Conditions in the housing market are “returning to normal” following the Covid-19 emergency, with new sales listings on the property website MyHome.es up 21 percent from pre-pandemic levels during the third quarter, according to an analysis by Davy.
Total stock available for sale at MyHome, which is owned by The Irish Times, now stands at 16,000, Davy’s chief economist Conall MacCoille said in a note to clients on Tuesday. While that’s still below pre-pandemic levels of more than 20,000, it’s well above the low of 13,200 earlier in the year.
“Irish property market activity is clearly still recovering from the Covid-19 disruption, for now resilient to economic uncertainty and the prospect of further rate hikes from the ECB due to pent-up demand and healthy labor market,” he said. MacCoille.
He noted that Ireland’s property market has faced disruption from the Covid-19 pandemic and now potentially uncertainty from developments in Ukraine and fears of a European recession.
However, the latest data from the listing website shows that liquidity is returning to the market. In the first nine months of the year, new listings for sale stood at 32,800, about a third more than in 2021 and just 1 percent below pre-pandemic 2019 levels.
“The market now appears to be making up for lost time,” MacCoille said. “New listings in the third quarter were 21 percent above pre-2019 pandemic levels.
“We estimate that transaction volumes in the quarter were up 10% on the year and 6% above the pre-pandemic third quarter of 2019. This improvement in liquidity will also help mortgage loans, which we forecast will grow to €13 billion in 2022.
“The easing in real estate market conditions is also evident in the general stock available for sale on MyHome. This now stands at 16,000, well above the low of 11,200 recorded in early 2022, though still below the average of 21,000 during 2017-2019.”
MacCoille added: “Still, the message here is that conditions are gradually returning to normal.”
The Central Bank has estimated that house prices in Ireland could have been 25 per cent higher had home lending rules that restrict the loan-to-income ratio not been in place, meaning that would-be home buyers would have assumed higher levels of debt.
“This latent and frustrated demand has been evident in the mortgage market, where around 20 per cent of approvals have not translated into a reduction,” Mr. MacCoille said.
“Similarly, Irish revenue data shows that in the first eight months of 2022, from January to August, there were 24,827 applications for the Help-to-Buy programme, but only 4,766.”
Data released on Monday showed that approximately 28,000 new homes are expected to be built in the Republic this year despite the negative effects of inflation and the increasingly uncertain macroeconomic outlook.
This would be the highest level of home production seen in Ireland since before the financial crisis and more than a third of last year’s total of 20,433 units.
However, BNP Paribas Real Estate Ireland’s latest Construction PMI warned that the positive trend in housing production should continue to cover “the strong reacceleration in population growth”.