Sales on Irish housing market continued to rise amid the COVID-19 crisis

DUBLIN: Although COVID-19 is sowing misery in all sectors of Ireland, sales on the housing market are on the rise. Nationally, 8,000 new homes were sold, of which 1,450 were in Dublin, Cork, Galway and Limerick.

55% of the houses sold were semi-detached; 30% terraced; 11% detached and only 4% apartments.

Experts testify that the housing market in the counties, including Cork, has made a very strong comeback in recent months. Sales of new homes in Munster also hit a record high.

It is noteworthy that housing prices in Ireland remain unchanged, except for a slight increase in early autumn and winter.

Despite the pandemic, only a few sales were canceled. Most of the people who buy houses in places including Cork are people working in IT, ICT, pharma FDI companies and civil service. Hundreds of families of people working in the health sector have bought homes in recent months. The vast majority of these are immigrants who came to work in Ireland. None of them are thought to have been relatively affected by the financial crisis aroused due to the pandemic.

Consumer confidence in housing is relatively high. Buyers have saved money over the last number of months.

When the sites closed in March, there were concerns in the sector that the housing crisis would worsen. It was feared the completion would drop to 14,000 homes, but that did not happen. Experts estimate that 18,000 homes could be delivered this year. The new challenges in this area are oil scarcity, policy, planning, functionality and uncertainty related to affordability.

The revised version of the Help To Buy scheme, introduced in July 2020, is expected to have a positive impact on the housing market. Last year, the scheme was able to activate the market by 5% to 10%.By the end of 2021, the scheme is expected to attract 70% of first-time buyers. First Time Buyers is expected to be very active in 2021. The HTB scheme has assisted certain buyers and should be extended with long term certainty.

Government also has a lot to do here

Clear annual goals should be set for new housing projects. The government is considering raising a number of demands from manufacturers and homeowners, including the need to revamp and expand the fast-track planning process and make the necessary investments in utilities, transport and infrastructure.

In Ireland, an average of 50,000 second-hand home transactions are made each year. With 40,000 new homes being completed, including public and private, at least €30 billion is needed. The mortgage market in 2020 for financial institutions, including banks, is only around €7 billion. For a functional market, this needs to at least double. The country will have to make up the balance of the other €15. This means that homes that are currently available on the market, including second-hand homes, are likely to fall in price only if mortgages are not available.

Experts say the Central Bank macro-prudential rules have insulated the system for the past five years. The requirement of 20% investment for second time buyers is a hindrance to trade.

Changing housing concepts

The government’s shared equity scheme hugely welcomed. But the industry needs to know the details of the scheme. It is estimated that this will help to supply 3,000 to 5,000 new homes each year. Price ranges related to density, differing house typographies and the localities are crucial.

Buyers are thinking about the functionality of their homes differently. The decision to move from apartment to house is significant. The new study shows that people saw it as an opportunity to be more secure during this pandemic phase.