Dublin property agents predict that local property prices can see as large as a 5% increase as the lockdown regulations are lifted in the upcoming months. Many agencies have reported a large influx of registered potential buyers, some firms even registering nearly tripe the number as the same period in past years. This rush of buyers is largely due to the pandemic putting stops to many families’ plans of setting and signing mortgages. For others, it may be the desire to invest in a discounted property before prices skyrocket. Regardless, the sudden increase in demand for properties is sure to cause discrepancies within the real estate market.
Several factors driving demand include the strength of new mortgage approvals in the last quarter of 2020, and the growing availability and willingness of mortgage-lending rule exemptions of banks to offer to potential borrowers in 2021. There has also been a large group of potential buyers who have recently obtained loan approvals and are potential targets for these mortgage-lending rule exemptions in the past 6 months.
As for the number of properties in the market, there is speculation that vendors will delay the marketing of their homes and we will see fewer cases that will keep supply limited until a full life of the lockdown which may not happen until late this year. Homeowners are finding trouble finding a new property, and therefore reluctant to put their old property on the market yet. The combined factors of growing demand and the limited supply are the driving factors behind the increase in property values, which is estimated to increase from 3-5% within Ireland.
Even during the pandemic, it is reported that the average price of a house in the capital increase by 1.2% during 2020, and the average price is estimated to be just over €440,000. Despite the pandemic, as well as the uncertainty provided by Brexit, house prices remained surprisingly resilient and even rose slightly within the last year. The stability in the real estate market has been a huge relief and blessing to many, but with the new year came an evident surge in demand. The housing market may just see a sudden rise in these housing prices to match the limited supply offered nationally. Buyers and sellers are advised to keep a close eye on property values both within and outside capital to match upcoming trends.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.