Coronavirus applies ‘hand brake’ to Irish property market

The coronavirus crisis has effectively applied “a hand brake ” to the Irish property market, halting construction, mortgage approvals and sales, according to estate agent DNG.

In its latest quarterly report on the residential market in Dublin, the company said prices in the capital remained relatively stable during the first quarter of 2020, with the average price of a resale home rising 0.4 per cent.

DNG’s house price gauge, which measures resale property prices across Dublin, suggested price pressure remained strongest at the entry level to the market, with prices below €300,000 recording growth of 0.8 per cent in the first quarter, whereas properties valued above €500,000 saw a more modest rise of 0.3 per cent over the period.

However, this was before the Covid-19 outbreak effectively stalled the residential market in its tracks.

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"Never has the picture in the rear-view and front-view mirrors of the property market looked so different than at the present time, and like virtually all sectors of the economy, activity levels have been negatively impacted in recent weeks," said DNG's director of research Paul Murgatroyd.

“It is unclear what effect the outbreak will have on prices in the short term, but much slower than forecast economic growth and the recent jump in unemployment can only be detrimental to the market.”

DNG chief executive Keith Lowe said the data for January and February showed that the market was moving up a gear "just as the hand brake was applied by the spread of the coronavirus, and the necessary but severe restrictions it has forced upon on every sector of society and the economy at the present time".

“It has changed the way all businesses operate, but the early signs are that potential buyers remain very active in the market,” he said, noting the firm was handling a greater number of engagements via online inquiry channels.

DNG’s latest report said that one in four of all sales in the first quarter were investors offloading rental properties “as the exodus of the small landlord from the market continues in the capital where values have recovered most since the downturn”.