MARKET REVIEW Q3 2020 - DNG
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RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
80
BRANCHES
NATIONWIDE
DONEGAL
MONAGHAN
LEITRIM
SLIGO
CAVAN
MAYO LOUTH
ROSCOMMON
LONGFORD MEATH DUBLIN
GALWAY PHIBSBORO
RAHENY
CASTLEKNOCK FAIRVIEW
WESTMEATH LUCAN CENTRAL
HEAD OFFICE NEW HOMES
& ADVISORY DIVISION
DUBLIN ROCK ROAD
OFFALY KILDARE DONNYBROOK
TERENURE RATHMINES
TALLAGHT
DUN LAOGHAIRE
STILLORGAN
RATHFARNHAM
CLARE WICKLOW
LAOIS
CARLOW
TIPPERARY
KILKENNY
LIMERICK
WEXFORD
WATERFORD
KERRY CORK
RESIDENTIAL PROPERTY
MARKET
REVIEW
Q3 2020
Report Compiled by
DNG Research
CONTENTS
September 2020
1 Introduction
3 DNG House Price Gauge
9 DNG Apartment Price Gauge
13 Purchaser Analysis
15 Cash & Non-Mortgage Transactions
16 Transaction Levels Ireland versus the UK
18 Supply Side Analysis
Paul Murgatroyd
20 Analysis and Outlook 2020
Director of Research
& Business Development
DNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
INTRODUCTION
By Keith Lowe, Chief Executive
“”
In Dublin the property market has been on something
of a rollercoaster ride over the last six months, with
prices dropping by 2.4% in Q2 and rising by 2.6% in
Q3 as the Covid-19 virus and consequent restrictions
impacted on the residential market in the capital.
The amount of homes for sale and
Anecdotal evidence in the three months of lockdown
during Q2 suggests that up to 25% of sales in Dublin
available on myhome.ie remains
did not proceed for a variety of reasons including 14% less in Dublin (20% nationwide) at the 1st
market uncertainty and banks not lending or
proceeding with loans to buyers who worked for September compared to the same date last
companies who availed of the government Temporary year.
Wage Subsidy Scheme. The latter was a bitter pill to
swallow for many buyers, and in my view somewhat
unfair, bearing in mind that in many cases the loan
applicants were still working and their employer’s decision to avail of the scheme was beyond their control.
However, in saying that, many sales that did not proceed were then subsequently reagreed to the underbidders,
with some buyers receiving price reductions as inducements to proceed with the purchase.
DNG re-opened our offices in the middle of June and since then have continued to witness very large numbers
of viewers, bidders and buyers, far exceeding our expectations, with monthly sales increasing by 25% compared
INTRODUCTION
to the same period last year. This is undoubtedly a reflection of the pent-up demand in the market due to the
extremely low level of sales during the lockdown period when estate agents were closed and viewings halted,
combined with a lack of supply in the new homes market. The majority of house sales that fell through in Q2 have
been resold in Q3, with many achieving sale prices ahead of their pre-covid prices.
In this covid times technology continues to play a particularly important role in the sales market and DNG now
have over 400 DNG 3D Virtual tours and videos uploaded to the web. Several properties have sold without actual
viewings, but the reality is that buyers still wish to physically view properties before they buy them. We continue
to strongly encourage buyers to view the DNG 3D Virtual Tours first as these provide the most realistic experience
in the industry, allowing house hunters the opportunity to narrow their search before requesting a physical
viewing. However, it is still the case that buyers still want to physically view properties before making an offer,
and this understandable for such an important decision and financial commitment. Our range of Covid-19 related
safety measures and protocols for physical viewings means that buyers continue to have the opportunity to inspect
all our properties in a safe and controlled manner that puts the health and wellbeing of our staff, clients and
customers to the fore.
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DNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
The amount of homes for sale and available on myhome.ie remains 14% less in Dublin (20% nationwide) at the 1st
September compared to the same date last year. This, along with a reduction in the number of new homes being
made available to the market due to lack of construction, and block sales to PRS and Social Housing operators, is
leading to multiple bidding on many second hand properties and strong new homes sales.
