actually come back slightly and are now just 2.1 per cent below their March level.
Pent-up demand
“Why might this be a puzzle? Unlike elsewhere the country, Dublin has seen a big increase in rental supply in recent months. Between the start of May and the end of July, the number of rental ads in Dublin this year was almost 50 per cent higher than the same period last year. In the rest of the country, it was 1.5 per cent lower, not higher,” he said.
Mr Lyons suggests the lack of rent reductions may be down to long-run pent-up demand coming on stream despite the pandemic.
“A second explanation is regulatory: the nature of rent pressure zones punishes landlords who cut their rents,” he said.
“ If you lower your rent now, the rent you set in one, three and 10 years will reflect the cut you make today. So, however open landlords might be to haggling ‘at the door’ and offering a month or two free rent at the start to sweeten the deal, they may be very reluctant to flag in an ad that they are indeed cutting their rent.”
