House prices will decline by another third, says economist
Published 26/01/2010 | 05:00
ONE economist who reckons that house prices have much further to fall is Derek Brawn.
Mr Brawn, whose book 'Ireland's House Party' (Gill & Macmillan) is a cutting critique of what caused the housing bust, reckons house prices will continue to fall for another three to four years at least.
He cites oversupply of vacant houses, the number of migrants leaving Ireland, and restrictions on mortgage finance as reasons to keep prices falling.
Mr Brawn acknowledges that interest rates are set to rise, but says other factors, such as wages and salaries, are more important determinants of housing affordability.
"People have to work out which will hurt them more, higher interest rates or missing out as price falls accelerate because you buy now?" he said.
Rents are falling faster than house prices, a situation potential buyers can use to enlarge the funds they have for a property deposit.
Property prices have already fallen by one third, but Mr Brawn says they will fall by another third.
"There is no recovery in the housing market in sight," he added.