S&P: Surging house prices to abate next year

Surging house prices in Dublin and other urban centres will moderate from 2015 onwards as supply constraints becomes less acute and mortgage arrears work their way through the market, according to a report by the ratings agency Standard & Poor’s.

Dublin has experienced the biggest increase in demand for housing over the past 12 months. However, because of the low level of completions over the past five years, this has put upward pressure on prices.

“We nevertheless don’t expect the recent strong increase in house prices to stay as strong beyond 2014. This is, first of all, because the Government has a medium-term economic strategy to address the ‘over-correction’ in the construction sector and help increase activity in that sector. This should limit supply shortages over the medium term,” said S&P.