Dublin house prices could increase this year although the omens for the coming year in the residential property market remain very uncertain and quite mixed. This was the view of economist Jim Power when speaking yesetrday at the seminar organised by estate agents Lisney.
On the positive side, although credit conditions remain difficult, mortgage credit is becoming slightly more readily available, with the total mortgage market expected to reach €4bn this year, compared to €2.6bn last year and almost €40bn in 2006. Some buyers believe that prices have fallen sufficiently to warrant good value, and the overall economy is showing signs of stabilising, and 1,200 net new jobs were created in 2012.
On the negative side, credit availability remains very difficult. The property tax may deter some buyers or at least will influence the prices they might be willing to pay.
"Later this year or in to 2014, we may see a glut of repossessed buy-to-let properties coming on the market. We may see a reduction in the number of cash buyers in the market, as there is a limit to the number of potential purchasers with cash; and the painful fiscal background is continuing to sap spending power and confidence," he added.
How these opposing forces will play out is anybody's guess at this juncture, such are the deep uncertainties that still abound in the economy in general.
On balance more buyers are likely to decide to dip their toes in the market, particularly as the dangerous and reckless decision made in Cyprus to rob some bank deposits may just convince people with money that it would be safer in a house than in a bank deposit account.
"Outside of Dublin, any increase in demand would be unlikely to give a lift to house prices as any transactions are likely to be driven by low prices. All in all it remains a very uncertain market with many competing variables, but at a national level it would probably be premature to call a turn in the market until considerably more evidence becomes available," he added.