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10% of property sales renegotiated with small reduction – SCSI

About one in ten property sales was renegotiated due to Covid-19 with an average price reduction of 3%, a survey of over 260 estate agents carried out by the Society of Chartered Surveyors of Ireland shows.

About two thirds of practitioners said property values had remained unchanged compared to the situation before the pandemic and the subsequent economic shutdown.

28% said prices had declined with 6% saying they had increased.

Figures from the Central Statistics Office last week suggested that annual property price inflation nationally practically came to a standstill in June at 0.1%. Dublin prices were down 0.7%.

The volume of transactions in June dropped by a third compared with the same month last year, the CSO figures indicated.

A separate set of figures from the Banking and Payments Federation showed that mortgage drawdowns amounted to €1.5 billion between April and the end of June, down 35% on the year.

About three quarters of estate agents surveyed by the SCSI said they had experienced at least one failed transaction as a result of the pandemic.

It is estimated from the survey findings that about 12% of sales fell through as a result of Covid-19 and the associated economic shock.

SCSI Vice President, TJ Cronin – a Cork based estate agent – said the findings underlined the resilience and the adaptability of the property sector, but he warned that the outlook remained challenging.

“Activity levels have been brisk due to pent-up demand. Confidence within the house purchasing market remains strong, especially among those who have been unaffected financially by Covid-19 or those that had finances in place.” 

“However new mortgage approvals and drawdowns are down, and the salaries of home purchasers are likely to be impacted as a result of Covid-19,” he added.

On the rental side, the survey found that on average 8% of tenants had not met their monthly rent obligations due to Covid-19. 

Just over a third of these had provided satisfactory evidence of inability to pay to their landlord.

The SCSI warned of a sharp rise in rent arrears with the removal or reduction of the pandemic support payments.

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