House prices could rise 25% by 2020

A new report is predicting house prices could rise by up to 25% by 2020.

New ESRI research says strong economic growth and the slow pace of house building will fuel price rises.

But it says the Irish housing market is not overheating and properties are not over-priced compared to other countries.

Kieran McQuinn from the ESRI is author of the report.

He said: "This is mainly related to the improvement in economic conditions in particular I suppose to developments in the labour market where we have seen a persistent fall in the unemployment rate over thr years.

"Given the apparent sluggish response of housing supply, when you have such strong demands that inevitably means that prices are likely to increase."

The Economics and Social Research Institute is predicting that house prices could rise by 20% by 2020.

Professor of Economics at the ESRI says many renters are trapped as high rents mean they can’t save enough of a deposit under the Central Bank rules.

He said: "You can really understand it from people's perspectives that on the one hand if you're paying out huge amounts of money on rent, it means that your ability to save is really being hampered and of course with the macroprudential rules they require certain deposit levels, so it is very difficult for people to save for deposits."


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