Housing crisis set to worsen as sellers delay bringing homes to market

There were 5,000 fewer homes available for sale at the beginning of June than at the same time last year, a 22 per cent fall, as sellers delayed in bringing their homes to market due to the Covid-19 lockdown of the economy, according to data from Sherry FitzGerald.

There were just 18,100 second-hand homes available for sale in the Republic at the start of last month, representing just 1 per cent of the total housing stock in the State. In Dublin, the volume of homes for sale represented just 0.7 per cent of the total housing stock, a 29 per cent fall on last Summer.

The trend of fewer houses coming to market began when the government imposed a lockdown to contain the spread of Covid-19. According to Sherry FitzGerald, there was a reduction of 69 per cent, or about 10,000 homes, for sale across March, April and May.

Ireland’s largest estate agent noted that April and May typically represent two of the busiest months of the year for new listings.

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"We started 2020 with a housing crisis and unfortunately that has only worsened," said Sherry FitzGerald managing director Marian Finnegan. "The combination of reduced construction activity, a loss of second-hand stock coming to the market and the continued exodus of investors from the residential lettings market all serve to further damage market stock levels."

Second-hand homes

The estate agent noted that, despite the challenges in the housing market, the average value of second-hand homes remained stable in the second quarter of this year.

In the first half of the year, prices rose by 0.1 per cent nationally and fell by 0.02 per cent in Dublin, according to Sherry FitzGerald. Ms Finnegan said activity has been "brisk" since lockdown measures were relaxed recently.

She noted that first-time buyers remain the dominant players in the market, accounting for 54 per cent of the owner occupiers who purchased property in the first six months of the year.

Sherry FitzGerald said investors are continuing to withdraw from the market. About 32 per cent of all sellers in the first six months of 2020 were selling investment properties while just 12 per cent of purchasers were investors.

If this continues throughout the year, the agent said, it would represent the lowest proportion of investors entering the market since 2012.

Sherry FitzGerald also released results of a survey of 10,000 people, to which it had responses from 1,600 potential purchasers. Some 60 per cent of respondents said their sentiment was unaffected by Covid-19 while 67 per cent said they’d been actively looking for a property for less than six months.