Strongest quarter of home sales in a decade - Sherry FitzGerald

Estate agent Sherry FitzGerald says it witnessed "the strongest closing quarter" of sales in a decade in the final three months of last year.

Managing director Marian Finnegan said pent-up demand linked to the pandemic had accelerated activity in the market.

While the official transaction figures have yet to be published, she said the residential market as a whole is likely to have experienced the biggest quarter on quarter jump in sales for some time.

There were approximately 29,100 recorded house sales between January and September last year – 25 per cent down on the previous year – according to the Central Statistics Office.

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Ms Finnegan estimates there were an additional 18,000-20,000 transactions in the final quarter.

She said prospective buyers were locked out of the market in the first lockdown and when the market reopened there was “a frenzy of activity”.

And because people were worried about the prospect of further lockdowns, they made decisions quicker, she said. “We probably saw five or six months of activity squeezed into a single quarter,” she said.

Ms Finnegan was speaking after the launch of the company’s latest annual review and outlook report, which forecast a modest rise in house prices this year – between 1 and 3 per cent – linked to a shortage of available stock.

The report, however, warned that supply pressures on the sales side would translate across to the rental market in the form of higher rents.

While rental inflation has been subdued during the pandemic – a trend linked to the fall-off in tourism and an increase in supply from former Airbnb landlords – this was likely to be short-lived, Ms Finnegan said.

‘Prime’ properties

She said rental inflation would be about 5 per cent this year and even higher in Dublin’s central business district once the lockdown ends and offices reopen.

Sherry FitzGerald’s report suggests a total of €6.6 billion has been invested in the Ireland’s private rental sector market since 2011. Despite Government-imposed rent caps in most areas, the average monthly rent in Dublin is now more than €2,000.

Ms Finnegan said one of the most pronounced trends of 2020 has been the pick-up in sales of “prime” properties – those priced above €800,000.

She said this end of the market had been in the doldrums in 2018 and 2019 – a trend she linked to Brexit – but has rebounded strongly this year with a proliferation of cash buyers in the market.

In its report, Sherry FitzGerald predicted the supply of new homes would be in region of 20,000 units this year – against an expected level of demand of 28,000.

Supply is not expected to meet demand until at least 2024, it said.

The company said the Government’s new shared equity scheme, which aims to help people buy, had the potential to assist in the delivery of 3,000-5,000 additional new homes annually.

“However, further Government intervention is needed if the mismatch between supply and demand is to be narrowed sufficiently,” it said.