“A rise in disposable income, population growth and the Government’s help-to-buy scheme will also boost demand, says ratings agency Standard & Poor’s.
It expects prices to rise by 7pc this year, with values also set to rise due to looser lending rules introduced last month by the Central Bank.
And prices will rise by 5pc in the follow year, the international ratings agency predicts.
The strong property value gains will come despite households still being lumbered with large debts, a legacy of the property bust. The collapse of the construction sector, and its slow recovery, has also restricted supply, pushing up demand.
“The Irish housing market remains impaired by crisis legacy issues.
“House price growth, however, should remain robust, underpinned by shortages in key areas, continued improvement in the labour market, and as help-to-buy and looser mortgage lending rules for first-time buyers are starting to have an impact,” Standard & Poor’s said in a new report on Europe’s housing markets.
The help-to-buy tax rebate gives 5pc back to buyers of new homes, up to a limit of €20,000.
Analysts at the ratings agency estimate that household consumption has now come close to, or even surpassed, pre-crisis level.”
This is an excerpt taken from the Irish Independent and written by Charlie Weston. The article can be read in full here.