Irish house prices predicted to rise the fastest in the Eurozone

Irish house prices predicted to rise the fastest in the Eurozone

Ireland’s housing market will experience the highest price rises across the Eurozone in 2015 , Standard & Poor’s said on Thursday, as it predicts that house price growth will stay “relatively robust” over the medium term.

The ratings agency is predicting price growth of 9 per cent for 2015 for Ireland, after which it said that growth should slow to a “calmer” rate of 5 per cent in 2016 and 3 per cent in 2017. Given that it will be “some time” before the mismatch in supply and demand is rectified, S&P said it sees house price growth staying “relatively robust over the medium term”.

However, it pointed to emerging “signs of a deceleration”, particularly in Dublin, with prices in the capital remaining flat in the seven months to May.

“This in our view reflects an adjustment in house-price expectations by households, after the Irish Central Bank introduced stricter controls on mortgage lending,” S&P said, as it added that these restrictions will likely to continue to temper the recovery going forward.

With annual price growth of 9 per cent in 2015, S&P said that Irish property price growth will outpace that in Germany (5%); Portugal (4%); and the Netherlands (3%). Spanish house prices will return to growth (by 2.5%) from their deep fall since the financial crisis, and Italian prices will also start to recover this year. Ireland’s property recovery will also outpace the UK, with S&P expecting house price inflation of 7 per cent in the UK, and a soft landing for Switzerland, with price growth of just 1.5 per cent.

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