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Covid-19 outbreak puts brakes on recovery in property market

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Paused: REA spokesperson Barry McDonald says property is now in a period of uncertainty

Paused: REA spokesperson Barry McDonald says property is now in a period of uncertainty

Paused: REA spokesperson Barry McDonald says property is now in a period of uncertainty

The outbreak of the coronavirus has put the brakes on what was shaping up to be a modest recovery in Irish house prices from the start of this year.

After successive quarters of prices falling due to uncertainty over Brexit, average house prices nationally grew in the first three months of the year according to the latest Irish Independent/REA Average House Price Index.

However, estate agents fear that if the Covid-19 pandemic is drawn out, jobs will be lost permanently, incomes will shrink and house prices will fall with the economy.

The price of a three-bedroom semi-detached house across the country rose by 0.14pc over the past three months to €235,028, after an annual decline of 0.63pc in 2019.

The figures illustrate how confidence had returned to the market, after months of Brexit uncertainty, with many agents indicating an upturn in viewings and sales since the start of the year.

In Dublin city, the price of a three-bed semi rose by 0.3pc, after a 4pc decline in 2019, with agents reporting an increase in first-time buyer activity.

The average family home in the capital's postcode districts now costs €427,167, an increase of €1,333 on the December figure, with time taken to sell decreasing from nine to eight weeks.

The Dublin market saw a return to growth in the south of the county, where prices rose by 0.3pc to €413,333, after falling by 5pc in 2019.

The availability of new-homes developments in the north of the county saw three-bed semi prices decline by 0.8pc to €312,500.

Prices in the commuter counties rose by 0.4pc, with the average house now selling for €247,556 - after an annual fall of 1pc in 2019.

The biggest growth came in Kildare where prices increased by 1.1pc in Q1 and 3.1pc annually to €285,000.

Prices in the major cities outside Dublin - Cork, Galway, Limerick and Waterford - remained largely unchanged at €255,875, up 0.1pc.

Values in the four cities rose by 1.34pc over the past 12 months.

The highest annual price increases were once again seen in the rest of the country's towns, which rose in selling price by an average of almost €3,000, or 1.67pc, in the past year, despite falling fractionally to €162,069 in Q1.

Ireland's highest percentage annual rise came in Wexford, where prices grew 9.5pc to €202,500.

The REA survey concentrates on the actual sale price of Ireland's typical stock home, the three-bed semi, giving an accurate picture of the second-hand property market in towns and cities countrywide to the start of the current crisis, which has seen a sudden slowdown in activity, according to REA.

"There is no doubt that we saw a stronger market in Q1 up to the start of the current health crisis, with increased first-time buyer activity and higher transaction levels than in the second half of 2019," said REA spokesperson Barry McDonald.

"We are suddenly in a time of uncertainty, and a pause button has been pressed on activity.

"But the fundamental issue of a lack of supply remains.

"We are in a different place than in 2008, and we will benefit from the effects that the Central Bank's lending restrictions have had on a market that has experienced conservative rather than rapid growth over the past seven years," he added.

Irish Independent