As we expected, Summer 2021 was very busy in terms of the property market. The normal type of seasonality did not happen with both buyers and sellers continuing to engage. This was driven hugely by the shift to digital in all aspects of our business. We continued to receive many enquiries on a 24/7 basis. The same issues however with supply and demand continue. This is leading to many properties selling well above their asking price and in record time.
Quarter 3 2021
We found that sales momentum continued strongly during a quarter which tends to see lower volumes of business due to holidays.
The supply of family homes coming on the market continued to be tight. Latest research from Daft.ie and Myhome.ie show that there was a third less properties available than the same period in 2020. This figure was also half of what was available in 2019, which may be a better comparison, given the abnormality of 2020.
Many people now need a home-office on a more permanent basis and this, among other factors, is driving the way people are assessing properties. We saw the highest demand and rate of price increase in 3-4 bed family homes, close to schools and other amenities. Properties that are in walk-in condition command a premium price, especially those with high BER ratings. However, the shortage of builders and the rising cost of labour and materials hasn’t deterred demand for older properties needing refurbishment. These properties, which are mainly executor sales, tend to have what young families are looking for – large gardens with potential to extend.
There continues to be a hesitancy with would-be sellers to go to market. Both those trading up and down feared they would not be able to find a suitable property to buy. This hesitancy has added to the already overflowing bottleneck.
We have also seen some return of investors to the market for one- and two-bedroom apartments.
Highlights and Concerns
The lack of supply theme continues and this needs to be addressed or the situation will not change. Prices continued to rise. The latest figures show an increase of 9% in the past 12 months. This rate of increase has slowed down now compared to earlier in the year. Prices in cities are inflating at a much lower rate than rural areas. Vendors are returning to the market, albeit slowly. But with demand continuing to outstrip supply, properties are selling for well above the asking price in many cases.
An issue for some who wish to purchase is the ability to move from being a renter to a home owner. This is the case even though many would-be first-time buyers would pay less per month on a mortgage than rent for a similar property (source IPAV). An underlying factor here is the ability to save for a mortgage deposit given the cost of rental.
Re-thinking our homes and the way we live as we emerge from Covid-19 is having an impact on buyer and seller behaviour. Although demand is more than supply across the board, there are certain types of properties which feature more prominently. Those doing work to their homes in terms of extension and new builds should take this into account for the future.
What lies ahead
Quarter 4 has started very robustly. Schools are open, businesses are open, offices are re-opening. All indications point to a continued rebound of the economy to the end of the year. Vendors are continuing to return to the market, and we expect continued momentum in sales activity to year end. The underlying issue constraining the market will continue – rate of inflation, social housing activity and construction costs. These need to be addressed for the country as a whole. For now, however, it is business as usual.
The above commentary is based on information available at the time of publication. Any opinions or assumptions are those of Quillsen and for example only. It is the responsibility of an individual to verify them.