NCB economist upbeat on future of property market

NCB Stockbrokers’ chief economist has today told business leaders not to be unduly pessimistic about the current state of the property market or of the economy.

Speaking at the Association of Chartered Certified Accountants’ Business Leaders’ Forum, Dermot O’Brien said that expectations that there will be a sharp slowdown in house building this year which will seriously dampen growth in the overall economy go far beyond the available evidence.

“A number of factors have had a temporary negative effect on the housing market in Ireland in recent months,” said O’Brien.

“These include fear about increased mortgage rates and the uncertainty around the issue of stamp duty prior to the election.

“All of the major political parties have promised to address this issue and interest rate increases look set to peak this year so I would expect better activity in the second half of the year as these issues are resolved.”

Even if house building were to fall to some degree this year, O’Brien believes that it would not necessarily mean an overall fall in construction output, or slower growth in the wider economy.

“Investment in housing declined marginally towards the end of last year, yet overall investment in construction rose, with commercial and industrial demand remaining high, and activity buoyed also by the significant increases in public spending planned in the new National Development Plan,” he said.

ACCA Ireland President Deane Morrice welcomed the comments, saying he hoped that the economy in the North could continue to replicate some of the Republic’s success in the construction sector.