I have no doubt that in the event of a further lockdown, or increased restrictions on society being put in place,
we will see a very different property market reaction than was evident back in March and April, with fewer
transactions falling through and more new sales occurring as buyers realise how strong the market has been since
that initial lockdown period earlier in the year.
DNG have just submitted our latest pre budget submission for Budget 2021. For the 5th year in a row we have
called for an Affordable Housing Scheme in the form of a Shared Equity Loan Scheme similar to that seen in the
UK, which has been a resounding success leading to a material increase in the supply of new homes. It would
appear that this year such a scheme may well be introduced into the market. If so, it will have a very positive
effect on the new homes market which will lead to increased output and more importantly allow buyers who
cannot currently afford to get on the housing ladder to do so, which in turn will release much needed rental
accommodation into the market. We have also called for the re-introduction of mortgage interest relief for first
time buyers as we believe that purchasing a home should not just be confined to the more privileged in society.
With interest rates in negative territory for high value deposits, and a softening in rental demand for some
commercial property types, residential property now looks an even more attractive proposition than it did pre-
covid 19. This has led to a an increased volume of residential properties being sold to investors and institutional
investment funds with an increasingly high proportion of these now being reserved for social housing. This
not only applies to new homes schemes but also to pepper-potted residential assets nationwide which is a new
phenomenon in the market.
The short-term outlook for the residential property market is positive but there are of course clouds on the
horizon in the form of Brexit and the economic impact of the current pandemic, the true effects of which are still
very difficult to judge. However, with underlying demand for homes, both to buy and rent, set to remain strong
given the demographics in the country, I would be very hopeful that the residential market will remain resilient in
the longer term.
INTRODUCTION
2
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DNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
DNG HOUSE The DNG House Price Gauge (HPG)
analyses the movement of house
prices across Dublin. The HPG
measures the change in value of a
PRICE GAUGE
representative sample of residential
dwellings across Dublin on a quarterly
basis. Price movements in different
areas (North, South and West Dublin)
and across different price brackets are
also recorded by the HPG.
KEY FINDINGS
• Average price of a resale home in the capital rebounds in Q3 rising 2.6%
• Prices remain relatively stable in the year to September, increasing 0.9% on average.
• Strong activity levels across the residential market in Dublin in the immediate post-lockdown period
• Average price of a residential property in the capital stands at €452,644 having recovered 87% of value since
the market low point in 2012.
DNG HOUSE PRICE GAUGE
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DNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
TABLE 1 Q3 2020
Average Dublin Second Hand Price €452,644
Percentage Change Q3 2020 2.6%
Annual Percentage Change 0.9%
% Change Since Low (Q2 2012) 86.9%
% Change From Peak (Q3 2006) -36.8%
QUARTERLY RESULTS
FIGURE 1. QUARTERLY PERCENTAGE CHANGE IN DUBLIN RESIDENTIAL PROPERTY PRICES
5
3
% Change
1
-1
-3 DNG HOUSE PRICE GAUGE
Source: DNG Research
The latest results of the DNG House Price Gauge (HPG) for Dublin show that the price of a resale property in Dublin
rose strongly during the three months to September, increasing by 2.6% on average. The latest quarterly increase
in prices means that the average price of a residential property in the capital is now marginally higher than at
the end of March when the country entered lockdown. After a dip in prices during the second quarter, the strong
levels of market activity seen in Q3 mean that prices have increased to a greater extent than they declined in the
second quarter, as shown in figure 1.
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DNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
ANNUAL RESULTS
On an annualised basis, the price of a resale home in Dublin remained relatively stable in the twelve months to
September, with the DNG HPG recording growth of 0.9%. This ends a two-year period where prices have declined
marginally on an annualised basis as shown in figure 2.
The average price of a resale residential property in Dublin now stands at €452,644, marginally higher than in
September 2019 when the average price was €448,458. Prices in the capital remain around 37% below their
previous peak value in 2006 but have risen by 87% since the market low point in 2012.
FIGURE 2. ANNUAL PERCENTAGE CHANGE IN DUBLIN RESIDENTIAL PROPERTY PRICES
12
10
8
6
% Change
4
2
0
-2
-4
Source: DNG Research
“”
DNG HOUSE PRICE GAUGE
A picture of price stability remains
evident in the Dublin market with the
average price of a home in the capital rising by 0.9% in
the year to September
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PRICE CHANGES BY LOCATION
The DNG HPG records the change in the average price of a residential property according to location within Dublin
as shown in Table 2.
