Property sales to 'plummet by up to 50%' due to Covid-19 crisis

Property sales are predicted to plummet by up to 50% this year while the number of new homes being built may also be almost halved, further exacerbating the housing crisis.
Property sales to 'plummet by up to 50%' due to Covid-19 crisis

Property sales are predicted to plummet by up to 50% this year while the number of new homes being built may also be almost halved, further exacerbating the housing crisis.

Angela Keegan, managing director of property website MyHome.ie, said the sector will have already lost almost one quarter of the year’s sales by the end of June.

"I don’t think we’re going to make up that 25%. My view is that transactions could be down up to 40% or 50%. I hope I’m wrong. Only 3,500 transactions were recorded on the property price register in April and May this year compared to 9,500 transactions in those two months last year."

“Seeing the construction industry come back to work again was great because so many weeks had been lost. There were about 21,000 new builds in 2019 and we know that number will be less at about 12,000 - 15,000 this year.”

MyHome.ie had more hits this May than in the same month last year — reflecting an interest in property. And a new survey by the company found that 35% of respondents would be encouraged to buy a home if there was more available housing stock.

“For now, it is crucial that construction is allowed to continue without interruption, as it is clear that supply issues are still a significant concern for people,” Ms Keegan said.

Eoin Ó Broin, TD and Sinn Féin spokesman on housing, said that the current interruption to the housing market is a worry, but that his concern with a housing shortfall pre-dates the Covid-19 crisis: “There’s a general sense in the industry that certainly private sector construction is going to drop very substantially."

Pre-Covid-19, home building was already well below the Government’s “notional target” of 35,000 new homes a year with 22,000 to 23,000 planned for this year — up from about 20,000 last year, Mr Ó Broin said. But that target will now be further eroded: “If that dropped whether it was by 40% or 50%, that’s a huge drop at a time where supply was already lagging far behind demand."

New socially-distanced construction rules will slow building rates, further squeezing supply, while private sector investors, concerned about a lack of buyers, may not invest, Mr Ó Broin said.

"No matter what way you look at it, this is going to have a very negative impact on the housing situation overall at a time when the housing crisis was already very bad."

He called on the Government to develop social and affordable homes on any private sector sites that became available due to the Covid-19 crisis to alleviate pressure on the sector.

He also advocated moving housing stock currently used for short-term letting into the long-term rental market by more regulation of short-term letting platforms: "We need the Government to increase investment in affordable and social housing to rent and to buy. It's still not clear what the overall impact of Covid will be on housing output, on prices, on rents, and really ... it won’t be until August or September that we have a clear concept of it.  But the Government needs to be able to act quickly to try to counter any negative trends in the sector."

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