HOUSE prices in city suburbs could see a modest growth next year.
Head of residential property at Savills Ronan O’Driscoll said the most active sector of the housing market is the realistically priced three- and four-bedroom family houses in traditional, established city suburbs.
He said for houses in this category there is “clearly an undersupply of suitable houses and plenty of mortgage-approved buyers”.
“A return to price growth, assuming no more catastrophic economic events take place, is within sight for the right locations, particularly in the cities.
“In some limited cases, a return to competitive bidding is taking place and modest price growth is likely as soon as 2011 for houses in these locations,” he said.
Mr O’Driscoll said activity levels for rural houses, apartments, holiday homes and trophy Celtic Tiger mansions continue to be weak with downward pressure on prices continuing.
“Predicting when house prices will eventually rise is difficult, particularly as we are so heavily reliant on an active mortgage market which no longer exists.
“However, we have seen a significant increase in the level of activity and we are selling more houses this year than we have for the past two years,” he said.
Mr O’Driscoll said evidence over the past quarter illustrates that prices in some sectors have stabilised and builders who have dramatically reduced prices are generating sales in good volumes.
Director of the Irish mortgage corporation, Frank Conway said he is finding the mortgage situation is no longer getting worse and levels of enquiries are steady. “There is a consistent level of interest in how much borrowers can actually borrow based on their current earnings. The big challenge of course is the state of the overall market. Many consumers that we have engaged with for their mortgage want to move on and buy their first home. However, they are loath to buy when there is a big risk that prices may continue to moderate.
“Everyone is looking for signs that the property market has stabilised and no one wants to overpay for their home so it is a game of cat and mouse at the moment.”
He said there is a real need for a national house sales transaction index, adding one is “sorely needed” to measure what is a major aspect of economic activity.
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