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.