Like all aspects of life this year, the residential property market has faced significant disruption due to the COVID-19 pandemic. The outbreak of the virus has represented an unprecedented shock to the economy and to society, unlike any experienced in living memory. The necessary precautionary health measures taken to reduce the spread of the virus has had adverse consequences for both the economy and the housing market and will continue to hamper the market as long as they are in place. However, while the impact has been extensive, the market has shown remarkable resilience despite the challenges COVID-19 has presented.
Since the onset of the pandemic, property values and buyer sentiment have shown extraordinary buoyancy. Following the implementation of the first national restrictions in March, it was widely expected that there would a substantial drop in property values before the end of the year. However, this did not materialise with prices remaining firm, even growing slightly in the year.
According to the Sherry FitzGerald house price index, the value of second-hand properties nationally increased by 0.5% in quarter three and in total have increased by 0.6% over the first nine months of the year. Remarkably, the rate of price growth at present is stronger than it was at any point last year. Indeed Q3 2020, saw the fastest rate of quarterly growth in the country in over two years.
In the year price growth was stronger outside of Dublin, the West (which includes Galway, Mayo and Roscommon ), prices grew 3.0% over the first nine months of 2020. This was the strongest rate of growth of any region in the country. The volume of second hand sales in Galway has shown a decrease in the first 6 months of 2020 when compared to the same period in 2019, a 19% decrease. This was a slightly less severe than the 22% fall seen nationally.
Stability
This stability in house prices has been due to falling supply levels and robust buyer demand, with the help of governmental income supports and an increase in savings. Another noticeable trend was the increase in demand from those returning back to Galway or deciding to relocated to Galway as it is an attractive place to live with recognised high quality of life and the improvements of remote working make this more attainable.
Despite the uncertainty in the market, potential purchaser’s commitment to buy has remained steadfast. A survey conducted by Sherry FitzGerald over the summer with over 1,500 respondents showed that 82% of potential buyers were either just as or even more committed to purchasing a property despite the uncertainty arising from the COVID-19 pandemic. This commitment to buy held across all age groups, locations, purchaser profiles, current accommodation circumstances and price ranges.
Like a lot of industries, estate agents have had to shift to remote working this year. While working from home has provided challenges, Sherry FitzGerald has shown its adaptability and flexibility. With the implementation of MySherryFitz, buyers have been able to conduct much of the sales process online.
Despite being able to do much of the sales process online, there was an enormous pick up at the start of the summer in enquires into the market, boosted by the physical reopening of branches and expansion of the Help-to-Buy scheme.
Restrictions
However, other aspects of the market were harder hit. Due to the restrictions, there was an inevitable drop off in construction, although not as great as initially feared. With sites closed for a number of months and working at reduced capacity since reopening, this has impacted output for this year and will likely impact next year as well. Sales, while reduced, have been steady and began to pick up towards the end of the summer and continue throughout the autumn market. Any new homes developments in the greater Galway area have shown strong sales in 2020. The second Level 5 six week lock down had a less severe impact on the market as estate agents were allowed to continue to do viewings in limited circumstance and yet again the robust trend continued in this time.
Looking forward into next year, the outlook for the Irish housing market remains intertwined with the trajectory of the virus, its transmission within the community and the roll out of the vaccines. Quality of life, quality of location and quality of accommodation seem to be more relevant than ever.
With the continued shortage of supply in the residential market extending into 2021, we are cautiously optimistic for the new year as Galway is a very attractive place to live and with the announcements of the roll out of vaccines hopefully getting the economy and residential property market back to normal soon. Its likely the new year and early spring market 2021 will be active and positive.
If you are considering selling your home or want free confidential advice about selling or renting a property, please contact myself Tony, or any of our team on 091 569123 or at [email protected].