TABLE 2
Q3 2020 Annual % Change From Peak (Q3 2006) From Low (Q2 2012)
Southside 2.6% 0.9% -42.1% 82.5%
Northside 2.6% 0.7% -33.2% 87.9%
Westside 2.4% 1.2% -25.2% 97.7%
All areas of the capital benefitted from the end of the lockdown period with strong activity evident across the
market. Prices in north and south Dublin increased by 2.6% in the third quarter of the year whilst the increase in
west Dublin was fractionally lower at 2.4%. All areas of the city saw marginally higher prices at the end of quarter
three compared to one year previous.
PRICE CHANGES BY PRICE BRACKET
The DNG HPG measures the movement in prices for different price brackets of property within the sample as
shown in table 3.
TABLE 3
Q3 2020 Annual % Change From Peak (Q3 2006) From Low (Q2 2012)
Up to €300,000 2.4% 1.5% -28.7% 132.2%
€301,000 to €500,000 2.8% 0.8% -27.0% 90.2%
Over €500,000 2.5% 0.8% -45.1% 72.9%
Pent up demand was evident at all price levels in the market during quarter three, which pushed up prices above
the levels seen before lockdown. The average price of a home valued between €300,000 and €500,000 increased
by 2.8% during the third quarter whilst prices at the entry level and upper level of the market record growth of
around 2.5%. In the year to September property prices at the entry level to the market rose by 1.5% whilst further
DNG HOUSE PRICE GAUGE
up the property ladder prices remained more stable with marginal increases of less than 1% recorded by the HPG.
DNG HPG & CSO RPPI DUBLIN
Figures 3 and 4 below show the quarterly change in Dublin residential property prices as measured by both the
DNG HPG and the CSO Residential Property Price Index (RPPI) for all Dublin residential property.
Due to the lag in reporting, the latest CSO data for the three months to July suggests a weaker market than
the DNG HPG in the early part of Q3. However, all available evidence suggests that demand remained strong
throughout August and September and when the CSO publish full July to September figures later in the year a
further improvement in price performance is expected. As figure 3 demonstrates there is a three month time lag
in the CSO trends when compared to the DNG HPG but overall the two indices follow a very similar pattern over
time.
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DNG.ieDNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
FIGURE 3. QUARTERLY PERCENTAGE CHANGE - DNG HPG & CSO RPPI DUBLIN RESIDENTIAL PROPERTY
8
6
DNG HPG
CSO RPPI Dublin Residential Property
4
% Change
2
0
-2
-4
Note – The CSO data reported above in the period Q3 2020 relates to the 12 months to July 2020 only. The latest available data at time of writing.
Source: DNG Research, CSO
This can be seen in the annualised data for both price measures as shown in figure 4, with both indices following
a remarkably similar trend over time. Price inflation has certainly stabilised in the last two years according to both
the CSO RPPI for Dublin and the DNG HPG with price changes fluctuating between +2% and -2% on an annualised
basis since the latter half of 2018.
FIGURE 4. ANNUAL PERCENTAGE CHANGE DUBLIN RESIDENTIAL PROPERTY PRICES
20
DNG HPG
CSO RPPI Dublin All Residential Property
15
10
% Change
5
DNG HOUSE PRICE GAUGE
0
-5
Note – The CSO data reported above in the period Q3 2020 relates to the 12 months to July 2020 only. The latest available data at time of writing.
