New property report offers more upbeat forecast

Property consultants CB Richard Ellis today launched its predictions for all sectors of the Irish property market in 2008.

Its annual Outlook report examines the potential for performance in each sector of the commercial property market in Ireland as well as commenting on the prospects for the new homes market and overseas investment markets over the next 12 months.

The report is relatively upbeat about prospects in some sectors of the Irish property market, stating that the commercial sector will weather the storm well in 2008.

However, it points out that other sectors of the property market are going to find 2008 challenging. CB Richard Ellis believes that activity in the residential sector in Ireland will remain relatively stagnant this year and that house completions could realistically fall by another 30% during the next 12 months.

However, they remain very confident about prospects in the commercial occupier markets including the office, retail and industrial sectors on the basis that the economy continues to perform relatively well in European terms and the balance between supply and demand in these sectors is well controlled.

The report has warned developers however to be mindful of the potential for oversupply in the retail sector, considering the quantum of new retail accommodation that has been built in Ireland in the last decade and the fact that consumer spending is expected to slow down in 2008.

“Forecasting property market performance in the current climate is extremely difficult,” said Marie Hunt, director of research at CB Richard Ellis.

“While we can monitor supply and demand with a reasonable degree of accuracy, influencing factors such as the performance of the Irish economy and the availability and cost of bank funding are largely dependent on what transpires in global economies and financial markets.

“While we believe that 2008 will be a challenging year for some sectors of the property market, we are confident that while the first half of the year will be slow, strong underlying fundamentals should ensure that momentum picks up as the year progresses.

“Many investors and developers will see 2008 as a year of good buying opportunities. However, the key ingredient that will drive transactional activity is confidence and this to a large extent will be determined by wider global factors, which at this point are difficult to predict”.