Davy sees faster-than-expected recovery in property market

Davy Stockbrokers says there has been a faster-than-expected pick-up in activity in the Irish property market that may prompt an upward revision in its forecast for mortgage lending this year.

It said the latest Property Price Register from the Central Statistics Office shows transaction volumes over the past month were down only 25 per cent compared to 2019, a significant improvement from the third quarter figure, which was 33 per cent lower.

This was “a slightly faster pick-up than we had expected,” Davy chief economist Conall MacCoille said, while highlighting that this followed strong mortgage approvals data in August, back to normal levels.

“If sustained, the recovery in transaction volumes could pose a small upside risk to our forecast for mortgage lending of €7.3 billion in 2020,” he said.

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Mortgage approvals

There were €946 million of mortgage approvals in August, down 2 per cent on 2019, of which €834 million were for house purchases, up 0.6 per cent. “So mortgage lending has returned to normal levels,” he said.

However, Mr MacCoille said the stock of homes listed for sale on property listings website MyHome was 17,800 in September – still down 25 per cent on 2019.

“So many homebuyers may be frustrated, pushing up prices, but with transactions still impaired in Q4,” he said.

“Overall, the data are broadly consistent with our forecast for a slow recovery in the mortgage market to total €7.3 billion in 2020,” he said.