Source: DNG Research, CSO
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ANNUAL PERCENTAGE CHANGE IN DUBLIN RESALE
PROPERTY PRICES
TABLE 4. ANNUAL PERCENTAGE CHANGE DUBLIN RESIDENTIAL PROPERTY PRICES
Year Change second hand house price
2001 t -3.5%
2002 s +21.2%
2003 s +9.5%
2004 s +13.0%
2005 s +22.0%
2006 s +19.0%
2007 t -11.3%
2008 t -21.5%
2009 t -24.2%
2010 t -15.1%
2011 t -20.0%
2012 s +2.2%
2013 s +17.7%
2014 s +23.5%
2015 s +0.7%
2016 s +5.9%
2017 s +10.9%
DNG HOUSE PRICE GAUGE
2018 s +2.8%
2019 t -1.1%
Source: DNG Research
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DNG
APARTMENT The DNG Apartment Price Gauge (APG)
analyses the movement of apartment
prices across Dublin. The APG measures
the change in value of a representative
PRICE GAUGE
sample of apartment dwellings across
Dublin on a quarterly basis. Within the
Dublin apartment market, the APG will
analyse price movements in different
areas (Central, North, South and West)
and by the number of bedrooms the
property contains.
HEADLINE RESULTS
€321,618
AVE. PRICE OF AN APARTMENT IN DUBLIN
0.5%
% CHANGE Q3 2020
-2.1%
ANNUAL PERCENTAGE CHANGE
DNG APARTMENT PRICE GAUGE
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QUARTERLY RESULTS
The average price of a resale apartment in the capital increased marginally during quarter three, following a
larger decline in values during the second quarter in line with very low market activity and transaction levels in the
market which may have distorted the data somewhat. As figure 6 shows, prices in the capital’s apartment market
have been relatively stable since 2018 with only a small quarterly variance in price evident based on the APG
results.
Quarterly Percentage Change in Dublin Apartment Prices
FIGURE 6. QUARTERLY PERCENTAGE CHANGE IN DUBLIN APARTMENT PRICES
6%
4%
% Change
2%
0%
-2%
-4%
16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Source: DNG Research
ANNUAL PERCENTAGE CHANGE
FIGURE 7. ANNUAL PERCENTAGE CHANGE IN DUBLIN APARTMENT PRICES
20%
15%
DNG APARTMENT PRICE GAUGE
10%
% Change
5%
0%
-5%
Source: DNG Research
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DNG.ieDNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
As shown in figure 7, the average price of an apartment in Dublin declined by 2.1% in the year to September.
Compared to the twelve-month period to the end of June, the decline in prices recorded by the APG moderated in
the year to the end of the third quarter this year. Overall, the picture in the apartment market is like the housing
market with a stabilisation in prices evident. The average price of an apartment in the capital now stands at
€321,618 compared to €328,411 in September 2019.
PRICE CHANGES BY LOCATION
TABLE 4
By Area % Change Q3 2020 Annual Percentage Change
Central -0.2% -1.6%
North Dublin 0.7% -3.8%
South Dublin 1.2% -1.6%
West Dublin -0.2% -2.0%
As part of the DNG APG series, prices in the apartment market are analysed by geographical location across
Dublin. Table 4 shows the rate of change in prices over the last three and last twelve months.
A small variance in apartment prices across the city was evident in the third quarter as shown in table 4. Prices in
central and west Dublin recorded virtually no change in value during the three months to September, whilst prices
in north and south Dublin rose modestly. Across the city the average price of an apartment is now marginally
lower than twelve months previously.
PRICE CHANGES BY NUMBER OF BEDROOMS
TABLE 5
By No. Bedrooms % Change Q3 2020 Annual Percentage Change
One bedroom apartment 0.3% -2.3%
Two bedroom apartment 0.3% -2.0%
Three bedroom apartment 2.3% -2.1%
DNG APARTMENT PRICE GAUGE
The results of the DNG APG are analysed based on the price movements of apartments, as defined by the number
of bedrooms the property contains. The results are for the whole Dublin area covered by the APG.
Smaller one- and two-bedroom apartments saw only a very modest recovery in values in the three months to the
end of September with the APG recording increases of 0.3%. However, more robust price growth was evident for
larger three-bedroom apartments in quarter three as prices recovered by 2.3% on average, following a decline of
4.3% during lockdown in Q2. Apartments of all sizes were approximately 2% lower in value than twelve months
previous as shown in table 5.
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DNG APG & CSO RPPI DUBLIN APARTMENTS
Both the DNG APG and the CSO RPPI for Dublin apartments show very similar trends as shown in figures 8 and
9. On a quarterly basis the CSO data does show larger swings in price changes when compared to the DNG APG
however these are smoothed when the annualised data is analysed. Both indices have seen a stabilisation in prices
in recent quarters resulting in price movements of less than 3% in an annualised basis since the beginning of 2019.
