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The Covid-19 pandemic has had a huge economic impact in all sectors including the housing market in Ireland. But what exactly has the pandemic brought? How is the housing market in Ireland doing right now? Let’s find out the answers to all these questions!
Drop during lockdown
Well, there was little chance that Covid-19 wouldn’t affect the housing market. In April and May, it was the time when housing prices and supply could not be predicted. No one knew what to do during the lockdown in April, according to Ronan Lyons, assistant professor of economics at Trinity College Dublin.
Covid-19 led to a significant drop in both the sales and rental markets. The supply of both sales and rental markets was much lower this year compared to those last spring and a couple of years ago.
In April 2020, there were 2,351 household dwelling purchases, according to the Central Statistics Office (CSO), which is 34.7% lower than in March 2020.
People tended to rent out or sell their houses less because the situation was too unstable. Another reason was that the Covid-19 restrictions prevented people from putting their houses up for rent or sale.
Sales market recovery
In June, however, everything seemed to return to its normal state. Lyons claimed that the trend observed before Covid-19 returned: house prices slowly decreasing, as well as last year and at the beginning of this year. In his report on daft.ie, it is said that “house prices nationally fell 3.3% in June,” when they were on average €254k across the country and €369k in Dublin.
The sales supply nationwide on July 1 was 19,510, the lowest July number since 2006.
Yet we have to remember that the economic consequences of Covid-19 can appear months later. Some economists claim that it is yet unknown what the full impact of the pandemic will be, but it will most likely affect people with lower incomes.
Rental market recovery
After the rental prices dropped in April, they rose again by 0.7% in May and by 0.2% in June. Compared with the same time last year, there is no significant change. In June, average rental prices were 1,402 euros nationwide and 2,023 euros in Dublin.
Covid-19 pushed the rental supply down, but now more houses are available for rent. In Dublin, there were 2,751 new homes for rent on July 1st, and this number is up 63% on the same date last year. Nationwide, 4,534 new homes appeared on the market, which is up 21%. The numbers show that more houses are now available for rent than in the previous years.
More housing needed
Though more houses are being advertised for rent, it is not enough to solve the housing supply problem in Dublin and nationwide. The problem is that most houses are nationally built for big families with children and outside cities. However, more houses for smaller households are needed, for one or two people. They also need to be in or close to big cities.
New accommodation blocks have been built for students. In some areas of Dublin, such as Prussia Street, it seems that there’s already too much student housing. The problem is, there will be fewer international students coming to Irish universities this September due to Covid-19.
Though even before the pandemic, the student housing supply was already higher than demand in autumn 2019. Plus, even these flats are often not affordable for some students, according to the Union of Students in Ireland (USI).
In April and May, Covid-19 definitely brought big changes to the housing market in Ireland, but now everything is getting back to normality with prices slowly going down. The issue of housing supply remains unresolved, as we need accommodation for smaller households.