Crunch year ahead regardless of predictions
Published 10/01/2013 | 05:00
HOMEOWNERS could be forgiven for being confused about property prices.
A report from ratings agency Fitch predicts they could drop as much as 20pc this year, though it reckons that a fall of 10pc is the more likely.
But hang on, I hear you say: had we not reached the bottom of the property market? And had prices not stabilised, particularly in cities and larger towns?
It must be remembered that Fitch had its reputation blown to bits during the global crash. And anyway, predictions are notoriously difficult.
What we can be more sure of is what has happened to property up to now.
The Irish Banking Federation said yesterday that there had been a huge jump in the numbers of people approved for home loans in November.
This comes after figures from the CSO showed a rise in prices nationally in November – the fourth month out of five that prices had risen.
The last few months of last year was a frenzied time for property buying as first-time buyers scrambled to avail of generous mortgage tax relief, which has since been withdrawn. So will prices continue to drop at all? Who knows.
Factors that will operate as a drag on the market include the new property tax.
How banks deal with people in trouble with mortgages will impact on how much they can lend for house purchases.
Likely to push up prices are plans by Permanent TSB and EBS to re-enter the lending market.
One thing is sure, this is set to be a crunch year for the housing market.