Buyers are snapping up homes before setting foot inside them
Houses are selling at the fastest pace in memory, despite buyers not being allowed to set foot inside a home until they have agreed to buy it.
Three-bedroomed semis are reaching ‘sale agreed’ in many areas in as little as two weeks – fuelled by an unprecedented lack of supply, the Irish Independent REA Average House Price Index has found.
This is even more unusual given that many estate agents cannot admit viewers into homes during lockdown. It means many homes are going ‘sale agreed’ without the new owners even stepping inside the door.
The price of a three-bedroomed semi-detached house across the country rose by almost €4,500 over the past three months to €243,603.
There has been an average annual increase of 3.6pc, but 2pc of this was over the past three months alone, even with the absence of physical viewings and in a marketplace that has the lowest supply in recent history.
Nationwide, the average time to sell a three-bed semi has gone down to five weeks – almost half the nine-week average experienced at this time last year.
Eight to 12 weeks would normally be considered a typical time frame to sell a home.
REA agents surveyed do not remember any time previously when properties sold so quickly. At the same time, house prices have also been rising steadily.
Several reasons are being given for this. First is that supply is down by more than a third on a year ago.
Second, buyers who are being forced into virtual viewing and bidding processes are making offers faster, therefore artificially increasing the bidding ante and inflating agreed prices further. Not having to schedule appointments has led to swifter bidding decisions, according to the REA.
The threat of mortgage approvals running out is also motivating buyers to move fast.
The biggest price rises in the first quarter came in commuter counties, as buyers move out of the city in preparation for long-term hybrid working situations.
But Dublin city itself also experienced its biggest quarterly rise in more than three years as the price of a three-bedroomed semi-detached house rose by 1.5pc to €438,500. This type of Dublin home has now recovered to its December 2017 price level after a period of decreases, mainly in 2019.
REA agents report that properties are reaching sale agreed just two weeks after going on the market in areas such as Dundalk and Ashbourne, where prices rose 8pc (€205,000) and 4.9pc (€320,000) in the first quarter.
In Dublin, three-bed semi-detached properties are being snapped up after just three weeks in the Lucan area, compared to seven weeks in March 2020. In Bray, the annual reduction is even starker, at three weeks – down from 15 weeks in March 2020.
Properties in Limerick city are also taking three weeks to sell, down from five weeks a year ago, while in Galway city the average selling time fell from 10 weeks to just four.
REA Gunne in Dundalk is seeing remote workers with increased savings bidding for scarce supply, while REA Grimes in Ashbourne says its virtual viewing and online sales campaigns facilitating an increased demand during lockdown.
REA spokesperson Barry McDonald said a lack of supply was fuelling demand and speed of transactions.
“Buyers are massively motivated, with many anxious to secure a home before their mortgage approval runs out,” he said. “The enforced move to virtual viewings has facilitated a speeding up of the sales process as buyers are not waiting for viewing appointments.
“Despite the restrictions, there is a willingness from some buyers to make offers for houses without physically viewing them. We are finding that some people are bidding for a number of properties at one time, in an attempt to get bids in, especially where mortgage approvals may be running out.
“We only show properties to bidders once their offer has been accepted. At that stage they can withdraw – however, most sales are progressing toward completion.”
Robert McGreal of REA McGreal Burke in Galway, which saw a 1pc rise to €292,500 in the quarter, said: “We are seeing double the number of enquiries compared to this time last year, with multiple bidders on all properties and asking prices being exceeded.”
Agent REA Sothern in Carlow Town reported two properties selling in just four days at 10pc over the asking price.
As the flight to rural locations continues, prices in the rest of the country’s towns rose by more than 2pc to €168,828.
Westmeath has had the largest quarterly rise in the survey at 5pc, with prices rising by €10,000 in the quarter to €210,000, driven by a high volume of sales through virtual viewings, according to REA Hynes in Athlone.
Meanwhile, there was a marked return of private investors and pension funds to the market, driven by strengthening rents and the potential of negative interest rates. “This is adding to the increased competition in what is becoming a perfect market for vendors,” said Mr McDonald.
The Irish Independent REA Average House Price Survey analyses actual sale prices of Ireland’s typical stock home, the three-bed semi.
Looking at sale prices rather than asking prices gives a more accurate picture of the second-hand property market countrywide.