Strength of migration 'underpins property demand'

The strength of migration into Ireland continues to underpin demand for property according to Sherry FitzGerald, Ireland’s largest estate agency.

Commenting on the latest estimates from the CSO for population and migration the chief economist with Sherry FitzGerald Group, Marian Finnegan noted that: “One of the key drivers of demand in the property market in recent years has been the strength of population growth.

"Such population growth continued with even greater vigour in 2006 with the latest data revealing that the total number of immigrants to Ireland reached 86,900 in the year to April 2006, notably the highest figure ever on record since the present series of annual migration estimates began in 1987.

"The impact of such strong levels of immigration on the property market is very direct. Even if one assumes that one third of all immigrants either buy or rent a property that suggests a requirement for just short of 30,000 units, almost a third of all new properties built in the same period.

"Interestingly, it is also equivalent to the total number of units in Ireland in 1995, an indication of the strength of market growth in the intervening period.”

“The stability and strength of our population growth is a clear indicator of the continued attractiveness of Ireland as a destination of choice. Such population growth is positively impacting demand for property as reflected in the strength of price inflation with the average price of a second-hand property in Ireland rising by 15% during the first six months of the year, while the figure for Dublin came in at 21.2% according to the Sherry FitzGerald barometer of second-hand house prices.

"That said, it would be foolish to suggest that the pace of price growth achieved in the first six months of the year can be repeated in the remainder of the year. The combination of increased supply - both new and second hand - and further rate increases will inevitably slow the pace of price growth to single digit figures in the second half of the year. This will still make 2006 one of the strongest on record," said Ms Finnegan.