Review of 2020

2020 has been a challenging year across the world with the Covid 19 Pandemic which has seen a lot of nations closing sections of their economy for periods of time or introducing heavy restrictions, which have had a negative impact on a lot of economies. We commenced the first quarter of 2020 with a buoyant market with plenty of activity particularly in the residential sector. Unfortunately, the introduction of the lockdown due to Covid 19 in March closed down the property industry from being in a position to carry out viewings during this 10 week period until June. Once we came back on the 8th June we saw a considerable level of activity with plenty of viewings and a good demand.

There was a definite bounce in the residential property sector with plenty of transactions catching up from the backlog having been unable to show properties for 8 weeks. There was no negative impact on values, in fact we found that the properties were making at least the value they would have made pre-lockdown and in a majority of cases were achieving a premium over and above that.

With the lack of supply and the increased demand we saw a strong middle and third quarter of 2020 but it has tapered off in the latter part of the year but this is purely due to the lack of supply of houses for sale. The first time buyer market has been very active and has been particularly helped by the Help to Buy Scheme where first time buyers can obtain a grant of up to €30,000 to assist them with their purchase, but this is based on having worked and paid tax in Ireland for the previous 4 years and also only on the purchase of new homes.

We have seen a considerable increase in the level of activity from people who are re-locating from Dublin. We have always seen Newbridge, Kildare, Naas, Kilcullen and surrounding areas as being a commuter destination to the Capital, with the good road and rail infrastructure, M7 Motorway, bus routes and train service along the Kildare/Newbridge/Sallins train line direct to the City Centre. Now even more so with a large percentage of people working remotely who don’t need to be in the City and they are able to work from home, they are moving out where they are getting better value and a larger home which will suit their requirements better.

We have seen the majority of enquiries from these people re-locating and they are looking for good broadband, home office, nice garden and these are all obtainable at much better value than the Capital.

Looking to 2021

We would be very optimistic looking into 2021 for a number of reasons as follows:

Demand

We see the demand continuing as the supply of homes on the market is not meeting the current demand and it is estimated that we need to be building 30,000 homes a year to catch up with this backlog, with the lack of building which took place from 2008 to 2015, we are still seeing a significant undersupply of properties to meet the requirement. It is estimated that we probably won’t even hit 15,000 new homes due to be built in 2021 which is a significant shortfall on the requirement.

Finance

Assuming a buyer meets the criteria they should be able to obtain finance from the financial institutions. Most institutions can only give a maximum of 3.5 times combined salary in the case of a couple and first time buyers must have a 10% deposit and second time purchasers a 20% deposit. If you have been affected by Covid Pandemic and your salary has been affected the financial institutions will want to see that this has been regularised before they will facilitate a loan. Due to the restrictions with restaurants, pubs, retail outlets and going on foreign holidays in 2020 people have more savings in their account and this will help to facilitate a move.

Help to Buy Scheme

This scheme has been extended until the end of 2021 which is a great boost to the first time buyer purchasing a new home.

Property Requirements

Due to the lockdown in the earlier part of 2020 and subsequent restrictions people have seen that their housing requirement may not suit their needs, while everyone was at home during the restrictions in 2020 people found their home very tight and cramped and generally they required more living space in the house to accommodate the family requirement and hence they may wish to trade up to a larger home to facilitate working remotely and extra living space.

Our forecast for 2021 would be an optimistic one on the basis of the above and hopefully with the introduction of the Covid 19 vaccine this might help the economy and market sentiment for 2021.

Our Review of 2020 and Looking Forward to 2021