A new report suggests the Irish housing market has so far avoided major disruption from COVID-19 measures.

The figures from property website Daft.ie show that house prices rose by 2.3% between June and July to an average of €260,000, the second rise in three months after a 5.3% dip in April. Sale prices were flat, however, compared with the same month last year.

Average monthly rents moved up 0.5% from the previous month to €1,412, meaning rents have risen by 1.2% over the past 12 months.

Urban centres

The report’s author, economist and TCD lecturer Ronan Lyons, said Dublin and Leinster had shown the strongest monthly gains in house prices – 2.7% and 3.4% respectively – bringing prices in those two regions higher than their March levels.

“This is at odds with the emerging narrative that COVID-19 is allowing people to move away from urban centres, because of the ability to work from home,” he said, adding it remained to be seen if such a shift in the market would take place.

The Daft.ie report shows that 2020 has seen as many homes put up for sale as any year between 2015 and 2019, while activity in the rental market is well within normal ranges.

Dublin puzzle

Mr Lyons says the resilience of rents in Dublin, which have risen after a sharp fall in April, may be puzzling as there has been a big increase in supply in the city.

Between the start of May and the end of July, the number of rental ads in Dublin this year was almost 50% higher than the same period last year.

The economist says, however, that the underlying shortage of rental accommodation in Dublin is “very acute”, and that lack of rent falls may be due to some of that long-run pent-up demand coming on stream.

Mr Lyons also argues that ‘rent pressure zones’ discourage landlords from lowering rent, as future rents will reflect that cut.