House prices to slow but no sustained decline expected - Davy stockbrokers
The rise in house prices will slow this year and in the coming years but there will be no sustained decline, one of the country’s leading stockbrokers has said.
Davy forecast prices to rise by 9.4pc this year, slower than the 12pc increase seen in 2014.
Price growth will moderate to 5.2pc next year and 4.5pc in 2017.
Davy said house prices had moderated at the start of the year following the introduction of the new Central Bank mortgage deposit rules.
The stockbroking company also said that although house prices are now at five times the average income, it expects that as the economy recovers further and unemployment falls, wages will rise and so will affordability.
The Central Bank rules will tighten affordability throughout this year, although the full impact of the measures are not expected to become apparent until later in the year, the Central Bank said.
Davy economist Conall Mac Coille said that Dublin house prices grew by 21pc last year, but prices rose by just 5.2pc in the rest of the country.
He said house prices remain 37pc below their peak levels in 2007.