FIGURE 8. QUARTERTLY PERCENTAGE CHANGE IN DUBLIN APARTMENT PRICES
9% DNG APG
CSO RPPI Dublin Apartments
7%
5%
% Change
3%
1%
-1%
-3%
-5%
-7%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Note – The CSO data reported above in the period Q3 2020 relates to the 3 months to July 2020 only. The latest available data at time of writing.
Source: DNG Research and CSO.
FIGURE 9. ANNUAL PERCENTAGE CHANGE IN DUBLIN APARTMENT PRICES
20%
DNG APG
CSO RPPI Dublin Apartments
15%
10%
% Change
DNG APARTMENT PRICE GAUGE
5%
0%
-5%
Note – The CSO data reported above in the period Q3 2020 relates to the 3 months to July 2020 only. The latest available data at time of writing.
Source: DNG Research and CSO
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PURCHASER
ANALYSIS
An analysis of purchasers in Q3 reveals that First Time Buyers continued to be the
majority buying group of resale properties in the market (53%) whilst buyers trading
up were the second largest cohort at 23%. Conversely, only 3% of purchasers were
trading down. Interestingly the percentage of purchasers buying in order to relocate
or move for work purposes rose slightly from 4% to 6% compared to the first half of
the year, a sign perhaps that the coronavirus pandemic has made people reassess the
suitability of their current living situations.
PURCHASER ANALYSIS
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FIGURE 10. PURCHASE PROFILE Q3 2020
First Time Buyer 23%
Investor/To Let
Reloca on/Moving Area
3%
Trading Down 53%
6%
Trading Up
Other
8%
7%
Source: DNG Research
PURCHASER FUNDING
An analysis of funding sources used by DNG purchasers in the third quarter reveals that almost three quarters of
buyers (71%) relied on mortgage finance to fund their new home, down marginally from 75% in the first half
of the year. Cash buyers made up a further 18% of the market virtually unchanged from H1 (17%). Perhaps of
more significance was the percentage of people buying properties who were selling an existing home, which
doubled from 3% in H1 to 6% in quarter three, as people took the opportunity to re-evaluated their current living
accommodation and location in light of the pandemic.
FIGURE 11. PURCHASER FUNDING SOURCE Q3 2020
3%
6%
2%
PURCHASER ANALYSIS
Pending Own Sale
18%
Other
Cash Buyer
Investment Fund
Mortgage Finance
71%
Source: DNG Research
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CASH &
NON-MORTGAGE
TRANSACTIONS
VALUE OF TRANSACTIONS Q2 2020 VOLUME OF TRANSACTIONS Q2 2020
2.39bn €1.15 8,207 5,035
Value of transactions Value of residential Number of transactions No. of transactions funded
purchase mortgages issued by purchase mortgage
€1.24bn 52% 3,172 38.6%
Value of purchases funded Value funded by cash or No. of transactions funded % transactions funded by
by cash or other sources other sources by cash or other sources cash or other sources
Source: DNG Research, BPFI & Property Price Register data. All figures exclude remortgage and top up loans.
• The value of purchase mortgages issued in quarter one was €1.15billion, a decrease of 38.1% on the same
period in 2019.
• The value of cash / nonmortgage funded transactions was €1.24 billion, a decrease of 41.9% the same period
CASH & NON-MORTGAGE TRANSACTIONS
2019.
• In value terms 52% of residential transactions were funded by cash / nonmortgage finance sources during the
first quarter.
• 8,207 residential transactions were registered between April and June 2020 according to the Property Price
Register, a decrease of 39.6% compared to quarter two 2019.
• Of these, 38.6% (3,172) were funded by cash / nonmortgage finance or other sources.
• In the second quarter of 2020, 5,035 purchase related mortgages were drawn down, a decrease of 37% on the
same period 2019.
• The number of cash / nonmortgage finance-based transactions fell by 43.5% in the second quarter of 2020
compared to the same period 2019.
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TRANSACTION
LEVELS DNG Research tracks the number of
housing transactions across the United
Kingdom and Ireland on a quarterly basis.
