Conditions in the housing market are “returning to normal” following the Covid-19 emergency, with new sales listings on property website MyHome.ie up 21 per cent on pre-pandemic levels during the third quarter, according to an analysis by Davy.
The total stock available for sale on MyHome, which is owned by The Irish Times, is now 16,000, Davy chief economist Conall Mac Coille said in a note to clients on Tuesday. While that is still below pre-pandemic levels of more than 20,000, it is well up from the 13,200 trough at the turn of the year.
“Irish housing market activity is clearly still recovering from the disruption of Covid-19, for now resilient to economic uncertainty and the prospect of further ECB rate hikes due to pent-up demand and the healthy labour market,” said Mr Mac Coille.
However, the latest data from the listings website shows liquidity is returning to the market. In the first nine months of the year, new listings for sale stood at 32,800, up about a third on 2021 and just 1 per cent below pre-pandemic 2019 levels.
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“The market now appears to be making up for lost time,” said Mr Mac Coille. “New listings in the third quarter were 21 per cent above pre-pandemic 2019 levels.
“We estimate that transaction volumes in the quarter were up 10 per cent on the year and 6 per cent above pre-pandemic third quarter 2019. This improvement in liquidity will also help mortgage lending, which we forecast will grow to €13 billion in 2022.
“The loosening in housing market conditions is also evident in the overall stock available for sale on MyHome. This now stands at 16,000, well above the 11,200 trough recorded at the beginning of 2022, albeit still below the 21,000 average through 2017-2019.”
Mr Mac Coille added: “Still, the message here is that conditions are gradually returning to normal.”
The Central Bank has estimated Irish house prices might have been 25 per cent higher had the mortgage lending rules restraining loan-to-income ratios not been present, implying prospective homebuyers would have taken on higher levels of debt.
“This latent, frustrated demand has been evident in the mortgage market, where circa 20 per cent of approvals have failed to translate into a drawdown,” said Mr Mac Coille.
“Similarly, Irish Revenue [Commissioners] data show that, in the first eight months of 2022, January to August, there were 24,827 applications for the help-to-buy scheme but just 4,766 claims.”
Data published on Monday showed roughly 28,000 new homes are expected to be built in the Republic this year despite the dampening effects of inflation and the increasingly uncertain macroeconomic outlook.
This would be the highest level of housing output seen in Ireland since before the financial crash and more than a third up on last year’s total of 20,433 units.
The latest BNP Paribas Real Estate Ireland Construction PMI, however, warned that the positive trend in housing output needed to continue to cover “the sharp re-acceleration in population growth”.
