This article is from page 13 of the 2007-07-03 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 13 JPG
A LEADING economist has told an Ennis seminar on the property mar- ket that the current slowdown in the Irish housing market is very desir- able.
Speaking at the What Next seminar hosted by Propertyplus in Ennis at the weekend, chief economist with Friends First, Jim Power said, ““The slowdown is very desirable because the house price inflation of recent years could not and should not be
sustained for any longer, as it would then start to become seriously dan- gerous.”
Figures released on Friday show that property prices have dropped by 2.1 per cent this year.
Mr Power said, “My own belief over the next five years is that we will see annual house price inflation at around three per cent per annum. That represents a soft landing in the Irish housing market.
“I believe that it is the most likely and the most desirable scenario, be-
cause another couple of years of dou- ble digit growth of house price infla- tion would have definitely created a bubble that, in my view, would then be burst.”
Mr Power anticipates that there will be 80,000 house completions in Ire- land this year, down from 93,000 last year.
He said that this year “over the next five years, you are looking at growth at 3-3.5 per cent per annum.
“We are entering a more mod- ern economic growth environment
— that’s normal, that is the real world. Over the last 10 years, we have been involved in a huge level of catch-up, now caught up and we are now start- ing to settle down.
“Over the next five years, we are moving back to about 60,000 house completions. That represents a de- cline of over 30,000 completions. That is the reality and I feel that it is a very desirable reality because the number of housing completions had to come back.
“Otherwise, if you have another
three years of 90,000 plus housing completions, you are left with a ser1- ous bubble situation.”
Ennis auctioneer, Philip O’Reilly who organised the event at the Tem- ple Gate Hotel told the audience that the issue of having to pay stamp duty “is quite a scandal”.
He said, “For a couple purchasing a €600,000 home, they must pay a further €35,000. That is basically a net year’s salary. People have been passive about this in the past but not anymore.”