IRELAND
Results are presented as the number of
housing transactions per thousand head of
population for each country for comparison.
VERSUS THE UK
QUARTERLY HOUSING TRANSACTIONS PER ‘000
POPULATION
• All areas of the UK and Ireland recorded a steep decline in transactions per thousand population in Q2 2020
compared to the same period in 2019. In Ireland transactions levels fell 40%, whilst in the UK the decline was
greater at 47%.
• Scotland, Wales and Northern Ireland all saw drops in the number of transactions per thousand population in
excess of 50% compared to the same period a year previously.
FIGURE 12. HOUSING TRANSACTIONS PER ‘000 POPULATION
Q2 2019
5.0
Q2 2020
4.5
4.0
3.5
TRANSACTION LEVELS IRELAND VERSUS THE UK
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Ireland Uk England Scotland Wales N Ireland Dublin
Source: DNG Research, Property Price Register, HM Revenue and Customs UK Property Transaction Statistics August 2020.
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DNG.ieDNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
• As can be seen in figure 13, the usual uplift in transactions between the first and second quarters of the year
did not materialise in 2020 due to the impact of coronavirus and the subsequent stalling of the market in both
the UK and Ireland during the lockdown period. Indeed in the usually busy period of April to June 2020 the
average number of transactions per thousand population in Ireland fell to the lowest quarterly level in over six
years.
• Even accounting for the lockdown period in Q2 2020, Ireland continues to transact far fewer properties
per annum per head of population than its nearest neighbours as outline in figure 14 signifying the still
dysfunctional nature of the property market. The quarterly average in the UK taken over the previous year
remains close to 4 however in Ireland it is 2.7.
FIGURE 13. QUARTERLY HOUSING TRANSACTIONS PER THOUSAND POPULATION - IRELAND & UK
Ireland
UK
6.0
5.0
4.0
% Change
3.0
2.0
1.0
0.0
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Source: DNG Research, Property Price Register, HM Revenue and Customs UK Property. Transaction Statistics August 2020.
FIGURE 14. TWELVE MONTH QUARTERLY AVERAGE NUMBER OF TRANSACTIONS PER THOUSAND
POPULATION - YEAR TO JUNE 2020
4.5
4.0
3.5
3.0
2.5
TRANSACTION LEVELS IRELAND VERSUS THE UK
2.0
1.5
1.0
0.5
0.0
Ireland UK England Scotland Wales N Ireland Dublin
Source: DNG Research, Property Price Register, HM Revenue and Customs UK Property. Transaction Statistics August 2020.
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SUPPLY SIDE
ANALYSIS
RESIDENTIAL PLANNING PERMISSIONS
The total number of new residential units granted planning permission fell markedly in Q2, down 29% in the same
period in 2019. A total of 6,807 new dwellings were granted permission during the quarter less than half the level
seen in Q1 2020 (14,789).
FIGURE 15. NATIONAL QUARTERLY RESIDENTIAL PLANNING PERMISSIONS
16,000
All Houses of which Multi Unit Houses All Apartments All Units
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2017 2018 2019 2020
Source: DNG Research and CSO
SUPPLY SIDE ANALYSIS
For the fourth successive quarter the number of apartment permissions granted (3,704) outstripped permissions
for houses (3,063) however the number of apartments granted permission fell 20% compared to Q2 2019. Dublin
accounted for almost 78% of apartment permissions granted in Q2.
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NEW HOUSING COMPLETIONS
FIGURE 16. NEW DWELLING COMPLETIONS
Single Scheme Apartment Total
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2017 2018 2019 2020
Source: DNG Research and CSO
New dwelling completion figures were severely affected by the Covid-19 restrictions in place across the country
during the majority of Q2, with the number of completions down by almost one third on Q2 2019. Completion
numbers were down 72% during April compared to April 2019 however there was a significant increase in
completions in May and June when compared to April. The area with the largest year on year decline in
completions in Q2 was Dublin, which recorded a 43% fall compared to Q2 2019. The Mid-East region saw the
highest number of new units completed in the second quarter at 941, followed by Dublin at 840. As has been
the case in recent quarters the majority of apartment completions were in Dublin with 68% of all apartments
completed.
