Can house prices hold up after Covid-19?
Smart Money: Prices resilient so far, but next year could bring a different story
The pandemic has interrupted the consistent rise in prices of recent years, but hasn’t sent it into reverse. Photograph: iStock
The extent of the economic collapse due to Covid-19 meant most forecasters were expecting a drop in house prices this year. A massive collapse in consumer spending in the second quarter and the effective shutting down of much of the economy did lead to a fall off in transactions and some softness in prices in spring and summer. But the latest figures show mortgage demand recovering and prices in October generally in line with the same month last year, albeit with some differences across the country and between different types of houses. So can the market hold next year in the wake of the Covid-19 economic fallout?
1. The data
The latest figures from the Central Statistics Office maintain the story of house prices holding up this year. Covid-19 has stopped their upward gallop, but it has not sent them into reverse. Prices in October were up 0.5 per cent on the previous month – the largest monthly rise since July 2019 – and were down just 0.4 per cent on the same month in 2019.