Economic downturn will not hit house prices

NEW home owners who fear the economic downturn might lead to a collapse in the value of their property received welcome news yesterday, with the prediction by a leading economist that there will be no fall in house prices in 2003.

In a major review of the Irish property market, the Bank of Ireland’s chief economist, Dan McLaughlin, has provided an upbeat outlook on house prices for the remainder of the year.

Dr McLaughlin forecast that second-hand prices will increase by 8% overall in 2003, while new house prices will remain largely unchanged over the same period. And the value of mortgage lending for home owners trading up (selling their property to buy a bigger house) rose to over €400m in the year to June, 2003. The figure represents more than a doubling in the value of such loans over the past five years, say the Bank of Ireland.