Monday may be the day thousands will flock to their local hairdresser or barber, or hit the road to visit friends or family, but it’s also the day putative home-buyers can finally view a property without having to buy it first.
Yes, estate agents across the country will once again start taking bookings for property viewings, whether the home is being sold by private treaty or auction, so putting an end to the lockdown norms of the past few months, which saw only those who went sale agreed on a property obtain the right to view it.
But, while this may be a welcome development in and of itself for home sellers and buyers alike, the bigger question, perhaps, is whether a loosening of restrictions will also encourage more properties to come to the market.
Since January, the property market has been hit by restrictions aimed at halting the spread of Covid-19. Unsurprisingly, the ban on putative buyers viewing a property until they had gone sale agreed, as well as the wider uncertain economic environment, meant that the supply of new homes coming to the market plummeted.
Figures from Sherry FitzGerald showed that January saw the lowest number of properties available for sale in a decade.
The crowded open viewings of old, where buyers could find themselves in queues to go upstairs or down, are unlikely to return for some months yet
While auctioneers and buyers alike did find ways of getting around the restrictions, through online bidding, videos of properties and drive-by viewings, many would-be vendors shied away from the market.
With such tight supply, demand for property translated into pressure on prices; figures from the Central Statistics Office for example, show that prices rose by an annual rate of 3 per cent in the year to February.
From Monday, however, estate agents will be accepting bookings for viewings, on an appointment-only basis, and their offices will reopen to the public from May 17th. (Another change from today is that auctions can take place in person again – with up to six people indoors or 15 outdoors.)
Potential buyers will likely welcome the return to private viewings, even if limited to about 15 minutes, as it affords them time and space to assess a property on their own. The crowded open viewings of old, where buyers could find themselves in queues to go upstairs or down, are unlikely to return for some months yet.
But it may also offer them more choice.
Agents now think that this more relaxed sales environment will translate into a healthier level of supply, offering a greater level of choice as vendors, who eschewed a listing in the past few months, come back with greater confidence.
Some may have been loath to put their properties on the market when viewing rules were so restricted, fearing perhaps that the sale price would be negatively impacted, while others simply weren’t comfortable allowing people into their home to view it when Covid-19 infection levels were so high.
“People said ‘I won’t put mine on until I see more stock on’ or ‘I don’t want to put it on until people can get in and view it’,” says Marian Finnegan, head of residential with Sherry FitzGerald.
A further limit on supply has been the reluctance of trader-uppers/downers to put their homes on the market at a time when they may have struggled to find a home themselves. The impact of the pandemic on mortgage lending, whereby banks are reluctant to lend to those on pandemic payments – even if it’s their employer receiving them – may also have curtailed this source of supply.
Now, however, with the restrictions removed, and a sense of vaccine-inspired hope amid the doom, agents expect the number of homes coming to market to increase sharply.
Finnegan says there will “definitely will be an uplift” in supply, while David Browne, head of new homes with Savills, agrees.
“There should be a lot more stock coming to the market; older people will be more comfortable to have people through their house,” he says.
Already, the data shows that there has been a sharp uptick in supply ahead of a return to some form of normality. Figures from myhome.ie, for example, show that new listings on the property portal – which is predominantly Dublin-based – slumped to 1,293 in January, before inching up to 2,748 in March. Last month, however, in the five weeks to May 2nd, there were 4,336 listings added to the platform, more than double the January figure.
There is a question mark over just how much supply will come on stream this year, given the pandemic-related restrictions on construction
This is not too far from the figure listed for April 2019 (a more “normal” year) when 5,267 properties were added.
However, these figures need to be treated with a note of caution. While it’s clear that supply coming to the market will help fill the gap, it’s still quite a considerable gap.
Indeed, for April, despite the increase in new listings, myhome.ie only had 12,600 homes on the site for sale. This compares with 19,100 on last year, when the country was locked down completely, and is down by 77 per cent on the more “normal” April 2019, when 22,300 homes were listed for sale.
“There is a supply problem but it won’t go away this year or next,” notes Browne.
And this gap comes at a time when demand is likely to increase. Figures from the Banking and Payments Federation Ireland (BPFI), for example, show mortgage approvals rose by 14 per cent in the first three months of the year, while Revenue data reveals that more than 20,000 would-be first-time buyers applied for the Help to Buy scheme in the first four months of the year. Now getting approval is one thing; buying is another – so not all these applicants will turn into sales.
Nonetheless, it’s a sizeable cohort ready to buy; one which may be increased even further by the Government’s shared equity scheme, which is due to take off this year.
Of the mooted 21,000 new builds this year, a little more than a third may be available on the open market, according to the economist Dermot O'Leary
The new homes market has long been the first port of call for first-time buyers. But here too challenges abound.
While in-person viewings are set to take off once more, there is a question mark over just how much supply will come on stream this year, given the pandemic-related restrictions on construction.
Research from Goodbody Stockbrokers shows that, overall, new-build figures will likely be in line with last year, at about 21,000 units, as economist Dermot O’Leary says the impact of the lockdown has not been “ as bad as feared”.
However, getting these to market will still take some time. Not only that, but home-buyers will also face competition from institutional investors – as well as the State – acquiring or letting homes for social housing. This was seen last week when investment firm Round Hill Capital acquired 112 houses at Bay Meadows in north Dublin to rent them out.
Indeed, according to O’Leary, of the mooted 21,000 new builds this year, a little more than a third may be available on the open market, as he expects the public sector, institutional purchases for the private rented sector, and one-off dwellings to account for about 11,000-13,000 of these. So potentially as few as 8,000 homes then – hardly enough to satisfy those 20,000 Help-to-Buy-ers.
Potential buyers should note an uptick in new developments coming to market over the summer and into the autumn, many of which have been delayed due to the pandemic
Where the shortage may be felt the keenest is in the apartments market, given the dearth of new developments on the open market. And where they are available, they are tipped at the more luxury end of the market, in excess of the €500,000 deemed as “affordable” under the Government’s shared equity scheme.
Prices start at about €855,000 for Cairn Homes’ Donnybrook Gardens development, for example, while Savills is readying a launch of 11 apartments at Merrion Park in Dublin’s city centre in June, where prices will start from €635,000.
Elsewhere, potential buyers should note an uptick in new developments coming to market over the summer and into the autumn, many of which have been delayed due to the pandemic.
Browne cites a number of new developments coming to market over the coming months, including The Heath, Adamstown; three- and four-bed homes at The Meadows in Kill, Co Kildare; Oak Park, a development of two-, three- and four-bed homes in Malahide, Co Dublin; as well as a high-end development on Church Lane in Greystones, Co Wicklow.
So for those in the market for a home this year, patience could yet prove to be a virtue, as supply steadily picks up.
As Browne notes: “Autumn is going to be the new spring.”
Whether that’s autumn 2021, however, or a subsequent year, remains to be seen.
