Economist warns that Dublin property prices are being 'talked up'
EARLY signs of recovery in the Dublin property market are being exploited by those interested in talking up the market as a whole, it has been warned.
Friends First economist Jim Power said the increase in prices in the capital are not reflective of the market across the country.
And he warned there was a risk of talking ourselves into another bubble.
“A housing shortage and rising prices in certain areas of Dublin does not constitute a recovery in the housing market,” Mr Power said, at the launch of Friends First’s latest economic commentary.
“There is a large bank of housing stock and development lands which are still tied up in NAMA and elsewhere and it is only when this supply comes back onto the market in Dublin and in other regions that we will have a more accurate picture of where the true market lies. Let us not repeat the mistakes of the past.”
Mr Power said efforts should be made to ensure there is no repeat of the past.
He said the Government should be looking at policies such as limiting income multiples, controlling Loan-to-Value ratios and introducing mandatory mortgage insurance.
“Furthermore, with clear signs of a lack of supply in Dublin in particular, a levy on development land that is being hoarded would make sense,” he said.
He said the economy was likely to grow 0.3pc this year, strengthening to 2.1pc in 2014. This is broadly in line with the projections from the Department of Finance.
Friends First said unemployment would fall this year 13.3pc, and drop to 12.5pc next year.