home
login
contact
about
Finance Dublin
Finance Jobs
 
Thursday, 18th April 2024
    Home             Archive             Publications             Our Services             Finance Jobs             Events             Surveys & Awards             
Property ‘bubble’ is not going to burst say economists Back  
A panel of Ireland’s leading economists, including stockbrokers, predict that Ireland’s residential property sector is not going to burst over the next five years.
Respondents to this year’s FINANCE property survey predict that house prices will continue to grow over the next five years, with expected growth of 17 per cent over the five years to 2007.

Against a backdrop of growing concern about Ireland’s property bubble bursting, and a Central Bank warning that prices may actually fall in 2003, the economists predict that house prices will continue to grow in 2003 at a rate of 6.4. However, the majority of this growth has already occurred in the first quarter of 2003 say the economists, and prices will remain flat under year-end, as supply begins to match demand. Growth will slow in 2004 to one per cent, say the economists, picking up slightly in 2005 to 1.7 per cent and increasing to 3.1 in 2006 and 3.7 in 2008.

This year, for the first time, the survey includes the economists’ forecasts for the commercial, retail and industrial sectors. Retail is set to out-perform the residential market, predict the economists, as well as the commercial and industrial markets, with expected growth of 3.3 per cent per annum over the next five years. Prices in the industrial sector are predicted to remain fairly flat, with growth of almost one per cent per annum. The commercial market will also stay static over the next five years.

These figures are compiled from a composite of predictions the economists gave for house price growth under bullish and bearish scenarios.

Dan McLaughlin, chief economist with Bank of Ireland, and a self-proclaimed ‘bull’ on the Irish residential property market, says that he now thinks the market is in broad equilibrium and that the days of double digit house price gains are gone, with supply beginning to meet demand. He predicts growth rates of 2.7 per annum over the next five years.

The most bullish economist is Austin Hughes, chief economist with IIB Bank, who predicts growth of 6 per cent per annum over the next five years. He says that the sharp rise in house price inflation seen through the past year suggests underlying demand is still reasonably robust. In 2006/2007 Hughes predicts that growth will be in the region of 7-8 per cent per annum, due to ‘an eventual return to economic growth rates for Ireland in the 5 to 6 per cent area’.

Bernard Feeney of Goodbody Economic Consultants is the most bearish economist, with projected growth of just 1.2 per cent per annum over the next five years. While he predicts that house prices will rise by 8.1 per cent in 2003, he predicts this will be followed by a decrease of 5.1 per cent in 2004 and 2.7 in 2005, returning to a growth of around 2 per cent in 2006.

Digg.com Del.icio.us Stumbleupon.com Reddit.com Yahoo.com

Home | About Us | Privacy Statement | Contact
©2024 Fintel Publications Ltd. All rights reserved.