Looking at the first half of the year as a whole completion levels were only down around 10% when compared
to the same period in 2019 due to a large rise in completions during Q1 2020 which helped offset some of the
damage done by Covid. As a result the drop in housing output in 2020 as a whole may not be as severe as was
first anticipated at the onset of the pandemic as sites have reopened, and remained opened since the easing of
restrictions leading to a rise in output since May. Overall output for 2020 is now forecast to total around 18,000
new units, a potential fall of around 14% compared to 2019.
SUPPLY SIDE ANALYSIS
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DNG.ieDNG RESIDENTIAL PROPERTY MARKET REVIEW Q3 2020
ANALYSIS
AND
OUTLOOK 2020
The latest results of the DNG House Price Gauge confirm the evidence seen across the capital since lockdown
restrictions were eased, with market activity rebounding strongly compared to quarter two. As a result, prices
recovered more ground than they lost during the Covid-19 restrictions, with the average price of a resale home
in the capital increasing by 2.6% in the third quarter. Price increases in the capital’s apartment market were more
muted during the third quarter and remain marginally lower that twelve months ago, but overall, the theme of
price stability is still the main feature of the Dublin residential market which is characterised by an under supply of
available homes and continued affordability issues for first time buyers.
With the lifting of Covid-19 related restrictions pent-up demand was released back to the market and potential
purchasers, especially first time buyers with mortgage approval, were quick to resume their property search and
purchase. First Time Buyers continue to be the most significant buyer cohort in the resale market, accounting for
53% of transactions during the third quarter and our analysis shows that more than 70% of transactions were
funded by way of mortgage finance. With available stock levels declining in the sales market during lockdown it is
therefore of no surprise that prices recovered all the ground lost when the market was effectively frozen.
Covid-19 related restrictions impacted heavily on all areas of the market during Q2 according to all official data
sources, with transaction levels, mortgage approvals, mortgage drawdowns, planning permissions and new
dwelling completions all experiencing significant declines. However, the housing and construction sector has
proved to be very resilient, with activity levels picking up sharply since the economy and society started to reopen
back in June. Mortgage approvals, a key indicator of demand in the market increased by 61% month on month in
July and 23% in August, with the August total of 3,337 purchase related approvals higher than either the March
or February totals, which is an encouraging sign for the market going forward. A further welcome development in
this regard, is the fact that payments made to companies under the new Employment Wage Subsidy Scheme, will
no longer show on employee’s payslips. Under the old Temporary Wage Subsidy Scheme payslips referenced the
ANALYSIS AND OUTLOOK 2020
support payments to staff and this impacted negatively on mortgage activity when payslips had to be presented as
proof of income before drawdown.
The heightened level of uncertainty current shrouding all aspects of the economy makes forecasting incredibly
challenging at the present time. Fears of further coronavirus related restrictions, the ongoing impact on labour
markets of Covid-19, and the continued uncertainty surrounding Brexit could all impact negatively on the
residential market in the months ahead. However, the shortage of residential supply, which will continue to be felt
for some time to come, coupled with strong institutional demand in the Private Rental Sector and the seemingly
resilient nature of large parts of the economy means that any negative impact on prices in the capital may well be
more muted that initially thought.
20
DNG.ieADDITIONAL SOURCES USED TO COMPILE THE REPORT:
AIB Treasury Economic Research Unit – Housing Market Bulletin September 2020
Banking and Payments Federation Ireland – Mortgage Approvals August 2020
Banking and Payments Federation Ireland – Mortgage Drawdowns Q2 2020
Banking and Payments Federation Ireland – Housing Market Monitor Q2 2020
Central Statistics Office - Residential Property Price Index July 2020
Central Statistics Office – New Dwelling Completions Q2 2020
Central Statistics Office – Planning Permissions Q2 2020
Central Statistics Office - Residential Property Price Register
UK HM Revenue & Customs – Monthly Property Transactions August 2020
T: +353 1 4912600 E: info@dng.ie
Disclaimer: Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we
have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently
confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and
do not represent the current or future performance of the market. This information is designed exclusively for use by
DNG and cannot be reproduced without prior written permission of DNG. All charts are created by DNG Research unless
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