Irish house prices stable in February, before coronavirus disruption

Irish residential property prices rose 1.1% in February from a year earlier, official data showed on Friday, but activity appears to have collapsed since then after the country imposed a lockdown to curb the spread of the coronavirus.

While the February data suggested a continued stabilization in the market in the first two months of the year, Ireland introduced a series of restrictions in March to try and contain the virus, including a stay-home order, which will stay in place until May 5. The activity has collapsed as a result, Davy Stockbrokers chief economist Conall MacCoille wrote in a note on Friday, with 700 transactions added to the state's property price register in the week to April 15, close to 40% lower than the weekly average in January and February.

Estate agents had stopped viewings before the restrictions were tightened late last month, which MacCoille said could push transactions to a negligible level and even prevent the CSO from publishing a house price inflation reading for April. "Ultimately, a functioning housing market will require the COVID-19 business restrictions to be relaxed making questions on where house prices go redundant for now," MacCoille said, predicting volatile price movements in the illiquid market.

"It is possible that transactions could bounce back in Q3 if the restrictions are relaxed, but almost certainly not sufficient to make up for the disruption early in the year." House prices have stabilized over the last year has shot up for five years following a strong economic recovery from a property crash a decade ago. Prices, which were down 0.1% month-on-month in February, according to the data from the Central Statistics Office (CSO) on Friday, are 17.9% below their 2007 peak.

However the economic shutdown has more than trebled the unemployment rate to 16.5% - at least temporarily - and consumer sentiment suffered its largest monthly drop on record in April, a survey showed on Thursday. Ireland's central bank has estimated that gross domestic product could fall by 8.3% in 2020 and that unemployment could reach 25% before falling back to 12.6% at the end of the year, assuming the current containment measures the last three months.