The property market bounced back in February after a period of Brexit uncertainty but this growth was short-lived due to the Covid-19 outbreak.
Economists Davy warned that the latest update of the Property Price Register showed a 40% decline in transactions, while Brokers Ireland says that consumer confidence has evaporated and will impact the market for months to come.
They were responding to new figures from the Central Statistics Office, which showed that residential property prices increased by 1.1% in the year to February. The report focuses on the period just before the Covid-19 outbreak.
Residential property prices rise by 1.1% in the year to Februaryhttps://t.co/5yXx4C0AdF #CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings #PropertyPrices #HousePrices pic.twitter.com/hUY3BnofdE— Central Statistics Office Ireland (@CSOIreland) April 17, 2020
Conal MacCoille, chief economist with Davy Stockbrokers, said activity in the market has collapsed since the virus outbreak, with just 700 transactions added to the Property Price Register in the week to April 15, almost 40% lower than the weekly average in January and February.
Mr MacCoille notes the bounce-back in the February report came in the wake of "Brexit uncertainty, depressed pricing and transactions at end-2019".
The CSO report shows prices in Dublin decreased by 0.1% in the year to February and rose by 2.4% in the rest of the country. Outside Dublin, the border region saw the biggest increase at 7.6%, while the south-east saw prices decline by 1.2%.
The figures show that property prices nationally have increased by 83.1% from their trough in early 2013.
The median price paid for a home in the 12 months to February was €260,000. The report also shows that first-time buyers account for 32% of purchases, with 15.1% of properties snapped up by investors.
Rachel McGovern, director of financial services at Brokers Ireland which represents 1,250 broker firms, said the drop in consumer confidence will have a significant impact on the market in the coming months.
"This trend is likely to continue over the months ahead, given the scale of shut downs," she said. "We’ve just seen new figures from Construction Information Services that shows the building of nearly 60,000 new homes on 796 sites has halted.
"This is clearly going to impact the market and the extent of it will depend upon the length and depth of the crisis."