Mark Keenan: 'Only certainty is more uncertainty as UK exit moves toward endgame'
'Brexit affects the property market too," is the core message from this year's Irish Independent/REA annual house price forecast.
But while discussions over Brexit have thus far broached fears for our farming sector, food imports, freedom of travel and medical supplies, little has been said about the possible impact on the housing market.
And the increasingly farcical antics of British politicians and an apparent lack of preparation here in Ireland seems to be having an impact on the property market already - as evidenced by prices largely stagnating in the last quarter of the year.
This looks set to continue, or even become more pronounced in the new year, depending on how Brexit unfurls.
Stagnant or falling property prices have not been experienced widely in Ireland for a number of years. And while estate agency firms are often reluctant to broach the subject, it's one of the Brexit fallout possibilities, particularly in locations with high exposure to farming, tourism and the Border. Conversely a 'good' Brexit for Ireland could increase prices in some regions.
A slippage in house prices can have very positive effects - if it is occurring for the right reasons. If caused by an increase in supply, then that's a good thing.
The more affordable homes are, the better it is for the economy overall. Those spending less of their disposable income on mortgages have more of it to spend on job and wealth generating commerce such as eating in restaurants, educating their children and taking short breaks in Ireland.
It's when they come for the wrong reasons that we need to be concerned. Outside of Brexit, recent low price growth in Dublin, commuter towns and parts of Cork city are symptomatic of the fallout from the Central Bank mortgage loan restriction regime combined with a continued lack of supply.
In the absence of enough new homes being built, fewer homes are being sold. At the same time people who ordinarily would be able to buy a home are pushed instead into the private rental sector to compete for space with those who would normally rent.
And with rent caps pushing small private landlords out of the market and little new housing being added, it means that an increasing tranche of new apartments in Dublin are being earmarked for the super landlord sector. This is the big sacrifice we are paying for Central Bank mortgage/price controls combined with the continued failure by Government over many years to get the supply of new and affordable family homes rolling out to the required levels.
In Dublin, those who would be ordinarily able to buy their own home are being pushed into the arms of big funds which are in turn buying up whole blocks to let them out en masse amidst both preferential tax rates and freedom from rent caps (new units can be let out at high market rates).
As far as the housing market goes, 2019 begins with Brexit fallout and further uncertainty.