House prices set to level out

THE Irish housing market is in line for a soft landing after years of strong price rises, but British homeowners have significantly more to worry about, according to PricewaterhouseCoopers’ European Economic Outlook.

PwC’s study of housing markets across Europe found Irish house prices were broadly in line with their long-term average, when wage levels, interest rates and inflation were taken onto account. Prices here were within 10% of their long-term average, which suggested the housing boom had been driven by sound economic reasons.

Strong growth in income levels and lower interest rates that came with the adoption of the euro were seen as the main reasons behind the price hike. “The Irish house price boom has proved to be one of the strongest in Europe, with house prices having doubled between 1995 and 2003,” said PwC.