Revealed – how has Covid-19 affected the Irish property market?

An Ireland-based PropTech startup has published its study on Covid-19’s impact on the Irish property sector.

Beagel, headed up by industry veteran Healy Hynes, aims to provide transparent online sales technology for estate agents.

Hynes says the paper is based on research derived from over €1 billion in private treaty bids placed on Beagel’s systems since January 2019.  

“The Beagel Covid-19 Impact report examines the on-the-ground changes in property sales,” he added.

Firstly, the study analysed the number of bids made per property sold. There were, on average, 6.6 bids per property in January 2019. This went up in February 2019 to 9.1 bids per property, a rise of 37.8%.  

The number of bids increased again in March 2019 to 10.2 bids per property, an increase of 12.1%, before dropping back down to 6.6 bids per property in April 2019.

For January 2020, meanwhile, there were on average 9.9 bids per property, but this fell by 31% in February 2020 to 6.9 bids per property, before climbing back up by 91% in March 2020 to 9.1 bids per property. The figure then fell dramatically by 86% in April 2020 to 1.3 bids per property as the coronavirus crisis – and lockdown measures to combat it – really took hold.

Secondly, the study examined the average sales prices relative to those being asked by sellers. In January 2019, the average property sold for 2.9% over the asking price, jumped by 41.4% to 4.1% over asking price in February 2019 and increased again in March 2019 (by 31.7% to 5.4% over the asking price). In April 2019, the average went down to 3.6% over the asking price, dropping by a third (33%).

By comparison, the average over the asking price in January 2020 was 3.6%, with this spread widening by 47.2% in February 2020 to 5.3% over the asking price.  

The trend, however, reversed in March 2020 when the average over asking price declined by 26.3% to a 3.9% premium. With the coronavirus causing chaos and tragedy across the world, the downward trend unsurprisingly continued into April 2020 when the average property sold for 3.4% under the asking price.

The study then went on to look at the time property had been on the market by the time it sold, with the average in January 2019 being 49.9 days. This fell by 11.4% to 44.2 days in February and dropped again by 29.5% to 31.2 days in March 2019. In April 2019, there was a slight rise in time on market to 34.6 days.

By contrast, for January 2020, the average property sold after 68.9 days on the market. This more than halved to 32.7 days in February 2020, only to then increase by 2.1% in March 2020 to 33.4 days. As the coronavirus gripped Ireland more strongly, the average more than doubled in April 2020 to 76 days.

“Comparing the year-to-year figures we can see that there was almost a 50% increase in bids per property between January 2019 January 2020,” Hynes commented. 

“These ratios then flipped in February when the bids in 2019 exceeded the bids in 2020.  The averages for March were practically identical with less than one bid in the difference. The downward trend, however, crystallised in April with a 92% difference between the months.”

In respect to final sale prices, the report highlighted that the gap between expected sale price and final sale price widened in January 2020 by 64%. That spread then more than halved in February and reversed in March, although sales prices continued to exceed the asking value. The trend then continued in April when sales prices for the first time dropped below the asking value.

“In regards to the trends of sale durations, January 2020 took 38% longer than January 2019, however this trend then inverted in February with sales taking less time than the previous year,” Hynes added. “Durations winded slightly in March with sales in March 2020 taking 2.2 days longer than the same period in the previous year. April 2020 then clearly demonstrated a significant shift with the average sale duration now more than double the previous year.”

The Beagel Covid-19 Impact Report can be downloaded for free at beagel.io/covid19.

How is Ireland dealing with the coronavirus?

The Republic of Ireland went into lockdown in late March, although certain measures had already been brought in before this – including the closure of schools, universities, pubs and most non-essential shops – to assist in the fight against the pandemic. 

At the beginning of this month, the Irish Prime Minister (Taoiseach) Leo Varadkar signalled an easing of lockdown restrictions while also setting out his phased five-point plan.

Since Tuesday 5 May, people over 70 and currently cocooning have been able to leave their homes as long as they avoid contact with others, while the 2km exercise limit in place for the Irish population during lockdown has been extended to 5km.

In a live television address to the nation on Friday 1 May, Varadkar announced the five-stage road map from May 18 to ‘reopen the country in a slow, phased way’.

He said: “On the 18th of May, Ireland begins to reopen and begins that journey to a new normal.”

The road map is set out in five phases and will work on two-to-four week cycles monitored throughout, with each stage dependent on the success of the previous one.

Phase One, from May 18, will see certain outdoor public amenities opened, a phased return of outdoor workers and retailers which are primarily outdoor, outdoor meetings between people from different households, and childcare for healthcare workers reopened.

Phase Two, from June 8, will allow household visits, while plans will be in place to open up businesses with consideration for the safety of staff and customers. Public libraries would also be opened, and small retail outlets would reopen with social distancing observed.

Phase Three, from June 29, will allow for small social gatherings, the reopening of playgrounds and the reopening of non-essential retail outlets with street level entrances and exits.

Phase Four, from July 20, will see those who cannot work from home allowed to return to work, a gradual easing of restrictions for higher-risk services like hairdressers, and the opening of museums, galleries and places of worship.

Phase Five, from 10 August, will allow for larger social gatherings, while workers across all sectors can return to the workplace. Primary and secondary schools and third level institutions will reopen on a phased basis, and there will be a further easing of restrictions on high-risk retail services.

At the time, Varadkar stressed the need for caution as ‘the risk of a second phase of the virus is ever-present’.

In Northern Ireland, part of the UK but sharing a border with the Republic, the devolved Stormont administration is taking a different path to the UK government. On Tuesday, the Northern Ireland Executive – a power-sharing arrangement between the DUP and Sinn Fein – unveiled a five-stage plan for easing the Covid-19 lockdown in the country.

Unlike plans announced in England and the Republic, the NI blueprint does not include a timetable, but the first minister Arlene Foster said she hoped to reach the final stage by December.

She also urged caution, though, with ‘progression’ depending on key health criteria being met.

The document, entitled Executive Approach to Decision-Making, was outlined by Foster and Deputy First Minister Michelle O'Neill in the Stormont Assembly last week.