House price inflation forecast at 6% in 2004

House price inflation is set to reach 6% by the end of 2004 after recording a 2% increase in the first quarter of this year.

Property prices will remain buoyant despite another year of record supply to the market, the Bank of Ireland’s Property Review said today.

Forecast completions are due to come in at 70,000 homes for the year, which would result in a further 5% gain to Ireland’s housing stock.

BOI’s report stated that the acceleration in employment growth is expected to underpin first-time buyers activity in the market and result in strong demand, which will absorb the record new housing supply.

Its Chief Economist Dan McLoughlin said today: "The Irish public certainly shows no sign of flagging in its desire to acquire mortgage debt.

"The level of activity in the market - including the number of mortgages, the scale of borrowing, the number of house completions, the flow of stamp duty - remains extremely buoyant pointing to 2004 as yet another record year for housing."

The review also notes that the growth in mortgage debt in Ireland is showing no signs of slowing, with the debt amounting to €62.4bn at the end of March 2004, having risen by €3.2bn over the first quarter resulting in year-over-year growth of 26.9%.