Lockdown extension set to hamper housing stock supply
A demand-fuelled market post-lockdown points to continued upward pressure on prices
‘It’s clear the planned – and much needed – throughput of new homes is going to be impacted by the latest lockdown.’
News of the latest lockdown extension and the continuation of stringent Level 5 measures into March will be a further blow to prospective buyers and sellers. The new year is typically a time when people bite the bullet and decide one way or another if they are going to make a property move. The necessary preparations begin and by Easter properties are ready launch to the market while buyers have jumped through all the necessary hoops to secure funding and start viewing.
Some preparation groundwork can still be laid in the coming weeks but there are obvious lockdown delay factors that will impede a return to a normal spring selling season. Access restrictions will hamper the usual preparations for sale including general property upgrades, valuations and photography.
Meanwhile it’s clear the planned – and much needed – throughput of new homes is going to be impacted. Commencement notices – the best indicator of new homes about to be built – fell by 45 per cent year on year in the second quarter of last year and by 28.4 per cent in the third quarter. Now the latest ban on non-essential construction, taking place at a time when most developers would be at their busiest is going to further limit the number of new homes completed this year.
Alongside this demand for property is stronger than ever, and not just from the substantial numbers who have managed to use lockdown time to save for a home. Agents are citing growing demand for homes among returning expats, in particular from the UK. A stamp duty holiday there (due to end on March 31st) has triggered a mini-boom which combined with Covid-19 and Brexit prompted Irish owners to sell up there and return. One agent said: “There are a good number already back and renting until they find a place to buy. Some plan to retain jobs in the UK and commute a couple of days a week or a month while working from here the rest of the time.”
Add to this growing families needing to trade up and the ingredients are there for a demand-fuelled market when restrictions finally ease. The selling season is likely to run all summer, especially if no one is travelling, while further restricted supply of homes to buy points to continued upward pressure on prices.