They will go up at first – then they will go down. You also need to split the housing market into price sections and make sure you can find a property for sale.

Below €400k the price will continue to go up. This is where the key demand segment is (first time buyers) and low/medium income families. These people are currently paying rent of say €2,000 a month and buying the same property would mean a mortgage of ~€1,400. They also get government assistance with a deposit (New Build/Central Bank) and require small cash upfront. They are in an environment they want to get out of – either high rent or living at home, so as long as they can keep their jobs, this segment of the market will remain strong. Its also where government intervention is likely to be strongest – further pushing up demand.

Property for sale at the high end

The real issues will be at the top end – €700k plus. There’s virtually no first time buyers here. This is trader uppers – so they need 20% deposits – and that’s chunky cash on a €700k house. They probably have a house that might be a little too small or want to live in a better area, but their costs will go up by getting a new property – just a bigger mortgage and they have a huge cash outlay with the deposit (even if its equity from selling an existing property). They would be taking a bigger risk than a first time buyer currently renting, so they are more likely to hold off hence the lack of property for sale. See daft for current numbers

This leads to less demand – which brings a price fall.

The other impacts of the market will be interest rates and government action. Interest rates are likely to go even lower as Central Banks go full Willy Wonka – rivers of money will be flowing from Brussels and Frankfurt. Lower interest rates will lower mortgage costs and drive a further wedge into the already massive gap between rent and mortgages, encouraging more renters into the ownership market.

Government Action

But Government intervention could be the bigger impact. Nothing like a well intentioned Minister with a short life span! I would expect significant and lots of temporary measures – that will turn out to be everlasting gobstoppers !! (think HAP, Help to buy).

The ban on evictions means you will see a lower supply of property for sale, payment breaks for mortgage holders means less distressed sales and the government buying up existing private properties to add them to the social housing stock will also curtail supply available to private buyers. Delays in house completion due to Covid will also mean less supply.


The countering forces on this are a weaker economy = less income/jobs – which will reduce demand. Herd mentality from the great unwashed will also be for price falls – Great Expectations – and this will further weaken demand. I believe you will have a situation where both supply and demand fall, but supply at the lower end of the market will fall more than demand which will help keep prices up.

Don’t be surprised if sub €400k price growth in 2020 is higher than 2019 and if there is a significant lack of property for sale

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