Covid-19 impacting housing market as property prices fall

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Covid-19 Impacting Housing Market As Property Prices Fall
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Muireann Duffy
Residential property prices have fallen by 0.6 per cent across the county in the 12-month period ending in August 2020, compared to the 1.9 per cent increase that had been recorded in August last year.

Properties in the capital saw a decrease in prices more than double that of the national average, with prices there declining by 1.6 per cent. House prices fell by 1.4 per cent in Dublin, while apartment prices decreased just 0.1 per cent.

Despite the wider trends, Fingal recorded price increases of 1.7 per cent, in contrast to other areas, with Dublin City reporting a decline of 3.4 per cent.

Increases were also seen in areas outside the capital, as the South-West was the region recording the highest increases, with a 5.2 per cent jump. The Border region noted a 2.7 per cent decline in prices.

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Recovery

The updated figures point to the national index being 17.6 per cent lower than its highest level in 2007, with Dublin residential property prices are 22.6 per cent lower than their February 2007 peak. Residential property prices in the rest of the country are 20.1 per cent lower compared to their highest levels in May 2007.

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Despite the fall from 2007 levels, prices have increased nationally by 83.8 per cent since 2012-2013.

Commenting on the data, Joey Sheahan from MyMortgages.ie said: "Overall today’s property price figures speak to a robust property market. And yesterday’s Budget announcement will only serve to strengthen it.

"The extension of the Help To Buy (HTB) scheme was necessary and will generate even more activity in the market in the months and year ahead. The announcement also brings a degree of certainty that was lacking the market – would be first time buyers were unsure as to whether they would or could make the December deadline.

"The salaries of many first time buyers are increasing year on year, so where last year they may have only qualified for €20,000 under HTB scheme, many more could now secure the maximum €30,000 in January 2021, due to the fact that they can include their income for 2020 in calculation.

"We are in the eye of a storm and the old saying that a person’s home is their castle has never been more true. Rather than the home being a half-way house between work, gym, socialising and dropping kids here there and everywhere, the home has now become a place of rest, an office, a gym and a social space. So, we are seeing people stretching their budgets to buy a bigger home with an extra bedroom which can be used as an office, and/or a bigger garden.

"Lower interest rates and increased competition in the mortgage market are also making borrowing more affordable," Mr Sheahan concluded.

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