Ireland’s property sector is one which has certainly seen its fair share or turmoil. From the heady highs of the Celtic Tiger to the depressing lows of the 2008 recession. In more recent times, the sector had appeared to be holding its own, as the country emerged from the recession. Until the Covid 19 pandemic took hold. In the run up to the emergency, house prices had been on the incline, albeit to a lower extent that had been anticipated. New homes were being built. In fact, according to the Central Bank figures, 23,000 new homes were constructed in 2019. Despite the looming uncertainty of Brexit, the property market looked good. No one could have anticipated what was to come. As we strive to cope with the ‘new normal’ of pandemics restrictive living, we at Dmac Media have taken a look at how the Irish people’s online behaviour has changed in relation to the residential property sector as these restrictions took hold.
The property sector itself is heavily reliant on the
internet for its survival with website such as daft.ie and myhome.ie, as a cornerstone
in the industry. To get a clear understanding of changes in consumer search,
we’ve compiled 661 key terms and phrases used by consumers when searching for
property online. We then determined how many times these terms and phrases were
searched for during March 2019 and compared this with data for March 2020. In
doing so, it provides us with a clear picture of how consumers search behaviour
altered as Covid 19 became an increasing part of our everyday lives. We know
that search interest pre-dates actual enquiries and purchases and therefore
these findings reflect a snapshot of the effect of Covid-19 on property markets.
Interestingly, the data showed just a 20% decline year on
year. While 20% is a significant figure, it is much lower than has been
experienced in other sectors such as hospitality and the motor industry. This
relatively small decline might suggest that in the early days of the pandemic,
Irish consumers were not completely deterred in their pursuit of a new home.
Those searching for the property website Daft, also
declined, however this was just 8% for our targeted terms and phrases.
Further exploration of the data revealed that location
specific searches, (i.e. searches for property for sale in a specific county)
had contracted by 39%. This figure is much more significant as it speaks to the
levels of intent consumers had in their search. As a consumer moves through a
particular search, the research phase of the Online Buyer Process, they refine their searches for specifics and a
decline in this subsection of keywords at this stage, would suggest that those in
the latter stages of the buying process had paused their intention.
Specifically, there was 9,000 less searches for “Houses for
Sale” year on year, representing a 33% decline and was the largest single
decline of our chosen phrases.
There are many aspects to the current crisis that have yet
to play out, a clearly high level of uncertainty within the property market is
evident. Daft.ie Q1 Property Price report shows a 50% decline in new houses
listed for sale in March 2020 compared with 2019. Rather interestingly the
report also demonstrates a slight decline in the average house price in March
but even with this decline in effect, average prices remained higher than in
January or March.
Ronan Lyons, Assistant Professor in Economics at Trinity
College in Dublin suggests that this anomaly demonstrates a two-fold reaction
by those selling houses. For those going to market with their houses, the
initial reaction was to withdraw rather than reduce their prices. For those
that did go to market in late March, obviously had much more confidence about
the future and the likely fallout of the pandemic.
The data observed in this report may very well be just the tip of the iceberg, as the most restrictive measures, particularly those impacting employment were only observed towards the end of March. A clearer picture will emerge with both time and data as it becomes available. Nevertheless, we will bring you the latest on property sector search interest later this month.