Property prices are now expected to stabilize and even increase in some sectors of the market following the changes to mortgage interest relief in the Budget.
That, coupled with falling mortgage rates and an expected increase in rents, means there has been a dramatic turnaround since the ESRI forecast last month that prices would fall further in 2012.
Experts now believe that a turnaround is on the cards with segments of the market, notably key city and farming sectors, already stabilizing and expecting growth next year.
Small pockets of the market are already showing signs of stability, if not recovery, including Dublin 4.
In the Ailesbury and Shrewsbury Road areas, investors recently splashed out more than €36 million for seven houses.
Similar signs of stability and recovery have been noticeable in terms of city-centre apartments, despite the Central Statistics Office reporting recently that Dublin apartment prices had fallen about 60% from the height of the boom.
The Allsop Space auction in The Shelbourne Hotel at the end of November also showed an increase in prices for the Castleforbes apartments in the north Docklands, compared with what they fetched at the same auction in April.
At that time, they went for between €116,000 and €129,000. This time around the lowest value for a property sold in the highly sought after area was €123,000 with the top sale hitting €167,500.
Speaking to the Irish Independent, Simon Ensor of Sherry FitzGerald said he expects that foreign investors will be enticed to buy whole blocks of Irish city apartments following the Budget’s tax exemption of sales profits from investors who buy before the end of next year and hold on to them for seven years.
The farm market has also seen increased buying activity and Edward Townshend of Colliers reckons prices for good land have risen by 10% this year to around €11,000 an acre.