House sales falls by 33% and price drops by €30k; COVID-19 pulls down the sales

Experts says that there will be a massive drop in the house prices. They could fall by an average of €30,000 by the end of 2020. This is mainly due to the confusion created by the covid-19 pandemic.

The national wise price figures show a little hike of 0.1% as per June, but this happened only because most of those sales were on agreement even before the outburst of covid-19.

 A fall of 33% is recorded this year when compared it with the previous year. From June,2019 to June, 2020 sales are down by 1.123 from 3,391.

John McCartney, Director of Savills said recently that the June price index was too early to be affected by the impact of Covid-19, because of the delay of the computation of the index.

He said that the recent data were from the sales, which was closed in June, and these sales might have been agreed in February or March.

“If there was no COVID we would have expected them to hold up at least as well as last year. So, we’ve had 33% of our transactions disappear.’ The prices in the latest CSO figures are for June, which reflect deals that were closed and completed in March.” He said

Mr. McCartney feels that some purchases might have pulled back during March and it’s because of that a reduction in transaction figures were reflected in June.

According to him there were some dealings, which were almost done and had crossed the ‘no return’ limit. Thus, those proceedings were done at the full agreed price. It is because of this the pricing impact has been modest.

He is also worried about the upcoming months too, ‘I believe not only will we see fewer transactions, but we will see the transactions happening at a lower price.’ He said. The house price might start to fall down over the next few months and thus, the prices will be down by 5-10% in Dublin and outside.

There is 29% fall in the number of first-time buyers. Last year during June, 1,129 was the number of first-time buyers but while coming to June 2020, it was only 804.

Institute of Professional Auctioneers and Valuers chief Pat Davitt said: ‘Despite gloomy predictions about property prices by some commentators, prices are holding up.’

‘We expect that to continue. While there may be new variations within areas, arising from how consumers and workers respond to the pandemic, overall, we fully expect prices to remain steady.’ He added.

He also believes that the delivery of new homes in this year could drop to 17,000 or even below that. This drop becomes more serious because the estimate demand is running high.