The Covid-19 pandemic is having a devastating impact on the supply of homes in the county.
“There has been a huge impact on the restriction of supply, particularly with new houses,” said the Westport-based auctioneer.
There are likely to be only about 15,000 house completions in 2021, according to the ESRI. “The underlying demand is for about 35,000 units so you can see there is a massive disconnect between the supply of new homes and what’s going to be built. Those challenges unfortunately are here for the foreseeable future until lockdown eases and construction activity can resume again,” Mr O’Toole stated.
A lack of supply is driving house prices up but wage growth has not risen in tandem. Mr O’Toole said figures show there are about 1,000 properties for sale in Mayo but he believes the true figure could be half that.“A lot of those (1,000 properties) are in poor condition, in underdeveloped areas, or are actually sites. I would say the active stock in Mayo is much, much lower. It could be as low as 500 or 600. If you compare that to demand annually, it suggests there is less than six months supply in the market at any one time and that is obviously very, very worrying,” said Mr O’Toole.
The mean house price in Mayo in 2020 was estimated to be approximately €143,000. There have been year-on-year price increases across the main towns of Ballina, Castlebar, Claremorris, and Westport. Westport house prices easily outstrip the rest of the county.
In 2017, the mean house price in Westport was €200,000 that has increased to €250,000. In Castlebar, mean house prices increased from €12000 in 2017 to €165,000 last year. Ballina property prices rose from €120,000 in 2017 to €130,000 in 20202 while during the same period the mean house price in Claremorris increased from €89,000 to €130,000.
“Those figures don’t confirm anything we don’t already know. Westport being the most expensive place to buy a house in the county, and probably outside of Galway on the western seaboard. That probably speaks to the broader demand for lifestyle buyers, holiday homes, and people retiring here that compete with other owners, local owners if you will, trying to get on the housing ladder,” said Mr O’Toole.
He warned that 2021 will be a challenging year with pent-up demand, continuing the upward pressure on house prices, particularly in desirable locations.
Independent councillor Michael Kilcoyne said many households find themselves in the predicament of not qualifying for social housing while unable to afford a mortgage. “These people are caught in this poverty trap that I feel is going to become a really serious issue over the next year or two,” said Cllr Kilcoyne.